Butte Energy Inc. announces share transfer, convertible loan and debt purchase and settlement

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TSXV ticker symbol: BEN.H

CALGARY, Dec. 4, 2017 /CNW/ - Butte Energy Inc. ("Butte" or the "Company") (TSXV: BEN.H) is pleased to announce that it has entered into the following arm's length agreements:

• a share purchase agreement (the "Share Purchase Agreement") with Victor Redekop ("Redekop"), Bill Baker ("Baker") and Stone's Throw Capital Corp. ("Stone's Throw") pursuant to which Redekop and Baker, as vendors, have agreed to sell 30,000,000 common shares of the Corporation ("Common Shares") to Stone's Throw for aggregate consideration of $2.00;
  
  
• a convertible loan agreement (the "Convertible Loan Agreement") with Stone's Throw, pursuant to which the Corporation will borrow the principal amount of $300,000 from Stone's Throw, which will bear interest at 10% per annum and is repayable on the date that is 12 months from the date of issuance.  The principal amount and accrued interest will be convertible at the option of Stone's Throw into units of the Corporation ("Units") at a conversion price of $0.05 per Unit.  Each Unit will consist of one Common Share and one Common Share purchase warrant (a "Warrant").  Each Warrant (substantially in the form attached as Schedule B to the Convertible Loan Agreement, the "Warrant Certificate") will entitle the holder to acquire one Common Share at an exercise price of $0.05 for a period of 12 months from the date they are issued; and
  
  
• a debt purchase and settlement agreement (the "DPS Agreement") with Redekop, Baker, Sand Hills Energy Inc. ("Sand Hills") and Stone's Throw pursuant to which: (i) Redekop, Baker and Sand Hills have agreed to sell their indebtedness from the Corporation in the aggregate amount of $12,966,379.60  (the "Purchased Debt"); and (ii) the Corporation and Stone's Throw have agreed to settle the Purchased Debt by the issuance to Stone's Throw of an aggregate of 259,327,592 Common Shares.

Without taking into account any securities which may be issuable upon the conversion of the convertible loan, on closing, Stone's Throw will hold 289,327,592 of the 303,066,402 of issued and outstanding Common Shares, representing 95.4% of the issued and outstanding Common Shares, and therefore will become a Control Person (as such term is defined in the policies of the TSX Venture Exchange (the "TSXV")) of the Corporation. Pursuant to the policies of the TSXV, the Corporation has received disinterested shareholder approval to the transactions resulting in the creation of a new Control Person.  Stone's Throw is controlled by Ron Tremblay.  Mr. Tremblay is the CEO and President of TSX-listed Levon Resources Ltd.

The transactions contemplated above are subject to standard industry closing conditions and approval by the TSXV. It is expected that the transactions contemplated above will be completed on or before mid-December. 

This news release includes certain statements that may be deemed "forward-looking statements" within the meaning of applicable Canadian securities legislation. Specifically, this news release includes, but is not limited to, forward-looking statements with respect to timing and closing of the transactions contemplated under the Share Purchase Agreement, the Convertible Loan Agreement and the DPS Agreement. Generally, forward-looking statements can be identified by the forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "projects", "intends", "anticipates", or "does not anticipate", or "believes", or "variations of such words and phrases or state that certain actions, events or results "may", "can", "could", "would", "might", or "will" be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks associated with general economic conditions, adverse industry events, loss of markets, inability to obtain regulatory approvals, the liabilities of the Corporation, income tax and regulatory matters. Although the Corporation has attempted to identify important factors that could cause results to differ materially from those contained in forward-looking statements, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements will prove accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Corporation does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.

This press release is not an offer of the securities for sale in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Butte Energy Inc.