Novo Orders
The original order from Novo was for an adhesive Novo was using in the production of a new line of toys for its Brazilian market. The toys needed to be waterproof and the adhesive, therefore, needed very specific properties. Through a mutual friend, Moreno had been introduced to Novo’s purchasing agent. Working with Doug Baker, she had then negotiated the original order in February (the basis for the pricing of that original order is show in Exhibit 1). Novo had agreed to pay shipping cost, so Baker Adhesives simply had to deliver the adhesive in 55 gallon drums to a nearby shipping facility.
The proposed new order was similar to the last one. As before, Novo agreed to make payment 30 days after receipt of the adhesives at the shipping facility. Baker anticipated a five-week manufacturing cycle once all the raw materials were in place. All materials would be received about three months from order placement; that was about how long the original order took. For this reason, Moreno expected receipt of payment on the new order, assuming it was agreed upon immediately, somewhere around September 5,2006.