TN-K Energy Group Inc. – ‘SC 13D’ on 2/14/97 re: TN-K Energy Group Inc.

As of:  Friday, 2/14/97   ·   Accession #:  942650-97-1   ·   File #:  5-49979

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General Statement of Beneficial Ownership   —   Schedule 13D
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 1: SC 13D      General Statement of Beneficial Ownership             26±   101K 

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SC 13D
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UNITED STATES     
SECURITIES AND EXCHANGE COMMISSION      
Washington, D.C. 20549      

SCHEDULE 13D      

Under the Securities Exchange Act of 1934     
(Amendment No. _____)*      

Wanderlust Interactive, Inc.      
----------------------------      
(Name of Issuer)      

Common Stock, $.01 par value      
----------------------------      
(Title of Class of Securities     

933694 10 1     
----------------------------      
(CUSIP Number)      

Richard S. Kalin      
Kalin & Banner, 757 Third Avenue, New York, New York 10017            
(212) 888-9010      
-----------------------------     
(Name, Address and Telephone Number of Person     
Authorized to Receive Notices and Communications)     

February 4, 1997      
----------------------------      
(Date of Event which Requires Filing of this Statement)     

If the filing person had previously filed a statement 13G to                    
report the acquisition which is the subject of this Schedule 13D,               
and is filing this schedule because of 13d-1(b)(3) or (4), check                
the following box [    ].                                                       

Note:  Six copies of this statement, including all exhibits,                    
should be filed with the Commission.  See Rule 13d-1(a) for other               
parties to whom copies are to be sent.                                          

*The remainder of this cover page shall be filled out for a                     
reporting person's initial filing on this form with respect to                  
the subject class of securities, and for any subsequent amendment               
containing information which would alter disclosures provided in                
a prior cover page.                                                             

The information required on the remainder of this cover page                    
shall be deemed to be "filed" for the purpose of Section 18 of                  
the Securities Exchange Act of 1934 ("Act") or otherwise subject                
to the liabilities of that section of the Act but shall be                      
subject to all other provisions of the Act (however, see the                    
Notes.)                                                                         
Page 1 of 29; Exhibit Index is on page 6                                        

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SCHEDULE 13D              

CUSIP No.   933694 10 1                  Page 2 of 29 pages                     

1.   Name of reporting person.                                                  
S.S. or I.R.S. Identification No. of Above Person                     

Jay Smith III                                                 

2.   Check the appropriate box if a member of a group*.                         

(a)  [    ]                                                   
(b)  [    ]                                                   

3.   SEC use only.                                                              

4.   Source of funds:    PF (personal shares).                                  

5.   Check box if disclosure of legal proceedings if required                   
pursuant to items 2(d) or 2(e).   [   ]                               

6.   Citizenship or place of organization:   USA                                

Number of shares beneficially owned by each reporting person                    
with:                                                                           

7.   Sole voting power:  0                                                      

8.   Shared voting power:  732,462                                              

9.   Sole dispositive power:  0                                                 

10.  Shared dispositive power:  732,462                                         

11.  Aggregate amount beneficially owned by each reporting                      
person:  732,462                                                      

12.  Check box if the aggregate amount in row (11) excludes                     
certain shares*.   [    ]                                             

13.  Percentage of class represented by amount in row (11):  16%                

14.  Type of reporting person*:   IN                                            

*SEE INSTRUCTIONS BEFORE FILING OUT!  INCLUDE BOTH SIDES OF THE                 
COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE                  
SCHEDULE, AND THE SIGNATURE ATTESTATION.                                        

Item 1. Security and Issuer.                                                    

Common Stock, $.01 par value, of Wanderlust                 
Interactive, Inc. (the "Company"). The Company's principal                      
executive offices are located at 462 Broadway, New York, New York               
10013.                                                                          

Item 2. Identity and Background.                                                

(a) Name:  Jay Smith III and Susan Smith, trustees of       
the Jay and Susan Smith Living Trust, of which Jay Smith is the                 
beneficial owner.                                                               

(b) Residence or business address: 5301 Beethoven           
Street, Los Angeles, CA 90066.                                                  

(c) Present principal occupation or employment and the      
name, principal business and address of any corporation or other                
organization in which such employment is conducted: Mr. Smith is                
President of Western Technologies, Inc. ("Western"), a wholly-                  
owned subsidiary of the Comapny. Western develops, manufactures                 
and distributes video games and interactive toys.                               

(d) Whether or not during the last five years, such       
person has been convicted in a criminal proceeding (excluding                   
traffic violations or similiar misdemeanors) and, if so, give the               
dates, nature of conviction, name and location of court, any                    
penalty imposed, or other disposition of the case.: None.                       

(e) Whether or not during the last five years, such       
person was a party to a civil proceeding of a judicial or                       
administrative body of competent jurisdiction and as a result of                
such proceeding was or is subject to a judgment, decree or final                
order enjoining future violations of, or prohibiting or mandating               
activities subject to, federal or state securities laws or                      
finding any violation with respect to such laws; and if so,                     
identify and describe such proceedings and summarize the terms of               
such judgment, decree or final order: Not applicable.                           

(f) Citizenship:  USA.                                    

Item 3.  Source and Amount of Funds or Other Consideration:                     

Mr. Smith exchanged his ownership of all of the outstanding         
shares of Common Stock of Western for his shares of stock in the                
Company.                                                                        

Item 4.  Purpose of Transaction:                                                

The purpose of the transaction was so that Western would            
become a wholly-owned subsidiary of the Company; the Company                    
anticipates that Mr. Smith will be nominated to the Company's                   
Board of Directors at its next annual meeting.                                  
Page 3                                                                          
Item 5.  Interest in Securities of the Issuer:                                  

(a)  Aggregate number owned by reporting person:              
732,462 Shares, or 16%.                                                         

(b)  Sole power to vote:  0 Shares                            
Shared power to vote:  732,462 Shares               
Sole power to dispose:  0  Shares                   
Shared power to dispose:  732,462 Shares            

(c) None.                                                     

(d)  Susan Smith, Mr. Smith's wife, is a co-trustee and       
beneficiary of the trust in which the shares are held.                          

(e) Not applicable.                                           

Item 6.  Contracts, Arrangements, Understandings or Relationships               
with respect to Securities of the Issuer.                                       

None.                                                       

Item 7.   Material to be Filed as Exhibits.                                     

Copy of the Acquisition Agreement among the Company, Mr.        
Smith and Western.                                                              

Page 4                                                                          

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Signature                                                                       

After reasonable inquiry and to the best of my              
knowledge and belief, I certify that the information set forth in               
this statement is true, complete and correct.                                   

Dated:  February 12, 1997                   s/ Jay Smith III                    
                       Jay Smith III

Page 5                                                                          

SC 13D
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   Exhibit Index

1.  Acquisition Agreement among Wanderlust Interactive, Inc., Jay               
Smith III d/b/a Smith Engineering and Western Technologies, Inc.                

Page 6                                                                          

ACQUISITION AGREEMENT     

This ACQUISITION AGREEMENT, dated as of December 30,        
1996, by and among WANDERLUST INTERACTIVE, INC., a Delaware                     
corporation whose principal place of business is 462 Broadway,                  
New York, NY  10013 ("Wanderlust"), JAY SMITH III, an individual                
whose principal place of business is 5301 Beethoven Street, Los                 
Angeles, CA 90066, including Smith d/b/a Smith Engineering, a                   
sole proprietorship) ("Smith") and Western Technologies, Inc., a                
California corporation whose principal place of business is 5301                
Beethoven Street, Los Angeles, CA  90066 ("Western" or "Acquired                
Entity").                                                                       

WHEREAS, Smith is the owner of all of the outstanding       
shares of stock of Western; and                                                 

WHEREAS Smith desires to sell to Wanderlust and             
Wanderlust desires to acquire from Smith: (i) all of the                        
outstanding shares of stock of Western (the "Western Stock") and                
(ii) all of the assets of Smith Engineering (other than those                   
exclusively assigned to Western pursuant to the License                         
Agreement, defined below and those excluded pursuant to Schedule                
2.13A hereof (the "Smith Assets;" the Western Stock and the Smith               
Assets are collectively referred to herein as the "Acquired                     
Stock");                                                                        

NOW THEREFORE in consideration of the promises and          
mutual agreements herein contained, the parties agree as follows:               

1.   Purchase and Sale of Acquired Stock; Price;            
Delivery; Closing.                                                              

1.1  Purchase and Sale of the Acquired Stock.     
On the Closing Date (as defined in Paragraph 1.4 below), Smith                  
shall sell the Acquired Stock and Wanderlust shall purchase the                 
Acquired Stock for the Purchase Price set forth in Paragraph 1.2.               

1.2  Purchase Price and Payment for the Acquired  
Stock. Wanderlust shall pay Smith the Purchase Price as follows:                

(a)  Guaranteed Purchase Price.  At the Closing,  
Wanderlust shall issue Smith 800,000 shares of Common Stock of                  
Wanderlust (the "Guaranteed Shares");                                           

(b)  Contingent Purchase Price.  Wanderlust shall 
issue Smith additional shares of Common Stock of Wanderlust if                  
any or all of the conditions set forth in Schedule 1.2(b)                       
attached hereto and made a part hereof are met. The aggregate                   
issuance of such additional shares shall not exceed 600,000                     
shares.                                                                         

1.3  Transfer Stamps.  All transfer stamps and/or 
documentary stamps shall be affixed to the Acquired Stock with                  
the cost of such stamps, if any, borne by Smith.                                

1.4  Closing.  The closing of the sale and        
purchase of the Acquired Stock (the "Closing") shall take place                 
at the offices of Clark & Trevithick, at 9:00 am P.S.T., on                     
January 28, 1997 or at such other time, place or date as the                    
parties hereto may agree (the "Closing Date").                                  

1.5  Transfer of Acquired Stock and Payment of    
Purchase Price at Closing.  At the Closing, subject to the terms                
of this Agreement, the following transactions shall occur, and                  
each such transaction shall be deemed to occur simultaneously                   
with the other transactions:                                                    

(a)  Acquired Stock Certificates.  Smith shall    
deliver certificates to Wanderlust representing the Western                     
Stock, duly endorsed in blank, with any required stock transfer                 
and other documentary stamps affixed;                                           

(b)  Bills of Sale.  Smith shall deliver          
Assignments and Bills of Sale necessary to convey the Smith                     
Assets to Wanderlust, in form and substance satisfactory to                     
Wanderlust.                                                                     

(c)  Delivery of Guaranteed Shares to Smith.      
Wanderlust shall deliver or instruct Wanderlust's transfer agent                
to deliver to Smith certificates representing 800,000 shares of                 
Common Stock of Wanderlust, registered in the name of Smith or as               
otherwise directed by Smith.                                                    

(d)  Opinions of Counsel.  Smith shall cause to be
delivered to Wanderlust the opinion of Clark & Trevithick,                      
counsel to Smith and Western, in accordance with the provisions                 
of Section 9.1 hereof;                                                          

(e)  Employment Agreement.  Smith shall execute   
and deliver to Wanderlust an employment agreement between Western               
and Smith (the "Smith Employment Agreement"), in the form                       
attached hereto as Exhibit 1.5(e);                                              

(f)  License Agreement.   Smith shall have entered
into a license agreement for the benefit of Western in the form                 
attached hereto as Exhibit 1.5(f).                                              

2.   Representations, Warranties and Covenants of Smith     
and the Acquired Entity.  Smith and the Acquired Entity each                    
hereby represent, warrant and covenant to Wanderlust as follows:                

2.1  Organization and Standing; Articles and      
Bylaws.  The Acquired Entity is a corporation duly organized and                
validly existing under the laws of its state of incorporation and               
is in good standing under such laws.  The Acquired Entity has the               
requisite corporate power to own and operate its properties and                 
assets, and to carry on its business as presently conducted and                 
as proposed to be conducted.  The Acquired Entity is qualified or               
licensed as a foreign corporation in all jurisdictions where the                
nature of its activities or of its properties owned or leased                   
makes such qualification or licensing necessary at this time.                   
The Acquired Entity has furnished Wanderlust with copies of its                 
Articles of Incorporation and Bylaws.  Said copies are true,                    
correct and complete and contain all amendments through the date                
of this Agreement.                                                              

2.2  Corporate Power.  The Acquired Entity and/or 
Smith has, and will have at the Closing, all requisite legal and                
corporate power to enter into this Agreement, to sell the                       
Acquired Stock sold by Smith hereunder, and to carry out and                    
perform its or his obligations under the terms of this Agreement.               

2.3  Subsidiaries.  The Acquired Entity has no    
subsidiaries except as set forth on Schedule 2.3 attached hereto.               
The Acquired Entity does not own, directly or indirectly, shares                
of stock or other interests in any other corporation,                           
association, joint venture, or business organization except set                 
forth on Schedule 2.3 attached hereto.                                          

2.4  Capitalization.  The Acquired Entity has the 
authorized number of shares of Common Stock as set forth on                     
Schedule 2.4.  All of the issued and outstanding shares of the                  
Acquired Entity have been duly authorized and validly issued, and               
are fully paid and non-assessable and were issued in compliance                 
with all applicable state and federal laws concerning the                       
issuance of securities.  There are no outstanding options or                    
other commitments to issue shares of the Acquired Entity except                 
as set forth on Schedule 2.4 attached hereto, which options or                  
other commitments have been cancelled or exercised in accordance                
with the agreements attached hereto as Schedule 2.4.                            

2.5  Authorization.                               

(a)  All corporate action on the part of the      
Acquired Entity, its officers, directors and stockholders                       
necessary for the performance by the Acquired Entity of its                     
obligations hereunder, has been taken prior to the execution of                 
this Agreement.  This Agreement is a legal, valid, and binding                  
obligation of Smith and the Acquired Entity, enforceable against                
them in accordance with its terms, except as limited by                         
bankruptcy, insolvency, reorganization, moratorium, or similar                  
laws of general application affecting enforcement of creditor's                 
rights, and affecting the availability of equitable remedies.                   

(b)  The Acquired Stock sold by Smith under this  
Agreement, when sold to Wanderlust in compliance with the                       
provisions of this Agreement, will be validly issued, fully-paid                
and nonassessable, and will be free of any liens or encumbrances.               

(c)  No shareholder of the Acquired Entity has any
right of first refusal or any preemptive rights in connection                   
with the issuance of the Acquired Stock.                                        

2.6  Financial Statements.  Each of the Acquired  
Entity's and Smith's financial statements for the presented                     
periods (collectively the "Financial Statements") are attached                  
hereto as Schedule 2.6, are true and correct, have been prepared                
in accordance with generally accepted accounting principles                     
consistently applied (except as disclosed therein), and fairly                  
present the financial condition of Smith or the Acquired Entity                 
and results of the operations of Smith or the Acquired Entity as                
of the date thereof.                                                            

2.7  Changes in Financial Condition.  Except as   
set forth in Schedule 2.7 attached hereto, since September 30,                  
1996: (a) neither Smith nor the Acquired Entity has entered into                
any transaction, including, but not limited to, incurring any                   
obligation, granting or releasing any lien, transferring or                     
otherwise disposing of any assets, compromise any debt, release                 
any rights of value, granted any concessions, which was not in                  
the ordinary course of business; (b) there has been no material                 
adverse change in the condition (financial or otherwise),                       
business, property, assets, or liabilities of Smith, or the                     
Acquired Entity; (c) there has been no damage to, destruction of,               
or loss of physical property (whether or not covered by                         
insurance) materially adversely affecting the business or                       
operations of Smith or the Acquired Entity; (d) the Acquired                    
Entity has not declared or paid any dividend or made any                        
distribution on its shares; (e) the Acquired Entity has not                     
materially increased the compensation of any employee, or the                   
rate of pay of employees as a group; (f) neither Smith nor the                  
Acquired Entity has received notice that there has been a loss of               
any major customer of Smith or the Acquired Entity, nor any                     
material order cancellation; (g) there has been no resignation or               
termination of employment of any senior or key officer or                       
employee of the Acquired Entity, and neither Smith nor the                      
Acquired Entity (including, without limitation, the members of                  
Western's board of directors and its executive officers as of the               
date of this Agreement) knows of an impending resignation or                    
termination of employment of any officer or employee of the                     
Acquired Entity or Smith that if consummated could have a                       
materially adverse effect on the business of the Acquired Entity                
or Smith; (h) there has been no labor dispute involving Smith or                
the Acquired Entity or its employees and none is pending or, to                 
the best knowledge of Smith or the Acquired Entity (including,                  
without limitation, the members of Western's board of directors                 
and its executive officer as of the date of this Agreement),                    
threatened; (i) neither Smith nor any of the officers or                        
employees of the Acquired Entity have lent Smith or the Acquired                
Entity any funds; and (j) to the best of their knowledge, there                 
has been no other event or condition of any character pertaining                
to and materially adversely affecting the assets or business of                 
the Acquired Entity or Smith.                                                   

2.8  Material Contracts and Commitments.  Except  
as set forth on Schedule 2.8, all of the material contracts,                    
commitments, agreements and instruments to which Smith or the                   
Acquired Entity is a party are legal, valid, binding, and in full               
force and effect in all material respects and enforceable by                    
Smith or the Acquired Entity in accordance with their terms,                    
except as limited by bankruptcy, insolvency, reorganization,                    
moratorium, or similar laws of general application affecting                    
enforcement of creditor's rights, and except as limited by                      
application of legal principles affecting the availability of                   
equitable remedies.  Neither Smith nor the Acquired Entity is in                
default under any of such contracts.                                            

2.9  Compliance with Other Instruments, etc.        
The Acquired Entity is not in violation of any term of its                      
Articles of Incorporation or Bylaws, or neither the Acquired                    
Entity nor Smith is in violation in any respect of any mortgage,                
indenture, contract, agreement, instrument, or any judgement,                   
decree, order, statute, rule, or regulation applicable to it or                 
him.  The execution, delivery, and performance by Smith of this                 
Agreement, and the issuance and sale of the Acquired Stock,                     
pursuant hereto, will not result in any such violation or be in                 
conflict with or constitute a default under any such term, or                   
cause the acceleration or maturity of any loan or material                      
obligation to which the Acquired Entity or Smith is a party or by               
which Smith or the Acquired Entity is bound or with respect to                  
which Smith or the Acquired Entity is an obligor or guarantor, or               
result in the creation or imposition or any material lien, claim,               
charge, restriction, equity, or encumbrance of any kind                         
whatsoever upon, or give to any other person any interest or                    
right (including any right of termination or cancellation) in or                
with respect to any of the properties, assets, business, or                     
agreements of the Acquired Entity.  No such term or condition                   
materially adversely affects or in the future (so far as can                    
reasonably be foreseen by Smith or the Acquired Entity,                         
including, without limitation, the members of its board of                      
directors and its executive officers, as of the date of this                    
Agreement) may materially adversely affect the business,                        
property, prospects, condition, affairs, or operations of Smith                 
or the Acquired Entity.                                                         

2.10 Litigation, etc.  Except as set forth on     
Schedule 2.10, there are no actions, proceedings or                             
investigations pending or threatened against either Smith or the                
Acquired Entity in any way relating to the Acquired Entity or                   
Smith, to the best of the knowledge of Smith and the Acquired                   
Entity (including, without limitation, the members of the board                 
of directors of the Acquired Entity and its executive officers as               
of the date of this Agreement), any basis therefor or threat                    
thereof, which, either individually or in the aggregate, could                  
result in any adverse change in the business, prospects,                        
conditions, affairs, or operations of the Acquired Entity or                    
Smith or in any of its or his properties or assets, or in any                   
impairment of the right or ability of the Acquired Entity, or                   
Smith to carry on its or his business as proposed to be                         
conducted, or in any material liability on the part of the                      
Acquired Entity or Smith, or which could affect the validity of                 
this Agreement or any action taken or to be taken in connection                 
herewith.                                                                       

2.11 Governmental Consent, etc.  Except as set    
forth on Schedule 2.11, no consent, approval or authorization of,               
or designation, declaration or filing with, any governmental unit               
or any other entity is required on the part of Smith or the                     
Acquired Entity in connection with the valid execution and                      
delivery of this Agreement, or the offer, sale, or issuance of                  
the Acquired Stock pursuant hereto or by this Agreement or                      
necessary or appropriate for consummation of transactions                       
contemplated.                                                                   

2.12 Offering.  The offer, sale and issuance of   
the Acquired Stock in conformity with the terms of this Agreement               
will not violate the Securities Act of 1933 or the securities                   
laws or "Blue Sky" laws of California.                                          

2.13 List of Properties and Assets.  Schedule 2.13
attached hereto is a complete and correct list setting forth the                
following information:                                                          

(i)  all real property owned of record or         
beneficially by the Acquired Entity and all leases of real                      
property to which the Acquired Entity is a party, with a brief                  
description of the property and any buildings or structures                     
located thereon and, in the case of each lease, the rental terms                
(including rents, termination dates and renewal conditions);                    

(ii)  all licenses, leases and other rights to    
personal property to which the Acquired Entity or Smith                         
(including Smith d/b/a as Smith Engineering) is a party, with a                 
brief description of the property which each such license, lease                
or other right relates and the rental or other applicable usage                 
terms (including rents, termination dates and renewal                           
conditions), other than leases with respect to office equipment,                
fixtures and other incidental personal property none of which                   
involves payments in excess of $5,000 per annum and all of which                
in the aggregate do not involve payments in excess of $25,000 per               
annum;                                                                          

(iii)  all personal property owned of record or   
beneficially by the Acquired Entity or Smith (including Smith                   
d/b/a as Smith Engineering) other than office equipment, fixtures               
and other incidental personal property having an aggregate value                
not in excess of $50,000. Schedule 2.13A sets forth certain                     
assets of Smith which will not be transferred;                                  

(iv)(A)  all patents, trademarks and trade names, 
trademark and trade name registrations, servicemark, brandmark                  
and brand name registrations, copyrights and copyright                          
registrations, unexpired as of the date hereof, all applications                
pending on said date for patents, for trademark or trade name                   
registrations, for servicemark, brandmark or brand name                         
registrations or for copyright registrations, and all other                     
proprietary or trade rights, used and/or owned in whole or in                   
part as noted thereon on said date by the Acquired Entity or                    
Smith (including Smith d/b/a Smith Engineering), and (B) all                    
licenses granted by or to the Acquired Entity or Smith (including               
Smith d/b/a Smith Engineering) and all other agreements to which                
the Acquired Entity or Smith (including Smith d/b/a Smith                       
Engineering) is a party which relate in whole or in part to any                 
items of the categories mentioned in (A) next above or to other                 
proprietary rights, whether owned by the Acquired Entity or Smith               
(including Smith d/b/a Smith Engineering) or otherwise;                         

(v)  all policies of insurance in force (with a   
notation as to the status of premiums paid or payable thereon)                  
insuring the properties, buildings, machinery, equipment,                       
fixtures or other assets of the Acquired Entity or Smith                        
(including Smith d/b/a Smith Engineering);                                      

(vi)  all contracts, understandings and           
commitments (including, without limitation, mortgages, leases,                  
indentures and loan agreements) to which the Acquired Entity or                 
Smith (including Smith d/b/a Smith Engineering) is a party, or to               
which they or any of their assets or properties is subject,                     
except contracts or commitments involving the payment by or to                  
the Acquired Entity or Smith (including Smith d/b/a Smith                       
Engineering) of less than $10,000 with respect to any one                       
contract or commitment or $50,000 with respect to any related                   
group of contracts or commitments;                                              

(vii)  all oral and written collective bargaining 
agreements, employment and consulting agreements, executive                     
compensation plans, bonus plans or other incentive compensation                 
plans, deferred compensation agreements, employee pension plans                 
or retirement plans, severance pay arrangements, employee profit                
sharing plans, employee stock purchase and stock option plans,                  
group life insurance, hospitalization insurance or other plans or               
arrangements providing for benefits for employees of  the                       
Acquired Entity or Smith (including Smith d/b/a Smith                           
Engineering) (indicating, with respect to each of the persons                   
named pursuant to Section 2.21 below, the amount received in the                
fiscal year ended June 30, 1996 under each such agreement, plan                 
or arrangement);                                                                

(viii)  the name of each bank or other financial  
institution from which loans, lines of credit or other credit                   
commitments to the Acquired Entity or Smith (including Smith                    
d/b/a Smith Engineering) are outstanding, the amount of each such               
loan or commitment and the principal terms thereof;                             

(ix)  all arrangements respecting loans to, or      
guarantees of loans to, employees of the Acquired Entity or Smith               
(including Smith d/b/a Smith Engineering) made by or to the                     
Acquired Entity or Smith (including Smith d/b/a Smith                           
Engineering).                                                                   
True and complete copies of all documents and true and      
complete written summaries of all oral agreements referred to in                
such list have been delivered to Wanderlust and its counsel.                    

2.14 Books and Records.  The books and records of 
the Acquired Entity and Smith (including Smith d/b/a Smith                      
Engineering) are in all respects complete and correct, have been                
maintained in accordance with good business practices and                       
accurately reflect the basis for the financial condition and                    
results of operations of the Acquired Entity and Smith (including               
Smith d/b/a Smith Engineering) set forth in the Financial                       
Statements referred to in Section 2.6 hereof.                                   

2.15 Patents, Trademarks, etc.  To the best       
knowledge of the Acquired Entity and Smith (including Smith d/b/a               
Smith Engineering) after due inquiry, the Acquired Entity owns,                 
or is licensed to use, all patents, trade names, trademarks,                    
copyrights, technology, know-how and processes now used by it in                
connection with its business, including those heretofore owned by               
Smith (including Smith d/b/a/ Smith Engineering).  The Acquired                 
Entity has protected by way of service mark or trade name or                    
application or registration therefor, trademark, trademark                      
registration or application, copyright, copyright registration or               
application, patent, patent application or registration or                      
otherwise, to the fullest extent permitted by law, the names or                 
designs set forth in Schedule 2.13 hereto and no other service                  
marks or trade names or applications or registrations therefor,                 
trademarks, trademark registrations or applications, patents or                 
patent applications or registrations are necessary for the                      
conduct of the business of the Acquired Entity or Smith                         
(including Smith d/b/a Smith Engineering) as now conducted.  All                
service marks and trade names and application and registrations                 
therefor, trademarks, trademark registrations and applications,                 
copyrights, copyright registrations and applications, patents and               
patent registrations and applications listed in Schedule 2.13 are               
in good standing, are valid and enforceable, are free from any                  
security interest, lien or encumbrance, or any default on the                   
part of the Acquired Entity or Smith (including Smith d/b/a Smith               
Engineering) and, except as disclosed in Schedule 2.15 hereto,                  
have not been and are not now challenged in any way or involved                 
in any pending or threatened infringement proceeding.  Neither                  
the Acquired Entity nor Smith (including Smith d/b/a Smith                      
Engineering) is a licensor in respect of any service mark or                    
trade name or registration or application therefor, trademark,                  
trademark registration or application, copyright, copyright                     
registration or application, patent or patent registration or                   
application.  To the best knowledge of the Acquired Entity or                   
Smith (including Smith d/b/a Smith Engineering), neither the                    
Acquired Entity nor Smith (including Smith d/b/a Smith                          
Engineering) is in violation of any service mark or trade name or               
registration or application therefor, trademark, trademark                      
registration or application, copyright, copyright registration or               
application, patent or patent registration or application of any                
other person.  None of the rights of the Acquired Entity or Smith               
(including Smith d/b/a Smith Engineering) to any such patents,                  
trademarks, trade names, copyrights, designs and any licenses                   
relating thereto will be impaired in any way by the transactions                
contemplated by this Agreement.                                                 

2.16 Accounts Receivable and Accounts Payable.    
The accounts receivable of the Acquired Entity as reflected on                  
the Financial Statements and on Schedule 2.16 and all accounts                  
receivable arising thereafter and prior to the date hereof arose                
from bona fide transactions in the ordinary course of business                  
and are current and to the best knowledge of Smith and the                      
Acquired Entity after due inquiry, fully collectible, less the                  
applicable allowance for doubtful accounts and subject to year-                 
end adjustments consistent with practices in prior years.  No                   
counterclaims or offsetting claims with respect to such accounts                
receivable are pending or, to the best knowledge of Smith or the                
Acquired Entity, are threatened.  The accounts payable reflected                
on any Financial Statements and on Schedule 2.16 and all accounts               
payable arising thereafter and prior to the date hereof arose                   
from bona fide transactions in the ordinary course of business                  
and have been paid or are not yet due and payable.                              

2.17 Transactions with Management.  The Acquired  
Entity is not now, nor during the period since April 1993 has                   
been, a party to any contract, lease or commitment with any                     
officer, director or stockholder of the Acquired Entity, nor any                
"associate" of any such officers, directors or stockholders (as                 
the term "associate" is defined in Rule 405 of the Rules and                    
Regulations promulgated under the Securities Act of 1933) nor are               
there now, or since April 1993 have there been, any loans                       
outstanding to any of such persons from the Acquired Entity,                    
except as disclosed in Schedule 2.17.  In no event shall any such               
loans be in excess of $130,000 at the Closing, provide for the                  
payment of more than $40,000 at the Closing, or mature prior to                 
five years from the Closing Date.                                               

2.18 Disclosure.  All facts material to the       
financial condition, assets, business and prospects of the                      
Acquired Entity or Smith (including Smith d/b/a Smith                           
Engineering) have been disclosed (or with respect to facts                      
arising hereafter will be promptly disclosed prior to the Closing               
Date) to Wanderlust in writing.  No representation or warranty                  
contained in this Agreement, and no statement, certificate,                     
schedule, list or other information furnished by or on behalf of                
the Acquired Entity or Smith (including Smith d/b/a Smith                       
Engineering) to Wanderlust in connection with this Agreement,                   
contains any untrue statement of a material fact or omits to                    
state a material fact necessary in order to make the statements                 
herein or therein, in light of the circumstances under which they               
were made, not misleading.                                                      

2.19 Title to and Condition of Properties.  Except
as set forth on Schedule 2.19, the Acquired Entity has good and                 
marketable title to all of its tangible and intangible property                 
and assets, including those reflected in the Financial Statements               
specifically including, but not limited to, software programs                   
(except as such assets have been sold or otherwise disposed of in               
the ordinary course of business), and such property and assets                  
are subject to no mortgage or security interest, conditional                    
sales contract, charge, lien or encumbrance (except for the lien                
of current taxes not yet due and payable and such imperfections                 
of title, easements and encumbrances, if any, as are not                        
substantial in character, amount, or extent and do not detract                  
from the value of, or interfere with the present use of the                     
properties subject thereto or affected thereby, or otherwise                    
impair the business operations of the Acquired Entity), and the                 
Acquired Entity has not sold or disposed of any of its property                 
and assets or obligated itself to do so except in the ordinary                  
course of business. Except for such minor defects as are not                    
substantial in character and which do not have a materially                     
adverse effect upon the validity  thereof, all material real and                
personal property leases to which the Acquired Entity is a party,               
are in good standing, valid and effective, and there is not under               
any such lease any existing default or event which with notice of               
lapse of time or both would constitute a default and in respect                 
of which the Acquired Entity has not taken reasonable steps to                  
prevent such a default from occurring, except as set forth on                   
Schedule 2.19.                                                                  

2.20 Taxes.  Except as set forth on Schedule 2.20,
each of Smith and the Acquired Entity has timely filed all tax                  
returns that are required to have been filed by them prior to the               
date of this Agreement with appropriate federal, state, country,                
and local governmental agencies or instrumentalities, and each of               
said returns correctly reflects the Acquired Entity's and Smith's               
income and its or his tax liability required to be shown therein.               
Smith and the Acquired Entity each has paid or established                      
reserves for all income, franchise, and other taxes due by it as                
reflected on said returns. The provisions for taxes due by the                  
Acquired Entity as shown in the Financial Statements are                        
sufficient for the payment in full of all unpaid federal, state,                
county, and local taxes in respect of their business and                        
operations for the periods then ended and all prior periods.                    
There is no pending dispute with any taxing authority relating to               
any of said returns which if determined adversely to the taxpayer               
corporation would result in the assertion by any taxing authority               
of any valid deficiency in a material amount for taxes.  No                     
federal income tax return of the Acquired Entity has been audited               
nor are there any pending or threatened audits of such returns.                 

2.21 Employees of Smith or Western.  Schedule 2.21
contains a true and correct statement of the names, dates of                    
hire, accrued vacation and sick time and current rates of                       
compensation of each employee (whether in the form of salary,                   
bonuses, commissions or other supplemental compensation now or                  
hereafter payable) of Smith and the Acquired Entity.  Wanderlust                
shall have the right to inspect Smith's and the Acquired Entity's               
personnel and payroll files for all such employees on or prior to               
the Closing Date, at reasonable times and upon reasonable notice.               
Neither the Acquired Entity nor Smith has any pension, profit-                  
sharing, option, or other incentive or employee benefit plan                    
(including obligations to or customary arrangements with                        
employees for incentive compensation, allowances, vacation,                     
severance pay or other benefits) except as listed in Schedule                   
2.21.  To the knowledge of Smith and the Acquired Entity, as of                 
the date hereof, (i) all obligations of the Acquired Entity                     
pursuant to the pension plan, if any, were fully funded as to                   
past service benefits under such pension plan, (ii) all accrued                 
payments thereunder had been paid or reserved for, (iii) the                    
pension plan did not have an accumulated funding deficiency, and                
(iv) no material liability to the Pension Benefit Guaranty                      
Corporation had been incurred with respect to the pension plan.                 

2.22  Bank Accounts and Powers of Attorney.       
Schedule 2.22 sets forth a true and complete list of:                           

(a)  The name of each bank in which the Acquired  
Entity and/or Smith (including Smith d/b/a/ Smith Engineering)                  
have accounts or safe deposit boxes and the names of all persons                
authorized to draw thereon or have access thereto; and                          

(b)  Each power of attorney granted by Smith and  
the Acquired Entity, identifying the nature of the power and the                
holder or holders thereof.                                                      

2.23  Customers.   Smith and the Acquired Entity  
have prepared and have in their possession a list of their                      
customers, and the amounts due by such customers to Smith or the                
Acquired Entity, which list is substantially true and correct and               
attached hereto as Schedule 2.23.                                               

2.24 Brokers.  Other than Joe Abrams who is       
entitled to a fee of up to one percent of the Purchase Price from               
Wanderlust, and Commercial Scientific, which may be entitled to a               
commission from Smith, there is no finder, broker, agent,                       
financial advisor or other intermediary who has acted on behalf                 
of Smith or the Acquired Entity in connection with this Agreement               
or the negotiation or consummation of the Agreement or the                      
transactions contemplated hereby who is entitled to any                         
compensation by Wanderlust.                                                     

2.25 Covenant Not to Compete.  Smith covenants and
agrees that for five years following the Closing Date (except as                
may be provided in the Employment Agreement delivered pursuant to               
Section 1.5(e)), Smith will not directly or indirectly:                         

(i)  become a stockholder, partner, employee,     
associate, owner, agent, creditor, independent contractor,                      
coventurer of or otherwise be interested in or associated with                  
any corporation, firm or business engaged in the same or any                    
similar business competitive with the business now or at any time               
during such period engaged in by the Acquired Entity in any                     
geographical area in which the Acquired Entity, or any affiliate                
of the Acquired Entity, now is or may during such period be                     
engaged; or                                                                     

(ii) solicit, cause or authorize, directly or     
indirectly, to be solicited, for or on behalf of himself or third               
parties, from parties who were within two years prior thereto, or               
then are, customers of Smith or the Acquired Entity or its                      
subsidiaries, any business similar to the business transacted by                
him or it with such customer; or                                                

(iii)  accept or cause or authorize, directly or  
indirectly, to be accepted, for or on behalf of himself or third                
parties, any such business from any such customer; or                           

(iv)  solicit or cause or authorize, directly or  
indirectly, to be solicited for employment for or on behalf of                  
himself or third parties, any persons who were within two years                 
prior thereto employees of the Acquired Entity or its                           
subsidiaries.                                                                   

(b)  Wanderlust shall be entitled, in addition to 
any other right or remedy it may have, at law or in equity, to an               
injunction, without the posting of any bond or other security,                  
enjoining or restraining Smith and third parties, as aforesaid,                 
from any violation or threatened violation of this Section 2.24.                
If any of the restrictions contained herein shall be deemed to be               
unenforceable by reason of the extent, duration or geographical                 
scope thereof, or otherwise, then the court making such                         
determination shall have the right to reduce such extent,                       
duration geographical scope thereof, or other provisions hereof                 
and, in its reduced form, this Section 2.25 shall be enforceable                
in the manner contemplated hereby.  It is expressly acknowledged                
that this covenant is given as part of the consideration for the                
acquisition of the Acquired Entity by Wanderlust contemplated by                
this Agreement.                                                                 

2.26 Conduct of the Business of Smith and the     
Acquired Entity Prior to the Closing Date.  Smith and the                       
Acquired Entity agree that at all times after the date hereof and               
prior to the Closing Date, except as otherwise consented to in                  
writing by Wanderlust:                                                          

(a)  the business of Smith and the Acquired Entity
shall be conducted only in the ordinary and usual course;                       

(b)  shall not (i) amend the Certificates of      
Incorporation or By-laws of the Acquired Entity; (ii) change the                
number of authorized or issued shares of the Acquired Entity; or                
(iii) declare, set aside or pay any dividend or other                           
distribution or payment in cash, stock or property.                             

(c)  neither Smith nor the Acquired Entity shall  
(i) issue, grant, sell or pledge or agree or propose to issue,                  
grant, sell or pledge any shares of, the capital stock of the                   
Acquired Entity; (ii) acquire any assets, other than in the                     
ordinary course of business; (iii) dispose of, encumber or                      
mortgage any assets or properties; (iv) incur any indebtedness                  
for borrowed money, discharge or satisfy any lien or encumbrance                
or pay any obligation or liability (fixed or contingent), or                    
enter into any other material transaction, other than in the                    
ordinary course of business; (v) waive, release, grant or                       
transfer any rights of value or modify or change in any material                
respect any existing license, lease, contract or other document;                
or (vi) enter into any contract, agreement, commitment or                       
arrangement with respect to any of the foregoing;                               

(d)  Smith shall use his best efforts to preserve 
intact the business organization of the Acquired Entity, to keep                
available the services of its present officers and key employees,               
and to preserve the good will of those having business                          
relationships with him and the Acquired Entity.                                 

(e)  neither Smith nor the Acquired Entity will   
(i) increase the compensation payable or to become payable by                   
them to any employee of Smith or the Acquired Entity, (ii) pay or               
provide for any bonus, profit sharing, stock option, pension,                   
retirement, deferred compensation, employment or other payment                  
plan, agreement or arrangement for the benefit of employees of                  
Smith or the  Acquired Entity except in the ordinary course of                  
the administration of its existing employment agreements and                    
benefit plans, all of the material terms of which heretofore have               
been disclosed in writing to Wanderlust, (iii) enter into any                   
employment agreement or other contract or arrangement with                      
respect to the performance of personal services which is not                    
terminable without liability by them on thirty days' notice or                  
less or which involves an annual rate of compensation (exclusive                
of overtime and sales commissions) in excess of $20,000, or (iv)                
make any loan to, or enter into any other transaction with, any                 
officer, director or stockholder of the Acquired Entity;                        

(f)  the properties of Smith and the Acquired     
Entity shall be maintained in customary repair, order and                       
condition, reasonable wear and use excepted, and insurance on                   
such properties and with respect to the conduct of the businesses               
of Smith and the Acquired Entity shall be maintained in such                    
amounts and of such kinds comparable to the insurance in effect                 
on the date hereof.                                                             

3.   Representations, Warranties and Covenants of           
Wanderlust.  Wanderlust hereby represents, warrants and covenants               
to Smith as follows:                                                            

3.1  Organization and Good Standing of Wanderlust.
Wanderlust is a corporation duly organized, validly existing and                
in good standing under the laws of the State of Delaware.                       

3.2  Authority of Wanderlust.   Wanderlust has the
full corporate authority to enter into this Agreement and carry                 
out the terms of this Agreement.  Neither the execution nor                     
delivery of this Agreement by Wanderlust, nor performance                       
hereunder will result in a violation or breach of any term or                   
provision nor constitute a default under any indenture, mortgage,               
deed of trust or other contract or agreement to which Wanderlust                
is a party.  Except as provided herein, in a schedule attached                  
hereto, A.S. Goldmen & Co., Inc., or previously obtained by                     
Wanderlust, no consent of any party to any such agreement or                    
instrument is required for the execution, delivery or performance               
of this Agreement, and the consummation of the transactions                     
contemplated hereby will not result in a breach of, or give rise                
to a right of cancellation of, any such agreement or instrument.                

3.3  Material Misstatements or Omissions.  No     
representations or warranties by Wanderlust in this Agreement,                  
nor any document, statement, certificate or schedule furnished or               
to be furnished Smith pursuant hereto, or in connection with the                
transactions contemplated hereby, contains or will contain any                  
untrue statement of a material fact, or omits or will omit to                   
state a material fact necessary to make the statement of facts                  
contained herein or therein nor misleading.                                     

3.4  Brokerage and Finder's Fees.  Other than Joe 
Abrams for which it is responsible for a fee of up to 1% of the                 
Purchase Price, Wanderlust has not employed any broker, finder or               
agent, nor has Wanderlust become in any way obligated for                       
finder's, broker's, agent's or similar fee with respect to the                  
transactions referred to herein.                                                

3.5  Information Correct and Complete.  All       
information contained in the representations and warranties made                
in this Paragraph 3 by Wanderlust is correct and complete and                   
will be correct and complete on the Closing Date.                               

3.6  Address.  The address given for Wanderlust in
Paragraph 13 is its true and correct primary place of business,                 
and it has no present intention of moving to any other state or                 
jurisdiction.                                                                   

3.7  Opportunity to Seek Information.  Wanderlust 
has been given the opportunity to ask questions of, and receive                 
answers from, Smith and the management of the Acquired Entity                   
regarding the terms and conditions of this Agreement, and the                   
transactions contemplated hereby, as well as the affairs of the                 
Acquired Entity and related matters.                                            

3.8  Capitalization.  Wanderlust has the authority
to issue 10,000,000 shares of Common Stock and 100,000 shares of                
Series Preferred Stock. There are currently issued and                          
outstanding 3,763,719 shares of Common Stock.  All of the issued                
and outstanding shares of Wanderlust have been duly authorized                  
and validly issued, and are fully paid and non-assessable and                   
were issued in compliance with all applicable state and federal                 
laws concerning the issuance of securities.  A Form 10-KSB Annual               
Report of Wanderlust for its fiscal year ended June 30, 1996 and                
its Form 10-QSB Quarterly Report for its calendar quarter ended                 
September 30, 1996 have been delivered to Smith for his review.                 

3.9 Wanderlust Shares Duly Authorized.  The shares
of Common Stock of Wanderlust issued to Smith under this                        
Agreement, when issued in compliance with the provisions of this                
Agreement, will be validly issued, fully paid and nonassessable,                
and will be free of any liens or encumbrances. No shareholder of                
Wanderlust has any right of first refusal or any preemptive                     
rights in connection with the issuance of the Wanderlust Shares.                

3.10 Infusion of Capital.  Wanderlust agrees to   
invest as debt or equity an aggregate of $500,000 into Western,                 
including any amounts advanced to Western prior to Closing.                     

4.   Survival of Representations, Warranties and            
Covenants.  The representations, warranties and covenants                       
contained herein shall survive the delivery, and payment for, the               
Acquired Stock for 18 months from the Closing Date (except for                  
the representations contained in Section 2.20, which shall                      
survive indefinitely).                                                          

5.   Indemnification.                                       

5.1  Indemnification by Smith.  Smith hereby      
agrees to indemnify and hold harmless Wanderlust, its employees,                
agents and attorneys against any and all losses, claims, demands,               
liabilities and expenses (including reasonable legal or other                   
expenses incurred by each such person in connection with                        
defending or investigating any such claims or liabilities,                      
whether or not resulting in any liability to such person) to                    
which any such indemnified party may become subject under the                   
federal securities laws, under any other statutes, at common law                
or otherwise, insofar as such losses, claims, demands,                          
liabilities and expenses (a) arise out of or are based upon any                 
untrue statement of a material fact made by Smith or the Acquired               
Entity in this Agreement, or (b) arise out of or are based upon                 
any breach of any representation, warranty or agreement made by                 
Smith or the Acquired Entity herein. The indemnity contained in                 
this Section is limited to the extent that any such losses,                     
claims, demands, liabilities and expenses exceed an aggregate                   
amount of $10,000 up to a maximum of $2,000,000 (excluding the                  
payment of taxes, for which Smith fully indemnifies Wanderlust).                
The Company shall have the right to receive 100% of the royalties               
under the License Agreement (instead of 75%) in order to fulfill                
Smith's indemnification obligation under this Section.                          

5.2  Indemnification by Wanderlust.  Wanderlust hereby      
agrees to indemnify and hold Smith harmless against any and all                 
losses, claims, demands, liabilities and expenses (including                    
reasonable legal or other expenses incurred by each such person                 
in connection with defending or investigating any such claims or                
liabilities, whether or not resulting in any liability to such                  
person) to which any such indemnified party may become subject                  
under the federal securities laws, under any such statutes, at                  
common law or otherwise, insofar as such losses, claims, demands,               
liabilities and expenses (a) arise out of or are based upon any                 
untrue statement of a material fact made by Wanderlust in this                  
Agreement or (b) arise out of or are based upon any breach of any               
representation, warranty or agreement made by Wanderlust herein.                
The indemnity contained in this Section is limited to the extent                
that any such losses, claims, demands, liabilities and expenses                 
exceed an aggregate amount of $10,000 up to a maximum of                        
$2,000,000.                                                                     

6. Fees and Expenses.  Each party hereto shall pay all      
fees and expenses incurred by it incident to the preparation of                 
this Agreement, carrying this Agreement into effect, and the                    
consummation of the transaction contemplated hereby.  Western                   
agrees that its outstanding legal fees and expenses at the                      
Closing shall not exceed $45,000 arising out of this transaction                
or for any other matter.                                                        

7.  Representation by Counsel.  All parties to this         
Agreement have been represented by counsel of their own                         
selection, which counsel participated in the drafting of this                   
Agreement.  Accordingly, no provision of this Agreement is to be                
construed against any party by reason that such party drafted                   
such provision.                                                                 

8.   Registration Rights.                                     

8.1  Inclusion of Wanderlust Stock in Public      
Offerings.  If during the three year period following the date of               
this Agreement, Wanderlust shall register any shares of                         
Wanderlust Common Stock in a registration statement pursuant to                 
an underwritten public offering (a "Public Offering"), or other                 
offering other than a Form S-8 Registration Statement, Wanderlust               
will give Smith at least thirty days advance written notice                     
thereof and except as set forth in Paragraph 8.2, include in such               
registration statement (and any related qualification under Blue                
Sky laws or other compliance), all shares of Wanderlust owned by                
Smith and specified by him in a written request sent to                         
Wanderlust within fifteen days after receipt of such written                    
notice from Wanderlust. All costs of such registration shall be                 
borne by Wanderlust.                                                            

8.2  Underwriting.  The right to register the     
Wanderlust Shares shall be pro rata with Catherine Winchester and               
Richard S. Kalin and shall be subject to a "No objection" letter                
of any underwriter for such registration.                                       

8.3  Registration Procedures.  In the case of each
registration, qualification, or compliance effected by                          
Wanderlust, Wanderlust will keep Smith fully advised in writing                 
as to the initiation of each registration, qualification and                    
compliance and as to the completion thereof.  At its expense,                   
Wanderlust will:                                                                

(a)  Keep such registration, qualification or     
compliance effective for a period of 180 days or until Smith has                
completed the distribution described in the registration                        
statement relating thereto, whichever first occurs; and                         

(b)  Furnish such number of prospectuses and other
documents incident thereto as Smith from time to time may                       
reasonably request.                                                             

8.4  Indemnification.  The respective             
indemnification rights of Smith and Wanderlust pursuant to                      
Paragraph 5 of this Agreement shall apply with respect to                       
statements or omissions made by Smith or Wanderlust incident to                 
any registration, qualification or compliance pursuant to this                  
Paragraph 8.                                                                    

8.5  Information by Smith.  In the event Smith    
elects that his shares of Common Stock of Wanderlust be included                
in any registration pursuant to this Paragraph 8, Smith shall                   
furnish to Wanderlust such written information regarding his                    
proposed distribution as Wanderlust may reasonably request in                   
writing and as shall be required in connection with any                         
registration, qualification or compliance referred to in this                   
Paragraph 8.                                                                    

8.6  Rule 144 Reporting.  In order to facilitate  
Smith's potential ability to benefit from certain rules and                     
regulations of the SEC which may permit the sale of the                         
Wanderlust Shares to the public without registration, Wanderlust                
agrees to use its best efforts to:                                              

(a)  Make and keep public information available,  
as those terms are understood and defined in Rule 144 under the                 
1933 Act, at all times; and                                                     

(b)  File with the SEC in a timely manner all     
reports and other documents required of the Acquired Entities                   
under the federal securities laws;                                              

9.   Conditions to Obligations of the Parties.              

The obligations of Wanderlust under this Agreement
are subject to the satisfaction of the following conditions at or               
prior to the Closing Date:                                                      

9.1 Opinion of Counsel. Smith shall have delivered
to Wanderlust the opinion of Clark & Trevithick, counsel to                     
Smith, and the Acquired Entity, dated the Closing Date, and                     
satisfactory to counsel for Wanderlust, to the effect that: (i)                 
this Agreement has been duly executed by Smith and the Acquired                 
Entity and constitutes the legal, valid and binding agreement of                
Smith and the Acquired Entity enforceable in accordance with its                
terms, subject to limitations on enforceability imposed by                      
bankruptcy, insolvency, reorganization, moratorium, or similar                  
laws of general application affecting enforcement of creditor's                 
rights, and affecting the availability of equitable remedies;                   
(ii) all corporate or other proceedings which were required to be               
taken by Smith and the Acquired Entity to enable Smith or such                  
Acquired Entity to carry out this Agreement have been taken;                    
(iii) The Acquired Entity is duly incorporated and validly                      
existing under the laws of its state of incorporation, with the                 
corporate power to own or lease and operate its properties and                  
assets and to carry on its business in the manner in which such                 
business is now being conducted, and is duly qualified to do                    
business and in good standing as a foreign corporation in every                 
jurisdiction wherein the character of the real properties owned                 
or leased by it makes such qualification necessary; (iv) all of                 
the issued and outstanding shares of the Acquired Entity have                   
been duly authorized and validly issued, and are fully paid and                 
non-assessable and none of such shares were issued in violation                 
of any preemptive rights of stockholders and when transferred to                
Wanderlust in accordance with this Agreement shall be owned by                  
Wanderlust free and clear of any liens and encumbrances and                     
Wanderlust shall own 100% of the Acquired Entity; (v) all of the                
warrants or options to acquire any such shares have been                        
cancelled or exercised; (vi) neither the execution nor delivery                 
of this Agreement nor the consummation of the transactions                      
contemplated herein will result in a violation of any judicial or               
governmental decree, order or judgment or constitute a default or               
result in a termination under any material agreement or other                   
instrument to which Smith or the Acquired Entity is a party or by               
which any of them is bound and which is known to such counsel,                  
and no consent of any party to any such agreement or instrument                 
is required for the execution, delivery or performance of this                  
Agreement; (vii) all of the patents and licenses of Smith                       
(including Smith d/b/a Smith Engineering) have been fully,                      
legally assigned in all respects to Western; (viii) there are no                
actions, suits or proceedings pending or threatened  against                    
Smith or the Acquired Entity in any court, or by or before any                  
arbitrator or governmental agency or authority; (ix) the offer,                 
sale and issuance of the Acquired Stock will not violate the                    
Securities Act of 1933 or the securities laws of any State or                   
jurisdiction; and (x) such other opinions that counsel for                      
Wanderlust may reasonably require from Smith.  Counsel for Smith                
may rely on such other counsel, including patent counsel, in                    
rendering its opinion.                                                          

9.2 Legal Action. There shall not have been       
instituted or threatened any legal proceeding seeking to prohibit               
the consummation of the transactions contemplated by this                       
Agreement.                                                                      

9.3  Representations Remain Accurate.  Smith shall
deliver a certificate at the Closing setting forth that the                     
representations and warranties of the Acquired Entity and Smith                 
contained in this Agreement shall be true and correct in all                    
material respects at and as of the Closing as if made at and as                 
of such time, except as affected by transactions contemplated                   
hereby and except to the extent that any such representation or                 
warranty is made as of a specified date in which case such                      
representation or warranty shall have been true and correct as of               
such date.                                                                      

9.4  Options Exercised or Cancelled.  All options 
and all warrants shall have been exercised or cancelled at or                   
prior to the Closing.                                                           

9.5  Employment Agreements Executed.  Smith shall,
and certain employees of the Acquired Entity (including Mike                    
Cartabinao, Mark Miller and Chris Longpre) shall, have entered                  
into employment agreements in the form attached hereto as Exhibit               
9.5 or in a manner satisfactory to Wanderlust.                                  

9.6  License Agreement.  Western and Smith shall  
have entered into a License Agreement in the form attached hereto               
as Exhibit 1.5(f) (the "License Agreement").  The License                       
Agreement shall provide for Smith to exclusively license all of                 
its intellectual property for which Smith is receiving royalties,               
to Western, and for Smith to assign 75% of the proceeds from                    
royalties from such property to Western.  Upon Smith receiving                  
$2,000,000 from the 25% of royalties retained by Smith from such                
properties, Smith shall transfer to Western or its assignee all                 
of his right, title and interest in and to such property and                    
Smith shall have no direct interest in such property thereafter.                
However, in the event Wanderlust must pay any losses, claims,                   
demands, liabilities and expenses pursuant to Section 5.1, Smith                
shall reimburse Wanderlust for such amount from any sources                     
including his 25% share of royalty payments from properties                     
licensed pursuant to the License Ageement.                                      

9.7  Consents.  (i) Smith shall obtain any and all
consents which may be required pursuant to the terms of each of                 
the license, development and royalty agreements which are                       
licensed by Smith to Western pursuant to Exhibit 1.5(f); and (ii)               
Smith shall obtain the consent of Western Bank to extend the                    
revolving bank loan in the amount of $250,000, which currently                  
matures on January 15, 1997 until not earlier than January 15,                  
1998.                                                                           

9.8  Payment to Smith at Closing.  At the Closing,
Wanderlust shall cause Western to repay Smith $40,000 in respect                
of his loans to Western.                                                        

9.9  Refinance Bank Debt.  In the event Wanderlust
obtains new financing in the amount of $5,000,000 or more,                      
Wanderlust agrees to refinance 50% of the remaining third party                 
debt of Western guaranteed by Smith.  In the event Wanderlust                   
obtains new financing in the amount of $10,000,000 or more,                     
Wanderlust agrees to refinance 100% of the remaining third party                
debt of Western guaranteed by Smith.                                            

10.  Notices.  All notices and other communications         
hereunder shall be in writing and shall be deemed given if                      
delivered personally, or twenty-four hours after being sent by                  
standard form of telecommunications, or five days after being                   
mailed (by registered or certified mail, return receipt                         
requested, postage prepaid), in each case addressed as follows                  
(or at such other address for a party as shall be specified by                  
like notice):                                                                   

(a)  if to Wanderlust:                            
Wanderlust Interactive, Inc.                      
462 Broadway                                      
New York, New York  10007                         
Attention:  Ms. Catherine Winchester, CEO         

with a copy sent to                               

Richard S. Kalin, Esq.                            
Kalin & Banner                                    
757 Third Avenue-7th Floor                        
New York, NY  10017                               

If to Smith or the Acquired Entities:             

Mr. Jay Smith III                                 
5301 Beethoven Street                             
Los Angeles, CA  90066                            

with a copy sent to:                              

Clark & Trevithick                                
800 Wilshire Boulevard                            
Los Angeles, CA  90017                            

11.  Assignment.  This Agreement may not be assigned by     
any party hereto without the prior written consent of the other                 
parties hereto.                                                                 

12.  Miscellaneous.  This Agreement may not be amended        
except by a writing signed by the parties hereto and shall be                   
binding upon and incur to the benefit of the parties, their                     
permitted successors and assigns.  Any provision of this                        
Agreement which is unenforceable in any jurisdiction shall, as to               
such jurisdiction, be ineffective to the extent of such                         
prohibition or unenforceability without invalidating the                        
remaining provision hereof, and any such prohibition or                         
unenforceability in any jurisdiction shall not invalidate or                    
render unenforceable such provision in any other jurisdiction.                  
The captions in this Agreement are for convenience only and shall               
not define or limit any of the terms hereof.  This Agreement                    
(including the schedules hereto and instruments referred to                     
herein) constitutes the entire agreement of the parties and                     
supersedes all prior agreements and understandings, both written                
and oral, between the parties with respect to the subject matter                
hereof.  This Agreement shall be governed by and construed in                   
accordance with the substantive laws of the State of New York                   
without reference to the conflicts of law rules thereof.  The                   
parties consent to the jurisdiction of any state or federal court               
sitting in the Borough of Manhattan in the State of New York and                
agree that any action arising out of this Agreement or its                      
subject matter may be heard and determined in any such court.                   
The parties waive any right to trial by jury in any such action.                
This Agreement may be executed in one or more counterparts which                
together shall constitute a single agreement.                                   

13.  Access to Properties and Records; Due Diligence.       
The Acquired Entities and Smith shall afford to Wanderlust and                  
its accountants, counsel and representatives full access during                 
normal business hours throughout the period prior to the Closing                
of all its properties, books, contracts, commitments and records                
(including but not limited to tax returns) and, during such                     
period, shall furnish promptly to Wanderlust (i) a copy of each                 
report, schedule and other document filed or received by it                     
pursuant to the requirements of federal or state securities laws,               
and (ii) all other information concerning its business,                         
properties and personnel as Wanderlust may reasonably request.                  
At any time until 45 days from the date the final schedules                     
pursuant to this Agreement have been delivered to Wanderlust, but               
in no event after February 5, 1996, Wanderlust shall have the                   
right to terminate this Agreement for any reason, and this                      
Agreement shall be null and void and of no further force and                    
effect. In the event of the termination of this Agreement,                      
Wanderlust will not use or disclose any information obtained from               
Smith or the Acquired Entities and, upon the Acquired Entities                  
and Smith's request, will cause its representatives to deliver to               
the Acquired Entities and Smith all documents, work papers and                  
other material and all copies thereof, obtained by Wanderlust or                
on its behalf from the Acquired Entities and Smith as a result of               
this Agreement or in connection herewith, whether so obtained                   
before or after the execution hereof, and except to the                         
extent otherwise agreed to in writing by the Acquired Entities                  
and Smith, Wanderlust will use its best efforts to hold such                    
information in confidence until such time as such information is                
otherwise publicly available.                                                   

SC 13D
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IN WITNESS WHEREOF, the parties hereto have       
executed this Agreement or have caused this Agreement to be duly                
executed by an officer duly authorized, all as of the date first                
written above.                                                                  

WANDERLUST INTERACTIVE, INC.  

By:                           
           Catherine Winchester, President

Jay Smith III                 

WESTERN TECHNOLOGIES, INC.    

By:                           
    Jay Smith III, President

   JAY SMITH D/B/A SMITH ENGINEERING

By:                           
    Jay Smith III, President

SC 13D
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EXHIBIT 1.2(b)      

(i)  In the event Wanderlust obtains new equity capital of            
at least $5,000,000, but less than $7,500,000 by July 31, 1997,                 
then Wanderlust shall issue Seller or his designee(s) an                        
aggregate of 200,000 shares of Common Stock of Wanderlust;                      

(ii) In the event Wanderlust obtains new equity capital of            
at least $5,000,000, but less than $7,500,000 by December 31,                   
1997, then Wanderlust shall issue Seller or his designee(s) an                  
aggregate of 100,000 shares of Common Stock of Wanderlust; or                   

(iii) In the event Wanderlust obtains new equity capital of           
$7,500,000 but less than $10,000,000 by July 31, 1997, then                     
Wanderlust shall issue Seller or his designee(s) an aggregate of                
300,000 shares of Common Stock of Wanderlust;                                   

(iv) In the event Wanderlust obtains new equity capital of            
at least $7,500,000, but less than $10,000,000 by December 31,                  
1997, then Wanderlust shall issue Seller or his designee(s) an                  
aggregate of 150,000 shares of Common Stock of Wanderlust;                      

(v)  In the event Wanderlust obtains new equity capital of            
at least $10,000,000, but less than $12,500,000 by July 31, 1997,               
then Wanderlust shall issue Seller or his designee(s) an                        
aggregate of 400,000 shares of Common Stock of Wanderlust;                      

(vi) In the event Wanderlust obtains new equity capital of            
$10,000,000 but less than $12,500,000 by December 31, 1997, then                
Wanderlust shall issue Seller or his designee(s) an aggregate of                
200,000 shares of Common Stock of Wanderlust;                                   

(vii) In the event Wanderlust obtains new equity capital of           
at least $12,500,000, but less than $15,000,000 by July 31, 1997,               
then Wanderlust shall issue Seller or his designee(s) an                        
aggregate of 500,000 shares of Common Stock of Wanderlust;                      

(viii) In the event Wanderlust obtains new equity capital of          
$12,500,000 but less than $15,000,000 by December 31, 1997, then                
Wanderlust shall issue Seller or his designee(s) an aggregate of                
250,000 shares of Common Stock of Wanderlust;                                   

(ix) In the event Wanderlust obtains new equity capital of            
$15,000,000 or more by July 31, 1997, then Wanderlust shall issue               
Seller or his designee(s) an aggregate of 600,000 shares of                     
Common Stock of Wanderlust; or                                                  

(x)  In the event Wanderlust obtains new equity capital of            
$15,000,000 or more by December 31, 1997, then Wanderlust shall                 
issue Seller or his designee(s) an aggregate of 300,000 shares of               
Common Stock of Wanderlust.                                                     

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘SC 13D’ Filing		Date		First		Last			Other Filings
		1/15/98		4
		12/31/97		6					10QSB,  DEF 14A,  PRE 14A
		7/31/97		6
Filed on:		2/14/97							10QSB
		2/12/97		3
		2/4/97		1
		1/28/97		4
		1/15/97		4
		12/30/96		4
		9/30/96		4					10QSB
		6/30/96		4					10KSB
		2/5/96		4
									List all Filings