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| **STELLAR INTERNATIONAL INC.**                |
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| **NOTICE OF ANNUAL AND SPECIAL      MEETING** |
| **AND MANAGEMENT INFORMATION      CIRCULAR**  |
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| April 2, 2004                                 |
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**STELLAR INTERNATIONAL INC.
**MANAGEMENT INFORMATION CIRCULAR
**SOLICITATION OF PROXIES

**    This Management Information Circular is furnished inconnection with the solicitation of proxies by****or on behalf of managementof Stellar International Inc.****(the "Corporation**") **for use at theannual and special meeting of the shareholders of the Corporation (the"Meeting") to be held at the offices of Fogler, Rubinoff LLP, Suite 4400, RoyalTrust Tower, Toronto-Dominion Centre, Toronto, Ontario, on Thursday, the 29thday of April, 2004, at the hour of 4:00 p.m. (Toronto time) for the purposes setforth in the annexed notice of the Meeting**. Unless otherwise noted, allinformation set forth herein is given as at March 29, 2004. The cost ofsolicitation by or on behalf of management will be borne by the Corporation. TheCorporation will reimburse brokers, custodians, nominees and other fiduciariesfor their reasonable charges and expenses incurred in forwarding the proxymaterial to beneficial owners of shares. It is expected that such solicitationwill be primarily by mail. In addition to solicitation by mail, certainofficers, directors and employees of the Corporation may solicit proxies bytelephone or personally. These persons will receive no compensation for suchsolicitation other than their regular salaries. **MANNER IN WHICH PROXIES WILL BE VOTED

    The shares represented by the accompanyingform of proxy (if the same is properly executed in favour of Messrs. Riehl andRosenkrantz, the management nominees, and is received at the offices of EquityTransfer Services Inc., Richmond Adelaide Centre, 120 Adelaide Street West,Suite 420, Toronto, Ontario M5H 4C3 not later than 4:00 p.m. (Toronto time)Tuesday, April 27, 2004, or, if the Meeting is adjourned, not later than 48hours, excluding Saturdays, Sundays and holidays, preceding the time of suchadjourned Meeting) will be voted at the Meeting, and where a choice is specifiedin respect of any matter to be acted upon, will be voted in accordance with thespecifications made. **In the absence of such aspecification, such shares will be voted in favour of such matter. 
    The accompanying form of proxy confersdiscretionary authority upon the persons named therein with respect toamendments or variations to matters identified in the annexed notice of theMeeting, and with respect to other matters which may properly come before theMeeting. At thedate hereof, management of the Corporation knows of no such amendments,variations or other matters. **ALTERNATE PROXY**
**    Each shareholder has the right to appoint a person otherthan the persons named in the accompanying form of proxy, who need not be ashareholder, to attend and act for him and on his behalf at the Meeting.**Anyshareholder wishing to exercise such right may do so by inserting in the blankspace provided in the accompanying form of proxy the name of the person whomsuch shareholder wishes to appoint as proxy and by duly depositing such proxy,or by duly completing and depositing another proper form of proxy. **REVOCABILITY OF PROXY**
    A shareholder giving a proxy has the powerto revoke it. Such revocation may be made by the shareholder duly executinganother form of proxy bearing a later date and duly depositing the same beforethe specified time, or may be made by written instrument revoking such proxyexecuted by the shareholder or by his attorney and authorized in writing or, ifthe shareholder is a body corporate, by an officer or attorney thereof dulyauthorized, and deposited either at the registered office of the Corporation, 82Wellington Street South, Suite 201, London, Ontario N6B 2K3, at any time up toand including the last business day preceding the date of the Meeting or anyadjournment thereof, or with the Chairman of the Meeting on the day of theMeeting or any adjournment thereof. If such written instrument is deposited withthe Chairman of the Meeting on the date of the Meeting or any adjournmentthereof, such instrument will not be effective with respect to any matter onwhich a vote has already been cast pursuant to such proxy. 

**ADVICETOBENEFICIALHOLDERSOFSECURITIES 
    The information set forth in this sectionis of significant importance to many public shareholders of the Corporation, asa substantial number of the public shareholders of the Corporation do not holdshares in their own names. Shareholders who do not hold their shares in theirown names (referred to in this Management Information Circular as "**BeneficialShareholders**") should note that only proxies deposited by shareholders whosenames appear on the records of the Corporation as the registered holders of theshares can be recognized and acted upon at the Meeting. If shares are listed inan account statement provided to a shareholder by a broker, then in almost allcases those shares will not be registered in the shareholder's name on therecords of the Corporation. Such shares will more likely be registered under thename of the shareholder's broker or an agent of that broker. In Canada, the vastmajority of such shares are registered under the name of CDS & Co. (theregistration name for The Canadian Depositary for Securities, which acts asnominee for many Canadian brokerage firms). Shares held by brokers or theirnominees can only be voted (for or against resolutions) upon the instructions ofthe Beneficial Shareholder. Without specific instructions, brokers/nominees areprohibited from voting shares for their clients. The directors and officers ofthe Corporation do not know for whose benefit the shares registered in the nameof CDS & Co. are held. 

    Applicable regulatory policy requiresintermediaries/brokers to seek voting instructions from Beneficial Shareholdersin advance of shareholders' meetings. Every intermediary/broker has its ownmailing procedures and provides its own return instructions, which should becarefully followed by Beneficial Shareholders in order to ensure that theirshares are voted at the Meeting. Often, the form of proxy supplied to aBeneficial Shareholder by its broker is identical to the form of proxy providedto registered shareholders. However, its purpose is limited to instructing theregistered shareholders how to vote on behalf of the Beneficial Shareholder. Themajority of brokers now delegate responsibility for obtaining instructions fromclients to ADP Investor Communications ("**ADP**"). ADP typically applies adecal to the proxy forms, mails those forms to the Beneficial Shareholders andasks Beneficial Shareholders to return the proxy forms to ADP. ADP thentabulates the results of all instructions received and provides appropriateinstructions respecting the voting of shares to be represented at the Meeting. ABeneficial Shareholder receiving a proxy with an ADP decal on it cannot use thatproxy to vote shares directly at the Meeting. The proxy must be returned to ADPwell in advance of the Meeting in order to have the shares voted. 

    Since the Corporation does not have accessto the names of its non-registered shareholders, if a Beneficial Shareholderattends the Meeting the Corporation will have no record of the BeneficialShareholder's shareholdings or of its entitlement to vote unless the BeneficialShareholder's nominee has appointed the Beneficial Shareholder as proxyholder.Therefore, a Beneficial Shareholder who wishes to vote in person at the Meetingmust insert its own name in the space provided on the voting instruction formsent to the Beneficial Shareholder by its nominee, and sign and return thevoting instruction form by following the signing and returning instructionsprovided by its nominee. By doing so, the Beneficial Shareholder will beinstructing its nominee to appoint the Beneficial Shareholder as proxyholder.The Beneficial Shareholder should not otherwise complete the voting instructionform as its vote will be taken at the Meeting. 
**VOTING SHARES AND PRINCIPAL HOLDERS THEREOF

    As at March 29, 2004, the Corporation hadoutstanding 20,789,206 common shares, each carrying the right to one vote. Therecord date for the determination of shareholders entitled to receive notice ofthe Meeting has been fixed as the close of business on March 29, 2004. Inaccordance with the provisions of the *Business Corporations Act*(Ontario), the Corporation will prepare a list of holders of common shares onsuch record date. Each holder of common shares named in the list will beentitled to vote the shares shown opposite his name on the list at the Meetingexcept to the extent that (a) the shareholder has transferred any of his sharesafter the record date, and (b) the transferee of those shares produces properlyendorsed share certificates or otherwise establishes that he owns such sharesand demands, not later than the close of business on the tenth business daybefore the Meeting, that his name be included in the list before the Meeting, inwhich case the transferee is entitled to vote his shares at the Meeting. 

    As of the date hereof, to the knowledge ofthe directors and senior officers of the Corporation, the following are the onlypersons beneficially owning, directly or indirectly, or exercising control ordirection over, voting securities of the Corporation carrying more than 10% ofthe voting rights attached to all voting securities of the Corporation: 

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  **Number of Common** **Name and    Municipality of Residence****Type of Ownership****Shares****Percentage of Class**Peter Riehl(1)Beneficial3,360,48016.2%London, Ontario   Samuel T. Hahn(2)Beneficial3,191,96115.4%Toronto, Ontario   SJ Strategic    Investments LLCBeneficial4,088,79419.7%Tennessee, U.S.A.   
Notes: (1) Includes 1,679,027 common shares owned by Mr. Riehl's spouse. (2) Includes 1,662,934 common shares owned by Mr. Hahn's spouse. 
**PARTICULARS OF MATTERS TO BE ACTED UPON
***(1) Appointment of Auditors***
    By resolution dated March 24, 2004 theBoard of Directors of the Corporation resolved not to propose the re-appointmentof the Corporation's present auditors, Kraft, Berger, Grill, Schwartz, Cohen &March LLP, as auditors for the Corporation at the meeting; and resolved topropose at the Meeting of the appointment of Mints & Partners LLP as thesuccessor auditors of the Corporation. There are no reportable disagreementsbetween the Corporation and Kraft, Berger, Grill, Schwartz, Cohen & March LLPas defined in National Policy Statement No. 31 and National Instrument 51-102 - *Continuous Disclosure Obligations* of the Canadian Securities Administrators,and there have been no qualified opinions or denials of opinions by Kraft,Berger, Grill, Schwartz, Cohen & March LLP. 

    Attached to this Management Proxy Circularas Schedule A is (i) a Notice to Shareholders of Change of Auditor stating thatthere have been no "reportable events" as defined in National Policy No. 31 andNational Instrument 51-102 - *Continuous Disclosure Obligations*; (ii) aletter of Kraft, Berger, Grill, Schwartz, Cohen & March LLP confirming that thecontents of the Notice to Shareholders of Change of Auditor are, to the best oftheir knowledge, true; (iii) a letter of Mints & Partners LLP confirming, to thebest of their knowledge, that the contents of the Notice to Shareholders ofChange of Auditor are true; and (iv) a written confirmation that the lettersreferred to in items (ii) and (iii) above have been reviewed by the directors ofthe Corporation. 

    Management is requesting shareholders pass the resolutionset forth in Appendix A attached hereto. 

**   Unless otherwise instructed, the form of proxy given pursuant to thissolicitation will be voted for the appointment of Mints & Partners LPL,Chartered Accountants, as auditors of the Corporation, to hold office until theclose of the next Annual General Meeting of the Corporation, at a remunerationto be fixed by the directors of the Corporation. *(2) Election of Directors***
    The articles of the Corporation providethat the number of directors shall be a minimum of one and a maximum of ten. Thenumber of directors is currently fixed at six (6) directors. **Unless theauthority to do so is withheld, the persons named in the accompanying form ofproxy (if the same is duly executed in their favour and is duly deposited) willvote the shares represented thereby in favour of the election as directors ofthe persons named below.** If prior to the Meeting any vacancies occur in theslate of nominees listed below, unless the authority to do so is withheld, it isintended that discretionary authority shall be exercised to vote the sharesrepresented by the proxies solicited in respect of the Meeting for the electionof such other person or persons as directors in accordance with the bestjudgment of management. Management is not aware that any of such nominees wouldbe unwilling or unable to serve as a director if elected. The information belowas to the number of shares of the Corporation beneficially owned by the proposednominees, not being within the knowledge of the Corporation, has been furnishedby the respective persons individually. 

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   **Common Shares Beneficially****Name, Municipality of Residence and**  **Owned, Directly or Indirectly, or****Position and/or Office with the**  **Over Which Control or Direction****Corporation****Principal Occupation****Period Served as a Director****is Exercised***David A. Rosenkrantz(1)President, Patica SecuritiesSince October 17, 2001324,500Toronto, OntarioLimited  Director   Peter RiehlPresident and ChiefSince December 19, 19963,360,481London, OntarioExecutive Officer of the  President, Chief ExecutiveCorporation  Officer and Director   John Kime(2)President, London EconomicSince November 28, 200050,000London, OntarioDevelopment Corporation  Director   Steven H. Goldman(1)(2)Partner, Goldman, Rosen (aSince August 31, 2000318,669Toronto, Ontariolaw firm)  Corporate Secretary and Director   W. Douglas Froom(1)(2)Pharmaceutical consultantSince June 19, 200270,000Burlington, Ontario   Director   Arnold TenneyFinancial ConsultantJuly 17, 2001-June 13, 2002352,700(3)Toronto, Ontario Nominee 
Notes: *Does notinclude options. (1) Member of the Compensation Committee. (2) Member of the Audit Committee. (3) Includes 80,000 common shares owned by Mr. Tenney's spouse. 
    The principal occupations for the pastfive years of each of the proposed nominees for election as a director exceptMr. Tenney are as set out above or as previously disclosed in the ManagementInformation Circular for the annual and special meeting of the shareholders ofthe Corporation held on June 19, 2003. 

    Mr. Tenney was formerly Chief ExecutiveOfficer of ARC International from 1978 to 2000, a director and Chairman ofCabletel Communications from 1985 to 2000, a director of Phillip Services Inc.from 1998 to 2000, a director of Ballantyne of Omaha from 1988 to 2000 andserved as its Chairman from 1992 to 2000. From July 2001 to June 2002, Mr.Tenney served as a director and Chairman of the Corporation. Since 2002, Mr.Tenney has been a financial consultant at Divine Entertainment Corporation, achildren's and family film production and development company.****
    The Board of Directors of the Corporation does****nothave an Executive Committee. 
***(3) Amendment to Stock Option Plan

    Shareholders will be asked to considerand, if thought appropriate, to pass an ordinary resolution approving anamendment to the Corporation's Stock Option Plan (the "**Plan**") to increasethe maximum number of common shares which may be issued under the Plan from2,852,000 to 4,157,841 (the "**Plan Amendment**"). Under the terms of thePlan, the Board has the right, from time to time, to increase such numbersubject to the approval of the shareholders of the Corporation. 

    Management believes that the proposed PlanAmendment would be beneficial to the Corporation in view of various factors. Inmaking the decision to seek shareholder approval of the proposed Plan Amendment,management noted that the utilization of stock options has been and willcontinue to be an important factor to attracting and keeping quality personnel.Management believes that at this critical stage of the Corporation's growth anddevelopment it is imperative the Corporation have sufficient flexibility in itsemployee incentive arrangements 

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to permit it to compete with various industry players who utilize shareincentive options in hiring and retaining key personnel. 

    In considering the proposed PlanAmendment, management also considered the number of common shares presentlyreserved for issuance in connection with previously granted options and theCorporation's outstanding capital. Presently, a total of 2,852,000 common sharesare reserved for issuance in connection with the Plan and options to purchase2,825,000(1) common shares have been granted under the Plan to date,leaving only 27,000 common shares available for issuance under the Plan.Management is requesting that shareholders pass the resolution set forth inAppendix B attached hereto. 

    The directors of the Corporation believe the passing ofthe resolution is in the best interests of the Corporation and recommend thatshareholders vote in favour of the resolution. 

**   Proxies received in favour of management will be voted in favour of theresolution, unless the shareholder has specified in the proxy that his commonshares are to be voted against such resolution.** In the event shareholderapproval is not obtained, the Plan will remain in full force and effect and themaximum number of common shares issuable thereunder will be 2,852,000. 
Note: (1) Does not include 140,000 options conditionally granted to five directors ofthe Corporation on April 2, 2004. See "PARTICULARS OF MATTERS TO BE ACTED UPON -*Ratification of Option Grants*". 
***(4) Ratification of Option Grants***
    On April 2, 2004, the directors of theCorporation conditionally granted a total of 140,000 options to five directorsof the Corporation, details of which are provided in the table below (the "**Option****Grants**"). The closing market price of the common shares as at April 1,2004 was $2.05. 
   **Option** **Name of Person To    Whom****Number of** **Exercise****Vesting Dates of****Options Granted****Options****Date Options Expire****Price****Options**David Rosenkrantz25,000April 2, 2007$2.05The day the OptionPeter Riehl35,000April 2, 2007$2.05Grants are approvedSteve Goldman30,000April 2, 2007$2.05by shareholders of theJohn Kime25,000April 2, 2007$2.05Corporation and by theDoug Froom25,000April 2, 2007$2.05
TSXV. **140,000**   
    The number of common shares issuablepursuant to the Option Grants exceeded the number of common shares available forissuance under the Stock Option Plan at the time of grant. Therefore the OptionGrants were conditional upon the receipt of all necessary shareholder andregulatory approval. As a condition for the TSXV's approval for the OptionGrants, the TSXV requires that the Option Grants be subject to disinterestedshareholder approval, and if such approval is obtained, the Option Grants willbe treated as being made under the Stock Option Plan as amended by the PlanAmendment. Accordingly, provided shareholders approve the Plan Amendment at theMeeting, shareholders will be asked to ratify the Option Grants. 

    Assuming the Plan Amendment is approved at the Meeting,management is requesting that shareholders pass the resolution set forth inAppendix C attached hereto. 

    Directors of the Corporation had notreceived monetary compensation in the past for acting as directors and theironly form of compensation had been stock options(1). Managementbelieves that the utilization of stock options has been and will continue to bean important factor to attracting and keeping quality individuals to serve as

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directors of the Corporation. Accordingly, the directors of the Corporationbelieve the passing of the resolution is in the best interests of theCorporation and recommend that shareholders vote in favour of the resolution.

**   Proxies received in favour of management will be voted in favour of theresolution, unless the shareholder has specified in the proxy that his commonshares are to be voted against such resolution.**
    In order to be effected, this resolutionmust be approved by a simple majority of the votes cast by disinterestedshareholders in respect thereof. To the knowledge of the Corporation, a total of4,123,650 common shares (being approximately 19.84%) are held by the fivedirectors receiving options under the Option Grants and the associates thereof,and will be excluded from voting on the resolution ratifying the Option Grants.

Note: (1) The board of directors may authorize the payment of monetary compensation todirectors for their services as directors in the year 2004. 
*(5) **Confirmation of Amendment to Section 19 of By-Law No. 1 of theCorporation***
    Shareholders will be asked to consider and, if thoughtappropriate, to pass a resolution confirming an amendment to section 19 of theCorporation's By-Law No. 1 (the "**By-Law**"). 

    Section 19 of the By-Law provides that aboard of directors of the Corporation may be called by a quorum of directors.The By-Law does not provide for the quorum of directors for a board meeting.Accordingly, under the *Business Corporations Act* (Ontario) (the "**OBCA**"),the quorum of directors is the majority of the directors. This means under thecurrent By-Law a meeting of the board of directors must be called by at leastfour directors of the Corporation. This requirement is administrativelycumbersome and inefficient and is much more onerous compared to typical by-lawsof other corporations governed under the OBCA. Typically a board meeting can becalled by a Chairman, by a President or Vice President who is also a director,or by two directors. In addition, the current ByLaw does not specificallyaddress board meeting issues such as quorum, holding of regular meetings, ornotice for adjoined board meetings. 

    The OBCA permits the board of directors ofthe Corporation to amend the By-Law and set out procedures for board meetings.On April 2, 2004, the board of directors of the Corporation approved anamendment to the ByLaw by replacing the current section 19 with an amendedsection 19. By implementing the amended section 19 of the By-Law, management hasbrought the By-Law more in line with by-laws of other corporations with respectto calling board meetings. The amended section 19 of the By-Law will expresslyprovide that a board meeting can be called by the Chairman of the Board, thePresident (if he is a director), a Vice-President (if he is a director) or anytwo of the directors. In addition, the amended section 19 also sets out quorumof a board meeting, and procedures governing notice for adjoined meetings andholding of regular board meetings. The full text of the amended section 19 isset out in Appendix D hereto. 

    In accordance with the OBCA, shareholdersare being asked to confirm the amendment to the By-Law by passing the resolutionattached as Appendix D hereto. The directors of the Corporation believe thepassing of the resolution is in the best interests of the Corporation andrecommend that shareholders vote in favour of the resolution. **Proxiesreceived in favour of management will be voted in favour of the resolution,unless the shareholder has specified in the proxy that his shares are to bevoted against such resolution.**

    In the event shareholder approval is not obtained, theBy-Law will remain in full force and effect in its present form. 
**BOARD COMMITTEES

    The Board has two (2) committees: the Audit Committee andthe Compensation Committee. 

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***Audit Committee

The Audit Committee is currently composed of the followingthree (3) members: John Kime, Doug Froom and Steven H. Goldman, the majority ofwhom are unrelated directors. The Audit Committee reviews all financialstatements, annual and interim, intended for circulation among shareholders andreports upon these to the Board. In addition, the Board may refer to the AuditCommittee other matters and questions relating to the financial position of theCorporation and its affiliates. There were three (3) meetings of the AuditCommittee during the year. 
***Compensation Committee***
The Compensation Committee is currently composed of thefollowing three (3) members: David Rosenkrantz, Doug Froom and Steven H.Goldman, the majority of whom are unrelated directors. The committee reviews theexecutive compensation and reports upon these to the Board. There was one (1)meeting of the Compensation Committee during the year. 
**STATEMENT OF EXECUTIVE COMPENSATION
***Summary Compensation Table

Ontario securities law requires that a "Statement ofExecutive Compensation" in accordance with Form 40 to the Regulation to the *Securities Act* (Ontario) be included in this Management InformationCircular. Form 40 prescribes the disclosure requirements in respect of thecompensation of the executive officers and directors of reporting issuers. Form40 provides that compensation disclosure must be provided for the ChiefExecutive Officer of an issuer and each of the issuer's four most highlycompensated executive officers, other than the Chief Executive Officer and otherthan an executive officer whose total salary and bonus does not exceedCdn$100,000. Based on these requirements, the executive officer of theCorporation for whom disclosure is required under Form 40 is Mr. Peter Riehl(President, Chief Executive Officer and Secretary of the Corporation). For thepurposes of this section of this Management Information Circular, Mr. PeterRiehl shall be referred to as the "Named Executive Officer". The followingaddresses the applicable items identified in Form 40. 
  **Annual Compensation****Long Term**      **Compensation**     **Other**      **Annual** **All Other****Name    and**   **Compen-****Securities under****Compen-****Principal Position with the****Fiscal****Salary****Bonus****sation****Options Granted****sation****Corporation****Year****($)****($)****($)****(#)****($)**Peter    Riehl2003100,000NilNilNilNil    President and Chief Executive2002100,000NilNilNilNilOfficer2001100,00060,000(1)NilNilNil
Note: (1) This amount was paid in 2001 for services rendered in prior years. 
***Stock Option Plan

    On November 21, 2000, the Corporationestablished a Stock Option Plan (the "**Plan**") in order to attract andretain competent directors, executive officers, employees and consultantsmotivated to work toward ensuring the Corporation's success and to encouragesuch persons to acquire shares of the Corporation. Individuals who are eligibleto receive options to purchase common shares under the Plan are directors,executive officers, employees and consultants of the Corporation andsubsidiaries of the Corporation, as determined by the Board of Directors of theCorporation. The Board of Directors administers the Plan and has the power toamend, modify, suspend or terminate the Plan, subject to any necessaryregulatory approvals. 

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    All of the options granted under the Planmay be exercised within a maximum period of three and one-half years followingthe date of grant thereof. The Board of Directors will designate the recipientsof options and determine the number of common shares covered by each of suchoptions, the date of vesting of each option, the exercise price of each option,the expiry date and any other question relating thereto, in each case inaccordance with the applicable legislation of the securities regulatoryauthorities. Options issued pursuant to the Plan have an exercise price equal tothe closing price of the common shares of the Corporation on those stockexchanges on which the Corporation's shares are listed on the business dayimmediately preceding the day when such options are issued, less any discountwhich such stock exchanges may allow. 

    The maximum number of common shares thatare currently issuable under the Plan is currently not to exceed 2,852,000shares. The Corporation is seeking shareholder approval at the Meeting toincrease the maximum number of common shares issuable under the Plan. See"PARTICULARS OF MATTERS TO BE ACTED UPON - 
*    Amendment to Stock Option Plan." 
***Options Granted During the Year Ended December 31, 2003

    The following table sets forth stock options grantedduring the most recently completed fiscal year to the Named Executive Officer.
  **% of Total** **Market Value of**   **Options** **Securities**   **Granted to All** **Underlying**  **Securities****Employees in****Exercise or****Options on the** **Name and Position as    at Fiscal****Under Options****the Financial****Base Price****Date of Grant** **Year-End****Granted (#)****Year****($/Securities)****($/Security)****Expiration Date**Peter Riehl25,00012.8%$0.33$0.33June 19, 2006President & Chief    Executive     Officer     ***Aggregated Option Exercises During the Year Ended December 31, 2003***
    No options were exercised by the Named Executive Officerduring the year ended December 31, 2003. 
**INDEBTEDNESS OF DIRECTORS AND SENIOR OFFICERS

    Since the beginning of the last completed financial yearof the Corporation, management is not aware of any indebtedness of theCorporation incurred on behalf of its directors and senior officers. 
**EMPLOYMENT CONTRACTS

    Effective as of September 1, 2000, theCorporation entered into an employment agreement with Peter Riehl, pursuant towhich Mr. Riehl agreed to continue to be employed as the President and ChiefExecutive Officer of the Corporation and also agreed to serve as a member of theBoard of Directors of the Corporation. The employment agreement provides for anannual salary of $100,000. Pursuant to the employment agreement, Mr. Riehl isentitled to receive an annual bonus, at the discretion of the Board ofDirectors, in the form of cash and/or stock options, based upon the achievementof certain performance goals established from time to time by the CompensationCommittee of the Board of Directors. The employment agreement was for an initialterm of two (2) years and is renewable automatically at the expiration of theinitial term for successive one year terms unless and until notice of intent toterminate is given by either Mr. Riehl or the Corporation at least three (3)months prior to the expiration of the initial term or any renewal term.Notwithstanding the foregoing, in the event that Mr. Riehl's employment isterminated other than for cause by the Corporation, then he is entitled to alump sum payment equal to 200% of his then current salary. In the event of anysuch termination, any unvested stock options held by him would immediately vest.Pursuant to his employment agreement, Mr. Riehl has agreed to not compete withthe Corporation for a period of two years from the date of the termination ofhis employment, irrespective of the cause of such termination. 

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    Mr. Sam Hahn who is a director and formal officer of theCorporation is currently finalizing his negotiation with the Corporation to actas a consultant. 

    Other than as set forth above, theCorporation has no plan or arrangement whereby any director or senior officermay be compensated in the event of his resignation, retirement or othertermination of employment, or in the event of a change of control of theCorporation or a change in such person's responsibilities following such achange of control. 
**COMPENSATION OF DIRECTORS

    The Corporation had no arrangements underwhich the directors of the Corporation were compensated in their capacity asdirectors during the year ended December 31, 2003. Directors have received andmay in the future receive options pursuant to the Plan. See "Stock Option Plan".
**DIRECTORS' AND OFFICERS' LIABILITY INSURANCE

    The Corporation provides insurance for thebenefit of the directors and officers of the Corporation against liabilityincurred by them in these capacities. The current annual policy limit is$1,000,000. Protection is provided to directors and officers for certainwrongful acts or omissions done or committed during the course of their dutiesas such. Under the policy, the Corporation is reimbursed for payments which itis required or permitted to make to its directors and officers to indemnifythem. The current annual premium is $21,960. No claims have been made under thepolicy.**INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS AND MANAGEMENTCONTRACTS**    Other than as set forth herein, for the fiscal year ended December 31, 2003 andfor the period from January 1, 2004 to the date hereof, insiders of theCorporation were not interested in any material transactions or managementcontracts. **REGISTRAR AND TRANSFER AGENT**
    Equity Transfer Services Inc., Suite 420, 120 AdelaideStreet West Toronto, Ontario, M5H 4C3, is the registrar and transfer agent forthe Corporation's common shares. 
**OTHER BUSINESS**
   Management of the Corporation knows of no amendment, variation or other matterto come before the Meeting other than those set forth in the Notice of Meeting.If any other matter properly comes before the Meeting, however, the accompanyingproxy will be voted on such matter in accordance with the best judgment of theperson or persons voting the proxy. **APPROVAL OF DIRECTORS

    The contents and the sending of this ManagementInformation Circular have been approved by the directors of the Corporation. 

    DATED as of the 2nd day of April, 2004. 
*"Peter              Riehl"***PETER RIEHL**President and            Chief Executive Officer
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**Schedule A
**REPORTING PACKAGE

[Letterhead of **STELLAR INTERNATIONAL INC.**] 
[Date]   Ontario    Securities Commission  *and    to*British    Columbia Securities CommissionKraft,    Berger, Grill, Schwartz, Cohen & March LLP,     Chartered AccountantsAlberta    Securities Commission       Autorité des marchés financiers*and    to* Mintz &    Partners LLP,Toronto    Venture Exchange    Chartered Accountants
Dear Sirs/Mesdames: 

RE: **NOTICE OF CHANGE OF AUDITOR**

In compliance with National Policy No. 31 - *Change of Auditor of aReporting Issuer* and proposed National Instrument 51-102 - *ContinuousDisclosure Obligations*, please be advised as follows: 
-  The former auditor of Stellar International Inc. (the "**Corporation**"),  Kraft, Berger, Grill, Swartz, Cohen & March LLP, Chartered Accountants (the "**Former  Auditor**"), is not being proposed for reappointment at the next annual and  special meeting of Shareholders. Subject to all applicable regulatory and  Shareholder approvals, the Corporation's new auditor will be Mintz & Partners  LLP, Chartered Accountants (the "**Successor Auditor**"), and it is being  proposed that they be appointed at the next annual and special meeting of  Shareholders.  There were no reservations in the auditors' report for  either of the Corporation's three completed fiscal years ending December 31,  2003, December 31, 2002 and December 31, 2001, nor for any period subsequent  thereto for which an audit report was issued and preceding the date hereof.   The decision not to recommend the Former Auditor for  reappointment and the appointment of the Successor Auditor was considered and  approved by the Audit Committee of the Board of Directors of the Corporation.   In the opinion of the Audit Committee and the Board of  Directors of the Corporation, there were no "Reportable Events" within the  meaning of National Policy No. 31 and proposed National Instrument 51-102 of  the Canadian Securities Administrators. 
DATED this ___ day of March, 2004. 
**ON BEHALF OF THE BOARD OF DIRECTORS 

Peter Riehl President and Chief Executive Officer 

[Letterhead of **FORMER AUDITOR**] 
[Date] 

Ontario Securities Commission British Columbia Securities Commission Alberta Securities Commission Autorité des marchés financiers Toronto Venture Exchange Stellar International Inc. 

Dear Sirs/Mesdames: 

RE: **STELLAR INTERNATIONAL INC. - CHANGE OF AUDITOR**

As required by National Policy No. 31 - *Change of Auditorof a Reporting Issuer* and proposed National Instrument 51-102 - *Continuous Disclosure Obligations*, we confirm that we have reviewed theinformation contained in the Notice of Change of Auditor of StellarInternational Inc. (the "**Corporation**"), dated as of the • day of March,2004 (the "**Notice**") and, based on our knowledge of the information atthat time, we agree with the information contained in the Notice. 

We understand that a copy of the Notice and this letter will be mailed to theShareholders of the Corporation. 

Yours very truly, 
**KRAFT, BERGER, GRILL, SCHWARTZ, COHEN & MARCH LLP Chartered Accountants 

[Letterhead of **SUCCESSOR AUDITOR**] 
[Date] 

Ontario Securities Commission British Columbia Securities Commission Alberta Securities Commission Autorité des marchés financiers Toronto Venture Exchange Stellar International Inc. 

Dear Sirs/Mesdames: 

RE: **STELLAR INTERNATIONAL INC. - CHANGE OF AUDITOR**

As required by National Policy No. 31 - *Change of Auditorof a Reporting Issuer* and proposed National Instrument 51-102 - *Continuous Disclosure Obligations*, we confirm that we have reviewed theinformation contained in the Notice of Change of Auditor of StellarInternational Inc. (the "**Corporation**"), dated as of the • day of March,2004 (the "**Notice**") and, based on our knowledge of the information atthat time, we agree with the information contained in the Notice. 

We understand that a copy of the Notice and this letter will be mailed to theShareholders of the Corporation. 

Yours very truly, 
**Mintz & Partners LLP Chartered Accountants 

[Letterhead of **STELLAR INTERNATIONAL INC.**] 
[Date] 

Ontario Securities Commission British Columbia Securities Commission Alberta Securities Commission Autorité des marchés financiers Toronto Venture Exchange Stellar International Inc. Kraft, Berger, Grill, Schwartz, Cohen & March LLP, Chartered Accountants Mintz & Partners LLP, Chartered Accountants 

Dear Sirs/Mesdames: 
**CONFIRMATION
**    THE UNDERSIGNED, a member of the AuditCommittee and a director of Stellar International Inc. (the "**Corporation**"),hereby confirms on behalf of the Audit Committee of the directors of theCorporation, that the Notice of Change of Auditor, the letter from the FormerAuditor and the letter from the proposed Successor Auditor of the Corporation, acopy of each of which is attached to this confirmation, have been reviewed bythe audit committee of the directors of the Corporation 
**DATED as of the ___ day of March, 2004. 

___________________________          Steven H. Goldman 

 
**Appendix A**RESOLUTION OF THE SHAREHOLDERS STELLAR INTERNATIONAL INC. 

Appointment of Auditors
**BE IT RESOLVED THAT, as an ordinary resolution:****
1. the change of the Corporation's auditors from Kraft,Berger, Grill, Schwartz, Cohen & March LLP, Chartered Accountants, to Mintz &Partners LLP, Chartered Accountants, as auditors of the Corporation for theensuing year, at a remuneration to be fixed by the directors of the Corporation,is hereby approved; and 

2. any director or officer of the Corporation be and he orshe is hereby authorized and directed, on behalf of the Corporation, to executeand deliver all such documents and to do all such other acts or things as he orshe may determine to be necessary or advisable to give effect to thisresolution, the execution of any such document or the doing of any such otheract or thing being conclusive evidence of such determination. 

 
**Appendix B 

RESOLUTION OF THE SHAREHOLDERS OF STELLAR INTERNATIONAL INC. 

Amendment of Stock Option Plan**BE IT RESOLVED THAT, as an ordinary resolution**:**
1. the amendment to the Corporation's Stock Option Plan (the"**Plan**") increasing the maximum number of common shares of the Corporationthat may be issued under the Plan from 2,852,000 to 4,157,841 is herebyapproved; and 

2. any director or officer of the Corporation be and he orshe is hereby authorized and directed, on behalf of the Corporation, to executeand deliver all such documents and to do all such other acts or things as he orshe may determine to be necessary or advisable to give effect to thisresolution, the execution of any such document or the doing of any such otheract or thing being conclusive evidence of such determination. 

 
**Appendix C 

RESOLUTION OF THE SHAREHOLDERS OF STELLAR INTERNATIONAL INC. 

Ratification of Stock Option Grants**BE IT RESOLVED THAT, as an ordinary resolution: 

1. the granting of a total of 140,000 options to five directors of theCorporation, as described in the Management Proxy Circular dated April 2, 2004,be and is hereby ratified, confirmed and approved; and 

2. any director or officer of the Corporation be and he orshe is hereby authorized and directed, on behalf of the Corporation, to executeand deliver all such documents and to do all such other acts or things as he orshe may determine to be necessary or advisable to give effect to thisresolution, the execution of any such document or the doing of any such otheract or thing being conclusive evidence of such determination. 

 
**Appendix D 

RESOLUTION OF THE SHAREHOLDERS OF STELLAR INTERNATIONAL INC. 

Confirmation of Amendment to Section 19 of By-Law No. 1**BE IT RESOLVED THAT, as an ordinary resolution: 

1. the amendment to section 19 of the Corporation's By-Law No. 1 as set outbelow approved by the board of directors of the Corporation on April 2, 2004, behereby confirmed; and 

2. any director or officer of the Corporation be and he orshe is hereby authorized and directed, on behalf of the Corporation, to executeand deliver all such documents and to do all such other acts or things as he orshe may determine to be necessary or advisable to give effect to thisresolution, the execution of any such document or the doing of any such otheract or thing being conclusive evidence of such determination. 

Full Text of Amendment 

"Section 19 of the By-Law No. 1 is hereby deleted and replaced with thefollowing: 
**19.Calling of Meetings 
(a)A meeting of the    board may be called at any time by the Chairman of the Board, the President    (if he is a director), a Vice-President (if he is a director) or any two of    the directors, and the Secretary shall cause notice of a meeting of    directors to be given when so directed by any such person or persons. 
(b)Notice of Meetings 
(i)Notice of        any meeting of the board specifying the time and, except where the        meeting is to be held as provided for in section 25 of this by-law, the        place for the holding of such meeting shall be given in accordance with        the terms of section 68 hereof to every director not less than 48 hours        (excluding any part of a Saturday or a holiday as defined by the *Interpretation Act* of Canada for the time being in force) before the        time the meeting is to be held. 
(ii)Notice of an        adjourned meeting of the board is not required to be given if the time        and place of the adjourned meeting is announced at the original meeting.        
(iii)Meetings of        the board may be held at any time without formal notice if all the        directors are present or if all the directors who are not present, in        writing or by fax, e-mail or any other form of transmitted or recorded        communication, waive notice or signify their consent to the meeting        being held without formal notice. Notice of any meeting or any        irregularity in any meeting or in the notice thereof may be waived by        any director either before or after such meeting. Attendance of a        director at a meeting of the board is a waiver of notice of the meeting,        except where a director attends a meeting for the express purpose of        objecting to the transaction of any business on the grounds that the        meeting is not lawfully called. 
(c)Regular Meetings 
The board may by resolution fix a day or days in any    month or months for the holding of regular meetings at a time and place    specified in such resolution. A copy of any resolution of the board    specifying the time and place for the holding of regular meetings of the    board shall be sent to each director at least two days before the first of    such regular meetings and no other notice shall be 

required for any of such regular meetings. 

(d)Quorum 
(i)Subject to the    articles, the by-laws, and subsection 19(d)(ii) below, a majority of the    number of directors or minimum number of directors required by the articles    constitutes a quorum at any meeting of the board, but in no case shall a    quorum be less than two-fifths of the number of directors or minimum number    of directors, as the case may be. 
(ii)Where the Corporation    has fewer than three directors, the director or both directors, as the case    may be, must be present at any meeting of the board to constitute a quorum.    
(iii)Subject to    subsection 19(d)(iv) below, directors, other than directors of a    non-resident corporation, shall not transact business at a meeting of    directors unless a quorum of the board is present and a majority of the    directors present are resident Canadians. 
(iv)Directors may transact    business at a meeting of directors where a majority of resident Canadian    directors is not present if, 
(A)a resident      Canadian director who is unable to be present approves in writing or by      telephone or other communications facilities the business transacted at      the meeting, and 
(B)a majority of      resident Canadian directors would have been present had that director been      present at the meeting."**************************************************************************************