Elektra's VP of A&R, Terry Tolkin, was impressed and Wareham signed a deal with Elektra, and started pulling together a band. He first contacted Justin Harwood, whom he had met while Harwood was playing with The Chills, and they recruited drummer Byron Guthrie, formerly from Ultra Vivid Scene. The trio recorded demos (produced by Dave Fridmann) and played a series of live dates with Mercury Rev guitarist Grasshopper. Guthrie was replaced by former Feelies drummer Stanley Demeski, and this line-up recorded the first album, "Lunapark", produced by Fred Maher and released by Elektra under the name Luna² to avoid confusion with a new-age musician known as "Luna". (Later an accord was reached which allowed the band to use the name Luna.)