UniversalPictures and specialty division Focus Features have signed multi-yearagreements with Roy Lee and Doug Davison's dynamic production outfitVertigo Entertainment.

Specifically, Universal Pictures has entered into afirst-look agreement with Vertigo, arguably Hollywood's leading Asiangenre remake specialists, for feature development and production, with Vertigoretaining the option to co-finance certain projects.

Focuswill act as Vertigo's foreign sales agent on those projects co-producedby Universal and Vertigo, as laid out in a separate agreement with Focus'international distribution arm.

"Wewelcome this new relationship with Vertigo Entertainment, whose slate includesa variety of compelling films," Universal's vice chairmen ofworldwide production Mary Parent and Scott Stuber said in a joint statement.

"Thestructure of the deal with Vertigo and Focus is reflective of the internationaldistribution scene, which continues to expand and diversify.

"Thiswill give us added flexibility in the marketplace and allow us to furtherdevelopment our presence both domestically and abroad."

"Ouroverseas distributors look to Focus to distribute the work of innovativefilmmakers with an understanding of the marketplace that is combined with thelynchpin of excellent domestic distribution," Focus co-president DavidLinde said.

"Royand Doug are just those kind of producers and we're really thrilled to beworking with them and our close friends at Universal."

"Theforward-thinking and creative approach that Universal and Focus have toward theentire filmmaking process is very exciting to us as producers, and we'reconfident that the unique structure of this deal will give us great creativeflexibility as we move forward," Lee and Davison added in a jointstatement.

Leeand Davison set up Vertigo in 2001 and scored a hit with their debut TheRing,which was released through DreamWorks in 2002 and grossed more than $249mworldwide.

Thecompany is currently in production on The Ring 2 for DreamWorks, which onceagain stars Naomi Watts and is being directed by Hideo Nakata, creator of theoriginal Ringu Japanese horror series.

Othercredits include the recently wrapped supernatural thriller Dark Water, which Disney willrelease and stars Jennifer Connelly, John C Reilly and Tim Roth; The Grudge, which stars SarahMichelle Gellar and opens through Sony Pictures on Oct 22; and The Departed , an in-developmentremake of the hit Hong Kong crime drama Infernal Affairs, which Warner Bros isco-producing with Plan B and will star Leonardo DiCaprio and Matt Damon and bedirected by Martin Scorsese.

Inaddition to Vertigo, Focus Features maintains ongoing relationships withAgustin and Pedro Almodovar's El Deseo , Michael Bay's Platinum Dunes, and BillKong's Edko Film Productions, among others.