##### 



(BROOKFIELD LOGO) BROOKFIELD PROPERTIES CORPORATION MANAGEMENT PROXY CIRCULAR TABLE OF CONTENTS PART ONE:
    
    Voting Information
    
    
    1PART TWO:
    
    Business of the Meeting
    
    
    31. Annual Financial Statements
    
    
    32. Number of Directors
    
    
    33. Election of Directors
    
    
    34. Amendment and Restatement of By-laws
    
    
    85. Appointment of Auditors
    
    
    9PART THREE:
    
    Executive Compensation Report
    
    
    10PART FOUR:
    
    Statement of Corporate Governance Practices
    
    
    15PART FIVE:
    
    Other Information
    
    
    21SCHEDULE A:
    
    Special Resolution Relating to fixing the Number of Directors
    
    
    23SCHEDULE B:
    
    Resolution Relating to the Amended
and Restated Bylaws
    
    
    23Appendix I to Schedule B: Amended and Restated By-laws
    
    
    24SCHEDULE C:
    
    Corporate Governance Guidelines
    
    
    30




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MANAGEMENT PROXY CIRCULAR PART ONE  VOTING INFORMATION Solicitation of Proxies The information contained in this Management Proxy Circular (the Circular) is furnished in
connection with the solicitation of proxies to be used at the Annual and Special Meeting of
Shareholders of Brookfield Properties Corporation (Brookfield) to be held on Wednesday, April 27,
2005 at 11:30 a.m. (e.s.t.) at 300 Madison Avenue, New York, New York and at any adjournments
thereof, for the purposes set forth in the accompanying notice. All amounts in the Circular are
expressed in U.S. dollars unless otherwise noted. It is expected that the solicitation will be
made primarily by mail, but proxies may also be solicited personally by officers or regular
employees of Brookfield. The solicitation of proxies by this Circular is being made by or
on behalf of the management of Brookfieldand the total cost of solicitation will be borne by us.
The information contained herein is given at March 15, 2005. Appointment of Proxies The persons named in the accompanying form of proxy are representatives of management and are
directors and officers of Brookfield. You have the right to appoint a person other than the
persons named in the enclosed form of proxy, who need not be a shareholder of Brookfield, to
represent you at the meeting or any adjournment thereof.Such right may be exercised by inserting
such persons name in the blank space provided in the form of proxy. To be valid, proxies must be executed legibly by a registered shareholder and deposited with CIBC
Mellon Trust Company, P.O. Box 12005, Station BRM B, Toronto, Ontario M7Y 2K5 (courier address: 200
Queens Quay East, Unit 6, Toronto, Ontario M5A 4K9; or if delivered by facsimile at 416-368-2502),
not later than the close of business on Monday, April 25, 2005 or, if the meeting is adjourned, 48
hours (excluding Saturdays and holidays) before any adjournment of the meeting. Non-Registered Holders Only registered holders of common shares and Class A Redeemable Voting preferred shares of
Brookfield, or the persons they appoint as their proxies, are permitted to attend and vote at the
meeting. However, in many cases, common shares and Class A Redeemable Voting preferred shares of
Brookfield beneficially owned by a holder (a Non-Registered Holder) are registered either:  a)

in the name of an intermediary that the Non-Registered Holder deals with in respect of the
shares, such as, among others, banks, trust companies, securities dealers or brokers and
trustees or administrators of self-administered RRSPs, RRIFs, RESPs and similar plans; or  b)

in the name of a depositary (such as The Canadian Depository for Securities Limited) of which
the intermediary is a participant. In accordance with the requirements of National Instrument 54-101, Brookfield has distributed
copies of the accompanying notice, this Circular, the enclosed form of proxy and Brookfields 2004
annual report (which includes managements discussion and analysis and consolidated financial
statements for the fiscal year ended December 31, 2004) (collectively, the meeting materials) to
the depositary and intermediaries for onward distribution to Non-Registered Holders. Non-Registered Holders who have not waived the right to receive meeting materials will receive
either a voting instruction form or, less frequently, a form of proxy. The purpose of these forms
is to permit Non-Registered Holders to direct the voting of the shares they beneficially own.
Non-Registered Holders should follow the procedures set out below, depending on which type of form
they receive.  a)

Voting Instruction Form. In most cases, a Non-Registered Holder will receive, as part of the
meeting materials, a voting instruction form. If the Non-Registered Holder does not wish to
attend and vote at the meeting in person (or have another person attend and vote on their
behalf), the voting instruction form must be completed, signed and returned in accordance with
the directions on the form. Voting instruction forms in some cases permit the completion of
the voting instruction form by telephone or through the internet. If a Non-Registered Holder
wishes to attend and vote at the meeting in person (or have another person attend and vote on
their behalf), they must complete, sign and return the voting instruction form in accordance
with the directions provided and a form of proxy giving the right to attend and vote will be
forwarded to them.  b)

Form of Proxy. Less frequently, a Non-Registered Holder will receive, as part of the meeting
materials, a form of proxy that has already been signed by the intermediary (typically by a
facsimile, stamped signature) which is restricted as to the number of shares beneficially
owned by the Non-Registered Holder but which is otherwise not complete. If the Non-Registered
Holder does not wish to attend and vote at the meeting in person (or have another person
attend and vote on their behalf), the Non-Registered Holder must complete the form of proxy
and deposit it with the Secretary of Brookfield c/o CIBC Mellon Trust Company, P.O. Box 12005,
Station BRM B, Toronto, Ontario M7Y 2K5 (courier address Attention: Proxy Department, 200
Queens Quay East, Unit 6, Toronto, Ontario M5A 4K9, or if delivered by facsimile at
416-368-2502); as described above. If a Non-Registered Holder wishes to attend and vote at the
meeting in person (or have another person attend and vote on their behalf), the Non-Registered
Holder must strike out the names of the persons named in the proxy and insert the
Non-Registered Holders (or such other persons) name in the blank space provided. 1




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Non-Registered Holders should follow the instructions on the forms they receive and contact their
intermediary promptly if they need assistance. Revocation If you are a registered shareholder who has given a proxy, you may revoke the proxy (a) by
completing and signing a proxy bearing a later date and depositing it as described above; (b) by
depositing an instrument in writing executed by you or your attorney authorized in writing (i) at
the registered office of Brookfield at any time up to and including the last business day preceding
the day of the meeting, or any adjournment thereof; or (ii) with the chairman of the meeting prior
to the commencement of the meeting on the day of the meeting or any adjournment thereof; or (c) in
any other manner permitted by law. If you are a Non-Registered Holder, you may revoke a voting instruction form or a waiver of the
right to receive meeting materials and to vote given to an intermediary at any time by written
notice to the intermediary, except that an intermediary is not required to act on a revocation of a
voting instruction form or of a waiver of the right to receive materials and to vote that is not
received by the intermediary at least seven days prior to the meeting. Voting Of Shares Represented By Management Proxies The management representatives designated in the enclosed form of proxy will vote or withhold
from voting the shares in respect of which they are appointed by proxy on any ballot that may be
called for in accordance with the direction of the shareholder as indicated on the proxy and, if
the shareholder specifies a choice with respect to any matter to be acted upon, the shares will be
voted accordingly. The enclosed form of proxy confers discretionary authority upon the management representatives
designated therein with respect to amendments to or variations of matters identified in the notice
and with respect to other matters which may properly come before the meeting. At the date hereof,
we know of no such amendments, variations or other matters. Voting Shares At March 15, 2005, Brookfield had outstanding 155,078,706 common shares and 6,312,000 Class A
Redeemable Voting preferred shares. If you are a holder of common shares or Class A Redeemable
Voting preferred shares of record at the close of business on March 15, 2005, the record date
established for the receipt of meeting materials and for voting in respect to the meeting, you will
be entitled to one vote in respect of each such share held by you on all matters to come before the
meeting. For a description of the procedures to be followed if you are a Non-Registered Holder to
direct the voting of shares beneficially owned, see Non-Registered Holders on page 1 of this
Circular. Principal Holders of Voting Shares To our knowledge, the only person or corporations beneficially owning, directly or indirectly,
or exercising control or direction over, voting securities of Brookfield carrying more than 10% of
the votes attached to any class of outstanding voting securities of Brookfield is Brascan
Corporation (Brascan), which, directly and indirectly, owns 78,088,013 common shares and
6,126,957 Class A Redeemable Voting preferred shares, being 50.4% and 97.1%, respectively, of the
outstanding shares of each such class. Brascan is an asset management company. Brascan is listed
on the New York and Toronto stock exchanges. Messrs. Jack Cockwell and Bruce Flatt, directors of
Brookfield, are also directors and/or officers of Brascan. We are advised by Brascan that its major shareholder is Partners Limited (Partners). Partners
and its shareholders collectively own, directly and indirectly, exercise control over, or have
options and warrants to acquire approximately 45 million Class A Limited Voting shares,
representing approximately 17% of the Class A Limited Voting shares of Brascan on a fully diluted
basis, and 85,120 Class B Limited Voting shares representing 100% of the Class B Limited Voting
shares of Brascan. These shareholdings include shares held through BNN Investments Ltd., a Toronto
Stock Exchange listed investment company that owns 17.4 million Class A Limited Voting shares of
Brascan. Messrs. Richard Clark and Bruce Flatt, who are directors and/or officers of Brookfield,
together with 12 other shareholders of Partners, own approximately 85% of the common shares of BNN
Investments Ltd. Partners is an investment holding company owned by 35 investors with no one
shareholder holding more than a 15% effective interest. Messrs. Gordon Arnell, Richard Clark, Jack
Cockwell, Bruce Flatt and John Zuccotti, who are directors and/or officers of Brookfield, are also
shareholders of Partners. 2




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PART TWO  BUSINESS OF THE MEETING 1. Annual Financial Statements Our annual financial statements for the fiscal year ended December 31, 2004 are included in our
2004 Annual Report, which is being mailed to you with this Circular. The annual report will be
placed before you and other shareholders at the meeting. 2. Number of Directors The board of directors is currently comprised of eleven directors. At the meeting,
shareholders will be asked to consider and, if thought advisable, to pass a special resolution, the
form of which is attached as Schedule B to this Circular on page 22, authorizing an
amendment to our articles of incorporation to fix the number of directors at thirteen. In order to
become effective, the special resolution must be approved by two-thirds of the votes cast who vote
in respect of the special resolution, present or represented at the meeting by proxy, in accordance
with the provisions of the Canada Business Corporations Act. Unless directed otherwise, on any ballot that may be called for in respect of the special
resolution, the management representatives designated in the enclosed form of proxy intend to vote
such shares in favor of the special resolution approving the amendment to our articles of
incorporation, unless the shareholder who has given such proxy had directed that the shares be
voted against the special resolution. 3. Election of Directors Our articles provide for cumulative voting so that each shareholder entitled to vote in the
election of directors has the right to cast a number of votes equal to the number of votes attached
to the shares held by the shareholder multiplied by the number of directors to be elected (e.g., if
you have one share and if there are thirteen directors nominated for election, you will be entitled
to thirteen votes). You may cast all such votes in favor of one candidate or distribute your votes
among the candidates in any manner you see fit. If you vote for more than one candidate without
specifying the distribution of your votes among such candidates, you will be deemed to have
distributed your votes equally among the candidates for whom you voted. On any ballot that may be called for in the election of directors, the management representatives
designated in the enclosed form of proxy intend to cast the votes to which the shares represented
by such proxy are entitled equally among the proposed nominees whose names are set forth below,
unless the shareholder who has given such proxy has directed that the shares be otherwise voted or
withheld from voting in the election of directors. If you wish to distribute your votes other than equally among the proposed nominees for whom you
have directed the management representatives designated in the enclosed form of proxy to vote, you
must do so personally at the meeting or by another proper form of proxy. We believe that all of
the proposed nominees will be able to serve as directors. If a proposed nominee is unable to serve
as a director for any reason prior to the meeting, the management representatives designated in the
enclosed form of proxy, unless directed to withhold from voting in the election of directors,
reserve the right to vote for other nominees at their discretion. 3




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Nominees for Directors The following table sets out the names of the thirteen persons nominated for election as
directors to hold office until the next annual meeting or until their successors are elected or
appointed, all major positions and offices in Brookfield, the principal occupation or employment of
each nominee, the year in which each nominee was first elected a director of Brookfield and the
approximate number of voting shares of each class of voting shares (and other derivative
securities) and deferred shares units of Brookfield and its subsidiaries that each nominee has
advised Brookfield, are beneficially owned, directly or indirectly, or subject to control or
direction by that person at March 15, 2005. GORDON E. ARNELLGordon E. Arnell has served as a
director of Brookfield since January
1989. A resident of London, United
Kingdom, he has been Chairman of
Brookfield and its Board of Directors
since October 1995. Mr. Arnell was
President of Brookfield from 1990-1995
and CEO from 1990-2000. He has also
previously held senior executive roles
at Oxford Development Group Ltd. and
Trizec Corporation Ltd.
    
    42,400 Common Shares
174,000 OptionsWILLIAM T. CAHILLWilliam T. Cahill has
served as a director of
Brookfield since January 2000.
A resident of Ridgefield,
Connecticut, Mr. Cahill is
Senior Credit Officer,
Citibank Community Development
and a director of Brookfield
Financial Properties, Inc. He
has held various positions
including Managing Director at
Citicorp Real Estate, Inc.;
OREO 1996-2002 and Senior
Asset Manager from 1991-1996;
Vice President and Senior
Asset Manager, Mellon Real
Estate Investment Advisors
Inc. from 1983-1991.
    
    Member of the Audit Committee
3,000 Options
1,249 Deferred Share UnitsRICHARD B. CLARKRichard B. Clark has served
as a director of Brookfield
since April 2002. A resident of
New York, New York, Mr. Clark
has been President and Chief
Executive Officer of Brookfield
since 2002. He was President
and CEO of Brookfields U.S.
operations from 2000-2002; held
senior management positions in
U.S. operations for Brookfield
and its predecessor companies
including Chief Operating
Officer, Executive Vice
President and Director of
Leasing. Mr. Clark is currently
also a managing partner and
Chief Executive Officer,
Commercial Real Estate of
Brascan.
    
    635,000 Options
164,376 Deferred Share Units
 4




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JACK L. COCKWELLJack L. Cockwell has
served as a director of
Brookfield since February
1999. A resident of Toronto,
Ontario, Mr. Cockwell is a
director and Group Chairman
of Brascan. As Group
Chariman Mr. Cockwell
represents Brascans
interests as a director of
its affiliates, Falconbridge
Limited, Noranda Inc.,
Norboard Inc. and Fraser
Papers. Mr. Cockwell is also
Chairman of the Board of
Trustees of the Royal Ontario
Museum and a director of the
C.D. Howe Institute. Mr.
Cockwell is also a director
of Astral Media Inc.
    
    Chairman of the Human
Resources and Compensation
Committee
147,960 Common SharesJ. BRUCE FLATTJ. Bruce Flatt has served as
a director of Brookfield since
February 1996. A resident of
Toronto, Ontario, Mr. Flatt is
President and Chief Executive
Officer and a director of
Brascan. Mr. Flatt was
previously President and CEO of
Brookfield from 2000-2001;
President and Chief Operating
Officer of Brookfield from
1995-2000; and held other senior
management positions at
Brookfield since 1992. Mr.
Flatt also represents Brascans
interests as a director of its
affiliates, Brookfield Homes
Corporation, Noranda Inc.,
Norboard Inc. and Fraser Papers.
    
    160 Common Shares
250,000 Options
32,250 Deferred Share UnitsRODERICK D. FRASER, Ph.D., O.C.A resident of Edmonton, Alberta,
Roderick D. Fraser has served as
President and Vice-Chancellor of
the University of Alberta since
January, 1995. Prior to joining
the University of Alberta, Dr.
Fraser served in various
positions at Queens University
in Kingston, including terms as
Dean of the Faculty of Arts and
Science and Vice-Principal
(Resources). Dr. Fraser is an
officer of the Order of Canada
and was awarded the Centenary
Medal, Royal Society of Canada.
Dr. Fraser is currently also a
director of The Canada-US
Fulbright Program and The Aga
Khan University.
 LANCE LIEBMANLance Liebman has
served as a director of
Brookfield since April
2003. A resident of New
York, New York, Mr. Liebman
has been a Professor of Law
at Columbia University
since 1991 and is Director
of the American Law
Institute. He was Dean,
Columbia Law School from
1991-1996; Professor,
Harvard Law School from
1970-1991; Assistant to NYC
Mayor John V. Lindsay from
1968-1970; Law Clerk to
U.S. Supreme Court Justice
Byron White from 1967-1968.
Mr. Liebman is currently
also a director of the
Tarragon Corp, the Greater
New York Insurance
Companies and Brookfield
Financial Properties, L.P.
    
    Chairman of the Governance and
Nominating Committee and Member
of the Human Resources and
Compensation Committee
200 Common Shares
1,249 Deferred Share Units
 5




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PAUL D. MCFARLANEPaul D. McFarlane has
served as a director of
Brookfield since April
1998. A resident of
Mississauga, Ontario, Mr.
McFarlane is a corporate
director. He retired from
CIBC in December 2002
after more than 40 years
of service in numerous
branch, regional and head
office positions most
recently as Senior Vice
President, Special Loans,
from 1994 until his
retirement.
    
    Member of the Audit Committee
and Human Resources and
Compensation Committee
3,000 Options
1,297 Deferred Share UnitsALLAN S. OLSONAllan S. Olson has
served as a director of
Brookfield since August
1995. A resident of
Spruce Grove, Alberta, Mr.
Olson has been President
and CEO of First
Industries Corporation, an
investment and management
company, since 1991. He
was President and CEO of
Churchill Corp. from
1989-1990 and Banister
Construction Group from
1990-1991 and held various
positions at Stuart Olson
Construction including
President and CEO from
1965-1989. Mr. Olson is
currently also a director
of Ipsco Steel and Summit
REIT and an Advisory
Director to Carma
Corporation, a Brookfield
subsidiary.
    
    Chairman of the Audit Committee
and Member of the Governance and
Nominating Committee
14,013 Common Shares
9,000 Options
1,373 Deferred Share UnitsSAM POLLOCK , O.C., C.Q.Sam Pollock has served
as a director of
Brookfield since
November 1978. A
resident of Toronto,
Ontario, Mr. Pollock is
President of 96345
Canada Inc., a Canadian
investment company. He
was Chairman of the
Toronto Blue Jays from
1995-2000; Chairman,
John Labatt Ltd. from
1991-1995; President,
Carena Investments from
1978-1991; Vice
President and General
Manager, Montreal
Canadiens from
1964-1978. Mr. Pollock
is also an officer of
the Order of Canada and
a member of the Order
of Quebec, was inducted
into the Hockey Hall of
Fame and the Canadian
Sports Hall of Fame and
was named Great
Montrealer in 1978.
    
    Member of the Governance and
Nominating Committee
414,543 Common Shares
9,000 Options
2,132 Deferred Share Units
 ROBERT L. STELZLA resident of Los Angeles, California, Mr. Stelzl is a
private real estate investor and fund manager. He recently
retired from Colony Capital, LLC, a large real estate private
equity investor, after 14 years as a principal and member of
the Investment Committee. Mr. Stelzl was previously president
of Bren Investment Properties from 1982-1989 and has held
senior management positions with several international real
estate companies including Cadillac Fairview and Cabot, Cabot
and Forbes. Mr. Stelzl is currently a director of Brookfield
Homes. He was previously Chairman of Aman Hotels in 1998.
 6




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WILLIAM C. WHEATON, PH.D.William C. Wheaton has
served as a director of
Brookfield since April 2004. A
resident of Hamilton,
Massachusetts, Mr. Wheaton has
been a Professor in MITs
Department of Economics since
1972, and is the current
research director of the MIT
Center for Real Estate which he
help found in 1984. He is the
co-author of a widely used text, Urban Economics and the Real
Estate Markets., and is
principal and co-founder of
Torto Wheaton Research, a
Boston real estate consulting
company.
    
    1,230 Deferred Share UnitsJOHN E. ZUCCOTTIJohn E. Zuccotti has served as a director
of Brookfield since August 1998. A resident
of New York, New York, Mr. Zuccotti has been
Co-Chairman of Brookfield and its Board of
Directors since 2002, Chairman of the Board
of Directors of Brookfield Financial
Properties, Inc. since 1996 and Senior
Counsel, Weil, Gotshal and Manges since 1998.
Mr. Zuccotti was Deputy Chairman of
Brookfield from 1999-2002; President and CEO,
Olympia & York Companies U.S.A. from
1990-1997; Partner, Brown & Wood from
1986-1990 and Tufo & Zuccotti 1 from
1978-1986; First Deputy Mayor of the City of
New York from 1975-1977; Chairman, New York
City Planning Commission from 1973-1975. Mr.
Zuccotti is currently also President of the
Real Estate Board of New York.
    
    100,000 Options
 7




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Compensation of Directors In 2004, Brookfield adopted a new compensation arrangement for directors. Directors who are resident in Canada receive their compensation in Canadian dollars, while U.S.
resident directors receive their compensation in U.S. dollars. Directors of Brookfield who are not
officers of Brookfield or its affiliates (the outside directors) are entitled to receive an
annual fee of $40,000 in U.S. funds (or $55,000 in Canadian funds) (the Annual Fee). The Boards
lead independent director and the chairman of the Audit Committee, are also entitled to receive a
supplemental annual retainer of $3,750 in U.S. funds (or $5,000 in Canadian funds) (the Annual
Retainer). One half of the Annual Fee payable to an outside director will be paid in Deferred Share Units of
Brookfield until the number of Deferred Share Units accumulated and common shares owned by the
director have an aggregate investment cost equal to five times the then current Annual Fee,
thereafter he or she may elect to take all of the Annual Fee in cash or Deferred Share Units. This
is equivalent to $200,000 in U.S. funds, or $275,000 in Canadian funds, based on the current Annual
Fee. An outside director may elect to receive all or part of the other half of the Annual Fee in
cash or Deferred Shares Units. The lead independent director and the chairman of the Audit
Committee may elect to receive all or part of their supplemental Annual Retainers in cash or
Deferred Shares Units. The following is a summary of the directors compensation and their election to receive all or a
portion of their compensation in Deferred Share Units: Elected Percentage2004 Annual Compensation
    
    
    of Compensation in
    
    
    Aggregate Deferred ShareDeferred Share
    
    
    Deferred Share
    
    
    Units IssuedCash (1)
    
    
    Units Issued
    
    
    Units
    
    
    at February 9, 2005Director
    
    ($)
    
    
    Value ($)
    
    
    (#)
    
    
    (%)
    
    
    Value ($)
    
    
    (#)William T. Cahill (US$)
    
    
    20,900
    
    
    
    20,000
    
    
    
    668
    
    
    
    50
    %
    
    
    45,729
    
    
    
    1,249Lance Liebman (US$)
    
    
    20,000
    
    
    
    20,000
    
    
    
    688
    
    
    
    50
    %
    
    
    45,429
    
    
    
    1,249John R. McCaig (C$)
    
    
    
    
    
    
    60,000
    
    
    
    1,516
    
    
    
    100
    %
    
    
    89,542
    
    
    
    1,974Paul D. McFarlane (C$)
    
    
    28,916
    
    
    
    27,500
    
    
    
    700
    
    
    
    50
    %
    
    
    58,808
    
    
    
    1,297Allan S. Olson (C$)
    
    
    32,832
    
    
    
    30,000
    
    
    
    763
    
    
    
    50
    %
    
    
    62,251
    
    
    
    1,373Sam Pollock (C$)
    
    
    2,832
    
    
    
    55,000
    
    
    
    1,391
    
    
    
    100
    %
    
    
    96,691
    
    
    
    2,132William Wheaton (US$)
    
    
    
    
    
    
    30,000
    
    
    
    973
    
    
    
    100
    %
    
    
    45,021
    
    
    
    1,230
 Notes:   (1)
    
    Includes cash payments of US$1.50 (C$2.36) per option held at December 31, 2002 to
adjust for the impact of the spin-off of Brookfield Homes Corporation. In 2004, Gordon E. Arnell was paid $110,000 for his consultancy services. Directors are also
reimbursed for travel and other out-of-pocket expenses incurred in attending board or committee
meetings. In 2004, nine directors of Brookfield received a total of $27,115 in directors
reimbursed expenses. Messrs. Jack Cockwell, Bruce Flatt, Gordon Arnell, John Zuccotti and Richard Clark do not receive
compensation for serving as directors. However, Mr, Flatt received a cash payment of $68,440 in
respect of options he held at December 31, 2002 to adjust for the impact of the spin-off of
Brookfield Homes Corporation. 4. Amendment and Restatement of the By-Laws of Brookfield At the meeting, you will be asked to consider and, if deemed appropriate, to pass, a
resolution, the full text of which is reproduced at Schedule B to this Circular, confirming
the adoption of new By-laws. These new By-laws were enacted by the board of directors on July 27,
2004, to replace our former general Bylaws, subject to the confirmation of shareholders. The
former general By-laws were enacted on September 6, 1978. The new By-laws are more concise than
the former general By-laws as the provisions of the former general By-laws simply incorporated by
reference the provisions of the Canada Business Corporations Act, pursuant to which Brookfield was
incorporated. The new By-laws also provide Brookfield additional flexibility in relation to the
holding of meetings of the directors and shareholders of Brookfield by electronic means. The full text of the new By-laws is reproduced at Appendix I to Schedule B to this
Circular. Unless directed otherwise, on any ballot that may be called for in respect of the By-law
Resolution, the management representatives designated in the enclosed form of proxy intend to vote
such shares in favour of the By-law Resolution approving the Amendment and Restatement of
Brookfields By-laws. 8




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5. Appointment of Auditors At its meeting held on February 8, 2005, the Audit Committee of the board of directors
recommended the reappointment of Deloitte & Touche LLP as external auditors of Brookfield, subject
to shareholder approval. Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu and
their respective affiliates (collectively Deloitte & Touche) are our principal external auditors.
Deloitte & Touche and its predecessors have served as external auditors of Brookfield since 1978. Unless directed otherwise, on any ballot that may be called for the appointment of auditors, the
management representatives designated in the enclosed form of proxy intend to vote such shares in
favour of reappointing Deloitte & Touche LLP, Chartered Accountants, as auditors of Brookfield to
hold office until the next annual meeting of shareholders, and authorizing the directors to fix the
remuneration to be paid to the auditors. Auditors Fees From time to time, Deloitte & Touche also provides us with consulting and other non-audit
services. In February 2004, the Audit Committee adopted a revised policy regarding the provision
of non-audit services by our external auditors. This policy, which is periodically reviewed and
updated, encourages consideration of whether the provision of services other than audit services is
compatible with maintaining the auditors independence and requires Audit Committee pre-approval of
permitted audit, audit-related and non-audit services. It also specifies a number of services the
provision of which is not permitted by our external auditors, including the use of its external
auditors for financial information system design and implementation assignments. The following table sets forth further information on the fees billed by Deloitte & Touche to
Brookfield for the fiscal years ended December 31, 2004 and 2003: Service Performed
    
    2004
    
    
    2003Audit and Audit-related servicesConsolidated, subsidiary and property level financial statements(1)
    
    $
    1,020,000
    
    
    $
    1,087,000Quarterly reviews(2)
    
    
    140,000
    
    
    
    Prospectuses
    
    
    97,000
    
    
    
    116,600S-OX 404 Readiness
    
    
    20,000
    
    
    
    Other
    
    
    10,000
    
    
    
    9,500TaxTax compliance
    
    
    240,000
    
    
    
    275,000Advisory
    
    
    70,000
    
    
    
    65,000Total fees
    
    $
    1,597,000
    
    
    $
    1,553,100
 Notes:   (1)
    
    Included in the 2004 and 2003 audit fees are $80,000 and $85,000,
respectively, relating to the audits of BPO Properties Ltd., which
is listed on the Toronto Stock Exchange.(2)
    
    Included in the 2004 quarterly review fees is $45,000
relating to the review of BPO Properties Ltd. Audit fees include fees that would normally be provided by the external auditor in connection
with statutory and regulatory filings or engagements, including fees for services necessary to
perform an audit or review in accordance with generally accepted auditing standards. This category
also includes services that generally only the external auditor reasonably can provide, including
comfort letters, statutory audits, attest services, consents and assistance with and review of
certain documents filed with securities regulatory authorities. Audit-related fees are paid for assurance and related services, such as due diligence services,
that traditionally are performed by the external auditor. More specifically, these services
include, among others: audits required by lenders, joint venture agreements, tenants and employee
benefit plan requirements, accounting consultations and audits in connection with potential
transactions, internal control reviews and consultation concerning financial accounting and
reporting standards. The Audit Committee of the board of directors has received representations from Deloitte & Touche
regarding their independence and has considered the relations described above in arriving at its
determination that Deloitte & Touche are independent of Brookfield. 9




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##### 



PART THREE  EXECUTIVE COMPENSATION REPORT Report of The Human Resources and Compensation Committee The Human Resources and Compensation Committee is comprised of three directors: Messrs. Jack
Cockwell (Chairman), Lance Liebman, and Paul McFarlane. The Human Resources and Compensation
Committee meets as required, and at least quarterly, to monitor and review management compensation
policies and benefits, management succession planning and to review the overall composition and
quality of our management resources. The Human Resources and Compensation Committee met on four
occasions in 2004. The Human Resources and Compensation Committee has a specific mandate to, among
other things, review and approve executive compensation. This includes an annual evaluation of the
performance of the Chief Executive Officer, and a review of performance reports for other executive
officers. The Human Resources and Compensation Committee makes recommendations to the board of
directors with respect to the compensation of the executive officers, and the board of directors
gives final approval on compensation matters. Executive compensation is based on the relative role and responsibility of the executive officers
as compared to other executive officers within Brookfield, as well as on the executive officers
individual performance. This applies equally to all executive officers, including the Chief
Executive Officer. Our compensation arrangements are focused on rewarding performance, taking into
account length of service, level of responsibility and experience of the individual. A specific
objective is to attract and retain highly qualified and motivated individuals. Accordingly,
compensation levels are monitored to ensure that they are competitive within the relevant market
place. The key components of executive officers compensation are base salary, short-term incentives and
long-term incentives. The short and long-term incentive plans are designed to provide a
significant amount of variable compensation which is linked to individual performance and increases
in shareholder value. Base Salaries Base salaries of executive officers are reviewed annually and are based on individual
performance, responsibility and experience to ensure that they reflect the contribution of each
executive officer. We believe that base salaries for executive officers should be lower than
average for the industry with compensation weighted to share performance in order to align these
executive officers interests with shareholder interests. Short-Term Incentives Short-term incentives are represented by cash bonus awards. Awards are determined based on
both the performance of Brookfield and the individual executive officers. Our performance is
measured by the achievement of financial and other operational objectives, also taking into
consideration the performance of competitors in the real estate industry and macro-economic
factors, as well as the efforts and achievements of the executive team. The performance of the
individual executive officer is based on the degree to which that executive officer has met
specific predetermined objectives. In order to further align management objectives with
shareholder objectives, certain senior executive officers may elect to receive all or a portion of
their annual bonus awards in Deferred Share Units, as described below under Long-Term Incentives. Long-Term Incentives Long-term incentives are intended to reward management based on increases in the value of our
common shares. The purpose of these arrangements is to achieve a commonality of interest between
shareholders and management and to motivate executives to improve Brookfields financial success,
measured in terms of enhanced shareholder wealth over the longer term. The allocation of long-term
incentives to officers is based on criteria similar to those for short-term incentives. Our long-term incentive plans consist of two elements:  a)

a Share Option Plan under which Brookfield grants options to employees and officers to
purchase common shares at a fixed price, being the closing price of the common shares on the
Toronto Stock Exchange for Canadian participants and on the New York Stock Exchange for U.S.
participants, on the last trading day preceding the date of the grant. The number of options
granted each year is determined based on a multiple of the officers base salary for that
year. The options vest as to 20% at the end of each year on a cumulative basis and are
exercisable over a 10-year period. Commencing in February 2003, in order to minimize any
appearance of certain senior executive officers opportunistically exercising options for
personal gains, our board of directors adopted a policy requiring the named executive officers
to hold, for at least one year, common shares or Deferred Share Units of Brookfield equal to
the net after-tax cash realized from the exercise of option grants, starting with options
granted in 2003; and  b)

a Deferred Share Unit Plan under which certain senior executive officers may, at their
option, receive all or a portion of their annual bonus awards in the form of Deferred Share
Units. The annual bonus awards are converted to Deferred Share Units based on a rate set at
the discretion of the board of directors on the award date. The portion of the annual bonus
award elected to be received in Deferred Share Units by the senior executive officer may, at
the discretion of the board of directors, be increased by a factor of up to two times for
purposes of calculating the number of Deferred Share Units to be allocated. A senior
executive officer who holds Deferred Share Units will receive additional Deferred Share Units
as dividends are paid on the common shares of Brookfield, on the same basis as if the
dividends were re-invested. The Deferred Share Units vest over a five-year period and
participants are only allowed to redeem them during the year following cessation of employment
through retirement, resignation, termination or death, 10




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##### 



for cash or an actuarially equivalent pension annuity. The cash value of the Deferred Share
Units when redeemed will be equivalent to the market value of an equivalent number of common
 shares of Brookfield. Chief Executive Officer Mr. Richard B. Clark, the President and Chief Executive Officer of Brookfield, has been charged
by the board of directors to develop and implement a business strategy focused on building
shareholder value by investing in commercial property assets and pro-actively managing these assets
to maximize cashflow and return on capital throughout economic cycles. Mr. Clarks overall compensation as an officer of Brookfield is linked largely to our performance
as reflected by the growth in Brookfields earnings and operating cashflow and the translation of
these attributes over time into a higher common share price. Mr. Clarks performance is rated each year by the board of directors in relation to the achievement
of predetermined objections. These objectives in 2004 and their achievement included:  

increasing Funds from Operations (FFO) per share, prior to straight-line rent and
gains, by 12% to $2.41 per share, which met the expectations of our business plan;

reporting $60 million of gains and total FFO per share of $2.93, which exceeded plan;

achieved our return on equity target of 20%;

shareholders benefited from a 30% increase in the common share price;

completing preferred share issues for C$350 million at an average rate of 5.1% and other
refinancings which lowered our overall cost of capital by 10 basis points, which exceeded
plan;

repurchasing 1.4 million common shares at an average price of $30.54, which exceeded
plan;

assembled a high quality Washington, D.C. office portfolio comprising one million
rentable square feet for $430 million, successfully reinvesting the proceeds from the sale
of the half interest in 245 Park Avenue; and

leasing 3.6 million square feet of space versus 900,000 square feet of expiries,
exceeding plan and in the process lowered our vacancy from 5.9% to 4.8% and rollover
expiries in 2005 from 7.2% to 4.5%. Mr. Clark received a salary of $500,000 during 2004, the same as in 2003. In addition, taking into
account Mr. Clarks accomplishments as described above, the Human Resources and Compensation
Committee, at its meeting in February 2005, awarded Mr. Clark 55,000 share options and a cash bonus
of $550,000. Signed by the members of the Human Resources and Compensation Committee,  Jack Cockwell, Chairman
    
    Lance Liebman
    
    Paul McFarlane
 11




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##### 



Performance Graph The following shows the cumulative total S&P/TSX shareholder return (assuming re-investment of
dividends) over the last five fiscal years, in comparison with the S&P/TSX Composite Index and the
S&P/TSX Canadian Real Estate Index. The Composite Index reflects the cumulative return of the TSX
Canadian Real Estate Index, including dividend re-investment. Five-Year Cumulative Total Return on $100 Investment
Assuming Dividends Are Reinvested
December 31, 1999  December 31, 2004 (PERFORMANCE GRAPH) December 311999
    
    
    2000
    
    
    2001
    
    
    2002
    
    
    2003
    
    
    2004Brookfield Properties Corporation
    
    
    100
    
    
    
    193
    
    
    
    208
    
    
    
    244
    
    
    
    344
    
    
    
    412S&P/TSX Canadian Real Estate
Index
    
    
    100
    
    
    
    115
    
    
    
    133
    
    
    
    133
    
    
    
    197
    
    
    
    223S&P/TSX Composite Index
    
    
    100
    
    
    
    107
    
    
    
    94
    
    
    
    82
    
    
    
    104
    
    
    
    119
 Summary Compensation of Named Executive Officers The following table sets out the compensation paid to the Chief Executive Officer, Chief
Financial Officer and other named executive officers. Annual Compensation
    
    
    Long-term Compensation AwardsSalary
    
    
    Bonus
    
    
    Other
    
    
    Share Options
    
    
    Deferred SharePaid
    
    
    Paid
    
    
    Compensation
    
    
    Granted
    
    
    Units Issued(2)Name and Principal Position
    
    Year
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    (#)
    
    
    Value ($)
    
    
    (#)Richard B. Clark (US$)
    
    
    2004
    
    
    
    500,000
    
    
    
    550,000
    
    
    
    96,000
    (1)
    
    
    55,000
    (2)
    
    
    
    
    
    
    President and CEO
    
    
    2003
    
    
    
    500,000
    
    
    
    250,000
    
    
    
    129,000
    (1)
    
    
    275,000
    
    
    
    250,000
    
    
    
    8,4982002
    
    
    
    400,000
    
    
    
    94,230
    
    
    
    298,500
    (1)
    
    
    75,000
    
    
    
    400,000
    
    
    
    21,932Craig J. Laurie (US$)
    
    
    2004
    
    
    
    200,000
    
    
    
    50,000
    
    
    
    
    
    
    
    20,929
    (2)
    
    
    100,000
    
    
    
    2,732Senior Vice President and
    
    
    2003
    
    
    
    102,083
    
    
    
    37,500
    
    
    
    20,000
    (4)
    
    
    37,000
    
    
    
    75,000
    
    
    
    2,549Chief Financial Officer(3)
    
    
    2002
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    John E. Zuccotti (US$)
    
    
    2004
    
    
    
    500,000
    
    
    
    700,000
    
    
    
    
    
    
    
    20,000
    (2)
    
    
    
    
    
    
    Co-Chairman
    
    
    2003
    
    
    
    500,000
    
    
    
    1,200,000
    
    
    
    
    
    
    
    20,000
    
    
    
    
    
    
    
    2002
    
    
    
    500,000
    
    
    
    505,000
    
    
    
    195,000
    (1)
    
    
    20,000
    
    
    
    
    
    
    
    Dennis H. Friedrich (US$)
    
    
    2004
    
    
    
    335,000
    
    
    
    225,000
    
    
    
    
    
    
    
    100,000
    (2)
    
    
    335,000
    
    
    
    9,153President and COO,
    
    
    2003
    
    
    
    325,000
    
    
    
    164,000
    
    
    
    
    
    
    
    133,141
    
    
    
    325,000
    
    
    
    11,047US Commercial Operations
    
    
    2002
    
    
    
    300,000
    
    
    
    
    
    
    
    135,000
    (1)
    
    
    75,000
    
    
    
    300,000
    
    
    
    16,449Thomas F. Farley (C$)
    
    
    2004
    
    
    
    275,000
    
    
    
    12,500
    
    
    
    79,711
    (1)
    
    
    80,000
    (2)
    
    
    275,000
    
    
    
    6,064President and COO,
    
    
    2003
    
    
    
    250,000
    
    
    
    126,618
    
    
    
    79,711
    (1)
    
    
    80,000
    
    
    
    200,000
    
    
    
    5,089Cdn Commercial Operations
    
    
    2002
    
    
    
    217,500
    
    
    
    77,256
    
    
    
    155,734
    (1)
    
    
    19,454
    
    
    
    
    
    
    
    
 Notes:   (1)
    
    Includes cash payments of US$1.50 (C$2.36) per option held at December 31, 2002 to
adjust for the impact of the spin-off of Brookfield Homes Corporation.(2)
    
    The Share Option and Deferred Share Unit awards shown for 2004 were granted on
February 9, 2005. The options and units are exercisable at a price of US$36.60 (C$45.35).(3)
    
    Craig J. Laurie became on employee of Brookfield in June, 2003. Prior thereto he was
an employee of Brascan where in 2003 prior to June thereof he earned C$87,500 in salary,
and in 2002 he earned C$190,000 in salary, C$60,000 in bonus and was awarded 37,500 shares
options and 1,511 deferred share units having a value of C$30,000.(4)
    
    Moving allowance allocated to Craig J. Laurie to compensate for expenses incurred in
relocating to New York City. 12




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##### 



Share Options Share Option Plan Information The following table sets out the information regarding the Share Option Plan at March 15, 2005: Shares remainingShares to be
    
    
    
    
    available for futureissued upon exercise
    
    Weighted-average
    
    
    issuance under anof outstanding
    
    exercise price of
    
    
    equity compensationoptions
    
    outstanding options
    
    
    plan#
    
    ($)
    
    
    #3,607,963
    
    
    23.21
    
    
    
    2,251,462
 Option Repricing Pursuant to Distribution of Brookfield Homes Corporation In recognition of the capital reduction due to the distribution of Brookfield Homes Corporation
to shareholders on December 31, 2002, the Toronto Stock Exchange permitted the options, issued at
the time of the distribution, to have their strike price reduced to reflect this event. The
reduction was equal to the weighted average reduction in market value of the shares of Brookfield
for 10 days subsequent to the record date for the distribution. This resulted in a reduction of
US$1.00 or C$1.58 to the strike price of options held at the time of the distribution. The impact
on the options held by the named executive officers is as follows: Securities Under
    
    
    Market Price of
    
    
    Weighted Average
    
    
    Weighted Average
    
    
    Length of OriginalOption
    
    
    Securities Prior to
    
    
    Exercise Price
    
    
    New Exercise Price
    
    
    Option TermName
    
    Date
    
    
    (#)
    
    
    Event ($/Security)
    
    
    ($/Security)
    
    
    ($/Security)
    
    
    RemainingRichard B. Clark (US$)
    
    Jan. 7, 2003
    
    
    430,000
    
    
    
    18.23
    
    
    
    14.19
    
    
    
    13.19
    
    
    
    3 to 9 yearsJohn E. Zuccotti (US$)
    
    Jan. 7, 2003
    
    
    130,000
    
    
    
    18.23
    
    
    
    14.81
    
    
    
    13.81
    
    
    
    3 to 9 yearsDennis H. Friedrich
(US$)
    
    Jan. 7, 2003
    
    
    90,000
    
    
    
    18.23
    
    
    
    17.11
    
    
    
    16.11
    
    
    
    3 to 9 yearsThomas F. Farley (C$)
    
    Jan. 7, 2003
    
    
    84,940
    
    
    
    28.52
    
    
    
    22.90
    
    
    
    21.32
    
    
    
    3 to 9 years
 Options Granted on February 9, 2005 Options are granted each year at the discretion of our board of directors to officers to
purchase common shares under the terms of the Share Option Plan. The following table shows the
most recent grant of options to purchase common shares to named executive officers, granted on
February 9, 2005. Percentage of Total
    
    
    
    
    
    
    Market Value ofOptions Granted to
    
    
    
    
    
    
    SecuritiesEmployees of the
    
    
    
    
    
    
    Underlying OptionsCommon Share
    
    
    Corporation for
    
    
    Exercise Price
    
    
    on the Date ofOptions Granted
    
    
    2004
    
    
    per Option
    
    
    GrantNamed Executive Officer
    
    (#)
    
    
    (%)
    
    
    ($)
    
    
    ($/Security)
    
    
    Expiration DateRichard B. Clark (US$)
    
    
    55,000
    
    
    
    11
    
    
    
    36.60
    
    
    
    36.60
    
    
    December 31, 2015Craig J. Laurie (US$)
    
    
    20,929
    
    
    
    4
    
    
    
    36.60
    
    
    
    36.60
    
    
    December 31, 2015John E. Zuccotti (US$)
    
    
    20,000
    
    
    
    4
    
    
    
    36.60
    
    
    
    36.60
    
    
    December 31, 2015Dennis H. Friedrich (US$)
    
    
    100,000
    
    
    
    20
    
    
    
    36.60
    
    
    
    36.60
    
    
    December 31, 2015Thomas F. Farley (C$)
    
    
    80,000
    
    
    
    16
    
    
    
    45.35
    
    
    
    45.35
    
    
    December 31, 2015
 Aggregate Options Exercised During The Most Recently Completed Financial Year and Option Values at February 9, 2005 The following table sets forth options exercised during the fiscal year ended December 31, 2004
and the number and value of the unexercised options at February 9, 2005 for the named executive
officers. In-the-Money Value ofSecurities
    
    
    Aggregate
    
    
    Unexercised Options at
    
    
    Unexercised Options(1) atAcquired
    
    
    Value
    
    
    February 9, 2005
    
    
    February 9, 2005on Exercise
    
    
    Realized
    
    
    (#)
    
    
    ($)Name
    
    (#)
    
    
    ($)
    
    
    Exercisable
    
    
    Unexercisable
    
    
    Exercisable
    
    
    UnexercisableRichard B. Clark (US$)
    
    
    200,000
    
    
    
    4,233,662
    
    
    
    234,000
    
    
    
    401,000
    
    
    
    4,439,600
    
    
    
    4,023,900Craig J. Laurie (US$)
    
    
    
    
    
    
    
    
    
    
    7,400
    
    
    
    50,529
    
    
    
    53,132
    
    
    
    212,528John E. Zuccotti (US$)
    
    
    90,000
    
    
    
    1,587,592
    
    
    
    30,000
    
    
    
    70,000
    
    
    
    588,210
    
    
    
    788,040Dennis H. Friedrich
(US$)
    
    
    60,000
    
    
    
    880,656
    
    
    
    59,628
    
    
    
    278,513
    
    
    
    833,400
    
    
    
    2,132,582Thomas F. Farley (C$)
    
    
    
    
    
    
    
    
    
    
    60,623
    
    
    
    166,994
    
    
    
    1,045,152
    
    
    
    814,429
 Notes:   (1)
    
    In-the-Money means the market value of the common shares under option exceed the exercise
price of the options prior to related income taxes. The closing price of Brookfields common
shares on February 9, 2005 on the NYSE was US$36.60 per share and on the TSX was C$45.35. 13




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##### 



Deferred Share Unit Plan Deferred Share Units may be granted each year at the discretion of board of directors to
certain senior executives in lieu of all or part of their annual cash bonus awards as described
above under Report of the Human Resources and Compensation Committee  Long-Term Incentives. on
page 10 of this Circular. The number of units owned by the named executive officers and the value of the Deferred Share Units
as of February 9, 2005 were as follows: Units Allocated
    
    
    
    
    
    
    
    
    
    
    Value of Unitsas of
    
    
    Units Owned in
    
    
    as ofFebruary 9, 2005
    
    
    Deferred Share Unit Plan
    
    
    February 9, 2005Name
    
    (#)
    
    
    ($)
    
    
    Vested (#)
    
    
    Unvested (#)
    
    
    Vested ($)
    
    
    Unvested ($)Richard B. Clark (US$)
    
    
    
    
    
    
    
    
    
    
    118,050
    
    
    
    46,326
    
    
    
    4,320,615
    
    
    
    1,695,529Craig J. Laurie (US$)
    
    
    2,732
    
    
    
    100,000
    
    
    
    559
    
    
    
    4,772
    
    
    
    20,472
    
    
    
    174,643Dennis H. Friedrich (US$)
    
    
    9,153
    
    
    
    335,000
    
    
    
    9,685
    
    
    
    27,860
    
    
    
    354,461
    
    
    
    1,019,677Thomas F. Farley (C$)
    
    
    6,064
    
    
    
    275,000
    
    
    
    1,119
    
    
    
    10,135
    
    
    
    50,733
    
    
    
    459,631
 Option and Deferred Share Unit Adjustment Pursuant Stock Split On February 9, 2005, the board of directors approved a three-for-two stock split. The stock
split will be in the form of a stock dividend. Shareholders will receive one Brookfield common
share for each two common shares held. Fractional shares will be paid in cash at the prevailing
market price. The stock dividend will be payable on March 31, 2005 to shareholders of record at the
close of business on March 15, 2005. All options and Deferred Share Units, issued at the time of
the distribution, have been adjusted to reflect this event. This adjustment has no effect on the
aggregate value of the options or the Deferred Share Units. The impact on the options and the
Deferred Share Units held by the named executive officers is as follows: Options Held at
    
    
    Deferred Share Units Held atMarch 15, 2005
    
    
    March 15, 2005(#)
    
    
    (#)Name
    
    Pre-Split
    
    
    Post-Split
    
    
    Pre-Split
    
    
    Post-SplitRichard B. Clark (US$)
    
    
    635,000
    
    
    
    952,000
    
    
    
    164,376
    
    
    
    246,564Craig J. Laurie (US$)
    
    
    57,929
    
    
    
    86,894
    
    
    
    5,331
    
    
    
    7,997John E. Zuccotti (US$)
    
    
    100,000
    
    
    
    150,000
    
    
    
    
    
    
    
    Dennis H. Friedrich (US$)
    
    
    338,141
    
    
    
    507,212
    
    
    
    37,545
    
    
    
    56,318Thomas F. Farley (C$)
    
    
    227,617
    
    
    
    341,426
    
    
    
    11,254
    
    
    
    16,881
 Employment Contracts In 2005, Brookfield entered into a one-year agreement with John E. Zuccotti which provides Mr.
Zuccotti with incentive payments of up to $600,000 for the accomplishment of certain pre-defined
goals and objectives. Indebtedness of Directors, Executive officers and Senior Officers Under Securities Purchase Programs In response to changing U.S. guidelines on executive loans, the board of directors discontinued
granting any further executive loans under our share purchase plan. At March 15, 2005, the
aggregate indebtedness (other than routine indebtedness under applicable Canadian securities
laws) to Brookfield or its subsidiaries of all officers, directors, proposed directors and
employees and former officers, directors and employees of Brookfield and its subsidiaries made in
connection with the purchase of common shares of Brookfield, publicly traded securities of
subsidiary and associated companies, or securities of Partners (See Principal Holders of Voting
Securities on page 2 of this Circular) (Designated Shares) was C$6,501,614. No additional loans
have been extended subsequent to July 30, 2002 to directors, executives or senior officers of
Brookfield. At March 15, 2005, Mr. Richard Clark, the President and Chief Executive Officer of Brookfield, had
an outstanding loan from Brookfield of C$698,726. The largest amount outstanding of such loan
during the 12 months ended December 31, 2004 was $ C$698,726. Designated Shares are held as
security for the loan. Indebtedness of Directors, Executive Officers and Senior Officers Other Than Under Securities Purchase Programs At March 15, 2005, there were no outstanding loans to officers, directors and employees and
former officers, directors and employees of Brookfield or its subsidiaries, other than in
connection with purchases of securities of Brookfield or subsidiaries of Brookfield (other than
routine indebtedness under applicable Canadian securities laws). No loans have been made to
officers, directors or employees for any purpose in 2004. 14




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Directors and Officers Liability Insurance Brookfield maintains directors and officers insurance with an annual policy limit of
C$50,000,000 subject to a corporate deductible of C$250,000 (C$500,000 for certain of our U.S.
subsidiaries) per loss at a cost of $216,743 for 2004. Under this insurance coverage, Brookfield
and certain of its associated companies are reimbursed for indemnity payments made to directors or
officers as required or permitted by law or under provisions of its by-laws as indemnity for
losses, including legal costs, arising from acts, errors or omissions committed by directors and
officers during the course of their duties as such. This insurance also provides coverage to
individual directors and officers without any deductible if they are not indemnified by Brookfield.
The insurance coverage for directors and officers has certain exclusions including, but not
limited to, those acts determined to be deliberately fraudulent or dishonest or have resulted in
personal profit or advantage. Interest of Management and Others in Material Transactions As of March 15, 2005, no director, senior officer or associate of a director or senior officer
nor, to the knowledge of our directors or senior officers after having made reasonable inquiry, any
person or company who beneficially owns, directly or indirectly, voting securities of Brookfield
carrying more than 10% of the voting rights attached to any class of voting securities of
Brookfield outstanding at the date hereof, or any associate or affiliate thereof, had any material
interest, direct or indirect, in any material transaction of Brookfield or its affiliates nor do
any such persons have a material interest, direct or indirect, in any proposed transaction of
Brookfield or its affiliates. At December 31, 2004, Brookfield had approximately $216 million of unsecured indebtedness
outstanding to Brascan Corporation and its affiliates. During 2004, borrowings in the normal
course from these related parties repayments totaled $346 million. PART FOUR  STATEMENT OF CORPORATE GOVERNANCE PRACTICES Corporate Governance Corporate governance relates to the activities of the board of directors who are elected by and
are accountable to the shareholders, and takes into account the role of management who are
appointed by the board of directors and who are charged with the ongoing management of Brookfield.
Our board of directors encourages sound corporate governance practices designed to promote the well
being and ongoing development of Brookfield, having always as its ultimate objective long-term
interests of Brookfield and the enhancement of value for shareholders. In 2004, we undertook a review of our corporate governance practices. As a result of this review,
the board of directors revised the composition of its committees, appointed a new lead independent
director and adopted new charters for the board of directors and each committee. These charters
are in compliance with the New York Stock Exchange rules on corporate governance (the NYSE
Rules), the provisions of the Sarbanes-Oxley Act of 2002 and Canadian securities laws. As set out under Principal Holders of Voting Shares, on page 2 of this Circular, Brascan owns
approximately 50.4% of our common shares and 97.1% of our Limited Class A redeemable voting
preferred shares. As such, we are a controlled company as defined by the NYSE Rules and have
chosen to rely on the controlled companies exemption with respect to certain independence
requirements under the NYSE Rules. The Governance and Nominating Committee and the Human Resources
and Compensation Committee are comprised of a majority of independent directors and each has one
Brascan representative. The Audit Committee is comprised solely of independent directors. The
board of directors believes this is an appropriate mix of directors and that the involvement of
Brascan on Brookfields board committees promotes effective oversight of the business plan and
assessing managements performance on an ongoing basis. We also continue to be subject to the Toronto Stock Exchange guidelines and the board of directors
believes that its policies and practices are in compliance with those guidelines as described
below. Board of Directors Mandate of the Board of Directors Our board of directors oversees the management of our business and affairs which is conducted
by our officers and employees under the direction of the Chief Executive Officer. In doing so, the
board of directors acts at all times with a view to the best interests of Brookfield. The board of
directors endeavors to enhance shareholder value on a sustainable basis and in a manner that
recognizes the interests of other stakeholders including our employees, suppliers, customers and
the communities in which we operate. In fulfilling our responsibilities, in 2004 the board of
directors adopted its Corporate Governance Guidelines. The guidelines are reviewed on an annual
basis and otherwise as appropriate. A copy of our Corporate Governance Guidelines are attached
hereto as Schedule C. 15




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Composition of the Board and Representation of Shareholders Interests The board of directors is currently composed of eleven directors and has one vacancy as a
result of the death of Mr. McCaig in January 2005. The board of directors has nominated two
additional directors Roderick Fraser and Robert Stelzl. As a result, thirteen nominees
are standing for election as directors. The board of directors considers that its proposed size
and composition is appropriate given the diversity of Brookfields operations and the need for a
variety of experience and backgrounds. The board of directors believes that a combination of
independent directors, directors related to Brascan and directors drawn from management leads to a
constructive exchange in deliberations resulting in objective, well-balanced and informed
discussion and decision making. The board of directors has determined that the thirteen director nominees are classified as follows:  

Seven independent directors: Messrs. William Cahill, Roderick Fraser, Lance
Liebman, Paul McFarlane, Allan Olson, Robert Stelzl and William Wheaton;  

Three Brascan directors: Messrs. Jack Cockwell, Bruce Flatt and Sam Pollock; and  

Three management representatives: Messrs. Gordon Arnell, Chairman, John
Zuccotti, Co-Chairman; and Richard Clark, President and Chief Executive Officer. In addition, the board of directors has appointed Mr. Allan Olson as the interim lead independent
director. It is the intention of the board of directors to elect Mr. Olson as the lead independent
director at its first board of directors meeting after the annual general meeting. The board of directors, with the assistance of the Governance and Nominating Committee, determines
whether each director is an independent director. In making these determinations, the board of
directors examines each individual directors circumstances and his or her relationship to
Brookfield and its affiliates and affirmatively determined that each such director has no material
relationship with Brookfield and each such director did not receive any consulting, advisory, or
other compensatory fee from us except is his capacity as a member of the board of directors or a
committee thereof. The determination that a director is not an independent director does not imply that the director
makes less of a contribution to Brookfield than a director determined to be independent or that a
director cannot and does not act with independence or in the best interests of shareholders. Board Meetings Each director is expected to attend all meetings of the board of directors and any committee of
which he or she is a member. The board of directors may also take action from time to time by
unanimous written consent. The board of directors meets at least once in each quarter, with additional meetings held when
required. The board of directors met six times in 2004 and took action by written consent four
times. There are four regular meetings scheduled for 2005. In addition, the independent directors
meet separately from management directors and directors related to Brascan at each regularly
scheduled board meeting and whenever otherwise appropriate. These meetings are conducted under the
direction of the lead independent director. Meeting frequency and agendas may change from time to time depending on opportunities or risks
faced. Additional meetings may be called by the Chairman, the Chief Executive Officer or any two
directors on proper notice. The following is a record of the directors attendance at the meetings of the board of directors
and the committees during 2004: Committee Meeting AttendanceGovernance and
    
    Human ResourcesBoard Meetings
    
    
    
    
    
    
    
    Nominating
    
    and CompensationAttended
    
    Attendance
    
    
    Audit Committee
    
    Committee
    
    CommitteeDirector
    
    (6 meetings)
    
    Percentage
    
    
    (4 Meetings)
    
    (5 Meetings)
    
    (4 Meetings)Gordon E. Arnell
    
    5 of 6
    
    
    83
    %
    
    
    
    
    
    William T. Cahill
    
    5 of 6
    
    
    83
    %
    
    4 of 4
    
    
    
    Richard B. Clark
    
    6 of 6
    
    
    100
    %
    
    
    
    
    
    Jack L. Cockwell
    
    6 of 6
    
    
    100
    %
    
    
    
    
    
    4 of 4J. Bruce Flatt
    
    6 of 6
    
    
    100
    %
    
    
    
    
    
    Lance Liebman
    
    6 of 6
    
    
    100
    %
    
    
    
    5 of 5
    
    4 of 4John R. McCaig*
    
    4 of 6
    
    
    66
    %
    
    
    
    4
    
    2 of 4Paul D. McFarlane
    
    6 of 6
    
    
    100
    %
    
    4 of 4
    
    
    
    3 of 4Allan S. Olson
    
    6 of 6
    
    
    100
    %
    
    4 of 4
    
    5 of 5
    
    Sam Pollock
    
    6 of 6
    
    
    100
    %
    
    
    
    5 of 5
    
    William Wheaton**
    
    3 of 4
    
    
    75
    %
    
    
    
    
    
    John E. Zuccotti
    
    5 of 6
    
    
    83
    %
    
    
    
    
    
    
   *
    
    Mr. McCaig was ill during significant portions of 2004 and passed away in January, 2005**
    
    Mr. Wheaton joined the board of directors in April 2004 and therefore was eligible to attend 4 meetings 16




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The Chairman is primarily responsible for the agenda. Prior to each board meeting, the
Chairman discusses agenda items for the meeting with the Chief Executive Officer, other members of
senior management and other members of the board of directors. Any director may propose the
inclusion of items on the agenda, request the presence of or a report by any member of senior
management, or raise subjects that are not on the agenda for that meeting. In advance of each board of directors and committee meeting, members receive the proposed agenda
and other materials important to the directors understanding of the matters considered. Directors
are expected to spend the time needed to review the materials in advance of such meetings and to
actively participate in such meetings. Committees of the Board of Directors We believe that committees of the board of directors assist in its effective functioning and
that the appropriate composition of board committees should enable the views of independent
directors to be effectively expressed. Our board of directors has three standing committees: the Audit Committee, the Human Resources and
Compensation Committee, and the Governance and Nominating Committee. Special committees may be
formed from time to time as required to review particular matters or transactions. While the board
of directors retains overall responsibility for corporate governance matters, the Audit, Human
Resources and Compensation, and Governance and Nominating Committees have specific responsibilities
for certain aspects of corporate governance as described below. The Audit Committee is comprised solely of independent directors and each of the Human Resources
and Compensation Committee and the Governance and Nominating Committee are comprised of a majority
of independent members and one member related to Brascan. The members of each committee are
selected by the board of directors on the recommendation of the Governance and Nominating
Committee. The following is a brief description of the charters of each committee, its composition and the
meetings held during the past year. The full text of each committees charter is available on
Brookfields Web site, www.brookfieldproperties.com. Audit Committee The Audit Committee is comprised of three directors, all of whom are independent directors:
Messrs. Allan Olson (Chairman), William Cahill and Paul McFarlane. In addition to being
independent directors as described above, all members of our Audit Committee must meet an
additional independence test under the Sarbanes-Oxley Act and National Instrument 51-110, in that
their directors fees are the only compensation they, or their firms, receive from Brookfield and
that they are not affiliated with Brookfield. Each member of the Audit Committee is financially
literate and Mr. Allan Olson is considered to be a financial expert as that term is defined under
the NYSE Rules. The Audit Committee is responsible for monitoring Brookfields systems and procedures for financial
reporting and internal control, reviewing certain public disclosure documents and monitoring the
performance and independence of the external auditors. The Audit Committee is also responsible for
reviewing Brookfields annual audited financial statements, unaudited quarterly financial
statements and managements discussion and analysis of financial results of operations and review
of related operations prior to their approval by the full board of directors. The Audit Committee met four times in 2004.There are four Audit Committee meetings scheduled for
2005. Meeting frequency and agendas may change from time to time depending on opportunities or
risks faced by Brookfield. The charter for the Audit Committee is reviewed annually by the Audit
Committee, the Governance and Nominating Committee and approved by the board of directors. A copy
of the Audit Committee charter is included in our Annual Information Form. Human Resources and Compensation Committee The Human Resources and Compensation Committee is comprised of three directors: Messrs. Jack
Cockwell (Chairman), Lance Liebman, and Paul McFarlane. Mr. Jack Cockwell is related to Brascan.
Messrs. Lance Liebman, and Paul McFarlane are independent directors. The responsibilities of the
Human Resources and Compensation Committee are as follows:  

review the existing human resources and plans to ensure that qualified personnel will be
available for succession to senior management positions within Brookfield, and report on
this matter to the board of directors at least annually;

consider proposed changes in senior management, and submit for the board of directors
consideration and approval, the names of persons proposed to be appointed as officers;

annually review the position description of the Chief Executive Officer and establish
objectives against which to review and assess the Chief Executive Officers performance;

assess the performance of the Chief Executive Officer against the pre-agreed objectives
and determine, either as a committee or together with other Independent Directors (as
directed by the board of directors), the Chief Executive Officers compensation level based
on this assessment; 17




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

in consultation with the Chief Executive Officer, review and make recommendations to the
board of directors with respect to salaries, performance awards and other remuneration
including any severance arrangements of senior management (other than the Chief Executive
Officer); and should the committee consider that any adjustment thereto or awards
thereunder would be appropriate, recommend such adjustments and awards for consideration
and approval by the board of directors;

review and make recommendations to the board of directors with respect to
incentive-compensation and equity based compensation plans, and make recommendations for
consideration by the board of directors with respect to any proposed material amendments
to, and any proposed awards (or changes in previous awards) under, such plans;

review and make recommendations to the board of directors with respect to any change to
compensation and benefit plans involving a material annual change in cost,

if Brookfield is required to prepare an accounting restatement due to material
non-compliance with any financial reporting requirements, the committee will:  o

determine the amount, if any, of any bonus or other incentive-based or
equity-based compensation and profits realized from the sale of securities of
Brookfield that must be reimbursed to Brookfield by the Chief Executive Officer and
the Chief Financial Officer in accordance with section 304 of the Sarbanes-Oxley Act
of 2002; ando

take appropriate steps to ensure that such amount is reimbursed; and  

oversee the preparation of the Compensation of Executive Officers and Report on
Executive Compensation sections of the Circular. The Human Resources and Compensation Committee met four times in 2004. There are four Human
Resources and Compensation Committee meetings scheduled for 2005. Meeting frequency and agendas
may change from time to time depending on opportunities or risks faced. The charter for the Human
Resources and Compensation Committee is reviewed annually by the committee and the Governance and
Nominating Committee and approved the board of directors. Governance and Nominating Committee The Governance and Nominating Committee is comprised of three directors: Messrs. Lance Liebman
(Chairman), Allan Olson and Sam Pollock. Messrs. Lance Liebman and Allan Olson are independent
directors. Mr. Sam Pollock is related to Brascan. The responsibilities of the Governance and
Nominating Committee are as follows:  

consider from time to time the appropriate size and composition of the board of
directors and its committees, and submit recommendations on the number of board of
directors positions to be filled and the overall composition of the board of directors
taking into consideration the business experience and specific areas of expertise of each
current director;

develop and maintain a succession plan for board of directors that is responsive to our
needs and the interests of our shareholders;

establish the qualifications (consistent with any criteria approved by the board of
directors) for new directors and procedures for identifying possible nominees who meet
these criteria;

review and assess the qualifications of persons proposed for appointment or election to
the board of directors and submit to the board of directors for consideration and decision,
consistent with any criteria approved by the board of directors, the names of persons to be
nominated for election as directors at the annual meeting of shareholders, or to be
appointed to fill vacancies between annual meetings and assess whether these candidates
would be considered independent directors, financially literate or an audit committee
financial expert;

be available as a forum for addressing the concerns of individual directors;

confirm that procedures are in place and resources are made available to provide new
directors with a proper orientation to both Brookfield and their responsibilities and
duties as directors and to provide directors with appropriate continuing education
opportunities;

together with the Chairman of the board of directors establish a process for reviewing
directors performance and oversee the evaluation of the board of directors;

periodically review the adequacy and form of directors compensation and make
recommendations to the board of directors where appropriate;

review the program of the board of directors for each year, and the methods and
processes to be pursued in carrying out this program including; 18




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

oversee the frequency and content of meetings and the requirement for any special meetings, including:  o

foreseeable issues, including a list of perspective topics for presentation and discussion;o

material to be provided to directors generally and with respect to
meetings of the board of directors or its committees; ando

communication process between the board of directors and management,
including monitoring the quality of the relationship between management and the
board of directors and recommending improvements as may be deemed necessary or
advisable;  

review and make recommendations with respect to the disclosure required concerning
corporate governance to be contained in public disclosure documents;

report on an annual basis on the effectiveness of the performance of the board of
directors as a whole, including specifically reviewing areas in which the board of
directors effectiveness may be enhanced taking into account suggestions of the board of
directors;

review and assess the corporate governance guidelines and make recommendations to the
board of directors, where appropriate;

develop charters for any new committees established by the board of directors and
annually review the charters of each existing committee and recommend any amendments to the
board of directors, where appropriate;

periodically review the position descriptions for the Chairman of the board of directors
and the Lead Independent Director and recommend any amendments to the board of directors,
where appropriate;

review and recommend the implementation of structures and procedures to facilitate the
board of directors independence from management and to avoid conflicts of interest;

monitor relationships between senior management and the board of directors, and
recommend procedures to allow directors to have access to, and an effective relationship
with, senior management;

review all significant proposed related party transactions and situations involving a
potential conflict of interest that are not required to be dealt with by an independent
special committee pursuant to securities law rules (where appropriate under applicable
laws, the committee may sit as an independent special committee);

develop a policy governing charitable contributions;

review and assess the Code of Business Conduct and Ethics for directors, officers and
employees to confirm that it addresses, among other things, conflicts of interest,
corporate opportunities, confidentiality, fair dealing, protection and proper use of our
assets, compliance with applicable laws, rules and regulations (including insider trading
laws) and the reporting of illegal or unethical behavior, and establishes mechanisms to
facilitate the effective operation of the Code and the granting of waivers of the code;

approve any waivers of the Code of Business Conduct and Ethics sought by directors or
members of senior management and confirm that any waivers of the code are promptly
disclosed to shareholders; and

review and make recommendations to the board of directors with respect to any
shareholder proposal that relates to corporate governance including a director nomination
by a shareholder. The Governance and Nominating Committee met five times in 2004. There are four Governance and
Nominating Committee meetings scheduled for 2005. Meeting frequency and agendas may change from
time to time depending on opportunities or risks faced by Brookfield. The charter for the
Governance and Nominating Committee is reviewed annually by the committee and approved by the board
of directors. Orientation and Continuing Education The Chief Financial Officer and the Secretary, under the oversight of the Governance and
Nominating Committee, are responsible for providing orientation and continuing education programs
for new directors. Generally, new directors are provided with materials describing our business
and governance policy and procedures and they also meet individually with the Chief Executive
Officer and the Chairman to learn about Brookfield and its operations. The board of directors and
the committees receive reports form management and third parties from time to time regarding
changes in securities laws and regulations and changes in corporate governance practice. In
addition, as part of the board of directors regular quarterly meetings, management provides an
update of the business conditions in our primary markets. 19




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Board of Directors Access to Outside Advisors The board of directors may at any time retain outside financial, legal or other advisors at the
expense of Brookfield and have the authority to determine the advisors fees and other retention
terms. Each committee of the board of directors may retain outside advisors, at the expense of
Brookfield, without the Boards approval, at any time. Any director may, subject to the approval
of the Chairman, retain an outside advisor at the expense of Brookfield. Management Managements Role The primary responsibility of management is to safeguard Brookfields assets and to create
wealth for shareholders. When performance is found to be inadequate, the board of directors has
the responsibility to bring about appropriate change. Brookfields corporate governance practices are designed to encourage autonomy and effective
decision making on the part of management, while ensuring appropriate oversight through its board
of directors and its committees. Managements Relationship to the Board of Directors Senior management, primarily through the Chief Executive Officer, reports to and is accountable
to the board of directors. At its meetings, the board of directors regularly engages in private
sessions with the Chairman and the Chief Executive Officer without other members of senior
management present. Business plans are developed to ensure the compatibility of shareholder, board of directors and
management views on our strategic direction, performance targets and utilization of shareholders
equity. A special meeting of the board of directors is held each year to review the strategic
initiatives and the business plan submitted by senior management. The board of directors approval
of the annual business plan provides a mandate for senior management to conduct the affairs of
Brookfield knowing it has the necessary support from the board of directors. Material deviations
from the plan are reported to and considered by the board of directors. Board of Directors Access to Management Information provided by management to directors is critical to their effectiveness. In
addition to the reports presented to the board of directors at its regular and special meetings,
the board of directors is kept informed on a timely basis by management of corporate developments
and key decisions taken by management in pursuing Brookfields business plan. The directors
periodically assess the quality, completeness and timeliness of information provided by management
to the board of directors. Directors also have the opportunity to meet with senior management and
to participate in work sessions to obtain further insight into the operations of Brookfield. Management Performance Review and Rewards The Human Resources and Compensation Committee annually reviews the position description of the
Chief Executive Officer and establishes objectives against which his performance is reviewed, with
his compensation or level being assessed against these pre-agreed objectives. Similar reviews and
assessments are undertaken by the Chief Executive Officer of the position descriptions of other
members of senior management in consultation with the Human Resources and Compensation Committee. Management Succession The board of directors in consultation with the Human Resources and Compensation Committee
maintains a succession plan for the Chief Executive Officer and other members of senior management.
The objective of the plan is to ensure the orderly succession of senior management, including
providing for any required recruiting, training and development. Communication and Disclosure Policies Brookfield has adopted a Disclosure and Insider Trading Policy which summarizes its policies
and practices regarding disclosure of material information to investors, analysts and the media.
The purpose of this policy is to ensure that Brookfields communications with the investment
community are timely, consistent and in compliance with all applicable securities legislation.
This Disclosure and Insider Trading Policy is reviewed annually by the board of directors and is
available on our web site, www.brookfieldproperties.com. We endeavor to keep our shareholders informed of our progress through a comprehensive annual
report, annual information form, quarterly interim reports and periodic press releases. We also
maintain a web site that provides summary information about Brookfield and ready access to its
published reports, press releases, statutory filings and supplementary information provided to
analysts and investors. Directors and management meet with Brookfields shareholders at the annual
meeting and are available to respond to questions at that time. We also have an investor relations program to respond to inquiries in a timely manner. Management
meets on a regular basis with investment analysts, financial advisors and interested members of the
public to ensure that accurate information is available to investors, including quarterly
conference calls and webcasts to discuss our financial results. We also endeavor to ensure that
the media are kept informed of developments as they occur, and have an opportunity to meet and
discuss these developments with our designated spokespersons. 20




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Code of Business Conduct and Ethics The board of directors expects all directors, officers and employees to conduct themselves in
accordance with the highest ethical standards and to adhere to Brookfields Code of Business
Conduct and Ethics. The board of directors encourages senior officers to create a culture of
integrity throughout the organization. Any waiver of the Code of Business Conduct and Ethics for
officers and directors may only be made by the board of directors or the Governance and Nominating
Committee and will be disclosed by Brookfield to the extent required by law, regulation or stock
exchange requirement. No waivers have been granted since the adoption of the code in April 2004.
This Code is reviewed annually by the board of directors and is posted on Brookfields web site,
www.brookfieldproperties.com.  PART FIVE  OTHER INFORMATION SHAREHOLDER PROPOSALS The Canada Business Corporations Actpermits eligible shareholders to submit shareholder
proposals to Brookfield, which proposals may be included in a management proxy circular relating to
an annual meeting of shareholders. The final date by which we must receive shareholder proposals
for the annual meeting of shareholders to be held in 2006 is January 31, 2006. AVAILABILITY OF DISCLOSURE DOCUMENTS We will provide any person or corporation, upon request to the Secretary of Brookfield, with a
copy of:  (a)

our most recent annual information form, together with a copy of any document or the
pertinent pages of any document incorporated therein by reference;  (b)

our comparative financial statements for the fiscal year ended December 31, 2004, together
with the report of the auditors thereon;  (c)

our most recent annual report, which includes managements discussion and analysis of
financial conditions and results of operations;  (d)

our interim financial statements for the periods subsequent to the end of its fiscal year;
and  (e)

our management proxy circular dated March 15, 2005, in connection with the annual and special
meeting of shareholders. OTHER BUSINESS We know of no matter to come before the meeting other than the matters referred to in the
accompanying notice of meeting. DIRECTORS APPROVAL The contents and sending of this Circular have been approved by the directors of Brookfield.  Toronto, Canada
March 15, 2005
    
    Kathleen G. Kane
Senior Vice President and
General Counsel and Secretary
 21




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Schedule A SPECIAL RESOLUTION AUTHORIZING AN AMENDMENT
TO THE ARTICLES OF INCORPORATION OF BROOKFIELD RESOLVED, AS A SPECIAL RESOLUTION, THAT:  1.

The certificate and articles of Brookfield are hereby amended to fix the number of
directors at 13; and2.

Any director or officer of Brookfield is hereby authorized for and in the name of and
on behalf of Brookfield to execute or cause to be executed, and to deliver or cause to be
delivered, all such documents and instruments, and to do or cause to be done all such
other acts and things, as in the opinion of such director or officer may be necessary or
desirable to carry out the intent of this resolution.   Schedule B RESOLUTION AUTHORIZING AN AMENDMENT AND RESTATEMENT
OF THE BY-LAWS OF BROOKFIELD RESOLVED THAT:  1.

The repeal of the general by-laws of Brookfield enacted on September 6, 1978 by the
board of directors be and are hereby confirmed;2.

The amended and restated by-laws attached to this resolution as Appendix I
be, and are hereby confirmed as the By-laws of Brookfield; and3.

Any director or officer of Brookfield is hereby authorized for and in the name of and
on behalf of Brookfield to execute or cause to be executed, and to deliver or cause to be
delivered, all such documents and instruments, and to do or cause to be done all such
other acts and things, as in the opinion of such director or officer may be necessary or
desirable to carry out the intent of this resolution. 23




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##### 



Appendix I to Schedule B AMENDED AND RESTATED
BYLAWS
of
BROOKFIELD PROPERTIES CORPORATION
(the Corporation) 1. REGISTERED OFFICE 1.1The registered office of the Corporation shall be in the province or territory of
Canada specified in the articles of the Corporation and at such location in that province or
territory as the directors may from time to time determine. 2. CORPORATE SEAL 2.1Until changed by the directors the corporate seal of the Corporation shall be in the
form impressed in the margin hereof. 3. FISCAL YEAR 3.1Until changed by resolution of the directors the fiscal year of the Corporation shall
terminate on the 31st day of December in each year. 4. DIRECTORS 4.1Number and Quorum. The number of directors shall be determined by the
directors but shall be not fewer than the minimum and not more than the maximum provided in the
articles. At least two directors shall not be officers or employees of the Corporation or of any
of its affiliates. A majority of directors or such greater or lesser number as the directors may
from time to time determine shall constitute a quorum for the transaction of business at any
meeting of directors. 4.2Qualification. No person shall be qualified to be a director if that person is
less than eighteen years of age, is of unsound mind and has been so found by a court in Canada or
elsewhere, or has the status of a bankrupt. At least twenty-five per cent of the directors shall
be resident Canadians. 4.3Election and Term of Office.The directors shall be elected at each annual
meeting of shareholders of the Corporation and each director shall hold office until the close of
the first annual meeting following the directors election; provided that if an election of
directors is not held at an annual meeting of shareholders, the directors then in office shall
continue in office until their successors are elected. Retiring directors are eligible for
re-election. 4.4Vacation of Office.A director ceases to hold office if the director dies, is
removed from office by the shareholders, ceases to be qualified for election as a director or
resigns by a written resignation received by the Corporation. A written resignation of a director
becomes effective at the time it is received by the Corporation, or at the time specified in the
resignation, whichever is later. 4.5Removal of Directors.The shareholders may by ordinary resolution at a special
meeting of shareholders remove any director or directors from office provided that where the
holders of any class or series of shares have an exclusive right to elect one or more directors, a
director so elected may only be removed by an ordinary resolution at a meeting of the shareholders
of that class or series. A vacancy created by the removal of a director may be filled at the
meeting of the shareholders at which the director is removed. 4.6Vacancies. A quorum of directors may fill a vacancy among the directors,
subject to the qualification that the total number of directors appointed in this way may not
exceed one third of the number of directors elected at the previous annual meeting of shareholders.
A director appointed or elected to fill a vacancy holds office for the unexpired term of the
directors predecessor. 4.7Action by Directors.The directors shall manage, or supervise the management
of, the business and affairs of the Corporation. Subject to sections 4.8 and 4.9, the powers of
the directors may be exercised at a meeting at which a quorum is present or by resolution in
writing signed by all the directors entitled to vote on that resolution at a meeting of the
directors. Where there is a vacancy in the board of directors the remaining directors may exercise
all the powers of the board so long as a quorum remains in office. 4.8Canadian Residents Required at Meetings.The directors shall not transact
business at a meeting other than filling a vacancy in the board unless at least twenty-five per
cent of the directors (the required number) present are resident Canadians or if a resident
Canadian director who is unable to be present approves in writing or by telephonic, electronic or
other communication facility the business transacted at the meeting and the required number of
resident Canadians would have been present had that director been present at the meeting. 4.9Meeting by Telephonic or Electronic Facility.Where all the directors of the
Corporation consent to the participation of a director in a meeting of directors or of a committee
of directors by means of a telephonic, electronic or other communication facility that permits all
persons participating in the meeting to communicate adequately with each other, such consent may be
given with respect to all meetings of the board and of committees of the board held while such
director holds office; such consent shall also be effective whether given before or after any
particular meeting to which it relates and a director participating in a meeting by such means is
deemed to be present at that meeting. 4.10Place of Meetings.Meetings of directors may be held at any place within or
outside of Canada. 4.11Calling of Meetings. Meetings of the directors shall be held at such time and
place as the Chairperson of the Board, the President and Chief Executive Officer or any two
directors may determine. 4.12Notice of Meeting. Notice of the time and place of each meeting of directors
shall be given to each director by telephone not less than 48 hours before the time of the meeting
or by written notice not less than four days before the day of the meeting and, subject to the Act,
need not specify the purpose of or the business to be transacted at the meeting. Meetings of the
directors may be held at any time without notice if all the directors have waived or are deemed to
have waived notice. 4.13First Meeting of New Board.No notice shall be necessary for the first
meeting of newly-elected directors held immediately following their election at a meeting of
shareholders. 4.14Adjourned Meeting. Notice of an adjourned meeting of directors is not
required if the time and place of the adjourned meeting is announced at the original meeting. 4.15Regular Meetings. The directors may appoint a day or days in any month or
months for regular meetings and shall designate the place and time at which such meetings are to be
held. A copy of any resolution of directors fixing the place and time of regular meetings of the
board shall be sent to each director forthwith after being passed, and no other notice shall be
required for any such regular meeting. 24




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4.16Chairperson. The Chairperson of the Board, or in the Chairpersons absence
the President and Chief Executive Officer if that person is a director, or in the President and
Chief Executive Officers absence a director chosen by the directors at the meeting shall be the
chairperson of any meeting of directors. 4.17Voting at Meetings.Questions arising at any meeting of directors shall be
decided by a majority of votes. In the event that an equality of votes occurs, the motion
addressing the question at issue shall be deemed to be defeated, and while the Chairperson may vote
as a director, he or she shall not have a second or casting vote. 4.18Conflict of Interest. A director or officer who is a party to, or who is a
director or officer or is acting in a similar capacity of, or has a material interest in, a party
to a material contract or material transaction, whether entered into or proposed, with the
Corporation shall disclose the nature and extent of the directors or officers interest at the
time and in the manner provided by the Act. 4.19Remuneration and Expenses. The directors shall be paid such remuneration as
the directors or a committee thereof may from time to time by resolution determine. The directors
shall also be entitled to be paid their travelling and other expenses properly incurred by them in
going to, attending and returning from meetings of directors or committees of directors. 5. COMMITTEES 5.1Committees of Directors. The directors may appoint from among their number one
or more committees of directors and delegate to them any of the powers of the directors except
those which under the Act a committee of directors has no authority to exercise. 5.2Transaction of Business. Subject to section 4.9, the powers of a committee
appointed by the directors may be exercised at a meeting at which a quorum is present or by
resolution in writing signed by all members of the committee entitled to vote on that resolution at
a meeting of the committee. Meetings of a committee may be held at any place in or outside Canada. 5.3Procedure. The quorum of each committee shall be not less than a majority of
committee members. Each committee shall have the power to regulate its procedure, subject to its
committee charter, as applicable. 6. OFFICERS 6.1General. The directors may from time to time appoint a Chairperson of the
Board, a President and Chief Executive Officer, one or more Vice Presidents (which include
Executive Vice Presidents, Senior Vice Presidents and other Vice Presidents), a Secretary and such
other officers as the directors may determine, including one or more assistants to any of the
officers so appointed. The officers so appointed may but need not be members of the board of
directors except as provided in sections 6.3 and 6.4. 6.2Term of Office. Any officer may be removed by the directors at any time but
such removal shall not affect the rights of that officer under any contract of employment with the
Corporation. Otherwise, each officer shall hold office until the officers successor is appointed. 6.3The Chairperson of the Board.The Chairperson of the Board, or, if the
directors so decide, the Co-Chairpersons of the Board, if any, shall be appointed from among the
directors and shall, when present, be chairperson of meetings of shareholders and directors and
shall have such other powers and duties as the directors may determine. 6.4The President and Chief Executive Officer. Unless the directors otherwise
determine, the President and Chief Executive Officer shall be the chief executive officer of the
Corporation and shall have general supervision of its business and affairs and in the absence of
the Chairperson of the Board shall be chairperson at meetings of shareholders and directors when
present. 6.5Vice President. A Vice President (including any Executive Vice Presidents,
Senior Vice Presidents and other Vice Presidents) shall have such powers and duties as the
directors or the President and Chief Executive Officer may determine. 6.6Secretary. The Secretary shall give, or cause to be given, all notices
required to be given to shareholders, directors, auditors and members of committees; shall attend
and be secretary of all meetings of shareholders, directors and committees appointed by the
directors and shall enter or cause to be entered in books kept for that purpose minutes of all
proceedings at such meetings; shall be the custodian of the corporate seal of the Corporation and
of all records, books, documents and other instruments belonging to the Corporation; and shall have
such other powers and duties as the directors or the President and Chief Executive Officer may
determine. 6.7Other Officers. The powers and duties of all other officers shall be such as
the directors or the President and Chief Executive Officer may determine. Any of the powers and
duties of an officer to whom an assistant has been appointed may be exercised and performed by such
assistant, unless the directors or the President and Chief Executive Officer otherwise direct. 6.8Variation of Duties. The directors may, from time to time, vary, add to or
limit the powers and duties of any officer. 6.9Conflict of Interest. An officer shall disclose the officers interest in any
material contract or material transaction, whether entered into or proposed, in accordance with
section 4.18. 6.10Agents and Attorneys. The directors shall have power from time to time to
appoint agents or attorneys for the Corporation within or outside Canada with such powers
(including the power to sub-delegate) of management, administration or otherwise as the directors
may specify. 7. PROTECTION OF DIRECTORS, OFFICERS AND OTHERS 7.1Indemnification of Directors and Officers. The Corporation shall indemnify a
director or officer, a former director or officer or a person who acts or acted at the
Corporations request as a director or officer, or in a similar capacity of another entity, and the
heirs and legal representatives of such a person to the extent permitted by the Act. 7.2Insurance. The Corporation may purchase and maintain insurance for the benefit
of any person referred to in section 7.1 to the extent permitted by the Act. 8. MEETINGS OF SHAREHOLDERS 8.1Annual Meetings. The annual meeting of the shareholders shall be held at the
registered office of the Corporation or at such other place within Canada as the directors may
determine, or at any place outside Canada specified in the articles of the Corporation or agreed to
by all the shareholders entitled to vote at that meeting, at such time in each year as the
directors may determine, for the purpose of receiving the reports and statements required to be
placed before the shareholders at an annual meeting, electing directors, appointing an auditor or
auditors, and for the transaction of such other business as may properly be brought before the
meeting. 8.2Other Meetings. The directors shall have power at any time to call a special
meeting of shareholders to be held at such place within Canada as the directors may determine, or
at any place outside Canada specified in the articles of the Corporation or agreed to by all the
shareholders entitled to vote at that meeting, at such time as may be determined by the board of
directors. 25




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8.3Notice of Meetings. Notice of the time and place of a meeting of shareholders
shall be given not less than 21 days nor more than 60 days before the meeting to each holder of
shares carrying voting rights at the close of business on the record date for notice, to each
director and to the auditor of the Corporation. Notice of a meeting of shareholders at which
special business is to be transacted shall state the nature of that business in sufficient detail
to permit the shareholder to form a reasoned judgment thereon and shall include the text of any
special resolution to be submitted to the meeting. All business transacted at a special meeting of
shareholders and all business transacted at an annual meeting of shareholders, except consideration
of the financial statements, auditors report, election of directors and reappointment of the
incumbent auditor, shall be deemed to be special business. 8.4Record Date for Notice. For the purpose of determining shareholders entitled
to receive notice of a meeting of shareholders, the directors may fix in advance a date as the
record date for such determination of shareholders, but the record date shall not precede by more
than 60 days or by less than 21 days the date on which the meeting is to be held. Where no record
date is fixed, the record date for the determination of shareholders entitled to receive notice of
a meeting of shareholders shall be at the close of business on the day immediately preceding the
day on which the notice is given, or, if no notice is given, shall be the day on which the meeting
is held. If a record date is fixed, unless notice of the record date is waived in writing by every
holder of a share of the class or series affected whose name is set out in the securities register
at the close of business on the day the directors fix the record date, notice thereof shall be
given, not less than seven days before the date so fixed, by advertisement in a newspaper published
or distributed in the place where the Corporation has its registered office and in each place in
Canada and the United States where it has a transfer agent or where a transfer of its shares may be
recorded and by written notice to each stock exchange in Canada and the United States on which the
shares of the Corporation are listed for trading. 8.5Record Date for Voting. For the purpose of determining shareholders entitled
to vote at a meeting of shareholders, the directors may fix in advance a date as the record date
for such determination of shareholders, but the record date shall not precede by more than 60 days
or by less than 21 days the date on which the meeting is to be held. If a record date is fixed,
unless notice of the record date is waived in writing by every holder of a share of the class or
series affected whose name is set out in the securities register at the close of business on the
day the directors fix the record date, notice thereof shall be given, not less than seven days
before the date so fixed, by advertisement in a newspaper published or distributed in the place
where the Corporation has its registered office and in each place in Canada and the United States
where it has a transfer agent or where a transfer of its shares may be recorded and by written
notice to each stock exchange in Canada and the United States on which the shares of the
Corporation are listed for trading. 8.6Persons Entitled to be Present. The only persons entitled to be present at a
meeting of shareholders shall be those entitled to vote thereat, the directors, the auditor and
other persons who are entitled or required under any provision of the Act or the articles or
by-laws of the Corporation to attend a meeting of shareholders of the Corporation. Any other
person may be admitted only on the invitation of the chairperson of the meeting or with the consent
of the meeting. 8.7Chairperson. The Chairperson of the Board, or in the Chairpersons absence the
President and Chief Executive Officer, or in the President and Chief Executive Officers absence a
person chosen by a vote at the meeting shall be chairperson of meetings of shareholders. 8.8Scrutineers. At each meeting of shareholders one or more scrutineers, who need
not be shareholders, may be appointed by a resolution or by the chairperson with the consent of the
meeting. 8.9Quorum. Two persons present in person and each being entitled to vote thereat
shall constitute a quorum for the transaction of business at any meeting of shareholders. 8.10Right to Receive Notice. The Corporation shall prepare a list of shareholders
entitled to receive notice of a meeting, arranged in alphabetical order and showing the number of
shares held by each shareholder, which list shall be prepared, 8.10.1 if a record date for notice is fixed under section 8.4, not later than ten days
after that record date; and 8.10.2 if no record date for notice is fixed under section 8.4, on the record date for
notice established under section 8.4. 8.11Right to Vote. The Corporation shall prepare a list of shareholders entitled
to vote at a meeting, arranged in alphabetical order and showing the number of shares held by each
shareholder, which list shall be prepared, 8.11.1 if a record date for voting is fixed under section 8.5, not later than ten days
after that record date; and 8.11.2 if no record date for voting is fixed, not later than 10 days after the record
date for notice fixed under section 8.4 or, if no record date for notice was so fixed, then
not later than the record date for notice established under section 8.4, and in both cases the
list shall be prepared as of the record date for notice. A shareholder whose name appears in the list prepared under this section 8.11 is entitled to
vote the shares shown opposite that shareholders name at the meeting to which the list relates. 8.12Joint Shareholders. Where two or more persons hold shares jointly, one of
those holders present at a meeting of shareholders may in the absence of the others vote the
shares, but if two or more of those persons are present, in person or by proxy, they shall vote as
one on the shares jointly held by them. 8.13Representatives. Where a body corporate or association is a shareholder of
the Corporation, the Corporation shall recognize any individual authorized by a resolution of the
directors or governing body of the body corporate or association to represent it at meetings of
shareholders of the Corporation. An individual so authorized may exercise on behalf of the body
corporate or association the individual represents all the powers it could exercise if it were an
individual shareholder. 8.14Executors and Others.An executor, administrator, committee of a mentally
incompetent person, guardian or trustee and, where a corporation is such executor, administrator,
committee, guardian or trustee of a testator, intestate, mentally incompetent person, ward or
cestui que trust, any duly appointed representative of such corporation, upon filing with the
secretary of the meeting sufficient proof of the persons appointment, shall represent the shares
in the persons or its hands at all meetings of shareholders of the Corporation and may vote
accordingly as a shareholder in the same manner and to the same extent as the shareholder of
record. If there be more than one executor, administrator, committee, guardian or trustee, the
provisions of this by-law respecting joint shareholders shall apply. 8.15Proxyholders. Every shareholder entitled to vote at a meeting of shareholders
may by means of a proxy appoint a proxyholder or one or more alternate proxyholders, who need not
be shareholders, as the shareholders nominee to attend and act at the meeting in the manner, to
the extent and with the authority conferred by the proxy. A proxyholder or an alternative
proxyholder has the same rights as the shareholder who appointed the proxyholder to speak at a
meeting of shareholders in respect of any matter, to vote by way of ballot at the meeting and,
except where a proxyholder or an alternative proxyholder has conflicting instructions from more
than one shareholder, to vote at such meeting in respect of any matter by way of any show of hands.
A proxy shall be executed by the shareholder or the shareholders attorney authorized in writing
or, if the shareholder is a body 26




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corporate, by an officer or attorney thereof duly authorized and shall be valid only at the meeting
in respect of which it is given or any adjournment thereof. A proxy shall be in such form as may
be prescribed from time to time by the directors or in such other form as the chairperson of the
meeting may accept and as complies with all applicable laws and regulations. 8.16Time for Deposit of Proxies. The directors may by resolution fix a time not
exceeding forty-eight hours, excluding Saturdays, Sundays and holidays, preceding any meeting or
adjourned meeting of shareholders before which time proxies to be used at that meeting must be
deposited with the Corporation or an agent thereof, and any period of time so fixed shall be
specified in the notice calling the meeting. 8.17Votes to Govern. Subject to the Act and the articles of the Corporation, at
all meetings of shareholders every question shall be decided, either on a show of hands (or its
functional equivalent) or by ballot, by a majority of the votes cast on the question. In case of
an equality of votes, the chairperson of the meeting shall have a second or casting vote. 8.18Electronic Meetings and Voting. If the directors call a meeting of
shareholders, they may determine that the meeting of shareholders shall be held entirely by means
of a telephonic, electronic or other communication facility that permits all participants to
communicate adequately with each other during the meeting, and any vote at that meeting of
shareholders shall be held entirely by means of that communication facility. A meeting of
shareholders may also be held at which some, but not all, persons entitled to attend may
participate and vote by means of a telephonic, electronic or other communication facility that
permits all participants to communicate adequately with each other during the meeting/such a
communication facility, if the Corporation makes one available. A person participating in a
meeting by such means is deemed to be present at the meeting. Any vote at a meeting of
shareholders may be also held entirely by means of a telephonic, electronic or other communication
facility, if the Corporation makes one available, even if none of the persons entitled to attend
otherwise participates in the meeting by means of a communication facility. For the purpose of
voting, a communication facility that is made available by the Corporation must enable the votes to
be gathered in a manner that permits their subsequent verification and permits the tallied votes to
be presented to the Corporation without it being possible for the Corporation to identify how each
shareholder or group of shareholders voted. 8.19Show of Hands. Voting at a meeting of shareholders shall be by show of hands,
or the functional equivalent of a show of hands by means of electronic, telephonic or other
communication facility, except where a ballot is demanded by a shareholder or proxyholder entitled
to vote at the meeting or where required by the chairperson. A ballot may be demanded either
before or after any vote by show of hands, or its functional equivalent. Upon a show of hands, or
its functional equivalent, every person who is present and entitled to vote shall have one vote.
Whenever a vote by show of hands, or its functional equivalent, shall have been taken upon a
question, unless a ballot thereon be required or demanded, an entry in the minutes of a meeting of
shareholders to the effect that the chairperson declared a motion to be carried is admissible in
evidence as prima facieproof of the fact without proof of the number or proportion of the votes
recorded in favour of or against the motion. A demand for a ballot may be withdrawn at any time
prior to taking of a poll on the ballot. 8.20Ballots. If a ballot is demanded or required, the vote upon the question
shall be taken in such manner as the chairperson of the meeting shall direct, or as provided by the
electronic, telephonic or other communication facility through which votes may be cast. Each
person present and entitled to vote at the meeting shall, unless the articles of the Corporation
otherwise provide, be entitled to one vote for each share in respect of which that person is
entitled to vote at the meeting. 8.21Adjournment. The chairperson of any meeting of shareholders may, with the
consent of the meeting and subject to such conditions as the meeting may decide, adjourn the same
from time to time and from place to place. If a meeting of shareholders is adjourned for less than
thirty days it is not necessary to give notice of the adjourned meeting other than by announcement
at the earliest meeting that is adjourned. If a meeting of shareholders is adjourned by one or
more adjournments for an aggregate of thirty days or more, notice of the adjourned meeting shall be
given as for an original meeting. Any business may be brought before or dealt with at any
adjourned meeting which might have been brought before or dealt with at the original meeting in
accordance with the notice calling such original meeting. 8.22Resolution in Lieu of Meeting. A resolution in writing signed by all the
shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it
had been passed at a meeting of shareholders except where a written statement in respect thereof
has been submitted by a director or where representations in writing are submitted by the auditor
of the Corporation, in either case, in accordance with the Act. 9. SHARES 9.1Issue. Subject to the Act and the articles of the Corporation, shares of the
Corporation may be issued at such times and to such persons and for such consideration as the
directors may determine, provided that no shares may be issued until it is fully paid as provided
in the Act. 9.2Commissions. The directors may authorize the Corporation to pay a reasonable
commission to any person in consideration of the person purchasing or agreeing to purchase shares
of the Corporation from the Corporation or from any other person, or procuring or agreeing to
procure purchasers for any such shares. 9.3Share Certificate. Every shareholder is entitled at the shareholders option
to a share certificate in respect of the shares held by the shareholder that complies with the Act
or to a non-transferable written acknowledgement (written acknowledgement) of the shareholders
right to obtain a share certificate from the Corporation in respect of the shares of the
Corporation held by the shareholder, but the Corporation is not bound to issue more than one share
certificate or written acknowledgement in respect of a share or shares held jointly by several
persons and delivery of a share certificate or written acknowledgement to one of several joint
holders is sufficient delivery to all. Written acknowledgements shall be in such form or forms as
the directors shall from time to time by resolution determine. The Corporation may charge a fee in
accordance with the Act for a share certificate issued in respect of a transfer. Subject to the
provisions of the Act and to the requirements of any stock exchange on which shares of the
Corporation may be listed, share certificates shall be in such form or forms as the directors shall
from time to time approve. Unless otherwise determined by the directors, share certificates shall
be signed by the Chairperson of the Board, the President and Chief Executive Officer, or a Vice
President or a director and need not be under the corporate seal and certificates for shares in
respect of which a transfer agent and/or registrar has been appointed shall not be valid unless
countersigned on behalf of such transfer agent and/or registrar. Share certificates shall be
signed manually, or signatures shall be printed or otherwise mechanically reproduced on the
certificate, and shall include the signature of at least one director or officer of the Corporation
or by or on behalf of a registrar, transfer agent or branch transfer agent of the Corporation. If
a share certificate contains a printed or mechanically reproduced signature of a person, the
Corporation may issue the share certificate, even though the person has ceased to be a director or
an officer of the Corporation, and the share certificate is as valid as if the person were a
director or an officer at the date of its issue. 9.4Transfer Agents and Registrars. For each class of shares issued by it, the
Corporation may appoint one or more agents to keep the securities register and the register of
transfers and one or more branch registers. Such an agent may be designated as a transfer agent or
registrar according to functions and one agent may be designated both transfer agent and registrar.
The securities register, the register of transfers and the branch register or registers (the
registers) shall be kept at the registered office of the Corporation or at such other place
inside or outside Canada designated by the directors. If the registers are kept outside Canada,
the Corporation will make them available for inspection in compliance with the Act. 27




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9.5Transfer of Shares. Subject to the Act, no transfer of a share shall be
registered except upon presentation of the certificate representing such share with an endorsement
which complies with the Act, together with such reasonable assurance that the endorsement is
genuine and effective as the directors may prescribe, upon payment of all applicable taxes and fees
and upon compliance with the articles of the Corporation. 9.6Non-Recognition of Trust. Subject to the Act, the Corporation may treat the
registered holder of any share as the person exclusively entitled to vote, to receive notices, to
receive any dividend or other payment in respect of the share, and to exercise all the rights and
powers of an owner of the share. 9.7Replacement of Share Certificates. Where the owner of a share certificate
claims that the share certificate has been lost, apparently destroyed or wrongfully taken, the
Corporation shall issue or cause to be issued a new certificate in place of the original
certificate if the owner (i) so requests before the Corporation has notice that the share
certificate has been acquired by a bona fidepurchaser; (ii) files with the Corporation an
indemnity bond sufficient in the Corporations opinion to protect the Corporation and any transfer
agent, registrar or other agent of the Corporation from any loss that it or any of them may suffer
by complying with the request to issue a new share certificate; and (iii) satisfies any other
reasonable requirements imposed from time to time by the Corporation. 10. DIVIDENDS AND RIGHTS 10.1Declaration of Dividends. Subject to the Act, the directors may from time to
time declare dividends payable to the shareholders according to their respective rights and
interest in the Corporation. 10.2Cheques. A dividend payable in money shall be paid by cheque to the order of
each registered holder of shares of the class or series in respect of which it has been declared
and mailed by prepaid ordinary mail to such registered holder at the address of such holder in the
Corporations securities register, unless such holder otherwise directs. In the case of joint
holders the cheque shall, unless such joint holders otherwise direct, be made payable to the order
of all such joint holders and mailed to them at their address in the Corporations securities
register. The mailing of such cheque as aforesaid, unless the same is not paid on due
presentation, shall satisfy and discharge the liability for the dividend to the extent of the sum
represented thereby plus the amount of any tax which the Corporation is required to and does
withhold. 10.3Non-Receipt of Cheques. In the event of non-receipt of any dividend cheque by
the person to whom it is sent as aforesaid, the Corporation shall issue to such person a
replacement cheque for a like amount on such terms as to indemnity, reimbursement of expenses and
evidence of non-receipt and of title as the directors may from time to time prescribe, whether
generally or in any particular case. 10.4Record Date for Dividends and Rights. The directors may fix in advance a
date, preceding by not more than 60 days the date for payment of any dividend or the date for the
issue of any warrant or other evidence of the right to subscribe for securities of the Corporation,
as a record date for the determination of the persons entitled to receive payment of such dividend
or to exercise the right to subscribe for such securities, and notice of any such record date shall
be given not less than seven days before such record date in the manner provided by the Act. If no
record date is so fixed, the record date for the determination of the persons entitled to receive
payment of any dividend or to exercise the right to subscribe for securities of the Corporation
shall be at the close of business on the day on which the resolution relating to such dividend or
right to subscribe is passed by the directors. 10.5Unclaimed Dividends. Any dividend unclaimed after a period of six years from
the date on which the same has been declared to be payable shall be forfeited and shall revert to
the Corporation. 11. NOTICES 11.1General. A notice or document required by the Act, the regulations
thereunder, the articles or the by-laws of the Corporation to be sent to a shareholder or director
of the Corporation may be sent by prepaid mail addressed to, or may be delivered personally to, the
shareholder or director at the shareholders or directors latest address as shown in the records
of the Corporation. A notice or document if mailed to a shareholder or director of the Corporation
shall be deemed to have been received at the time it would be delivered in the ordinary course of
mail unless there are reasonable grounds for believing that the shareholder or director did not
receive the notice or the document at that time or at all. 11.2Electronic Delivery. Provided the addressee has consented in writing or
electronically in accordance with the Act and the regulations thereunder, the Corporation may
satisfy the requirement to send any notice or document referred to in section 11.1 by creating and
providing an electronic document in compliance with the Act and the regulations under the Act. An
electronic document is deemed to have been received when it enters the information system
designated by the addressee or, if the document is posted on or made available through a generally
accessible electronic source, when the addressee receives notice in writing of the availability and
location of that electronic document, or, if such notice is sent electronically, when it enters the
information system designated by the addressee. 11.3Undelivered Notices. If the Corporation sends a notice or document, including
a notice or document via electronic mail (e-mail) to a shareholder in accordance with this
section and the notice, document or e-mail is returned on two consecutive occasions because the
shareholder cannot be found, the Corporation is not required to send any further notices, documents
or e-mails to the shareholder until the shareholder informs the Corporation in writing of the
shareholders new address. 11.4Computation of Time. In computing the time when a notice or document must be
given or sent under any provision requiring a specified number of days notice of any meeting or
other event, the day on which the notice or document is given or sent shall be excluded and the day
on which the meeting or other event occurs shall be included. 11.5Omission and Errors. The accidental omission to give any notice or send any
document to any shareholder, director or other person or the non-receipt of any notice or document
by any shareholder, director or other person or any error in any notice or document not affecting
the substance thereof shall not invalidate any action taken at any meeting held pursuant to such
notice or otherwise founded on such notice or document. 11.6Notice to Joint Shareholders. All notices or documents with respect to any
shares registered in more than one name may, if more than one address appears on the securities
register of the Corporation in respect of such joint holding, be given to such joint shareholders
at the first address so appearing, and all notices so given or documents so sent shall be
sufficient notice to all the holders of such shares. 11.7Proof of Service. A certificate of the Secretary or other duly authorized
officer of the Corporation, or of any agent of the Corporation, as to facts in relation to the
mailing or delivery or sending of any notice or document to any shareholder or director of the
Corporation or to any other person or publication of any such notice or document, shall be
conclusive evidence thereof and shall be binding on every shareholder or director or other person
as the case may be. 11.8Signature to Notice. The signature to any notice or document given by the
Corporation, if not in electronic form, may be printed or otherwise mechanically reproduced thereon
or partly printed or otherwise mechanically reproduced thereon. 11.9Waiver of Notice. Notice may be waived or the time for the sending of a
notice or document may be waived or abridged at any time with the consent in writing of the person
entitled thereto. Attendance of any director at a meeting of the directors or of any shareholder
at a meeting of 28




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shareholders is a waiver of notice of such meeting, except where the director or shareholder
attends for the express purpose of objecting to the transaction of any business on the grounds that
the meeting is not lawfully called. 12. BUSINESS OF THE CORPORATION 12.1Voting Shares and Securities in Other Corporations. All of the shares or
other securities carrying voting rights of any other body corporate or bodies corporate held from
time to time by the Corporation may be voted at any and all meetings of holders of such securities
of such other body corporate or bodies corporate in such manner and by such person or persons as
the directors of the Corporation shall from time to time determine or failing such determination
the proper signing officers of the Corporation may also from time to time execute and deliver for
and on behalf of the Corporation instruments of proxy and arrange for the issue of voting
certificates and other evidence of the right to vote in such names as they may determine. 12.2Bank Accounts, Cheques, Drafts and Notes. The Corporations bank accounts
shall be kept in such chartered bank or banks, trust company or trust companies or other firm or
corporation carrying on a banking business as the directors may by resolution from time to time
determine. Cheques on bank accounts, drafts drawn or accepted by the Corporation, promissory notes
given by it, acceptances, bills of exchange, orders for the payment of money and other instruments
of a like nature may be made, signed, drawn, accepted or endorsed, as the case may be, by such
officer or officers, person or persons as the directors may by resolution from time to time name
for that purpose. Cheques, promissory notes, bills of exchange, orders for the payment of money
and other negotiable paper may be endorsed for deposit to the credit of any one of the
Corporations bank accounts by such officer or officers, person or persons, as the directors may by
resolution from time to time name for that purpose, or they may be endorsed for such deposit by
means of a stamp bearing the Corporations name. 12.3Execution of Instruments. The Chairperson of the Board, the President and
Chief Executive Officer, a Vice President (which includes Executive Vice Presidents, Senior Vice
Presidents and other Vice Presidents) or any director, or the Secretary or Assistant Secretary,
shall have authority to sign in the name and on behalf of the Corporation all instruments in
writing and any instruments in writing so signed shall be binding upon the Corporation without any
further authorization or formality. The board of directors shall have power from time to time by
resolution to appoint any other officer or officers or any person or persons on behalf of the
Corporation either to sign instruments in writing generally or to sign specific instruments in
writing. Any signing officer may affix the corporate seal to any instrument requiring the same.
The term instruments in writing as used herein shall, without limiting the generality thereof,
include contracts, documents, powers of attorney, deeds, mortgages, hypothecs, charges,
conveyances, transfers and assignments of property (real or personal, immovable or movable),
agreements, tenders, releases, receipts and discharges for the payment of money or other
obligations, conveyances, transfers and assignments of shares, stocks, bonds, debentures or other
securities, instruments of proxy and all paper writing. 13. INTERPRETATION 13.1In this by-law, wherever the context requires or permits, the singular shall include
the plural and the plural the singular; the word person shall include firms and corporations, and
masculine gender shall include the feminine and neuter genders. Wherever reference is made to any
determination or other action by the directors such shall mean determination or other action by or
pursuant to a resolution passed at a meeting of the directors, or by or pursuant to a resolution
consented to by all the directors as evidenced by their signatures thereto. Wherever reference is
made to the Canada Business Corporations Act or the Act, it shall mean the Canada Business
Corporations Act, R.S.C. 1985, c. C-44 and every other act or statute incorporated therewith or
amending the same, or any act or statute substituted therefor. Unless the context otherwise
requires, all words used in this by-law shall have the meanings given to such words in the Act. 29




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Schedule C CORPORATE GOVERNANCE GUIDELINES 1. INTRODUCTION Corporate governance relates to the activities of the board of directors who are elected by and are
accountable to the shareholders, and takes into account the role of management who are appointed by
the board of directors and who are charged with the ongoing management of the corporation. The Board is of the view that Brookfields corporate governance policies and practices, outlined
below (the Guidelines) are comprehensive and consistent with requirements of the New York Stock
Exchange, the Toronto Stock Exchange and the applicable provisions under the U.S. Sarbanes-Oxley
Act of 2002 and applicable Canadian Securities laws. The board of directors (the Board) of Brookfield Properties Corporation (Brookfield or the
Corporation) will revise these Guidelines from time to time based on its assessment of
Brookfields needs and legal and regulatory developments. The Corporations Governance and
Nominating Committee will review these Guidelines annually, or more often if warranted, and
recommend to the board of directors such changes as it deems necessary and appropriate. 2. ROLE AND FUNCTIONS OF THE BOARD The role of the board of directors is to oversee the business and affairs of Brookfield which are
conducted by its officers and employees under the direction of the Chief Executive Officer. In
doing so, the board of directors acts at all times with a view to the best interests of Brookfield.
The Board endeavors to ensure that shareholder value is enhanced on a sustainable basis and in a
manner that recognizes the interests of other stakeholders in Brookfield including its employees,
suppliers, customers and the communities in which it operates. In fulfilling its responsibilities, the board of directors, both directly and through its various
committees, shall: Strategic planning  

oversee the strategic planning process including, on an annual basis, reviewing and approving the business plan for
Brookfield and monitoring performance of Brookfield under the plan;  

oversee the financial and business strategies and objectives included within the business plan; Appoint and monitor senior management  

develop a position description for the Chief Executive Officer including the corporate objectives that the Chief Executive
Officer is responsible for meeting;  

oversee the selection, evaluation and compensation of the Chief Executive Officer:  

oversee the selection, evaluation and compensation of other senior management;  

monitor succession planning of the Chief Executive Officer and other members of senior management;  

to the extent feasible, satisfy itself as to the integrity of the Chief Executive Officer and other members of senior management; Risk assessment and management  

assess the major risks facing Brookfield and its
businesses and review, approve, monitor and oversee the
implementation of appropriate systems to manage those
risks; Public disclosure and financial reporting  

oversee Brookfields public disclosure and financial reporting, review and monitor Brookfields
management information systems and disclosure controls and procedures, its internal controls and
procedures for financial reporting and compliance with Brookfields code of business conduct and ethics
(the Code of Business Conduct and Ethics) to ensure that Brookfield maintains its integrity and
accountability; Corporate governance  

ensure an appropriate system of corporate governance is in place so the board of directors and management
can operate effectively, in the best interests of Brookfield;  

confirm that processes are in place for Brookfield and its businesses to address and comply with
applicable legal, regulatory, corporate, securities and other compliance matters;  

oversee the creation of a culture of integrity throughout the organization; Approval of certain matters  

approve all material transactions for Brookfield;  

approve all transactions (other than diminimus transactions) involving related parties to Brookfield; and  

approve those matters which may not be delegated by the board of directors under applicable corporate law
including, among others, the issuance of securities of Brookfield (except in the manner and on terms
authorized by the board of directors), the declaration of dividends, the repurchase or redemption of
shares of Brookfield and the adoption, repeal or amendment of the by-laws of Brookfield, or any other
matter which the board of directors reserved to itself the right to approve notwithstanding the
delegation to senior management of the authority to manage the business of Brookfield. 3. QUALIFICATIONS OF DIRECTORS Directors are expected to have the highest personal and professional ethics and values and be
committed to advancing the best interests of Brookfield and its shareholders. They are also
expected to possess skills and competencies in areas that are relevant to Brookfields activities
and that enhance the ability of the board of directors to effectively oversee the business and
affairs of Brookfield. Each director must have an understanding of Brookfields principal operational and financial
objectives, plans and strategies, financial position and performance as well as the performance of
Brookfield relative to its principal competitors. Directors must have sufficient time to carry out
their duties and not assume responsibilities that would materially interfere with or be
incompatible with Board membership. Directors who experience a significant change in their
personal circumstances, including a change in their principal occupation, are expected to advise
the Chairperson of the Governance and Nominating Committee and, if determined appropriate by the
board of directors on the recommendation of the Governance and Nominating Committee, resign from
the board of directors. 30




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4. COMPOSITION OF BOARD Size of Board and selection process The directors of Brookfield are elected each year by the shareholders at the annual meeting of
shareholders. The Governance and Nominating Committee recommends to the full Board the nominees
for election to the board of directors and based on this recommendation the board of directors
proposes a slate of nominees to the shareholders for election. Any shareholder may propose a
nominee for election to the board of directors either by means of a shareholder proposal in
compliance with the requirements prescribed by the Canada Business Corporations Act(CBCA) or at
the annual meeting. The Board also recommends the number of directors on the board of directors for approval to the
shareholders, again based on the recommendation of the Governance and Nominating Committee.
Presently, the board of directors believes that not less than twelve directors is an appropriate
size for the board of directors and its committees to operate effectively. Between annual
meetings, the board of directors may appoint directors to serve until the next annual meeting,
subject to the relevant provisions of the CBCA. Independence of directors and representation of shareholders interests Brascan Corporation (Brascan) owns approximately 50% of Brookfields common shares and 97% of
Brookfields Limited Class A redeemable voting preferred shares. As such, Brookfield is a
controlled company as defined by the New York Stock Exchange rules on corporate governance (the
NYSE Rules) and has chosen to rely on the NYSE Rules controlled companies exemption with
respect to certain independence requirements. Six of Brookfields twelve directors are independent
of management and of Brascan. Brascan will have three representatives on the board of directors
and the remaining three will be members of management. The Board considers that its current size
and composition is appropriate given the diversity of Brookfields operations and the need for a
variety of experience and backgrounds. The Board believes that a combination of independent
directors, directors related to Brascan and directors drawn from management leads to a constructive
exchange in board deliberations resulting in objective, well-balanced and informed discussion and
decision making. The Board, with the assistance of the Governance and Nominating Committee, determines whether each
director is an Independent Director. In making these determinations, the board of directors
examines each individual directors circumstances and his or her relationship to Brookfield and its
affiliates and evaluates if he or she meets the definition of an Independent Director.  Independent Director means a director who has been affirmatively determined by the board
of directors to have no material relationship with Brookfield, either directly or as a
partner, shareholder or officer of an organization that has a relationship with Brookfield.
In addition, a director who:  (i)

is an employee, or whose immediate family member is an executive officer of
Brookfield is not independent until three years after the end of such employment
relationship;(ii)

is receiving, or whose immediate family member receives, more than US$50,000
per year in direct compensation from Brookfield, other than director and committee fees
and pension or other forms of deferred compensation for prior service (provided such
compensation is not contingent in any way on continued service) is not independent
until three years after he or she ceases to receive more than US$50,000 per year in
compensation;(iii)

is affiliated with or employed by, or whose immediate family member is
employed in a professional capacity by a present or former internal or external auditor
of Brookfield is not independent until three years after the end of the affiliation or
employment of the auditing relationship;(iv)

is employed as, or whose immediate family member is employed as, an executive
officer of another company where any of the present (at the time of review) members of
senior management of Brookfield serve on that companys compensation committee is not
independent until three years after the end of such service or the employment
relationship; and(v)

is an executive officer or an employee of, or whose immediate family member is
an executive officer of, another company for which Brookfield makes payments to, or
receives payments from, Brookfield for property or services in an amount which, in any
single fiscal year, exceeds at least 2% or US$1 million, whichever is greater, of such
other companys consolidated gross revenues, in each case is not independent until
three years after falling below such threshold. For the purposes of the definition above, the term Corporation includes any parent, subsidiary or
affiliated entity of Brookfield and the term immediate family member means the directors current
spouse, parents, children, siblings, current mothers- and fathers-in-law, current sons- and
daughters-in-law, current brothers and sisters-in-law and anyone (other than employees) who shares
the directors home. Members of the Audit Committee are subject to the additional requirements that they may not:  (i)

accept any consulting, advisory, or other compensatory fee from Brookfield or
any of its subsidiaries, other than director and committee fees and pension or other
forms of deferred compensation for prior service (provided such compensation is not
contingent in any way on continued service), or(ii)

be an affiliated person of Brookfield or any of its subsidiaries (within the
meaning of applicable regulations). Each member of the Audit Committee shall be financially literate.  Financially Literate means the ability to read and understand a set of financial
statements that present a breadth and level of complexity of accounting issues that are
generally comparable to the breadth and complexity of the issues that can reasonably be
expected to be raised by Brookfields financial statements. The Board will review the independence of all directors on an annual basis and will publish its
determinations in the management proxy circular for Brookfields annual meeting of shareholders and
in accordance with other applicable laws. Directors have an ongoing obligation to inform the board
of directors of any material changes in their circumstances or relationships that may affect the
board of directors determination as to their independence. Chairperson(s) The Board will in each year elect from among its members a Chairperson who is not the Chief
Executive Officer. The Chairperson of the board of directors is principally responsible for
overseeing the operation and affairs of the board of directors. The Board has established a
position description for the Chairperson which is attached as an Appendix to these Guidelines. The
Board may also appoint a Co-Chairperson or Vice-Chairperson where it believes this would enhance
the operations of the board of directors. In this case, the Co-Chairperson or Vice-Chairperson
will share the responsibilities of the Chairperson. Term All directors are elected at the annual meeting of shareholders of Brookfield for a term of one
year. The Board does not believe it is advisable to establish term limits or mandatory retirement
ages for its members as such limits may deprive Brookfield and its shareholders of the
contributions of members who have been able to develop, over time, valuable insights into
Brookfield, its strategy and business operations. 31




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Board succession The Governance and Nominating Committee is responsible for maintaining a Board succession plan that
is responsive to Brookfields needs and the interests of its shareholders. In considering new
nominees to the board of directors, the Committee shall consider the following criteria:  (i)

the competencies and skills necessary for the board of directors, as a whole,
to possess;(ii)

the competencies and skills that each existing director possesses; and(iii)

the competencies and skills each new nominee will bring to the boardroom. 5. MEETINGS The Board has meetings at least once in each quarter, with additional meetings held when required.
Additional meetings may be called by the Chairperson, the Chief Executive Officer or any two
directors on proper notice. The Chairperson is primarily responsible for the agenda. Prior to each Board meeting, the
Chairperson discusses agenda items for the meeting with the Chief Executive Officer, other members
of senior management and other members of the board of directors. Any director may propose the
inclusion of items on the agenda, request the presence of or a report by any member of senior
management, or at any Board meeting raise subjects that are not on the agenda for that meeting. The Human Resources and Compensation Committee, the Governance and Nominating Committee and the
Audit Committee generally have meetings quarterly, with additional meetings held when required.
Meeting frequency and agendas for the standing committees may change from time to time, however,
depending on opportunities or risks faced by Brookfield. Any member of a committee may call a
committee meeting, request that an item be included on the committees agenda or raise subjects
that are not on the agenda for that meeting. Audit Committee meetings can also be called by
Brookfields auditor or Chief Financial Officer of Brookfield. Notice of the place, day and time of each Board or committee meeting must be served on each
director at least 48 hours prior to the meeting. Director or committee members may waive notice of
any meeting and attendance at a meeting is deemed to be waiver of notice. The notice need not
state the purpose or purposes for which the meeting is being held. Procedures for Board meetings Procedures for Board meetings are determined by the Chairperson unless otherwise determined by the
by-laws of Brookfield or a resolution of the board of directors. Procedures for committee meetings are determined by the committee chairperson unless otherwise
determined by the by-laws of Brookfield or a resolution of the committee or the board of directors. A quorum for any Board or committee meeting is not less than a majority of directors, unless the
directors fix the quorum otherwise. The Chairperson may vote as a director at any meeting, but does not have a second or casting vote
in the case of an equality of votes. The Secretary of Brookfield keeps minutes of the meeting of the board of directors and each of its
committees and circulates copies of the minutes to each Board or committee member, as the case may
be, on a timely basis. Independent Directors meetings The Independent Directors have at least four meetings a year with only Independent Directors
present. Each year, the directors will appoint an Independent Director to act as lead independent
director to chair these meetings and to report to the board of directors on these meetings as is
appropriate (the Lead Independent Director). The Board has developed a position description for
the Lead Independent Director which is attached as an Appendix to these Guidelines. 6. DIRECTORS RESPONSIBILITIES Director orientation and continuing education The Chief Financial Officer and the Secretary of Brookfield, under the oversight of the Governance
and Nominating Committee, are responsible for providing orientation and continuing education
programs for new directors. Generally, new directors are provided with materials describing
Brookfields business and governance policy and procedures and they also meet individually with the
Chief Executive Officer and the Chairperson to learn about Brookfield and its operations. Attendance and participation Each director is expected to attend all meetings of the board of directors and any committee of
which he or she is a member. A director who is unable to attend a meeting in person may
participate by telephone or teleconference. The Board may also take action from time to time by
unanimous written consent. In advance of each Board and committee meeting, members will receive the proposed agenda and other
materials important to the directors understanding of the matters considered. Directors are
expected to spend the time needed to review the materials in advance of such meetings and to
actively participate in such meetings. Service on other boards and audit committees The Board does not believe that its members should be prohibited from serving on the boards of
other public companies so long as these commitments do not materially interfere and are compatible
with their ability to fulfill their duties as a member of the board of directors. Directors must
advise the Chairperson in advance of accepting an invitation to serve on the board of another
public company and, as a general rule, directors are not allowed to join a board of another public
company on which two or more other directors of Brookfield serve. Members of the Audit Committee may not serve on the audit committees of more than two other public
companies without the prior approval of the board of directors. Access to independent advisors The Board and any committee may at any time retain outside financial, legal or other advisors at
the expense of Brookfield and have the authority to determine the advisors fees and other
retention terms. Any director may, subject to the approval of the Chairperson, retain an outside
advisor at the expense of Brookfield. 7. COMMITTEES OF THE BOARD General Brookfield believes that Board committees assist in the effective functioning of the board of
directors. The Governance and Nominating Committee and the Human Resource and Compensation Committee are
comprised of a majority of independent directors and each has one Brascan representative. The
Audit Committee is comprised solely of independent directors. 32




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The Board has three standing committees: the Audit Committee, the Human Resources and Compensation
Committee, and the Governance and Nominating Committee. Special committees may be formed from time
to time as required to review particular matters or transactions. While the board of directors
retains overall responsibility for corporate governance matters, the Audit, Human Resources and
Compensation, and Governance and Nominating Committees have specific responsibilities for certain
aspects of corporate governance as described below. The following is a brief description of the mandate of each committee: Audit Committee The Audit Committee is responsible for monitoring Brookfields systems and procedures for financial
reporting and internal control, reviewing certain public disclosure documents and monitoring the
performance and independence of Brookfields auditors. The committee is also responsible for
reviewing Brookfields annual audited financial statements, unaudited quarterly financial
statements and managements discussion and analysis and review of related operations prior to their
approval by the full Board. Human Resources and Compensation Committee The Human Resources and Compensation Committee is responsible for reviewing and reporting to the
board of directors on human resource planning, including senior management appointments, succession
planning and the levels and form of executive compensation in general, and the specific
compensation of senior executives. The committee also reviews the positions descriptions and
annual objectives of Brookfields Chief Executive Officer and his or her performance in relation to
these objectives, and reports to the board of directors. Governance and Nominating Committee It is the responsibility of the Governance and Nominating Committee, in consultation with the
Chairperson, to assess periodically the size and composition of the board of directors and its
committees, to assess effectiveness of the performance of the board of directors and its directors,
to review Brookfields Code of Business Conduct and Ethics and its Guidelines, to monitor its
relations with management, and to review and recommend directors compensation. Committee Chairpersons The Audit and Governance and Nominating Committees are each chaired by an Independent Director.
The Human Resources and Compensation Committee is chaired by a director related to Brascan. Each
committee chairperson is selected by the board of directors on the recommendation of the Governance
and Nominating Committee and is responsible for determining the agenda and the frequency and
conduct of committee meetings. Committee charters Each committee has its own charter that sets out its responsibilities and duties, qualifications
for membership, procedures for committee member removal and appointment and reporting to the board
of directors. Copies of each charter are posted on Brookfields Web site,
www.brookfieldproperties.com. 8. EVALUATION OF BOARD, DIRECTORS AND COMMITTEES The Governance and Nominating Committee in consultation with the Chairperson will ensure that an
appropriate system is in place to evaluate and perform an annual evaluation of the effectiveness of
the board of directors as a whole as well as the committees of the board of directors to ensure
they are fulfilling their respective responsibilities and duties as set out in these Guidelines and
in their respective committee charters. In connection with these evaluations, each director will
be requested to provide his or her assessment of the effectiveness of the board and each committee.
These evaluations should take into account the competencies and skills each director is expected
to bring to his or her particular role on the board of directors or on a committee, as well as any
other relevant facts. 9. MANAGEMENT Managements role The primary responsibility of management is to safeguard Brookfields assets and to create wealth
for shareholders. When performance is found to be inadequate, the board of directors has the
responsibility to bring about appropriate change. Brookfields governance practices are designed to encourage autonomy and effective decision making
on the part of management, while ensuring appropriate oversight by the board of directors and its
committees. Management of Brookfield is under the direction of the Chief Executive Officer. The Board has
developed a position description of the Chief Executive Officer which is attached as an Appendix to
these Guidelines. Managements relationship to the board of directors Senior management of Brookfield, primarily through the Chief Executive Officer, reports to and is
accountable to the board of directors. At its meetings, the board of directors regularly engages
in private sessions with Brookfields Chairperson and Chief Executive Officer without other members
of senior management present. Business plans are developed to ensure the compatibility of shareholder, Board and management views
on Brookfields strategic direction, performance targets and utilization of shareholders equity.
A special meeting of the board of directors is held each year to review the strategic initiatives
and the business plan submitted by senior management. The Boards approval of the annual business
plan then provides a mandate for senior management to conduct the affairs of Brookfield knowing it
has the necessary Board support. Material deviations from the plan are reported to and considered
by the board of directors. Board access to management Information provided by management to directors is critical to their effectiveness. In addition to
the reports presented to the board of directors at its regular and special meetings, the board of
directors is also kept informed on a timely basis by management of corporate developments and key
decisions taken by management in pursuing Brookfields business plan. The directors periodically
assess the quality, completeness and timeliness of information provided by management to the board
of directors. Management succession The Board in consultation with the Human Resources and Compensation Committee maintains a
succession plan for the Chief Executive Officer and other members of senior management. The
objective of the plan is to ensure the orderly succession of senior management, including providing
for any required recruiting, training and development. Management performance review and rewards The Human Resources and Compensation Committee annually reviews the position description of the
Chief Executive Officer and establishes objectives against which his or her performance is
reviewed, with his or her compensation or level being assessed against these pre-agreed objectives.
Similar reviews and assessments are undertaken for other members of senior management in
consultation with the Chief Executive Officer. 33




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Brookfields compensation plans are based on maintaining a direct link between management rewards
and the wealth created for shareholders. The Corporation attempts to reward the most senior
executives with primary compensation earned through share appreciation. Annually, members of
senior management receive allocations of share options to augment their compensation and to
encourage further share ownership, and in 1999 a deferred share unit plan was introduced for the
most senior members of management to reward increases in share performance. Brookfield is also
committed to maintaining periodic reviews of its compensation practices to ensure that management
is fairly rewarded over time based on performance. 10. COMMUNICATION AND DISCLOSURE POLICIES The Corporation has adopted a Disclosure and Insider Trading Policy which summarizes its policies
and practices regarding disclosure of material information to investors, analysts and the media.
The purpose of this policy is to ensure that Brookfields communications with the investment
community are timely, consistent and in compliance with all applicable securities legislation.
This Disclosure and Insider Trading Policy is reviewed annually by the board of directors and
available on Brookfields Web site, www.brookfieldproperties.com. The Corporation endeavors to keep its shareholders informed of its progress through a comprehensive
annual report, annual information form, quarterly interim reports and periodic press releases. It
also maintains a Web site that provides summary information about the Company and ready access to
its published reports, press releases, statutory filings and supplementary information provided to
analysts and investors. Directors and management meet with Brookfields shareholders at the annual
meeting and are available to respond to questions at that time. The Corporation also maintains an investor relations program to respond to inquiries in a timely
manner. Management meets on a regular basis with investment analysts, financial advisors and
interested members of the public to ensure that accurate information is available to investors,
including quarterly conference calls and webcasts to discuss Brookfields financial results. The
Corporation also endeavors to ensure that the media are kept informed of developments as they
occur, and have an opportunity to meet and discuss these developments with Brookfields designated
spokespersons. 11. DIRECTOR COMPENSATION Directors who are employees of Brookfield or any of its subsidiaries do not receive any
compensation for service as directors. Annually, the Governance and Nominating Committee recommends to the board of directors the form and
adequacy of compensation and benefits for non-management directors. During this recommendation
process, the committee seeks to ensure that the compensation and benefits reflect the
responsibilities and risks involved in being a director of Brookfield and to align the interests of
the directors with the best interests of Brookfield and its stakeholders. Directors are reimbursed by Brookfield for reasonable travel expenses and other out-of-pocket
expenses incurred in connection with their duties as directors. Directors who are resident in Canada receive their compensation in Canadian dollars, while U.S.
resident directors receive their compensation in U.S. dollars. Directors of Brookfield who are not
officers of Brookfield or its affiliates (the outside directors) are entitled to receive an
annual fee of $40,000 in U.S. funds (or $55,000 in Canadian funds) (the Annual Fee). The Boards
Lead Independent Director and the chairperson of the Audit Committee, are also entitled to receive
a supplemental annual retainer of $3,750 in U.S. funds (or $5,000 in Canadian funds) (the Annual
Retainer). One half of the Annual Fee payable to an outside director will be paid in deferred share units of
Brookfield until the number of deferred share units accumulated and common shares owned by the
director have an aggregate investment cost equal to five times the then current Annual Fee,
thereafter he or she may elect to take all of the Annual Fee in cash or deferred share units .
This is equivalent to $200,000 in U.S. funds, or $275,000 in Canadian funds, based on the current
Annual Fee. An outside director may elect to receive all or part of the other half of the Annual
Fee in cash or deferred share units. The Lead Independent Director and the chairperson of the
Audit Committee may elect to receive all or part of their supplemental Annual Retainers in cash or
Deferred share Units. 12. CODE OF BUSINESS CONDUCT AND ETHICS The Board expects all directors, officers and employees of Brookfield to conduct themselves in
accordance with the highest ethical standards and to adhere to Brookfields Code of Business
Conduct and Ethics. Any waiver of the Code of Business Conduct and Ethics for officers and
directors may only be made by the board of directors or the Governance and Nominating Committee and
will be disclosed to shareholders by Brookfield to the extent required by law, regulation or stock
exchange requirement. 13. PROHIBITION ON PERSONAL LOANS The Corporation will not, either directly or indirectly, including through its subsidiaries, extend
or maintain credit, arrange for the extension of credit, or renew an extension of credit, in the
form of a personal loan to or for any director or executive officer. 14. INDEMNIFICATION AND INSURANCE In accordance with the by-laws of Brookfield and applicable laws, present and former directors and
officers are each indemnified by Brookfield. In addition, Brookfield maintains directors and officers insurance with an annual policy limit of
C$50,000,000 subject to a corporate deductible of C$250,000 (C$500,000 for certain of Brookfields
U.S. subsidiaries) per loss. Under this insurance coverage, Brookfield and certain of its
associated companies are reimbursed for indemnity payments made to directors or officers as
required or permitted by law or under provisions of its by-laws as indemnity for losses, including
legal costs, arising from acts, errors or omissions committed by directors and officers during the
course of their duties as such. This insurance also provides coverage to individual directors and
officers without any deductible if they are not indemnified by Brookfield. The insurance coverage
for directors and officers has certain exclusions including, but not limited to, those acts
determined to be deliberately fraudulent or dishonest or have resulted in personal profit or
advantage. 15. CONFLICTS OF INTEREST Each director is required to inform the board of directors of any potential or actual conflicts, or
what might appear to be a conflict of interest he or she may have with Brookfield. If a director
has a personal interest in a matter before the board of directors or a committee, he or she must
not participate in any vote on the matter except where the board of directors or the committee has
expressly determined that it is appropriate for him or her to do so. 16. CONTACT BOARD AND COMMITTEES The Board welcomes input and comments from shareholders of Brookfield. You may contact one or more
members of the board of directors or its committees by writing to Brookfields General Counsel at: Board of Directors of Brookfield Properties Corporation
c/o Brookfield Properties Corporation
One Liberty Plaza
New York, New York 10006 U.S.A.
E-mail: boardofdirectors@brookfieldproperties.com Approved by the Board of Directors March 29, 2004 34




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APPENDIX TO CORPORATE GOVERNANCE GUIDELINES Position description of Chairperson The Chairperson of the board of directors of Brookfield is principally responsible for overseeing
the operations and affairs of the board of directors. In fulfilling his or her responsibilities,
the Chairperson will:  

provide leadership to foster the effectiveness of the board of directors;  

ensure there is an effective relationship between the board of directors and senior management of Brookfield;  

ensure that the appropriate committee structure is in place and assist the Governance and Nominating Committee in
making recommendations for appointments to such committees;  

in consultation with the other members of the board of directors and the Chief Executive Officer, prepare the agenda
for each meeting of the board of directors;  

ensure that all directors receive the information required for the proper performance of their duties, including
information relevant to each meeting of the board of directors;  

chair Board meetings, including stimulating debate, providing adequate time for discussion of issues, facilitating
consensus, encouraging full participation and discussion by individual directors and confirming that clarity regarding
decision-making is reached and accurately recorded;  

together with the Governance and Nominating Committee, ensure that an appropriate system is in place to evaluate the
performance of the board of directors as a whole, the board of directorss committees and individual directors, and
make recommendations to the Governance and Nominating Committee for changes when appropriate;  

work with the Chief Executive Officer and other members of senior management to monitor progress on strategic planning,
policy implementation and succession planning; and  

provide additional services requested by the board of directors. Position description of Lead Independent Director The Lead Independent Director will preside over all sessions of Brookfields Independent Directors
and is responsible for ensuring that matters raised during these meetings are reviewed with the
full Board and Corporations senior management and acted upon in a timely fashion. In addition,
the Lead Director performs the following functions:  (a)

consults with the Chairman of the board on the preparation of the agenda for each meeting of
the board; and  (b)

in consultation with the Chairman, ensures that an appropriate system is in place to evaluate
the performance of the board as a whole, its committees and individual directors. Position description of Chief Executive Officer The Chief Executive Officer of Brookfield is responsible for providing the leadership of Brookfield
and, subject to the direction provided by the board of directors, managing the business and affairs
of Brookfield. In fulfilling his or her responsibilities, the Chief Executive Officer will:  

develop and present to the board of directors for approval a business plan for Brookfield, which includes the fundamental
objectives and goals of the plan, the strategies to achieve the objectives and goals, the risks and alternatives to these
strategies and specific steps and performance indicators which will enable the board of directors to evaluate managements progress
on implementing such strategies and achieving the objectives and goals, and report regularly to the board of directors on the
progress of the business plan;  

develop and present to the board of directors for approval annual capital and operating plans to implement Brookfields business
plan together with key financial and other performance goals for Brookfields activities, and report regularly to the board of
directors on the progress against these goals;  

manage the operations of Brookfield in accordance with the business, capital and operating plans approved by the board of directors;  

act as the primary spokesperson for Brookfield;  

recommend to the board of directors the appointment or termination of senior management of Brookfield;  

present to the board of directors for approval annually an assessment of the senior management of Brookfield together with a
succession plan that provides for the orderly succession of senior management including the recruitment, training and development
required;  

together with Brookfields Chief Financial Officer, establish and maintain disclosure controls and procedures and internal controls
and procedures for financial reporting appropriate to ensure the accuracy and integrity of Brookfields financial reporting and
public disclosure; and  

foster a corporate culture that promotes ethical practices and encourages individual integrity and social responsibility. 35




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