RAINBOW RESOURCES INC.
TERM SHEET
PRIVATE PLACEMENT OF UNITS AND FLOW-THROUGH UNITS
Issuer: Rainbow Resources Inc. ("Rainbow")
Offering: Offering of units (the "Units") and flow-through units ("FT Units") in the capital of
Rainbow (the "Offering") to be issued by way of private placement exemptions from
the prospectus requirements, subject to receipt of any applicable regulatory and director
approvals.
Each Unit will be comprised of one common share in the capital of Rainbow (a
"Common Share") and one-half of one Common Share purchase warrant (each whole
purchase warrant, a "Warrant").
Each FT Unit will be comprised of one flow-through share in the capital of Rainbow
and one-half of one Warrant.
Warrants: Each Warrant will entitle the holder to subscribe for one Common Share at an exercise
price of $0.25 per Common Share for a period of 24 months from the Closing Date,
provided, however, that in the event that the closing price of the outstanding common
shares on the TSX Venture Exchange (the "TSXV") is greater than $0.50 for a period
of 10 consecutive trading days at any time following the four month anniversary date of
the Closing Date, Rainbow may, at its option, accelerate the expiry date of the Warrants
by giving notice to the holders thereof and in such case the Warrants will expire at 5:00
p.m. (Toronto time) on the date which is the earlier of: (i) the 30th day after the date on
which such notice is given by Rainbow; and (ii) 24 months from the Closing Date.
Issue Price: The issue price per Unit will be $0.18. The issue price per FT Unit will be $0.20.
Amount: Up to $360,000 worth of Units and up to $200,000 worth of FT Units, with Rainbow
having the right to increase the Offering by up to $560,000 of either Units or FT Units.
Closing Date: Payment for, and delivery of, the Units and FT Units is to occur on or about June 29,
2012 or such other date as is determined by Rainbow (the "Closing Date").
Commission: 8% cash or shares
Use of Proceeds: The gross proceeds of the FT Units will be used for exploring Rainbow's exploration
projects in Southeastern British Columbia, and the net proceeds of the Units will be
used for exploration work on the projects in Nevada and Southeastern British Columbia
as well as general corporate purposes.