I think the sticking point might be the structure. I think the Pats will want to structure it as an "extention" with this season's cap numbers being low. It would mean that he'd make the same $4MM as his salary, with whatever signing bonus being the increase in his 2017 pay.
I think part of the fear with Bulter is that he might not age well. His quickness and acceleration are a huge part of his success. When that starts to slip, even marginally, there might be a fear that he will quickly slip into mediocrity.