Five Arrows is converting 25%, or slightly fewer than 1.1 million shares of its total holdings of series B cumulative convertible preferred stock in Brandywine for the same number of shares of common stock in the company. Brandywine is redeeming, in effect, repurchasing, the remaining 75% of Five Arrows' series B shares for approximately $27.50 a share, or a little more than $90 million in cash. The par value of the initial private transaction with Five Arrows, which took place in 1998, is about $105 million, according to Christopher P. Marr, Brandywine's CFO.

In addition, Brandywine is purchasing warrants held by Five Arrows entitling the REIT to purchase up to 250,000 shares of common stock at a strike price of $24 per share, or almost $1.2 million. On completion of these transactions, Five Arrows will own common shares representing approximately 2.67% of all of Brandywine's outstanding common stock. As a result of these transactions with Five Arrows, Marr tells GlobeSt.com, "We eliminate a very high fixed charge for the 8.75% dividend."

At the same time, Brandywine is selling two million shares of its 7.5% series C preferred cumulative redeemable shares to Bear Stearns & Co. for a public offering. "This essentially replaces the 8.75% series C shares," says Marr. As underwriter, Bear Stearns will offer the preferred stock at $25 a share, which will give Brandywine an infusion of approximately $50 million. The agreement also provides Bear Stearns with an over-allotment of 300,000 shares, which can raise the tally by an additional $7.5 million.