Exhibit 10.3

 

INCREMENTAL FACILITY ACTIVATION NOTICE

(Incremental Term Loan X)

 

To:                              BANK OF AMERICA, N.A.,

as Administrative Agent under the Credit Agreement referred to below

 

Reference is hereby made to the Credit Agreement, dated as of June 30, 2011 (as
amended by the First Amendment to Credit Agreement dated as of October 5, 2011,
and as further amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), among SPX Corporation, a Delaware corporation
(the “Parent Borrower”), the Foreign Subsidiary Borrowers from time to time
parties thereto, the Lenders from time to time parties thereto, Bank of America,
N.A., as Administrative Agent (in such capacity, the “Administrative Agent”) and
Deutsche Bank AG Deutschlandgeschäft Branch, as Foreign Trade Facility Agent. 
Terms defined in the Credit Agreement shall have their defined meanings when
used herein.

 

This notice is an Incremental Facility Activation Notice referred to in the
Credit Agreement, and the Parent Borrower and each of the Lenders party hereto
hereby notify you of the following agreements of the Parent Borrower and such
Lenders:

 

1.                                     Subject to the terms and conditions set
forth herein and in the Credit Agreement, each Lender party hereto severally
agrees to make its portion of an Incremental Term Loan (the “Incremental Term
Loan X”) to the Parent Borrower in Dollars in one advance on any Business Day
during the Availability Period (as defined below) in the amount (such Lender’s
“Incremental Term Loan X Commitment”) set forth opposite such Lender’s name
below under the caption “Incremental Term Loan X Amount”; provided, however,
before the Incremental Term Loan X may be made, (a) the Parent Borrower shall
have delivered to the Administrative Agent (i) a certificate substantially in
the form of Exhibit 1 attached hereto (the “Incremental Term Loan Funding Date
Certificate”) and (ii) a Borrowing Request in accordance with Section 2.3 of the
Credit Agreement and (b) each Lender party hereto shall have received the
upfront fee required to be paid by the Parent Borrower to each such Lender in
connection with the Incremental Term Loan X.  The aggregate amount of the
Incremental Term Loan X Commitments is Three Hundred Million Dollars
($300,000,000) as of the Incremental Term Loan Closing Date (as defined below).

 

2.                                     The closing date for the Incremental Term
Loan X is October 5, 2011 (the “Incremental Term Loan Closing Date”).

 

3.                                     The Incremental Term Loan Maturity Date
for the Incremental Term Loan X is the date eighteen (18) months after the
Funding Date (as defined below).

 

4.                                     The Availability Period for the
Incremental Term Loan X means the period from and including the Incremental Term
Loan Closing Date to the earliest of (a) December 31, 2011, (b) the date of
termination of Commitments by the Administrative Agent pursuant to Article VII
of the Credit Agreement and (c) the date of termination of the Commitments
hereunder by the Parent Borrower pursuant to Section 2.9(b) of the Credit
Agreement.

 

5.                                     The proceeds of the Incremental Term Loan
X shall be used as part of the consideration to consummate the acquisition (the
“Acquisition”) of Clyde Union (Holdings) S.A.R.L. and may be used to repay debt
outstanding on the date of the funding of the Incremental

 

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Term Loan X (such date of funding, the “Funding Date”); provided, however, that
unless used by the Parent Borrower to consummate the Acquisition and/or repay
debt as identified above no later than five (5) Business Days following the
Funding Date, such proceeds shall be maintained with the Administrative Agent
pursuant to the terms of the Cash Collateral Agreement (as defined below).  The
Parent Borrower also agrees that, if subsequent to the Funding Date, it
determines in its discretion that the Acquisition will not be consummated, the
Parent Borrower shall promptly repay to the applicable Lenders the outstanding
principal amount of the Incremental Term Loan X.  For purposes hereof, “Cash
Collateral Agreement” means that certain Cash Collateral Agreement by and
between the Parent Borrower and the Administrative Agent, substantially in the
form of Exhibit 2 attached hereto.

 

6.                                     Each of the Lenders party hereto and the
Parent Borrower hereby agrees that the Applicable Rate for the Incremental Term
Loan X shall be as set forth on the grid in Annex A attached hereto based upon
the Consolidated Leverage Ratio as of the most recent Determination Date.

 

7.                                     Each of the Lenders party hereto agree
that as provided in Section 2.13(b) of the Credit Agreement, (a) any mandatory
prepayment of the Incremental Term Loans with the Net Proceeds received with
respect to any Prepayment Event described in clause (d) of the definition of the
term Prepayment Event shall be allocated only to the prepayment of the
Incremental Term Loan X and (b) any mandatory prepayment of the Incremental Term
Loans with the Net Proceeds received with respect to any Prepayment Event
described in clauses (a), (b) or (c) of the definition of the term Prepayment
Event shall be allocated by the applicable Borrower among the Classes of
Incremental Term Loans in the manner directed in writing by the Parent Borrower
to the Administrative Agent.

 

8.                                     The Parent Borrower agrees to pay to the
Administrative Agent for the account of each Lender party hereto a commitment
fee (the “Incremental Term Loan X Commitment Fee”), which shall accrue at the
rate of 0.275% on the actual daily unused amount of Incremental Term Loan X
Commitment of such Lender during the Availability Period.  Accrued Incremental
Term Loan X Commitment Fees shall be payable in arrears on the last Business Day
of December, March and June and on the last day of the Availability Period,
commencing on the first such date to occur after the date hereof.  The
Incremental Term Loan X Commitment Fee shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).  For purposes of computing
the Incremental Term Loan X Commitment Fees, the Incremental Term Loan X
Commitment of a Lender shall be deemed to be used to the extent of the portion
of the outstanding Incremental Term Loan X advanced by such Lender.

 

9.                                     Each Lender party hereto agrees not to
assign its Incremental Term Loan X Commitment hereunder without the consent of
the Parent Borrower (such consent not to be unreasonably withheld or delayed)
unless (a) an Event of Default has occurred and is continuing at the time of
such assignment or (b) such assignment is to a Lender, an Affiliate of a Lender
or an Approved Fund.

 

10.                               Each of the Lenders party hereto that are
identified on Schedule 1 (the “New Lenders”) agrees to be bound by the
provisions of the Credit Agreement, and agrees that, as of the date hereof, it
is a Lender for all purposes of the Credit Agreement to the same extent as if
originally a party thereto.

 

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11.                               Each New Lender (a) represents and warrants
that it is legally authorized to enter into this Incremental Facility Activation
Notice; (b) confirms that it has received a copy of the Credit Agreement,
together with copies of the financial statements referred to in Section 3.4
thereof, copies of the most recent financial statements delivered pursuant to
Section 5.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Incremental Facility Activation Notice; (c) agrees that it has made and will,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement or any instrument or document furnished
pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement or any instrument or document furnished
pursuant hereto or thereto as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are incidental thereto; and
(e) agrees that it will be bound by the provisions of the Credit Agreement and
will perform in accordance with its terms all the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Lender
including, without limitation, if it is a Non-U.S. Lender, its obligation
pursuant to Section 2.19(e) of the Credit Agreement.

 

12.                         Each New Lender represents and warrants that its
address for notices for the purposes of the Credit Agreement is as set forth on
Schedule 1 opposite its name.

 

[Signatures on Following Page(s)]

 

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IN WITNESS WHEREOF, the undersigned have executed this Incremental Facility
Activation Notice this 5th day of October, 2011.

 

 

SPX CORPORATION

 

 

 

 

By:

/s/ Patrick J. O’Leary

 

Name:

Patrick J. O’Leary

 

Title:

Executive Vice President and Chief Financial Officer

 

 

ACKNOWLEDGED:

 

 

 

BANK OF AMERICA, N.A.,

 

as Administrative Agent

 

 

 

By:

/s/ Mollie S. Canup

 

Name: Mollie S. Canup

 

Title: Vice President

 

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $24,375,000

BANK OF AMERICA, N.A.,

 

as a Lender

 

 

 

By:

/s/ Chris Burns

 

Name: Chris Burns

 

Title: Vice President

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $24,375,000

THE BANK OF NOVA SCOTIA,

 

as a Lender

 

 

 

By:

/s/ David Schwartzbard

 

Name: David Schwartzbard

 

Title: Director, Execution Head

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $24,375,000

THE BANK OF TOKYO-MITSUBISHI UFJ, Ltd.

NEW YORK BRANCH,

 

as a Lender

 

 

 

By:

/s/ George Stoecklein

 

Name: George Stoecklein

 

Title: Vice President

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $24,375,000

HSBC BANK USA,

NATIONAL ASSOCIATION,

 

as a Lender

 

 

 

By:

/s/ Reed R. Menefee

 

Name: Reed R. Menefee

 

Title: Vice President, Global Relationship Manager

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $19,500,000

CITIBANK NA,

 

as a Lender

 

 

 

By:

/s/ Janice D’Arco

 

Name: Janice D’Arco

 

Title: Vice President

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $19,500,000

DNB NOR BANK ASA, NEW YORK BRANCH,

 

as a Lender

 

 

 

By:

/s/ Philip F. Kurpiewski

 

Name: Philip F. Kurpiewski

 

Title: Senior Vice President 

 

 

 

By:

/s/ Pal Boger

 

Name: Pål Boger

 

Title: Vice President

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $19,500,000

JPMORGAN CHASE BANK, N.A.,

 

as a Lender

 

 

 

By:

/s/ Richard W. Duker

 

Name: Richard W. Duker

 

Title: Managing Director

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $19,500,000

MIZUHO CORPORATE BANK, LTD.,

 

as a Lender

 

 

 

By:

/s/ David Lim

 

Name: David Lim

 

Title: Authorized Signatory

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $19,500,000

SUMITOMO MITSUI BANKING CORPORATION,

 

as a Lender

 

 

 

By:

/s/ Shuji Yabe

 

Name: Shuji Yabe

 

Title: Managing Director

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $15,000,000

COMPASS BANK,

 

as a Lender

 

 

 

By:

/s/ Susana Campuzano

 

Name: Susana Campuzano

 

Title: Vice President

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $9,375,000

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED,

 

as a Lender

 

 

 

By:

/s/ Robert Grillo

 

Name: Robert Grillo

 

Title: Director

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $9,375,000

COMMERZBANK AG,

NEW YORK and GRAND CAYMAN BRANCHES,

 

as a Lender

 

 

 

By:

/s/ Matthew Havens

 

Name: Matthew Havens

 

Title: Assistant Vice President

 

 

 

By:

/s/ Sandy Bau

 

Name: Sandy Bau

 

Title: Associate

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $9,375,000

CREDIT SUISSE AG,

 

as a Lender

 

 

 

By:

/s/ Ari Bruger

 

Name: Ari Bruger

 

Title: Vice President

 

 

 

By:

/s/ Vipul Dhadda

 

Name: Vipul Dhadda

 

Title: Associate

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $9,375,000

DBS BANK LTD., LOS ANGELES AGENCY,

 

as a Lender

 

 

 

By:

/s/ James McWalters

 

Name: James McWalters

 

Title: General Manager

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE — TERM LOAN X

 

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Incremental Term Loan X Amount: $9,375,000

FIFTH THIRD BANK,

 

as a Lender

 

 

 

By:

/s/ Mary Ramsey

 

Name:  Mary Ramsey

 

Title:  Vice President

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE – TERM LOAN X

 

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Incremental Term Loan X Amount: $9,375,000

TD BANK NATIONAL ASSOCIATION,,

 

as a Lender

 

 

 

By:

/s/ Mark Willner

 

Name:  Mark Willner

 

Title:  SVP

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE – TERM LOAN X

 

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Incremental Term Loan X Amount: $9,375,000

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as a Lender

 

 

 

By:

/s/ Scott Santa Cruz

 

Name:  Scott Santa Cruz

 

Title:  Managing Director

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE – TERM LOAN X

 

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Incremental Term Loan X Amount: $7,500,000

CREDIT AGRICOLE CORPORATE & INVESTMENT BANK,

 

as a Lender

 

 

 

By:

/s/ Rachel Tresser

 

Name:  Rachel Tresser

 

Title:  Director

 

 

 

By:

/s/ Yuri Muzichenko

 

Name:  Yuri Muzichenko

 

Title:  Director

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE – TERM LOAN X

 

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Incremental Term Loan X Amount: $5,625,000

SUNTRUST BANK,

 

as a Lender

 

 

 

By:

/s/ J. Lance Walton

 

Name:  J. Lance Walton

 

Title:  Senior Vice President

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE – TERM LOAN X

 

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Incremental Term Loan X Amount: $3,750,000

COMERICA BANK,

 

as a Lender

 

 

 

By:

/s/ Chris Rice

 

Name:  Chris Rice

 

Title:  AVP

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE – TERM LOAN X

 

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Incremental Term Loan X Amount: $3,750,000

NORDEA BANK FINLAND PLC

NEW YORK and GRAND CAYMAN BRANCHES,

 

as a Lender

 

Date:  October 4, 2011

 

 

 

By:

/s/ Mogens R. Jensen

 

Name:  Mogens R. Jensen

 

Title:  Senior Vice President

 

 

 

Date:  October 4, 2011

 

 

 

By:

/s/ Gerald Chelius

 

Name:  Gerald Chelius

 

Title:  Senior Vice President

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE – TERM LOAN X

 

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Incremental Term Loan X Amount: $3,750,000

FIRST COMMERCIAL BANK,

NEW YORK AGENCY,

 

as a Lender

 

 

 

By:

/s/ Jason Lee

 

Name: Jason Lee

 

Title: VP & General Manager

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE – TERM LOAN X

 

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Schedule 1 to

Incremental Facility Activation Notice

 

NEW LENDERS

 

Lender

 

Address

 

 

 

Compass Bank

 

24 Greenway Plaza, Suite 1400B

Houston, Texas 77046

 

 

 

Credit Suisse AG, Cayman Island Branch

 

Eleven Madison Avenue

New York, New York 10010

 

 

 

Comerica Bank

 

3551 Hamlin Road, 4th Floor

Auburn Hills, Michigan 48326

 

 

 

First Commercial Bank , New York Branch

 

750 3rd Avenue, 34th Floor

New York, New York 10017

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE – TERM LOAN X

 

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Annex A to

Incremental Facility Activation Notice

 

 

APPLICABLE RATE FOR INCREMENTAL TERM LOAN X

 

“Applicable Rate”:  with respect to the Incremental Term Loan X, for any day,
the applicable rate per annum set forth below in the applicable grid, based upon
the Consolidated Leverage Ratio as of the most recent Determination Date:

 

Pricing
Tier

 

Consolidated
Leverage
Ratio

 

LIBO
Rate
Loans

 

ABR
Loans

 

1

 

< 1.0 to 1.0

 

1.50

%

0.50

%

2

 

> 1.0 to 1.0
but
< 1.5 to 1.0

 

1.75

%

0.75

%

3

 

> 1.5 to 1.0
but
< 2.0 to 1.0

 

2.00

%

1.00

%

4

 

> 2.0 to 1.0
but
< 3.0 to 1.0

 

2.125

%

1.125

%

5

 

> 3.0 to 1.0

 

2.25

%

1.25

%

 

For purposes of the foregoing, (a) the Consolidated Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Parent Borrower’s fiscal
year based upon the Parent Borrower’s consolidated financial statements
delivered pursuant to Section 5.1(a) or (b), and (b) each change in the
Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall
be effective during the period commencing on and including the date of delivery
to the Administrative Agent of such consolidated financial statements indicating
such change and ending on the date immediately preceding the effective date of
the next such change; provided that (i) Pricing Tier 5 shall apply at any time
that an Event of Default has occurred and is continuing or (ii) at the option of
the Administrative Agent or at the request of the Required Lenders in respect of
the Incremental Term Loan X, if a Compliance Certificate is not delivered when
due in accordance with Section 5.1(a) or (b), Pricing Tier 5 shall apply as of
the first Business Day after the date on which such Compliance Certificate was
required to have been delivered and shall continue to apply until the first
Business Day immediately following the date a Compliance Certificate is
delivered in accordance with Section 5.1(a) or (b), whereupon the Applicable
Rate shall be adjusted based upon the calculation of the Consolidated Leverage
Ratio contained in such Compliance Certificate.  Notwithstanding the foregoing,
the Applicable Rate in effect from the Funding Date through the first Business
Day immediately following the date a Compliance Certificate is required to be
delivered pursuant to Section 5.1(b) for the fiscal quarter (and fiscal year)
ending December 31, 2011 shall be determined based upon the Consolidated
Leverage Ratio contained in the Incremental Term Loan Funding Date Certificate. 
Notwithstanding anything to the contrary contained in this definition, the
determination of the Applicable Rate for any period shall be subject to the
provisions of Section 2.15(f) of the Credit Agreement.

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE – TERM LOAN X

 

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Exhibit 1 to
Incremental Facility Activation Notice

 

To:          BANK OF AMERICA, N.A.,

as Administrative Agent under the Credit Agreement referred to below

 

Reference is hereby made to the Credit Agreement, dated as of June 30, 2011 (as
amended by the First Amendment to Credit Agreement, dated as of October    ,
2011, and as further amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among SPX Corporation, a Delaware
corporation (the “Parent Borrower”), the Foreign Subsidiary Borrowers from time
to time parties thereto, the Lenders from time to time parties thereto, Bank of
America, N.A., as Administrative Agent (in such capacity, the “Administrative
Agent”) and Deutsche Bank AG Deutschlandgeschäft Branch, as Foreign Trade
Facility Agent.  Unless otherwise defined herein, terms shall have the meaning
ascribed to such terms in the Credit Agreement or the Operative Incremental
Facility Activation Notice (as defined below), as applicable.

 

The undersigned [Chief Financial Officer][Vice President — Finance] of the
Parent Borrower certifies as follows:

 

1.              I am the duly elected, qualified and acting [Chief Financial
Officer][Vice President — Finance] of the Parent Borrower.

 

2.              I have reviewed and am familiar with the contents of the
Incremental Facility Activation Notice attached hereto as Exhibit A (the
“Operative Incremental Facility Activation Notice”).

 

3.              I have reviewed the terms of the Credit Agreement and the other
Loan Documents and have made or caused to be made under my supervision, a review
in reasonable detail of the transactions and condition of the Parent Borrower
during the accounting period ended                                       ,
20       [insert most recent period for which financial statements have been
delivered].  Such review did not disclose the existence during or at the end of
the accounting period covered by the Parent Borrower’s most recent financial
statements delivered pursuant to Section 5.1(a) or (b) of the Credit Agreement,
and I have no knowledge of the existence, as of the date of the Operative
Incremental Facility Activation Notice, of any Default or Event of Default, both
on the date hereof and after giving pro forma effect to any Loans made pursuant
to the Operative Incremental Facility Activation Notice and the application of
the proceeds therefrom.

 

4.              Attached hereto as Attachment 1 are the computations showing
that after giving pro forma effect to the making of the Incremental Term Loan X
and any other Loans on the Funding Date [and the substantially concurrent
Acquisition and related repayments of Indebtedness], the Parent Borrower shall
be in compliance with the financial covenants contained in Section 6.1 of the
Credit Agreement as of the last day of the most recent period of four
consecutive fiscal quarters of the Parent Borrower for which financial
statements have been delivered pursuant to Section 5.1(a) or (b) of the Credit
Agreement (calculated as if the Incremental Term Loan X and any other such Loans
had been incurred [and the substantially concurrent Acquisition and related
repayments of Indebtedness consummated] on the first day of such period).

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE – TERM LOAN X

 

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Attachment 1 to
Incremental Facility Activation Notice

 

[Set forth Compliance Calculations]

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE – TERM LOAN X

 

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Exhibit 2 to
Incremental Facility Activation Notice

 

[Form of Cash Collateral Agreement]

 

CASH COLLATERAL AGREEMENT

 

THIS CASH COLLATERAL AGREEMENT (this “Agreement”) dated as of [              
            ], 2011 is made and entered into among SPX Corporation, a Delaware
corporation (the “Pledgor”), Bank of America, N.A., as Administrative Agent (in
such capacity, the “Pledgee”) and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the “Securities Intermediary”).

 

RECITALS

 

WHEREAS, credit facilities have been established in favor of the Pledgor and
certain of its subsidiaries pursuant to the terms of that certain Credit
Agreement, dated as of June 30, 2011 (as amended by the First Amendment to
Credit Agreement dated as of October     , 2011, and as further amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Pledgor, such subsidiaries, the lenders party thereto,
the Pledgee and Deutsche Bank AG, Deutschlandgeschäft Branch, as the foreign
trade facility agent;

 

WHEREAS, the Pledgor intends to make borrowings under (a) a $500,000,000
five-year term loan (“Term Loan A”), and (b) a $300,000,000 18-month term loan
(“Term Loan X”; together with the Term Loan A, the “Incremental Term Loans”), in
each case established pursuant to Section 2.1(b) of the Credit Agreement, the
proceeds of which shall be used as part of the consideration to consummate the
acquisition (the “Acquisition”) of Clyde Union (Holdings) S.À R.L. and may be
used to repay debt outstanding at the time of the funding of the Incremental
Term Loans; and

 

WHEREAS, until used by the Pledgor as identified above, the proceeds of the
Incremental Term Loans shall be maintained in a blocked securities account
pursuant to the terms of this Agreement.

 

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

ARTICLE I

 

Creation of Security Interest

 

Section 1.1.            Defined Terms.  As used herein, the terms “Securities
Account” and “Proceeds”, which are defined in the Uniform Commercial Code as in
effect from time to time in the State of New York (the “UCC”), are used herein
as so defined.

 

Section 1.2             Cash Collateral Account.  The Pledgor has established
the following securities account with the Securities Intermediary (the “Cash
Collateral Account”):

 

Account Number:                                    

Account Name:  SPX Corporation Collateral Account for Bank of America,

N.A., in its capacity as Administrative Agent

 

SPX CORPORATION

INCREMENTAL FACILITY ACTIVATION NOTICE – TERM LOAN X

 

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Unless used by the Pledgor, no later than five (5) business days following the
date of the funding of the Incremental Term Loans, to consummate the Acquisition
and/or repay debt as identified above, the Pledgor shall deposit the proceeds of
the Incremental Term Loans into the Cash Collateral Account.

 

Section 1.3             Grant of Security Interest.  To secure the prompt
payment and performance in full when due, whether by lapse of time,
acceleration, mandatory prepayment or otherwise, of the Obligations, the Pledgor
hereby grants, pledges, assigns and transfers to the Pledgee, a continuing
security interest in any and all right, title and interest of the Pledgor, in
and to the Cash Collateral Account and all financial assets, investment
property, securities, cash and other property now or hereafter held therein,
including without limitation dividends payable in cash or stock and shares or
other proceeds of conversions or splits of any securities in the Cash Collateral
Account (collectively, the “Collateral”).  Pledgor, Pledgee and the Securities
Intermediary agree that the Cash Collateral Account is a “securities account”
within the meaning of Article 8 of the UCC and that all Collateral held in the
Cash Collateral Account will be treated as financial assets under the UCC.  The
Securities Intermediary shall have no obligation or duty to follow any
instructions given by the Pledgor with respect to the Cash Collateral Account,
except as provided in Section 6.1(e) below.  The Pledgee shall have no
obligation or duty to follow any instructions of Pledgor, except as provided in
Section 4.1.  The rights and interests granted hereunder are specifically
intended to convey “control” to the Pledgee over the Cash Collateral Account and
all amounts therein within the meaning of the UCC.

 

Section 1.4             The Pledgor hereby agrees to execute and deliver to the
Pledgee concurrently with the execution of this Agreement, and at any time or
times hereafter at the request of Pledgee, all assignments, conveyances,
assignment statements, financing statements, renewal financing statements,
security agreements, affidavits, notices and all other agreements, instruments
and documents that the Pledgee may reasonably request, and will execute all
necessary endorsements in order to perfect and maintain the security interests
and liens granted herein by the Pledgor to the Pledgee.  In furtherance of the
foregoing, the Pledgor hereby appoints the Pledgee as its attorney-in-fact for
the purpose of making any of the foregoing endorsements and executing any such
financing statements, documents and agreements; provided, however, that the
Pledgee covenants to the Pledgor that it may act in the capacity as
attorney-in-fact granted hereunder only after the occurrence of an Event of
Default (here and hereinafter, as such term is defined the Credit Agreement) and
during the continuance thereof.  The foregoing power of attorney shall be a
power coupled with an interest and shall be irrevocable until the Termination
Date (as defined below).

 

ARTICLE II

 

Priority of Security Interests

 

Section 2.1             The Pledgor represents and warrants that the security
interest created in Section 1.3 is a first priority security interest in favor
of the Pledgee, and shall constitute at all times a valid and perfected security
interest in the Collateral and that said security interest in said Collateral
shall not become subordinate or junior to the security interests, liens or
claims of any other person, firm or corporation, except for the Unsubordinated
Obligations (as defined below).

 

ARTICLE III

 

Default

 

Section 3.1             The Pledgor and the Pledgee hereby acknowledge and agree
that upon the

 

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occurrence of an Event of Default and during the continuance thereof, the
Pledgee shall have, in respect of the Collateral, (a) after having provided five
(5) business days prior written notice to the Pledgor (or immediately upon the
occurrence of an event with respect to the Pledgor described in paragraph (h) or
(i) of Article VII of the Credit Agreement), the right, immediately and without
further action by the Pledgee, to notify the Securities Intermediary in writing
to deliver all assets in the Cash Collateral Account to the Pledgee for
application by the Pledgee against the Obligations (as defined in the Credit
Agreement), (b) all the rights and remedies contained in this Agreement, the
Loan Documents (here and hereinafter, as defined in the Credit Agreement) or
permitted by law and (c) all the rights and remedies of a secured party under
the UCC, all of which shall be cumulative to the extent permitted by law.  The
Securities Intermediary agrees to promptly deliver all such assets in the Cash
Collateral Account to the Pledgee upon receipt of such written notice from the
Pledgee reference in clause (a) above.

 

Section 3.2             The Pledgee’s failure at any time or times hereafter to
require strict performance by the Pledgor of any of the provisions, warranties,
terms and conditions contained in this Agreement shall not waive, affect or
diminish any right of the Pledgee at any time or times hereafter to demand
strict performance therewith and with respect to any other provisions,
warranties, terms and conditions contained in this Agreement.

 

ARTICLE IV

 

Access/Release of Collateral

 

Section 4.1             Method for Disbursement.

 

(a)           Upon the Pledgee’s receipt of a certificate of a financial officer
of the Pledgor, (i) certifying that the Acquisition is expected to be
consummated no later than five (5) business days following the advance of such
funds in accordance with the terms of the Acquisition in all material respects,
including receipt of all governmental, shareholder and third party consents and
approvals (including Hart-Scott-Rodino clearance) reasonably necessary in
connection with the Acquisition, (ii) certifying that at the time of the advance
of the funds in the Cash Collateral Account to the Pledgor and immediately after
the consummation of the Acquisition with such funds, no Specified Default (as
defined in the Credit Agreement) shall have occurred and be continuing, or would
occur after giving effect to the Acquisition, (iii) containing a calculation of
the covenants contained in Section 6.1 of the Credit Agreement demonstrating
that the Pledgor shall be in compliance, on a pro forma basis (as contemplated
in the Credit Agreement), after giving effect to the Acquisition, with such
covenants, in each case recomputed as at the last day of the most recently ended
fiscal quarter of the Pledgor for which the relevant information is available
and (iv) setting forth wiring instructions for the account(s) into which the
funds from the Cash Collateral Account shall be deposited, the Pledgee promptly
shall instruct the Securities Intermediary to terminate the Cash Collateral
Account, to liquidate all investments in the Cash Collateral Account and to
disburse the entire amount of funds held in the Cash Collateral to the Pledgor
(using the wiring instructions provided in the certificate described above).

 

(b)           If the Pledgor determines in its discretion that the Acquisition
will not be consummated, upon receipt by the Pledgee of written instructions
from the Pledgor to do so, the Pledgee promptly shall instruct the Securities
Intermediary in writing to terminate the Cash Collateral Account, to liquidate
all investments in the Cash Collateral Account and to disburse the entire amount
of funds held in the Cash Collateral Account to the Pledgee, for prompt
application thereof by the Pledgee for repayment of the outstanding principal
amount of the Incremental Term Loans.

 

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ARTICLE V

 

Representations and Warranties

 

Section 5.1             The Pledgor hereby represents and warrants that:

 

(a)           it has the corporate right, power and authority to execute,
deliver and perform this Agreement and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement;

 

(b)           this Agreement constitutes a legal, valid and binding obligation
of the Pledgor, enforceable against the Pledgor in accordance with its terms,
except as such enforceability may be limited by the Bankruptcy Code of the
United States and other applicable debtor relief laws and by general principles
of equity and principles of good faith and fair dealing; and

 

(c)           the execution, delivery and performance of this Agreement will not
violate any provision of any applicable law or material contractual obligation
of the Pledgor.

 

ARTICLE VI

 

Securities Account Provisions

 

Section 6.1             The parties hereto agree (which agreement by the Pledgor
will be construed as instructions to the Securities Intermediary):

 

(a)           The Securities Intermediary is instructed to register the pledge
on its books. The Securities Intermediary shall hold all certificated securities
that comprise all or part of the Collateral with proper endorsements to the
Securities Intermediary or in blank, or, upon the written request of the
Pledgee, will deliver possession of such certificated securities to the Pledgee;
provided that the Pledgee hereby covenants to the Pledgor that it shall make no
such written request except after the occurrence of an Event of Default during
the continuance thereof.

 

(b)           The Securities Intermediary is instructed to deliver to the
Pledgee and the Pledgor copies of monthly statements on the Cash Collateral
Account and, upon request by either the Pledgee or the Pledgor, account balance
verifications.

 

(c)           The Cash Collateral Account will be styled as provided in Section
1.2 above.

 

(d)           All dividends, interest, gains and other profits with respect to
the Cash Collateral Account will be reported in the name and tax identification
number of the Pledgor.

 

(e)           The Securities Intermediary may not, without the prior written
consent of Pledgee, deliver, release or otherwise dispose of the Collateral or
any interest therein unless the proceeds thereof are held or reinvested in the
Cash Collateral Account as part of the Collateral or applied by Securities
Intermediary to the satisfaction of an Unsubordinated Obligation (as defined
below) owed to it.  The Pledgee shall have exclusive control over the Cash
Collateral Account; provided, however, the Securities Intermediary may comply
with orders or instructions from Pledgor regarding the purchase and sale of, and
the investment or reinvestment of proceeds from the sale of securities, cash
dividends, interest, income, earnings and other distributions in the Cash
Collateral Account until a reasonable period of time after the Securities
Intermediary receives written notification from the Pledgee that the Securities

 

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Intermediary shall comply with the orders and instructions of the Pledgee only
with respect to the purchase and sale of, and the investment or reinvestment of
proceeds from the sale of securities, cash dividends, interest, income, earnings
and other distributions; provided that the Pledgee covenants to the Pledgor that
it may provide such written notification only after the occurrence of an Event
of Default and during the continuance thereof.

 

(f)            The Pledgor authorizes the Securities Intermediary, and the
Securities Intermediary agrees, to comply with any order or instruction from
Pledgee concerning the Cash Collateral Account, including an order or
instruction directing sale, transfer or redemption of all or part of the
Collateral and the remittance of the proceeds thereof, if any, to Pledgee,
without further consent by the Pledgor; provided that the Pledgee acknowledges
and agrees that it may deliver such order or instruction only after the
occurrence of an Event of Default and during the continuance thereof. 
Securities Intermediary shall have no responsibility or liability to Pledgor for
complying with any order or instruction, whether oral or written, concerning the
Cash Collateral Account, the Collateral, any interest therein, or the proceeds
thereof originated by Pledgee and shall have no responsibility to investigate
the appropriateness of any such order or instruction, even if Pledgor notifies
Securities Intermediary that Pledgee is not legally entitled to originate any
such order or instruction.  The Securities Intermediary shall have no
responsibility or liability to Pledgee for complying with any order or
instruction, whether oral or written, concerning the Cash Collateral Account,
the Collateral, any interest therein, or the proceeds thereof originated by
Pledgor except to the extent such compliance would cause Securities Intermediary
to violate any of the provisions hereof, including subsection 6.1(e) above.  The
Securities Intermediary shall be able to rely upon any notice, order or
instruction that it reasonably believes to be genuine.  The Securities
Intermediary shall have no responsibility or liability to Pledgee with respect
to the value of the Cash Collateral Account or any of the Collateral.  This
Agreement does not create any obligation or duty on the part of Securities
Intermediary other than those expressly set forth herein.

 

(g)           The Securities Intermediary shall not be liable for any loss or
damage with respect to any matter that may arise out of or in connection with
this Agreement or any action taken or not taken pursuant hereto, except to the
extent caused by Securities Intermediary’s gross negligence or willful
misconduct.  In no event shall Securities Intermediary be liable for special,
indirect, exemplary, punitive or consequential damages, including without
limitation lost profits, regardless of any notice.  Notwithstanding any other
provision of this Agreement, Securities Intermediary shall have no liability to
Pledgor or Pledgee for any losses or damages resulting from any failure to
comply with any instruction or order concerning the Cash Collateral Account, the
Collateral, any interest therein, or the proceeds thereof or from delay in
complying with such instruction or order if compliance would require Securities
Intermediary to violate any then-existing injunction or order of any court of
competent jurisdiction, including without limitation in any bankruptcy case
under Title 11, United States Code.

 

(h)           The Pledgor hereby indemnifies and hold the Securities
Intermediary, its directors, officers, employees, and agents harmless from and
against any and all claims, causes of action, liabilities, losses, lawsuits,
demands, damages, costs and expenses, including without limitation court costs
and reasonable attorneys’ fees and expenses and allocated costs of in-house
counsel, that may arise out of or in connection with this Agreement or any
action taken or not taken pursuant hereto, except to the extent caused by
Securities Intermediary’s gross negligence or willful misconduct. The
obligations of the Pledgor set forth in this subsection (h) shall survive the
termination of this Agreement.

 

(i)            The Securities Intermediary is instructed that the Cash
Collateral Account is to remain a “cash account” within the meaning of
Regulation T issued by the Board of Governors of the Federal Reserve System. 
The Securities Intermediary represents that it has not received notice regarding
any lien, encumbrance or other claim to the Collateral or the Cash Collateral
Account from any other person and has not entered into an agreement with any
third party to act on such third party’s instructions without

 

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further consent of the Pledgor.  The Securities Intermediary further agrees not
to enter into any such agreement with any third party.

 

(j)            The Securities Intermediary subordinates to the lien and security
interest of the Pledgee any right of setoff, encumbrance, security interest,
lien or other claim that it may have against the Collateral, except for any
lien, claim, encumbrance or right of set off against the Cash Collateral Account
for (i) customary commissions and fees arising from permitted trading activity
within the Cash Collateral Account, and (ii) payment owed to Securities
Intermediary for open trade commitments for the purchase and/or sale of
financial assets in and for the Cash Collateral Account (the “Unsubordinated
Obligations”).

 

(k)           To the extent a conflict exists between the terms of this
Agreement and any account agreement between the Pledgor and the Securities
Intermediary, the terms of this Agreement will control, provided that this
Agreement shall not alter or affect any mandatory arbitration provision
currently in effect between Securities Intermediary and Pledgor.

 

(l)            Except as otherwise expressly provided herein, any notice, order,
instruction, request or other communication required or permitted to be given
under this Agreement shall be in writing and may be delivered in person, sent by
facsimile or other electronic means if electronic confirmation of error free
receipt is received, or sent by United States mail, postage prepaid, addressed
to the party at the address set forth below.

 

(m)          Any notice, order, instruction, request or other communication from
the Pledgee to the Securities Intermediary required to be in writing shall be on
the Pledgee’s letterhead and signed by an authorized representative of the
Pledgee.  The Pledgee may change its authorized representatives by written
notice to the Securities Intermediary which notice shall include the name, title
and specimen signature of each new authorized representative of Pledgee.

 

(n)           The Securities Intermediary will be excused from failing to act or
delay in acting, and no such failure or delay shall constitute a breach of this
Agreement or otherwise give rise to any liability of the Securities
Intermediary, if (i) such failure or delay is caused by circumstances beyond the
reasonable control of the Securities Intermediary, including without limitation
legal constraint, emergency conditions, action or inaction of governmental,
civil or military authority, terrorism, fire, strike, lockout or other labor
dispute, war, riot, theft, flood, earthquake or other natural disaster,
breakdown of public or private or common carrier communication or transmission
facilities, equipment failure, or act, negligence or default of Pledgor or
Pledgee or (ii) such failure or delay resulted from Securities Intermediary’s
reasonable belief that the action would have violated any guideline, rule or
regulation of any governmental authority.

 

(o)           Pledgor agrees to pay Securities Intermediary, upon receipt of
Securities Intermediary’s invoice, all reasonable costs, expenses and attorneys’
fees (including without limitation allocated costs of in-house counsel) incurred
in the preparation and administration of this Agreement (including any
amendments hereto or instruments or agreements required hereunder).  Pledgor and
Pledgee jointly and severally agree to pay Securities Intermediary, upon receipt
of Securities Intermediary’s invoice, all reasonable costs, expenses and
attorneys’ fees (including without limitation allocated costs of in-house
counsel) incurred by Securities Intermediary in connection with the enforcement
of this Agreement or any instrument or agreement required hereunder, including
without limitation any reasonable costs, expenses, and fees arising out of the
resolution of any conflict, dispute, motion regarding entitlement to rights or
rights of action, or other action to enforce Securities Intermediary’s rights
hereunder in a case arising under Title 11, United States Code.  This subsection
(o) shall survive termination of this Agreement.

 

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(p)           Notwithstanding any of the other provisions of this Agreement, in
the event of the commencement of a case pursuant to Title 11, United States
Code, filed by or against Pledgor, or in the event of the commencement of any
similar case under then applicable federal or state law providing for the relief
of debtors or the protection of creditors by or against Pledgor, Securities
Intermediary may act as Securities Intermediary deems necessary to comply with
all applicable provisions of governing statutes and neither Pledgor nor Pledgee
shall assert any claim against Securities Intermediary for so doing.

 

ARTICLE VII

 

Miscellaneous

 

Section 7.1             Governing Law; Submission to Jurisdiction; Venue.

 

(a)           This Agreement shall be construed in accordance with and governed
by the law of the State of New York (including Sections 5-1401 and 5-1402 of the
New York General Obligations Law).

 

(b)           Each party to this Agreement hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court.  Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this Agreement shall affect any right that any
Agent or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement against any Borrower or its properties in the courts
of any jurisdiction.

 

(c)           Each party to this Agreement hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, (i) any objection which it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement
in any court referred to in subsection (b) of this Section 7.1, (ii) the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court and (iii) any right it may have to claim or recover in any legal
action or proceeding referred to in this Section 7.1 any special, exemplary,
punitive or consequential damages (as opposed to direct or actual damages).

 

(d)           Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.1 of the Credit
Agreement.  Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.

 

Section 7.2             Continuing Security Interest.  This Agreement shall
create a continuing security interest in the Collateral in favor of the Pledgee
and shall be binding upon the Pledgor, the Securities Intermediary and the
Pledgee, to the benefit of the Pledgee and its successors and permitted assigns;
provided, however, the Pledgor may not assign its rights or delegate its duties
hereunder without the prior written consent of the requisite lenders under the
Credit Agreement.

 

Section 7.3             Termination.  This Agreement and the security interest
granted herein shall terminate upon the earlier to occur (the date of such
occurrence, the “Termination Date”) of (a) written notice to the Securities
Intermediary from the Pledgee, which notice the Pledgee covenants to the Pledgor
to make

 

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promptly upon (i) repayment in full of all Incremental Term Loans and
termination of the commitments with respect to the Incremental Term Loans or
(ii) the disbursement of all funds in the Cash Collateral Account pursuant to
the terms of Section 4.1 and (b) the Securities Intermediary’s termination of
this Agreement by giving thirty (30) days’ prior written notice to Pledgor and
Pledgee; provided that with respect to this clause (c), at the end of such
thirty (30) day period, the Securities Intermediary will deliver all assets held
in the Cash Collateral Account to Pledgee unless Pledgor and Pledgee deliver
joint instructions to Securities Intermediary to deliver or transfer the assets
in the Cash Collateral Account to another party or securities intermediary, and
in the event that it is not possible or practicable, in the judgment of the
Securities Intermediary, to transfer the Collateral or deliver the Collateral to
any other party, the Securities Intermediary will sell such assets and deliver
the proceeds according to the instructions provided by the Pledgee or the joint
instructions given by the Pledgee and Pledgor.  Termination shall not affect any
of the rights or liabilities of the parties hereto incurred before the date of
termination.

 

Section 7.4             Counterparts.  This Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument.  It
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.

 

Section 7.5             Severability.  If any provision of this Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.

 

Section 7.6             Customary Fees and Expenses of Securities Intermediary. 
Upon receipt of an invoice from the Securities Intermediary, the Pledgor shall
pay to the Securities Intermediary the reasonable, customary fees and other
reasonable, standard costs and charges of the Securities Intermediary relating
to the maintenance of the Cash Collateral Account as are from time to time
outstanding.

 

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Each of the parties hereto has caused a counterpart of this Agreement to be duly
executed and delivered as of the date first above written.

 

 

PLEDGOR:

SPX CORPORATION, a Delaware corporation,

 

as Pledgor

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

PLEDGEE:

BANK OF AMERICA, N.A., in its capacity as Administrative Agent,

 

as Pledgee

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

SECURITIES

 

INTERMEDIARY:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

 

as Securities Intermediary

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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