<PAGE>   1
                                                              EXHIBIT 10 (b)

                               PLACEMENT AGREEMENT

         THIS PLACEMENT AGREEMENT (this "Agreement") is made on October 12,
1999, between BULLET ENVIRONMENTAL TECHNOLOGIES, INC., a Delaware corporation
(the "Company"), and MFC MERCHANT BANK S.A., a Swiss Corporation (the "Agent").

                                   BACKGROUND

         The Company wishes to privately place with purchasers at least
1,000,000 but no more than 2,000,000 Units (as hereinafter defined), at $5.00
per Unit, the proceeds of which will be used for working capital and general
corporate purposes.

         The Company wishes to appoint the Agent as placement agent in
connection with such private placement.

         In consideration of the mutual representations, warranties, covenants
and agreements contained in this Agreement, the parties agree as follows:

                               STATEMENT OF TERMS

1.       DEFINITIONS

         In this Agreement, the following terms have the following meanings:

         (a)      "Act" means the Securities Act of 1933 (United States), as
                  amended, the regulations and rules made thereunder and all
                  administrative policy statements, blanket orders, notices,
                  directions and rulings issued by the United States Securities
                  and Exchange Commission.

         (b)      "Closing" means the day on which Units are issued to the
                  Purchasers.

         (c)      "Company Stock" means the common voting stock, par value
                  $0.0001, of the Company.

         (d)      "Private Placement" means the offering of the Units on the
                  terms and conditions set forth in this Agreement or the
                  Subscription Agreements.

         (e)      "Private Placement Memorandum" means any private placement
                  memorandum, and any amendments made to such private placement
                  memorandum, which is required by the Act to be prepared, or
                  which is prepared, by the Company in connection with the sale
                  of any of the Units.




<PAGE>   2


         (f)      "Purchasers" means the purchasers of Units pursuant to the
                  Private Placement.

         (g)      "Subscription Agreement" means any Subscription Agreement in
                  connection with the Private Placement substantially in the
                  form of Attachment I, attached hereto.

         (h)      "Unit" means one share of the Company Stock and one warrant
                  for the purchase of one additional share of the Company Stock
                  for the price of Ten Dollars ($10.00) per share, which
                  warrant must be exercised within one year.

2.       APPOINTMENT OF AGENT

         The Company appoints the Agent as its exclusive agent and the Agent
         accepts the appointment and agrees to act as the exclusive agent of
         the Company to use its commercially reasonable efforts to find and
         introduce to the Company potential purchasers to purchase up to
         1,000,000, but no more than 2,000,000 Units, at a price of $5.00 per
         Unit, by way of private placement prior to November 15, 1999.

3.       COOPERATION AND INFORMATION

         In connection with the Agent's activities hereunder on the Company's
         behalf, the Company agrees to cooperate with the Agent and will
         furnish to, or cause to be furnished to, the Agent, any and all
         information and data reasonably requested by the Agent concerning the
         Company, the Private Placement and the use of the proceeds generated
         by the Private Placement.

4.       OFFERING RESTRICTIONS

         The Agent will only sell the Units to entities who represent
         themselves as being:

         (a)     entities purchasing as principal who are accredited investors
                 residing outside the United States; and

         (b)     otherwise qualified to purchase the Units as described in the
                 Subscription Agreement.

         The Agent agrees that at the time any buy order for the Units is
         placed by clients of the Agent, the Purchaser will be outside the
         United States, or the Agent and all persons acting on its behalf will
         reasonably believe that the Purchaser is outside the United States,
         and neither the Agent nor any person acting on its behalf will have
         knowledge that such transaction has been pre-arranged with a Purchaser
         within the United States.


<PAGE>   3




         Neither the Company, the Agent, nor any of their respective
         affiliates, nor any person acting on behalf of any of them, will offer
         or sell any of the Units to persons or entities in the United States,
         or undertake any activity for the purpose of, or that could reasonably
         be expected to have the effect of, conditioning the market for the
         Units in the United States.

5.       PRIVATE PLACEMENT MEMORANDUM

         The Company will ensure that any Private Placement Memorandum which is
         prepared and delivered by the Company will conform with any and all
         the requirements of the Act and will be reasonably satisfactory to the
         Agent. The Company will deliver to the Agent, as soon as possible
         after the date on which the Company gives a "Transaction Notice" (as
         described in that Investor Issuance Deposit Agreement between the
         Company and Agent of even date hereof (the "Deposit Agreement"))
         sufficient commercial copies of any Private Placement Memorandum which
         has been prepared and the names and addresses of each person whom the
         Company has provided the Private Placement Memorandum. If prior to the
         Closing, there is any material adverse change in the Company's
         business which has not previously been disclosed to the Agent, the
         Company will as soon as possible inform the Agent of the change and
         prepare an appropriate amendment to the Private Placement Memorandum.
         Delivery by the Company of a Private Placement Memorandum will
         constitute the Company's authorization to the Agent to utilize the
         Private Placement Memorandum in connection with the Private Placement,
         and will constitute a representation and warranty by the Company that
         the Private Placement Memorandum does not contain any
         misrepresentations (as defined in the Act), other than with respect to
         information supplied by and relating solely to the Agent. If the
         Company has delivered a Private Placement Memorandum to the Agent
         which has been prepared in accordance with this Agreement, then the
         Agent will, on behalf of the Company, deliver a copy of such Private
         Placement Memorandum to each potential purchaser introduced to the
         Company by the Agent.

6.       SUBSCRIPTIONS

         The Agent will use its best efforts to obtain from each Purchaser
         introduced by the Agent on or before November 15, 1999, duly completed
         and signed subscriptions in the form of the Subscription Agreement or
         in such other form consented to by the Company and the Agent and
         executed by the Purchaser.

7.       AGENT'S FEE

         In consideration for performing the duties of placement agent under
         this Agreement and performing the duties of custody agent under the
         Deposit Agreement, the Agent will be entitled to a combined total fee
         under both this Agreement and the Deposit Agreement equal to (i) eight
         percent (8%) of the amount of the proceeds of the Private Placement
         (which in no event will be less




<PAGE>   4




         than $500,000) (the "Fee Portion") distributable to the Company under
         the terms contained herein, and (ii) reimbursement of reasonable
         out-of-pocket costs and expenses incurred by the Agent in connection
         with the Private Placement (the "Financing Expenses"). The combined
         total fee will be paid as set forth in Section 8 of the Deposit
         Agreement. The Agent acknowledges and agrees that the above-defined
         Fee Portion and Financing Expenses constitute the entire amounts to be
         paid by the Company in consideration of the Private Placement. In the
         event that the Agent engages any sub-agents for the placement or
         syndication of the Units, the Agent agrees to be solely responsible
         for paying such sub-agents from the fees otherwise payable hereunder,
         and no additional fee amounts will be due or owing from the Company
         and the Company will have no obligation or liability to any sub-agent
         for any amounts.

         It is expressly understood and agreed by the parties to this Agreement
         that the aforesaid fee is the same fee, and not an additional one, to
         be paid to Agent under the Deposit Agreement, and that Agent is
         entitled to a combined fee consisting of the Fee Portion and
         reimbursement of the Financing Expenses upon the performance of its
         duties under both this Agreement and the Deposit Agreement and the
         disbursements set forth in Section 7(a) of the Deposit Agreement. It
         is also expressly understood and agreed by the parties that in no
         event will any fee or reimbursement of any expenses, whether arising
         in connection with or under this Agreement, the Deposit Agreement, or
         both, be payable to Agent if the proceeds of the Private Placement are
         not disbursed to the Company in accordance with the provisions of
         Section 7 and 8 of the Deposit Agreement and that, in any event, no
         Fee Portion will be payable to Agent as to any proceeds of the Private
         Placement not disbursed to the Company.

8.       REPRESENTATIONS AND WARRANTIES

         The Company represent and warrants to the Agent that:

         (a)      it is a valid and subsisting corporation under the law of the
                  jurisdiction in which it was incorporated;

         (b)      it is registered to do business in accordance with applicable
                  law in the jurisdictions required to the extent necessary in
                  connection with the transaction contemplated by this
                  Agreement;

         (c)      this Agreement has been, or will be as of the date of
                  execution, duly authorized by all necessary corporate action
                  on the part of the Company, and the Company has full
                  corporate power and authority to undertake the Private
                  Placement;

         (d)      the authorized and issued capital of the Company are as
                  disclosed in the Private Placement Memorandum and the
                  outstanding shares of the Company are fully paid and
                  non-assessable;




<PAGE>   5



         (e)      the Company will reserve or set aside sufficient shares in
                  its treasury to issue the Units and all such shares will be
                  duly and validly issued as fully paid and non-assessable;

         (f)      the Private Placement Memorandum, subscription form and all
                  other written or oral representations made by the Company to
                  a Purchaser or potential Purchaser in connection with the
                  Private Placement will be accurate in all material respects
                  and will omit no fact, the omission of which will make such
                  representations misleading or incorrect;

         (g)      the Company has complied in all material respects and will so
                  comply with the requirements of all applicable corporate and
                  securities laws and administrative policies and directions,
                  including, without limitation, the Act, in relation to the
                  issuance and trading of its securities and in all matters
                  relating to the Private Placement;

         (h)      there is not presently, and will not be until the Closing,
                  any material adverse change in the business of the Company
                  which has not been or will not be fully disclosed to the
                  Agent;

         (i)      the issuance and sale of the securities by the Company and
                  the Agent does not and will not conflict with, and does not
                  and will not result in a breach of, any of the terms of its
                  organizational documents or any material agreement or
                  instrument to which the Company is a party;

         (j)      neither the Company nor any of its subsidiaries is a party to
                  any actions, suits or proceedings which could materially
                  affect its business or financial condition and to the best of
                  the Company's knowledge no such actions, suits or proceedings
                  are contemplated or have been threatened which are not
                  disclosed in the Private Placement Memorandum;

         (k)      there are no judgments against the Company or any of its
                  subsidiaries, if any, which are unsatisfied, nor are there
                  any consent decrees or injunctions to which the Company or
                  any of its subsidiaries, if any, is subject;

         (l)      no order halting or suspending trading in securities of the
                  Company nor prohibiting the sale of such securities has been
                  issued to and is outstanding against the Company or its
                  directors, officers or promoters and no investigations or
                  proceedings for such purposes are pending or threatened;

         (m)      except as disclosed in the Private Placement Memorandum, no
                  person has any right, agreement or option, present or future,
                  contingent or absolute, or any right capable of becoming such
                  a right, agreement or option, for the issuance or allotment
                  of any unissued shares in the capital of the Company




<PAGE>   6




                  or its subsidiaries, if any, or any other security
                  convertible into or exchangeable for any such shares, or to
                  require the Company or its subsidiaries, if any, to purchase,
                  redeem or otherwise acquire any of the issued and outstanding
                  shares in its capital;

         (n)      other than the Agent, no person, firm or corporation acting
                  or purporting to act at the request of the Company is
                  entitled to any brokerage, agency or finder's fee in
                  connection with the transactions described herein; and

         (o)      the representations and warranties in this Section are
                  materially true and correct and will remain so as of the
                  Closing.

         The Agent represents and warrants to the Company that:

         (a)      it is a valid and subsisting corporation under the law of the
                  jurisdiction in which it was incorporated;

         (b)      it is registered to do business in accordance with applicable
                  law in the jurisdictions required to the extent necessary in
                  connection with the transactions contemplated by this
                  Agreement;

         (c)      this Agreement has been, or will be as of the date of
                  execution, duly authorized by all necessary corporate action
                  on the part of the Agent, and the Agent has full corporate
                  power and authority to perform its obligations under this
                  Agreement;

         (d)      it is not a "U.S. person" as defined under the Act;

         (e)      it will sell the Units in compliance with the Act;

         (f)      it will only make representations consistent with the
                  information in the Private Placement Memorandum, the
                  Subscription Agreements and any other materials provided by
                  the Company; and

         (g)      the representations and warranties in this Section are
                  materially true and correct and will remain so as of the
                  Closing.

9.       TERMINATION



<PAGE>   7



         The Agent may terminate its obligations under this Agreement by notice
         in writing to the Company at any time before the Closing if:

         (a)      a material adverse change in the business of the Company has
                  occurred;

         (b)      an inquiry or investigation from or by a governmental
                  regulatory agency (whether formal or informal) in relation to
                  the Company, or the Company's directors, officers or
                  promoters, which may have a material adverse offset on the
                  proposed offering is commenced or threatened in writing;

         (c)      any order to cease, halt or suspend trading (including an
                  order prohibiting communications with persons in order to
                  obtain expressions of interest) in the securities of the
                  Company prohibiting or restricting the Private Placement is
                  made by a competent regulatory authority and that order is
                  still in effect; or

         (d)      the Company breaches any material term of this Agreement and
                  fails to cure such breach within five (5) business days after
                  written notice thereof from the Agent.

10.      CONFIDENTIALITY

         Each party to this Agreement agrees that it will not make any public
         announcements of any kind and will not release or issue any reports,
         statements or releases relating or pertaining to the Private
         Placement, this Agreement or the transactions contemplated herein,
         without the prior written consent of the other party, except (i) to
         professional advisors under a duty of confidentiality as necessary to
         consummate the transactions contemplated herein, and (ii) as may be
         required upon the written advice of counsel to comply with applicable
         laws or regulatory requirements after consulting with the other party
         and seeking their consent to such announcement, report, statement or
         release. Each party agrees that such information will be used solely
         for the purposes of consummating the transactions contemplated herein
         and that such information will not be used or disclosed other than in
         furtherance of such purposes under the terms of this Agreement.

11.      INDEMNIFICATIONS




<PAGE>   8



         The Company will indemnify the Agent and each of the Agent's agents,
         directors, officers and employees (collectively, the "Indemnified
         Parties") and save them harmless against all losses, claims, damages
         or liabilities:

          (a)     existing by reason of a material misstatement contained in
                  the Private Placement Memorandum, Subscription Agreement or
                  other written or oral representation made by the Company to a
                  Purchaser or potential Purchaser in connection with the
                  Private Placement by reason of the omission to state a
                  material fact necessary to make such statements or
                  representations not misleading (except for information and
                  statements supplied by and relating solely to the Agent);

          (b)     arising directly or indirectly out of any order made by any
                  regulatory authority based upon an allegation that any such
                  material misstatement, misrepresentation or omission exists
                  (except information and statements supplied by and relating
                  solely to Agent), that trading in or distribution of any of
                  the securities is to cease;

          (c)     resulting from the failure by the Company to obtain any
                  required regulatory approval to the Private Placement unless
                  the failure to obtain such approval is the result of a breach
                  of this Agreement by the Agent;

          (d)     resulting from a material breach by the Company of any of the
                  terms of this Agreement; or

          (e)     if, following the completion of a sale of any of the Units, a
                  determination is made by any competent authority setting
                  aside the sale, unless that determination arises out of an
                  act or omission by the Agent.

         If any action or claim is brought against an Indemnified Party in
         respect of which indemnity may be sought from the Company pursuant to
         this Agreement, the Indemnified Party will promptly notify the Company
         in writing. The Company will assume the defense of the action or
         claim, including the employment of counsel and the payment of all
         expenses. The Indemnified Party will have the right to employ counsel
         acceptable to the Company, and the Company will pay the reasonable
         documented fees and expenses of such counsel.

         The indemnity provided for in this Section will not be limited or
         otherwise affected by any other indemnity obtained by the Indemnified
         Party from any other person in respect of any matters specified in
         this Agreement and will continue in full force and effect until all
         possible liability of the Indemnified Parties arising out of the
         transactions contemplated by this Agreement has been extinguished by
         the operation of law.




<PAGE>   9


         If indemnification under this Agreement is found in a final judgment
         (not subject to further appeal) by a court of competent jurisdiction
         not to be available for reason of public policy, the Company and the
         Indemnified Parties will contribute to the losses, claims, damages,
         liabilities or expenses (or actions in respect thereof) for which such
         indemnification is held unavailable in such proportion as is
         appropriate to reflect the relative benefits to and fault of the
         Company, on the one hand, and the Indemnified Parties on the other
         hand, in connection with the mater giving rise to such losses, claims,
         damages, liabilities or expenses (or actions in respect thereof). No
         person found liable for a fraudulent misrepresentation (within the
         meaning of applicable securities laws) will be entitled to
         contribution from any person who is not found liable for such
         fraudulent misrepresentation.

         To the extent that any Indemnified Party is not a party to this
         Agreement, the Agent will obtain and hold the right and benefit of
         this Section in trust for and on be half of such Indemnified Party.

         The Agent will indemnify the Company and each of the Company's agents,
         directors, officers and employees and save them harmless against all
         losses, claims, damages or liabilities resulting from the Agent's
         material breach of any term of this Agreement.

         The indemnities contained in this Section will survive for a period of
         one (1) year from the date of the Closing.

12.      GOVERNING LAW

         This Agreement will be governed and construed in accordance with the
         laws of Delaware.

13.      ENFORCEMENT

         Each party to this Agreement (i) submits to personal jurisdiction in
         Delaware for the enforcement of this Agreement or in connection with
         this Agreement, and (ii) waives any and all rights under the laws of
         any state to object to jurisdiction within Delaware for the purposes
         of litigation to enforce this Agreement or in connection with this
         Agreement.

14.      WAIVER OF JURY TRIAL

         Each of the parties hereto knowingly, voluntarily, and irrevocably
         waives any right it may have to a trial by jury in respect of any
         claim based upon, arising out of or in connection with this Agreement
         or the Private Placement.



<PAGE>   10




15.      ASSIGNMENT AND SELLING GROUP PARTICIPATION

         This Agreement may not be assigned in whole, or in part, by either
         party without the prior written consent of the other party.

         The Agent may offer selling group participation in compliance with
         applicable laws and consistent with the normal course of brokerage
         business to selling groups of other licensed dealers, brokers, and
         investment dealers, who may or may not be offered part of the Agent's
         fee defined in Section 7 of this Agreement.

16.      BENEFITS; NO THIRD PARTY BENEFICIARIES

         This Agreement is specifically for the benefit of the parties hereto
         and the Indemnified Parties as set forth in Section 11 hereof, and is
         binding on the aforesaid parties to this Agreement and their
         successors and permitted assigns. None of the provisions of this
         Agreement is or may be construed as for the benefit of or enforceable
         by any other person.

17.      NOTICES; DELIVERIES

         Any notice required to be given hereunder must be in writing and
         delivered by fax, hand delivery or sent by Federal Express, DHL or
         other recognized international express courier service that provides
         receipt of delivery, to the party to whom it is to be delivered at the
         addresses set forth below. Any notice given by fax must be sent to the
         fax numbers provided below and the electronic confirmation of the
         sender will be evidence of receipt. Any notice given by fax must also
         be sent by express courier on the same day as the fax transmission or
         the next business day.

<TABLE>
<S>                                         <C>
         If to the Company:                 Bullet Environmental Technologies, Inc.
                                            1177 West Hastings Street
                                            Suite 1818
                                            Vancouver, British Columbia V6E 2K3
                                            Attention:  G.W. Norman Wareham, President
                                            Tel:  (604) 602-1717
                                            Fax:  (604) 683-2370

         with a copy to:                    Powell, Goldstein, Frazer & Murphy LLP
                                            1001 Pennsylvania Avenue, N.W.
                                            Sixth Floor
                                            Washington,  D.C.  20004
                                            Attention:  Michael H. Chanin, Esq.
                                            Tel:  (202) 347-0066
                                            Fax:  (202) 624-7222
</TABLE>
                       [Continued on the following page.]



<PAGE>   11



<TABLE>
<S>                                         <C>
         If to Agent:                       MFC Merchant Bank S.A.
                                            6 Cours De Rive
                                            1211 Geneva, Switzerland
                                            Attention:  Mr. Peter Jessop
                                            Tel:       41-22-818-2929
                                            Fax:       41-22-818-2930
</TABLE>


18.      TIME

         Time is of the essence of this Agreement.

19.      ENTIRE AGREEMENT; AMENDMENTS

         This Agreement constitutes the entire Agreement and understanding
         among the parties hereto relating to the Private Placement described
         herein and supersedes any and all prior agreements and understandings
         relating to the matters provided for herein. No alteration, waiver,
         amendment, change or supplement hereto will be binding or effective
         unless the same is set forth in writing, signed by a duly authorized
         representative of both parties.

20.      COUNTERPARTS

         This Agreement may be executed in one or more counterparts each of
         which will be deemed to be an original. In order for this Agreement to
         be effective, it will not be necessary for all counterparts to be
         signed by each party hereto, provided that at least one counterpart of
         this Agreement is signed by each of the parties hereto.

21.      FAX EXECUTION

         This Agreement may be executed by delivery of a signed signature page
         by fax and such fax execution will be effective in all respects, but
         must be followed by an exchange of copies by one of the methods
         provided in the "Notices" section of this Agreement.

                        [Signatures on following page.]


<PAGE>   12




EXECUTED on                  , 1999.
            -----------------

BULLET ENVIRONMENTAL TECHNOLOGIES, INC.

By:               /s/
         -----------------------------------
         G.W. Norman Wareham
         President

MFC MERCHANT BANK S.A.

By:               /s/
         -----------------------------------
         Name:
         Title:  President