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CAROLYN RIVER PROJECTS LTD.(the Corporation)

CODE OF ETHICS AND BUSINESS CONDUCTFOR DIRECTORS,
SENIOR OFFICERS AND EMPLOYEES OF THE CORPORATION(the Code)

This Code applies to the Chief Executive Officer, President,
Chief Financial Officer, Principal Executive Officer, Principal Financial
Officer, Principal Accounting Officer, Controller and persons performing similar
functions (collectively, the Senior Officers) along with all directors and
employees within the Corporation (the Senior Officers, directors and employees
are hereinafter collectively referred to as the Employees). This Code covers a
wide range of business practices and procedures. It does not cover every issue
that may arise, but it sets out basic principles to guide all Employees of the
Corporation. All Employees should conduct themselves accordingly and seek to
avoid the appearance of improper behaviour in any way relating to the
Corporation.

Any Employee who has any questions about the Code should
consult with the Chief Executive Officer, the President, the Corporations board
of directors (the Board) or the Corporations audit committee (the Audit
Committee).

The Corporation has adopted the Code for the purpose of
promoting:

- honest and ethical conduct, including the ethical handling of actual or
  apparent conflicts of interest between personal and professional
  relationships;
- full, fair, accurate, timely and understandable disclosure in all reports
  and documents that the Corporation files with, or submits to, the Securities
  and Exchange Commission (SEC) and in other public communications made by the
  Corporation that are within the Senior Officers area of responsibility;
- compliance with applicable governmental laws, rules and regulations;
- the prompt internal reporting of violations of the Code; and
- accountability for adherence to the Code.

HONEST AND ETHICAL CONDUCT

Each Senior Officer and member of the Board owes a duty to the
Corporation to act with integrity. Integrity requires, among other things, being
honest and candid. Employees must adhere to a high standard of business ethics
and are expected to make decisions and take actions based on the best interests
of the Corporation, as a whole, and not based on personal relationships or
benefits. Generally, a conflict of interest occurs when an Employees personal
interests is, or appears to be, inconsistent with, interferes with or is opposed
to the best interests of the Corporation or gives the appearance of
impropriety.

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Business decisions and actions must be made in the best
interests of the Corporation and should not be influenced by personal
considerations or relationships. Relationships with the Corporations
stakeholders - for example suppliers, competitors and customers - should not in
any way affect an Employees responsibility and accountability to the
Corporation. Conflicts of interest can arise when an Employee or a member of his
or her family receive improper gifts, entertainment or benefits as a result of
his or her position in the Corporation.

Specifically, each Employee must:

| | 1.  | act with integrity, including being honest and candid
      while still maintaining the confidentiality of information when required
      or consistent with the Corporations policies;                                                               
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| |     |                                                                                                                                                                                                                                                         
| | 2.  | avoid violations of the Code, including actual or
      apparent conflicts of interest with the Corporation in personal and
      professional relationships;                                                                                           
| |     |                                                                                                                                                                                                                                                         
| | 3.  | disclose to the Board or the Audit Committee any material
      transaction or relationship that could reasonably be expected to give rise
      to a breach of the Code, including actual or apparent conflicts of
      interest with the Corporation;
| |     |                                                                                                                                                                                                                                                         
| | 4.  | obtain approval from the Board or Audit Committee before
      making any decisions or taking any action that could reasonably be
      expected to involve a conflict of interest or the appearance of a conflict
      of interest;                   
| |     |                                                                                                                                                                                                                                                         
| | 5.  | observe both the form and spirit of laws and governmental
      rules and regulations, accounting standards and Corporation
    policies;                                                                                                               
| |     |                                                                                                                                                                                                                                                         
| | 6.  | maintain a high standard of accuracy and completeness in
      the Corporations financial records;                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                         
| | 7.  | ensure full, fair, timely, accurate and understandable
      disclosure in the Corporations periodic reports;                                                                                                                                          
| |     |                                                                                                                                                                                                                                                         
| | 8.  | report any violations of the Code to the Board or Audit
      Committee;                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                         
| | 9.  | proactively promote ethical behaviour among peers in his
      or her work environment; and                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                         
| | 10. | maintain the skills appropriate and necessary for the
      performance of his or her duties.                                                                                                                                                           

DISCLOSURE OF CORPORATION INFORMATION

As a result of the Corporations status as a public company, it
is required to file periodic and other reports with the SEC. The Corporation
takes its public disclosure responsibility seriously to ensure that these
reports furnish the marketplace with full, fair, accurate, timely and
understandable disclosure regarding the financial and business condition of the
Corporation. All disclosures contained in reports and documents filed with or
submitted to the SEC, or other

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government agencies, on behalf of the Corporation or contained
in other public communications made by the Corporation must be complete and
correct in all material respects and understandable to the intended recipient.

The Senior Officers, in relation to his or her area of
responsibility, must be committed to providing timely, consistent and accurate
information, in compliance with all legal and regulatory requirements. It is
imperative that this disclosure be accomplished consistently during both good
times and bad and that all parties in the marketplace have equal or similar
access to this information.

All of the Corporations books, records, accounts and financial
statements must be maintained in reasonable detail, must appropriately reflect
the Corporations transactions, and must conform both to applicable legal
requirements and to the Corporations system of internal controls. Unrecorded or
off the book funds, assets or liabilities should not be maintained unless
permitted by applicable law or regulation. Senior Officers involved in the
preparation of the Corporations financial statements must prepare those
statements in accordance with generally accepted accounting principles,
consistently applied, and any other applicable accounting standards and rules so
that the financial statements materially, fairly and completely reflect the
business transactions and financial statements and related condition of the
Corporation. Further, it is important that financial statements and related
disclosures be free of material errors.

Specifically, each Senior Officer must:

| | 1. | familiarize himself or herself with the disclosure
      requirements generally applicable to the Corporation;                                                                                                                                                  
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                 
| | 2. | not knowingly misrepresent, or cause others to
      misrepresent, facts about the Corporation to others, including the
      Corporations independent auditors, governmental regulators,
      self-regulating organizations and other governmental officials;
| |    |                                                                                                                                                                                                                                                                 
| | 3. | to the extent that he or she participates in the creation
      of the Corporations books and records, promote the accuracy, fairness and
      timeliness of those records; and                                                                               
| |    |                                                                                                                                                                                                                                                                 
| | 4. | in relation to his or her area of responsibility,
      properly review and critically analyse proposed disclosure for accuracy
      and completeness.                                                                                                         

CONFIDENTIAL INFORMATION

Employees must maintain the confidentiality of confidential
information entrusted to them by the Corporation of its customers, suppliers,
joint venture partners, or others with whom the Corporation is considering a
business or other transaction except when disclosure is authorized by an
executive officer or required or mandated by laws or regulations. Confidential
information includes all non-public information that might be useful or helpful
to competitors or harmful to the Corporation or its customers or suppliers, if
disclosed. It also includes information that suppliers, customers and other
parties have entrusted to the Corporation. The obligation to preserve
confidential information continues even after employment ends.

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Records containing personal data about employees or private
information about customers and their employees are confidential. They are to be
carefully safeguarded, kept current, relevant and accurate. They should be
disclosed only to authorized personnel or as required by law.

All inquiries regarding the Corporation from non-employees,
such as financial analysts and journalists, should be directed to the Board or
the Audit Committee. The Corporations policy is to cooperate with every
reasonable request of government investigators for information. At the same
time, the Corporation is entitled to all the safeguards provided by law for the
benefit of persons under investigation or accused of wrongdoing, including legal
representation. If a representative of any government or government agency seeks
an interview or requests access to data or documents for the purposes of an
investigation, the Employee should refer the representative to the Board or the
Audit Committee. Employees also should preserve all materials, including
documents and e-mails that might relate to any pending or reasonably possible
investigation.

COMPLIANCE WITH LAWS

The Employees must respect and obey all applicable foreign,
federal, state and local laws, rules and regulations applicable to the business
and operations of the Corporation.

Employees who have access to, or knowledge of, material
nonpublic information from or about the Corporation are prohibited from buying,
selling or otherwise trading in the Corporations stock or other securities.
Material nonpublic information includes any information, positive or negative,
that has not yet been made available or disclosed to the public and that might
be of significance to an investor, as part of the total mix of information, in
deciding whether to buy or sell stock or other securities.

Employees also are prohibited from giving tips on material
nonpublic information, that is directly or indirectly disclosing such
information to any other person, including family members, other relatives and
friends, so that they may trade in the Corporations stock or other securities.

Furthermore, if, during the course of an Employees service
with the Corporation, he or she acquires material nonpublic information about
another company, such as one of our customers or suppliers, or you learn that
the Corporation is planning a major transaction with another company (such as an
acquisition), the Employee is restricted from trading in the securities of the
other company.

REPORTING ACTUAL AND POTENTIAL VIOLATIONS OF THE CODE AND
ACCOUNTABILITY FOR COMPLIANCE WITH THE CODE

The Corporation, through the Board or the Audit Committee, is
responsible for applying this Code to specific situations in which questions may
arise and has the authority to interpret this Code in any particular situation.
This Code is not intended to provide a comprehensive guideline for Senior
Officers in relation to their business activities with the Corporation. Any
Employee may seek clarification on the application of this Code from the Board
or the Audit Committee.

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Each Employee must:

| | 1. | notify the Corporation of any existing or potential
      violation of this Code, and failure to do so is itself a breach of the
      Code; and                                                                                                        
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| |    |                                                                                                                                                                                                                                                         
| | 2. | not retaliate, directly or indirectly, or encourage
      others to do so, against any Employee for reports, made in good faith, of
      any misconduct or violations of the Code solely because that Employee
      raised a legitimate ethical issue.

The Board or the Audit Committee will take all action it
considers appropriate to investigate any breach of the Code reported to it. All
Employees are required to cooperate fully with any such investigations and to
provide truthful and accurate information. If the Board or the Audit Committee
determines that a breach has occurred, it will take or authorize disciplinary or
preventative action as it deems appropriate, after consultation with the
Corporations counsel if warranted, up to and including termination of
employment. Where appropriate, the Corporation will not limit itself to
disciplinary action but may pursue legal action against the offending Employee
involved. In some cases, the Corporation may have a legal or ethical obligation
to call violations to the attention of appropriate enforcement authorities.

Compliance with the Code may be monitored by audits performed
by the Board, Audit Committee, the Corporations counsel and/or by the
Corporations outside auditors. All Employees are required to cooperate fully
with any such audits and to provide truthful and accurate information.

Any waiver of this Code for any Employee may be made only by
the Board or the Audit Committee and will be promptly disclosed to stockholders
and others, as required by applicable law. The Corporation must disclose changes
to and waivers of the Code in accordance with applicable law.

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