Germany's VCL Film+Medien is to take a 25% stake in the next two Terminator films being produced by Mario Kassar and Andy Vajna's C2 Productions and Japan's Toho Towa.

VCL, which went public last year, will get a 25% share of world revenues in all media and an option on the rights in German-speaking territories, in return for a further percentage of the budget.

"They are getting slightly better terms, because they are coming in early, but this is a deal which works for everyone. And of course they will exercise the option, they are very excited about the projects," Kassar told Screen International on Friday.

Toho, which committed last year, is making the same financial investment as VCL, but obtains a slightly different percentage of the revenues, plus the option on Japanese rights.

"We have a long relationship with my friends at VCL and Toho. It does not take a brain surgeon to work out that we could go with them. But they had the intelligence to make the move," explained Kassar, whose former production partnership with Andy Vajna, Carolco Pictures, hit pay-dirt with James Cameron's Terminator 2: Judgement Day in 1991.

Kassar added that he is not looking for further independent backers for the projects, but that he will now seek a studio partner to handle the North American release. Industry sources have previously tipped 20th Century Fox and Universal as the front runners.

"I hope to be able to announce a director within the next 45 days. That will obviously also influence which studio we go with," said Kassar. He added that he would like the two Terminator sequels to be shot back to back, but could not be certain of having the same director on both.

Tedi Sarafian, writer on Tidal Wave: No Escape and Tank Girl, is days away from delivering completed a script for Terminator 3, which will shoot in the autumn and be delivered for US release in the fourth quarter of 2001. In Kassar's view: "Tedi's first draft is more than excellent."

David Wilson, whose credits include both Supernova and Rollerball, is the assigned writer on Terminator 4. "David's treatment on T4 is also excellent," said Kassar.

Toho and VCL's deals with C2 also cover the planned extensions to the franchise, which currently include a computer game and a TV series.

VCL, which handled German video releases of the two previous Terminator pictures, forecast that it will earn revenues of DM30m in the period prior to the release of T3 and a total of DM100m from the Terminator franchise in 2002.

VCL has recently moved to expand away from its roots in video and recently became a founder investor in MBP Film, the holding company which currently controls MBP funds of $26m and $50m. It is not clear whether MBP is an investor in the Terminator projects.

The first two Terminators, both directed by Cameron and starring Arnold Schwarzenegger, amassed worldwide grosses of some $800m.

Although Kassar declined to be drawn on the plot-points for the sequels, T3 is understood to be set in the present (2001) and features a war between computer network Skynet and mankind. The fourth is set in the future after the nuclear battle has settled down.