PURCHASE AGREEMENT

        THIS PURCHASE AGREEMENT is made as of this 18th day of June 1998, by
   and between ULTRA PACIFIC HOLDINGS S.A., a Liberian corporation, with its
   office at c/o Dr. Herbert Batliner, Aeulestrasse 74, Post Box 86, F.L.
   9490, Vaduz, Liechtenstein, Attention: Herr Hans Gassner, (the
   "Purchaser"), and METALCLAD CORPORATION, a Delaware corporation, with its
   principal offices at 3737 Birch Street, Suite 300, Newport Beach,
   California 92660, United States of America (the "Company").

        WHEREAS, the Company is offering to sell a U.S. $252,812.50 Principal
   Amount Zero Coupon Secured  Note (the  "Note"), to be dated and issued as
   of the date hereof and to be due 45 days following the date hereof being
   July 31, 1998 (the "Maturity Date"), the Purchaser or any other holder of
   the Note being hereinafter sometimes referred to as the "Noteholder, and
   the principal amount of the  Note being hereinafter sometimes referred to
   as the "Principal Amount", the  Note to be substantially in the form of
   Exhibit A annexed hereto and made a part hereof;

        WHEREAS, on the Maturity Date of the Note, the Company shall issue to
   the Purchaser 250,000 "Warrants" (hereinafter defined) to purchase the
   Company s common stock par value U.S.$.10 per share ("Common Stock");

        WHEREAS, for each day following the Maturity Date that the Note is
   not paid in full (whether or not the Noteholder has declared an Event of
   Default), the Company will issue to the Noteholder an additional 7,143
   Warrants to and including the date on which payment in full of the Note is
   made; 

        WHEREAS, the obligations of the Company under this Purchase Agreement
   and the Note  are entitled to the benefits of the Pledge Agreement and the
   Assignment mentioned below;   

        WHEREAS, the placement of the Note has  been arranged directly by and
   between the Company and the Purchaser;

        WHEREAS, the Company has furnished to the Purchaser, in accordance
   with Section 4.2(c) hereof, the latest annual and quarterly reports and
   other public information referred to below filed with the United States
   Securities and Exchange Commission ("SEC") constituting all of the filings
   of any nature which the Company has filed and was required to file with
   the SEC from and including January 1, 1998 through and including the date
   hereof; 

        WHEREAS, the Company, the Purchaser and Sundial International Fund
   Limited ("Sundial") heretofore entered into that certain Purchase
                               st
   Agreement dated as of the 31   day of December, 1997 ("Prior Purchase
   Agreement") pursuant to which the Purchaser and Sundial purchased
   U.S.$2,200,000.00 Principal Amount of the Company s Zero Coupon Secured
   Notes due December 31, 2002 (each a "Prior Note" and together the "Prior


   <PAGE>                             1
<PAGE>






   Notes" and the Purchaser and Sundial in such capacity being herein
   referred to individually as "Prior Noteholder" and together as the "Prior
   Noteholders") which Prior Purchase Agreement provided for the issuance to
   the Prior Noteholders of certain Warrants to purchase Common Stock of the
   Company and the right of the Prior Noteholders to convert the Prior Notes
   into Common Stock of the Company and the right of the Company to require
   the conversion of the Prior Notes into Common Stock of the Company, each
   under certain circumstances, and all on the terms and conditions set forth
   in the Prior Purchase Agreement and the documents referred to therein; and 

        WHEREAS, due to a mutual factual misunderstanding respecting
   adjustment to the exercise price of the Warrants to be issued under the
   Prior Purchase Agreement and certain other warrants, the number of
   Warrants to be issued thereunder and the price at which the Prior Note to
   be convertible into Common Stock of the Company, which mutual factual
   misunderstanding the parties hereto wish to correct for their mutual
   benefit and for the benefit of Sundial, all as more particularly set forth
   in Section 2.7 of this Purchase Agreement.  

        NOW, THEREFORE, in consideration of the premises and the mutual
   covenants  contained in this Purchase Agreement, the undersigned agree as
   follows:

   Section 1.  Agreement to Sell and Purchase the Note.

        1.1  On the basis of the representations, warranties and agreements
   contained in this Purchase Agreement but subject to the terms and
   conditions set forth in this Purchase Agreement, the Company agrees to
   issue and sell to the Purchaser, and the Purchaser agrees to purchase from
   the Company on the date hereof, or on such other date as shall be mutually
   agreed upon by the Company and the Purchaser (the "Closing Date"), the
   Note for a purchase price of U.S.$250,000.00 (the "Purchase Price").  

        1.2  Payment of the Purchase Price shall be made by the Purchaser to
   the Company by wire transfer, net of all wire transfer charges, in 
   immediately available funds for value on the date hereof, or such other
   date as the Company and the Purchaser shall agree, in United States
   dollars to:

        Account:       Metalclad Corporation
        Account No.:   040116487
        ABA No.:       122003516
        Bank:          Sanwa Bank, Santa Ana Main Branch
                       1622 North Main Street, 
                       Santa Ana, California 92701
                       United States of America

        Alternatively, at the option of the Purchaser, payment may be made in
   escrow in advance of the Closing Date by wire transfer of the Purchase
   Price in immediately available funds to:

        Account:       Gilmartin, Poster & Shafto Trust Account
        Account No.    04278931
        ABA No.        0210000089 


   <PAGE>                             2
<PAGE>






        Bank:          Citibank, N.A. 
                       One Broadway 
                       New York, New York 10004
                       Attention: Ms. Lena Circosta

   Should the funds be transferred in such alternative manner and should the
   Closing take place at a time of day when it is no longer practicable or
   possible to wire transfer said funds to the above mentioned account of the
   Company, Purchaser will cause Messrs. Gilmartin, Poster & Shafto
   ("Agent"), concurrently with the Closing, to: (i) issue and deliver to the
   Company the Agent s irrevocable and unconditional confirmation that
   concurrently with the Closing the Agent holds such Purchase Price solely
   and exclusively for the benefit of the Company, and (ii) issue and deliver
   to Citibank, N.A. no later than the opening of business on the following
   Business Day its irrevocable and unconditional instructions forthwith to
   wire transfer, net of all wire transfer charges, the  Purchase Price of
   the Note to the Company s account with said Sanwa Bank above mentioned.

        1.3  The completion of the sale and purchase of the Note (the
   "Closing") shall take place at the offices of the Agent, 5th Floor, One
   William Street, New York, New York 10004, at 10:00 a.m. local time on the
   Closing Date. At the Closing, the Company shall deliver to the Agent, for
   the account of Purchaser, the Note registered in the name of the 
   Purchaser or its nominee, representing the Note being purchased by
   Purchaser, against payment of the Purchase Price therefor in immediately
   available funds to the account of the Company designated in or otherwise
   as provided in Section 1.2 of this Purchase Agreement. 

        1.4  The obligation of the  Purchaser to purchase the Note at the
   Closing shall be conditional upon the delivery by the Company to the
   Agent, on behalf of the Purchaser, of:

             1.4.1  The Secondary Pledge Agreement (as executed and
   delivered, the "Pledge Agreement") by and between the Company and the
   Agent dated as of the Closing Date substantially in the form of Schedule 1
   annexed hereto and made a part hereof pursuant to which the Company
   pledges to the Agent for the benefit of the Noteholder and as security
   for, among other things, the obligations of the Company under the Note and
   this Purchase Agreement, all of the issued and outstanding capital stock
   ("MIC Shares") of the Company s wholly owned subsidiary, Metalclad
   Insulation Corporation ("MIC"), a California corporation, subject to the
   prior rights of the Agent  under that certain Pledge Agreement dated as of
         st
   the 31   day of December, 1997 between the Company and the Agent (the
   "Prior Pledge Agreement"), the MIC Share Certificates and the MIC Stock
   Powers having been previously delivered by the Company to the Agent
   pursuant to the Prior Pledge Agreement.

             1.4.2  An Assignment of Account ("Assignment") substantially in
   the form of Schedule 2 annexed hereto and made a part hereof pursuant to
   which the Company assigns to the Agent, as secured party, acting on behalf
   of the Noteholder, all of the Company s right, title and interest in and
   to the "Fund Trust Agreement"(hereinafter defined) as security, inter
   alia, for all of the "Obligations" (hereinafter defined).  



   <PAGE>                             3
<PAGE>






             1.4.3  The Company s irrevocable and unconditioned undertaking
   hereby made, to issue on, but not before, the Maturity Date (July 31,
   1998), a Warrant dated the Maturity Date to purchase 250,000 Shares of the
   Company s Common Stock at the Warrant Exercise Price with an expiration
   date of July 31, 2003 registered to Purchaser.  

             1.44  Evidence satisfactory to the Agent of the authority of the
   persons executing the Note, the Pledge Agreement, the Assignment and all
   other transaction documents on behalf of the Company. 

             1.4.5  The Note. 

             1.4.6  UCC Financing Statements relating to the Collateral to be
   filed in such jurisdictions as are determined appropriate by the Agent.

             1.4.7  An opinion of Messrs. Gibson, Haglund & Johnson, counsel
   to the Company, in form and substance satisfactory to the Agent.  

   Section 2.  Definitions; Certain Rights of the Noteholder Upon the
   Occurrence of an Event of Default.

        2.1  When used in this Purchase Agreement, the following terms shall
   have the following meanings:

             2.1.1  "Agent" shall have the meaning set forth in Section 1.2
   of this Agreement.  

             2.1.2  "Assignment" shall mean that certain Assignment of
   Account executed by the Company in favor of the Agent dated as of the date
   hereof substantially in the form of Schedule 2 annexed hereto and made a
   part hereof pursuant to which, among other things, the Company assigns to
   the Agent for the benefit of the Noteholder and as security for the
   payment of any and all indebtedness of the company to Ultra all right,
   title and interest of the Company in and to, among other things, the
   account and all proceeds thereof established pursuant to the Fund Trust
   Agreement. 

             2.1.3  "Business Day" shall mean a day on which banks are open
   for business in each of Los Angeles, California, New York City, New York,
   London, England and the Channel Islands.

             2.1.4  "Closing Date" shall have the meaning set forth in
   Section 1.1 of this Agreement.

             2.1.5  "Collateral" shall mean all the right, title and interest
   of the Agent in and to the property described in the Assignment and the
   Pledge Agreement, which property the Agent holds for the benefit of the
   Noteholder and as security for the performance of the Obligations.  

             2.1.6  "Common Stock" shall have the meaning set forth in the
   second recital of this Agreement.

             2.1.7  "Company" shall have the meaning set forth in the first
   paragraph of this Agreement. 


   <PAGE>                             4
<PAGE>






             2.1.8  "Debentures" shall have the meaning set forth in Section
   3.1 of this Agreement.  


             2.1.9  "Default Rate" shall be a per annum rate of interest
   equal to (i) the greater of (w) 15% or (x) the sum of 6% plus the rate
   announced from time to time by Citibank, N.A. as its prime or stated rate
   for unsecured short term U.S. dollar commercial loans in the United
   States.  

             2.1.10  "Discounted Present Value"with respect to the Note shall
   be based on a simple interest rate of 9% per annum without compounding and
   shall mean with respect to the Note an amount calculated  in accordance
   with the following formula: 

                   $250,000.00 + ($2,812.50 (n/45))

   wherein n equals the number of days elapsed from and including the date of
   issuance of any Note to and including the date of occurrence of an Event
   of Default, as the case may be, and 45 equals the total number of days
   from and including the date of issuance to and including the date of
   maturity of the Note.  

             2.1.11  "EPA" shall have the meaning set forth in Section 6.15
   of this Agreement.  

             2.1.12  "Event of Default" shall mean any of the events referred
   to in Section 7.1 of this Agreement; and "Events of Default" shall mean
   more than one such event.

             2.1.13  "Fund Trust Agreement" shall mean that certain Amended
   and Restated Fund Trust Agreement" between the Company and Pacific
   National Bank, a copy of the Fund Trust Agreement being annexed hereto as
   Schedule 4 and made a part hereof.  

             2.1.14  "GAAP" shall mean the standards, conventions, rules and
   principles generally accepted and followed by accountants in the United
   States in recording and summarizing transactions and in the preparation of
   financial statements.  

             2.1.15  "Market Price" shall have the meaning set forth in the
   form of Warrant annexed to this Purchase Agreement as Schedule 3 and made
   a part hereof.

             2.1.16  "MIC Shares" shall mean all of the issued and
   outstanding capital stock of Metalclad Insulation Corporation, a
   California corporation.

             2.1.17  "MIC Stock Powers" shall mean stock powers executed in
   blank, with signature guaranteed, in form sufficient to enable the Agent
   to transfer the registered and beneficial ownership of the whole or any
   portion of the MIC Shares pursuant to the terms of the Pledge Agreement.

             2.1.18  "Noteholder" and "Noteholders" shall have the meanings


   <PAGE>                             5
<PAGE>






   set forth in the first recital of this Agreement.  

             2.1.19  "Note" shall have the meaning set forth in the first
   recital of this Agreement.  

             2.1.20  "Obligations" shall mean all of the obligations of the
   Company to the Noteholder under or pursuant to the Note, this Purchase
   Agreement, the Pledge Agreement and the Assignment.  
             2.1.21  "OFW Ratchet Clause" shall mean the adjustments to the
   Warrant Exercise Price set forth in Section 7 of the form of Warrant
   annexed hereto as Schedule 3 and made a part hereof.  

             2.1.22  "OSHA" shall have the meaning set forth in Section 6.15
   of this Agreement.  

             2.1.23  "Pledge Agreement" shall mean that certain Secondary
   Pledge Agreement by and between the Company and the Agent dated as of the
   date hereof substantially in the form of Schedule 1 annexed hereto and
   made a part hereof, pursuant to which, among other things, the Company
   pledges to the Agent for the benefit of the Noteholder and as security for
   all of the Obligations, the MIC Shares subject, however, to the prior
   rights of the Agent under and pursuant to the Prior Pledge Agreement.  .

             2.1.24  "Principal Amount" shall mean with respect to the Note,
   U.S. $252,812.50.    

             2.1.25  "Prior Note"and "Prior Notes" shall have the meaning set
   forth on the penultimate recital to this Agreement.  

             2.1.26  "Prior Noteholder" and "Prior Noteholders" shall have
   the meaning set forth in the penultimate recital to this Agreement.  

             2.1.27  "Prior Pledge Agreement" shall mean that certain Pledge
                         st
   Agreement dated the 31   day of December, 1997 by and between the Company
   and the Agent pursuant to which the MIC shares and the MIC Stock Powers
   were delivered to the Agent as security for the "Obligations" referred to
   therein.  

             2.1.28  "Prior Purchaser" shall have the meaning set forth in
   the penultimate recital to this Agreement.  

             2.1.29  "Purchaser" shall have the meaning set forth in the
   first paragraph of this Agreement.

             2.1.30  "Purchase Price" of the Note shall mean U.S.$250,000.00. 

             2.1.31  "Registration Rights Agreement" shall have the meaning
   set forth in the Prior Purchase Agreement.  

             2.1.32  "Restricted Period" shall have the meaning set forth in
   Section 4.3(a) of this Agreement.  


             2.1.33  "SEC" shall have the meaning set forth in the last


   <PAGE>                             6
<PAGE>






   recital of this Agreement. 

             2.1.34  "Securities" shall have the meaning set forth in
   Section 3.6 of this Agreement.  

             2.1.35  "Sundial"shall have the meaning set forth in the
   penultimate recital to this Agreement.  

             2.1.36  "Transaction documents" shall have the meaning set forth
   in Section 3.3 of this Agreement.  

             2.1.37  "Warrant" shall mean the non-redeemable right to
   purchase shares of  Common Stock at the Warrant Exercise Price; and
   "Warrants" shall mean the plural thereof, each Warrant to be substantially
   in the form of Schedule 3 annexed hereto and made a part hereof.

             2.1.38  "Warrant Exercise Price" shall mean U.S. $1.25 per share
   of Common Stock as the same may be adjusted pursuant to the OFW Ratchet
   Clause.

             2.1.39  "Warrant Shares" shall mean the shares of Common Stock
   of the Company issuable upon exercise of the Warrants.  

        2.2  Concurrently with the Maturity  of the Note on the Maturity
   Date, the Company will issue to the Purchaser a Warrant dated the Maturity
   Date to purchase 250,000 shares of Common Stock.  For each day following
         th
   the 45   day from the date of issuance of the Note that the Note has not
   been paid in full (together with any default interest due thereon), the
   Company will issue to the Purchaser an additional Warrant to purchase
   7,143 shares of the Common Stock.  

        2.3  Upon the occurrence of an Event of Default and so long as the
   same shall be continuing, the Noteholder shall have the right to declare
   the Note to be in default.  In the event of any such declaration, the
   Discounted Present Value of such Note shall be calculated to the date of
   the occurrence of such Event of Default and, (i) thereafter, such
   Discounted Present Value of the Note shall bear interest at the Default
   Rate until all amounts due the Noteholder are paid in full, and (ii) in
   addition to the Warrant to purchase 250,000 shares of Common Stock,
   Noteholder shall receive a  Warrant to purchase 7,143 shares of Common
                                                     th
   Stock of the Company for each day following the 45   day after the date of
   issuance of the Note until the entire Principal Amount of the Note and
   default interest thereon, if any, have  been paid in full (whether or not
   an Event of Default has been declared or waived by the Noteholder).  Upon
   the occurrence of an Event of Default the Noteholder may instruct the
   Agent to exercise any one or more or all of the Agent s rights under the
   Pledge Agreement and the Assignment, all without prejudice to the
   Noteholder s rights in law or equity.

        2.4  If the SEC or any other agency of the government of the United
   States abolishes, modifies or otherwise changes the terms of Regulation S
   or Rule 144 promulgated under the Securities Act of 1933, as amended, so
   as to (i) extend the holding period under Regulation S to a period greater
   than one year, or (ii) extend the holding period under Rule 144 to greater


   <PAGE>                             7
<PAGE>






   than one year, the Purchaser adversely affected thereby shall have
   piggyback registration rights to the registration rights set forth in the
   Registration Rights Agreement. 

        2.5  In the event there shall have accumulated $250,000.00 in the
   Fund Trust Agreement at a time when any of the Obligations shall remain
   outstanding, the Company shall cause a "Closing" (as defined in the Fund
   Trust Agreement to take place) and shall apply the proceeds thereof to
   payment of any the Obligations which then remaining outstanding.  

        2.6  The Purchaser hereby appoints the Agent to act as its agent for
   purposes of retaining, perfecting and enforcing all of the rights
   conferred upon Agent pursuant to the Pledge Agreement and the Assignment.  

        2.7.1  For the purposes of this Section 2.7 only, capitalized terms
   used herein and not defined herein are used as defined in the Prior
   Purchase Agreement.  

        2.7.2  The form of Warrant annexed to the Prior Purchase Agreement as
   "Exhibit B" and made a part thereof is hereby amended by inserting a
   subsection 7(e) following subsection 7(d) and renumbering existing
   subsections (e) and (f) as subsections (f) and (g): 

               (e)  Adjustment in Number of Shares.  Upon each adjustment of
   the Exercise Price pursuant to the provisions of this paragraph 7, the
   number of Shares issuable upon the exercise of each Warrant shall be
   adjusted to the nearest full Share by multiplying a number equal to the
   Exercise Price in effect immediately prior to such adjustment by the
   number of Shares issuable upon exercise of the Warrants immediately prior
   to such adjustment and dividing the product so obtained by the adjusted
   Exercise Price.  

        2.7.3  The definition of the term "OFW Rachet Clause" contained in
   Section 2.1.18 of the Prior Purchase Agreement shall be changed to read as
   follows:

              "2.1.18   OFW Rachet Clause  shall mean the entirety of
   Section 7 of the form of Warrant annexed hereto as Exhibit B and made a
   part hereof and shall include the addition to Section 7 thereof of the new
   subsection (e) referred to in Section 2.7.2 of the Purchase Agreement
                     th
   dated as of the 18   day of June 1998 by and among Ultra Pacific Holdings
   S.A. ("Ultra"), it being understood that the OFW Rachet Clause as
   hereinabove modified shall also be applied to modify and adjust the
   Conversion Rate as well as the Warrant Exercise Price."  

        2.7.4  It is understood that no Warrants have heretofore been issued
   under or pursuant to the Prior Purchase Agreement but that in accordance
   with the terms of the Prior Purchase Agreement and the Note referred to
   therein, Warrants shall become issuable by the Company to Ultra and
   Sundial upon the occurrence of one or more of certain events described in
   the Prior Purchase Agreement and the Note such that it is a certainty that
   Warrants will be issued by the Company to Ultra and Sundial thereunder
   because it is a certainty that one or more of the events referred to
   therein will occur.  It is further agreed that concurrently with the first


   <PAGE>                             8
<PAGE>






   issuance by the Company to Ultra and Sundial of Warrants in accordance
   with the terms of the Prior Purchase Agreement and the Note referred to
   therein, an additional 400,000 Warrants in the form of the Warrant annexed
   to the Prior Purchase Agreement as Exhibit B as modified pursuant to this
   Section 2.7., shall also then be issued to Ultra and Sundial in the
   following proportions:   a Warrant to Sundial to purchase 266,667 shares
   of Common Stock and a Warrant to Ultra to purchase 133,333 shares of
   Common Stock.   

   Section 3.  Representations and Warranties of the Company

        The Company hereby represents and warrants to the Purchaser as
   follows:

        3.1   Organization and Qualification.  The Company is a corporation
   duly organized, validly existing and in good standing under the laws of
   the State of Delaware and has all requisite corporate power and authority
   to own and lease its properties and to conduct its business as presently
   conducted and as described in the Confidential Private Placement
   Memorandum dated as of May 27, 1998 respecting the proposed issuance by
   the Company  of up to $5,000,000 principal amount of its 10% Convertible
   Subordinated Debentures due 2001 ("Debentures").   The Company and its
   subsidiaries are duly qualified to do business as foreign corporations and
   are in good standing in every jurisdiction where such qualification is
   required by controlling law and where the failure so to qualify would have
   a material adverse effect on the Company and its subsidiaries taken as a
   whole.

        3.2  MIC Shares.  The MIC Shares consist of 1,000 shares of Common
   Stock, no par value, representing all of the issued shares of capital
   stock of MIC, have been duly and validly authorized and issued, and are
   fully paid and nonassessable.  The MIC Shares are owned directly by the
   Company and are free and clear of any claim, lien, security interest,
   mortgage, pledge, charge or other encumbrance of any nature whatsoever
   other than the lien of the Prior Pledge and the Pledge Agreement.

        3.3  Due Execution, Delivery and Performance of the Purchase
   Agreement

             The execution, delivery and performance of this Purchase
   Agreement, the Note, the Pledge Agreement, the Assignment and all other
   documents delivered or to be delivered by the Company in connection with
   this Purchase Agreement including the Warrant to be dated and delivered
   the Maturity Date (together the "transaction documents") (a) have been
   duly authorized by all requisite corporate action of the Company, and (b)
   will not violate (i) the Certificate of Incorporation or Bylaws of the
   Company or (ii) any law applicable to the Company, MIC, or any of its
   other subsidiaries or any rule, regulation or order of any court or
   governmental agency or body having jurisdiction over the Company, MIC, or
   any of its other subsidiaries or (iii) any provision of any indenture,
   mortgage, debenture, agreement, contract or other instrument by which the
   Company or its property is bound or affected.  

        3.4  Issuance and Delivery of the Warrant Shares.  The offer,


   <PAGE>                             9
<PAGE>






   issuance, sale and delivery of the Warrant Shares, in accordance with the
   Purchase Agreement, have been duly authorized by all requisite corporate
   action of the Company.  The Warrant Shares, when issued, will conform to
   the terms of the Common Stock set forth in the Company s Certificate of
   Incorporation.  The Warrant Shares, when issued upon exercise of the
   Warrants therefor, will be duly and validly issued and outstanding, fully
   paid and non-assessable, will not be subject to any pre-emptive or similar
   right, and Purchaser will receive good and valid record title to the
   Warrant Shares, free and clear of any claim, lien, security interest,
   mortgage, pledge, charge or other encumbrance of any nature whatsoever,
   except such as may have been created by the Purchaser.  No consent or
   approval by the stockholders of the Company or of any other person is
   required to be obtained by the Company for the consummation of the
   issuance, sale and delivery of the Warrant Shares pursuant to the terms of
   this Purchase Agreement.  The Warrant Shares have been duly and validly
   authorized and reserved for issuance.

        3.5  Note and Warrant Authorized.   At the Closing, the Note, and on
   the Maturity Date, the Warrant, will be duly and validly executed and
   delivered by the Company and will constitute the valid and legally binding
   obligations of the Company, enforceable against the Company in accordance
   with their respective terms, except as the enforceability thereof may be
   limited by any applicable bankruptcy, insolvency, reorganization or other
   similar laws relating to or affecting enforcement of creditors  rights
   generally and by general equitable principles, regardless of whether such
   enforceability is considered in a proceeding in equity or at law.

        3.6  Compliance with Regulation S.  The Company is a "reporting
   issuer" (as defined in Regulation S promulgated by the SEC).  The Company,
   its affiliates, and any person acting on behalf of, or as agent of, any of
   the foregoing, whether as principal or agent, (a) has offered and sold the
   securities which are the subject of this Purchase Agreement, including the
   Note, the Warrants and the Warrant Shares (the "Securities") to the
   Purchaser only in an "offshore transaction" (as defined in Regulation S),
   (b) has not engaged with respect to the Securities in any "directed
   selling efforts" (as defined in Regulation S) in or directed toward the
   United States, and (c) has complied with all "offering restrictions" (as
   defined in Regulation S) in respect of the Securities.

   Section 4.  Representations, Warranties and Covenants of Purchaser.

        The Purchaser hereby represents, warrants and covenants to the
   Company as follows:

        4.1  Compliance with United States Securities Laws.  The Purchaser
   understands and acknowledges that (a) the Securities have not been and
   will not be registered under the Securities Act, and may not be offered or
   sold in the United States or to, or for the account or benefit of, any
   "U.S. person" (as defined in Regulation S), unless such securities are
   registered under the Securities Act and any applicable state securities or
   blue sky laws or such offer or sale is made pursuant to exemptions from
   the registration requirements of such laws, (b) the Warrant may not be
   exercised in the United States or by or on behalf of a "U.S. Person" (as
   defined in Regulation S) unless the Warrant and the Warrant Shares are


   <PAGE>                             10
<PAGE>






   registered under the Securities Act and any applicable state securities or
   blue sky laws or exemptions from the registration requirements of such
   laws are available, and (c) the Securities are being offered and sold
   pursuant to the terms of Regulation S under the Securities Act, which
   permits securities to be sold to non-"U.S. persons" in "offshore
   transactions" (as defined in Regulation S), subject to certain terms and
   conditions.

        4.2  Status of Purchaser.

             (a)  Purchaser is purchasing the Securities for its own account
   or for persons or accounts as to which it exercises investment discretion. 
   Neither Purchaser nor such person or account is a "U.S. person" (as
   defined in Regulation S).  Purchaser has executed this Purchase Agreement
   outside the United States.  The offer to Purchaser and sale of the
   Securities has occurred outside the United States.

             (b)  Purchaser (and any person or account on whose behalf
   Purchaser is purchasing) is knowledgeable, sophisticated and experienced
   in making, and is qualified to make, decisions with respect to investments
   in restricted securities such as this Purchase Agreement and the
   Securities) and has requested, received, reviewed and considered all
   information it deems relevant in making a decision to execute this
   Purchase Agreement and to purchase the Securities.  Purchaser acknowledges
   that it is capable of evaluating the merits and risks of an investment in
   the Securities.

             (c)  Purchaser acknowledges that the Company has made available
   to Purchaser (i) the latest annual and quarterly reports and other public
   information referred to below filed with the SEC, including all of the
   filings of any nature which the Company has filed and was required to file
   with the SEC from and including January 1, 1998 through and including the
   date hereof, (ii) the opportunity to ask questions and receive answers
   concerning the terms and conditions of the offering of the Securities, and
   (iii) the opportunity to obtain any additional information that the
   Company possesses or can acquire without unreasonable effort or expense
   necessary to verify the accuracy of the information furnished in
   connection herewith and the transactions contemplated hereby.

             (d)  Purchaser has agreed to purchase the Securities for
   investment purposes and not with a view to distribution.  To the extent
   that the Note and the Warrants comprising the Securities are registered in
   the name of Purchaser s nominee, Purchaser confirms that such nominee is
   acting as custodian for Purchaser of such securities.

        4.3  Restrictions on Transfer or Re-Sale.

             (a)  For a period of one year following the Closing Date,  or if
   the Securities come to be issued on more than one day, the latest Closing
   Date (the "Restricted Period"), Purchaser shall not engage in any activity
   for the purpose of, or which may reasonably be expected to have the effect
   of, conditioning the market in the United States for the Securities, or
   offer, sell, transfer, pledge or otherwise dispose of the Securities, or
   any interest therein in the United States to, or for the account or


   <PAGE>                             11
<PAGE>






   benefit of, a "U.S. person" (as defined in Regulation S).

             (b)  Purchaser understands that the Warrant Shares or any
   interest therein are only transferable on the books and records of the
   Transfer Agent and Registrar of the Common Stock of the Company and, with
   respect to the Note and the Warrants, on the books and records of the
   Company.  Purchaser further understands that the Transfer Agent and
   Registrar and the Company will not register any transfer of the Securities
   or any interest therein which the Company in good faith believes violates
   the restrictions set forth  herein.

             (c)  Unless registered under the Securities Act, any proposed
   offer, sale, transfer, pledge or other disposition during the Restricted
   Period of any of the Securities or any interest therein shall be subject
   to the condition that Purchaser must deliver to the Company (i) a written
   certification that neither record nor beneficial ownership of the
   Securities has been offered or sold in the United States or to, or for the
   account or benefit of, any "U.S. person" (as defined in Regulation S),
   (ii) a written certification of the proposed transferee that such
   transferee (or any account for which such transferee is acquiring such
   Securities is not a "U.S. person" (as defined in Regulation S), that such
   transferee is acquiring such Securities or such interest therein, as the
   case may be, for such transferee s own account (or an account over which
   it has investment discretion) and for investment and not with a view to
   distribution, and that such transferee is knowledgeable of and agrees to
   be bound by the restrictions on re-sale set forth in this section and
   Regulation S during the Restricted Period, and (iii) a written opinion of
   United States counsel, in form and substance satisfactory to the Company,
   to the effect that the offer, sale, transfer, pledge or other disposition
   of such Securities, or any interest therein, as the case may be, are
   exempt from registration under the Securities Act and any applicable state
   securities or blue sky laws.

             (d)  Purchaser will not, directly or indirectly, voluntarily
   offer, sell, pledge, transfer or otherwise dispose of (or solicit any
   offers to buy, purchase or otherwise acquire or take a pledge of) its
   rights under this Purchase Agreement otherwise than in compliance with the
   Securities Act, any applicable state securities or blue sky laws and any
   applicable securities laws of jurisdictions outside the United States, and
   the rules and regulations promulgated thereunder.

        4.4  Exercise of the Warrants.  Purchaser understands that the
   Warrants may not be exercised by or on behalf of any "U.S. person" (as
   defined in Regulation S) unless the Warrants and the Warrant Shares
   issuable upon exercise thereof are registered under the Securities Act or
   an exemption from such registration is available.  Accordingly, Purchaser
   understands that it is a condition to the exercise of the Warrants that
   (a) any shares of Common Stock issuable upon such exercise will not be
   delivered within the United States except in circumstances constituting an
   "offshore transaction" (as defined in Regulation S) or unless such shares
   of Common Stock have been registered under the Securities Act or an
   exemption from such registration is available, and (b) the holder
   exercising the Warrants must deliver to the Company (i) a written
   certification that such holder is not a "U.S. person" (as defined in


   <PAGE>                             12
<PAGE>






   Regulation S) and that the Warrants are not being exercised on behalf of,
   or for the account or benefit of, a "U.S. person" (as defined in
   Regulation S) or (ii) a written opinion of United States counsel, in form
   and substance satisfactory to the Company, to the effect that the Warrants
   and the shares of Common Stock issuable upon exercise of the Warrants have
   been registered under the Securities Act or are exempt from registration
   under the Securities Act.

        4.5  Due Execution, Delivery and Performance of the Purchase
   Agreement and Other Obligations.  Purchaser has full right, power,
   authority and capacity to enter into this Purchase Agreement and to
   consummate the transactions contemplated hereby; if Purchaser is a company
   or corporation, the execution, delivery and performance of this Purchase
   Agreement by Purchaser have been duly authorized by all requisite
   corporate action of Purchaser.  Upon the execution and delivery of this
   Purchase Agreement by Purchaser, this Purchase Agreement shall constitute
   the legal, valid and binding obligations of Purchaser, except as the
   enforceability thereof may be limited by any applicable bankruptcy,
   insolvency, reorganization or other similar laws relating to or affecting
   the enforcement of creditors  rights generally and by general equitable
   principles, regardless of whether such enforceability is considered in a
   proceeding in equity or at law.

   Section 5.  Representations and Warranties at the Closing; Survival of
   Representations, Warranties and Agreements.

        5.1  Each of the parties hereto acknowledges that each of its
   respective representations and warranties contained in this Purchase
   Agreement is true and correct as of the date of this Purchase Agreement.

        5.2  Notwithstanding any investigation made by either party to this
   Purchase Agreement, all covenants, agreements, representations and
   warranties made by the Company and Purchaser herein and in the Securities
   delivered pursuant hereto shall survive the execution and delivery of this
   Purchase Agreement and the other transaction documents, the delivery to
   Purchaser of the Securities, and the receipt by the Company of payment for
   the Securities.

   Section 6.  Certain Agreements of the Company.

        The Company hereby covenants and agrees with Purchaser as follows:

        6.1  The Company shall cause MIC to preserve and maintain its
   corporate existence and all of its right, privileges and franchises in
   every jurisdiction in which the character of the property owned or the
   nature of the business transacted makes licensing of qualification
   necessary relative to the conduct of MIC s business.

        6.2  Except for the Prior Pledge, the Company shall not permit MIC to
   encumber, mortgage, pledge, assign or grant any security in MIC s assets
   to anyone other than Purchaser.  The Company shall cause MIC to place
   notations on MIC s books of account and financial statements to disclose
   Purchaser s interest in MIC s assets.



   <PAGE>                             13
<PAGE>






        6.3  The Company shall cause MIC to keep and maintain  MIC s assets
   in good operating condition, reasonable wear and tear excepted.

        6.4  The Company shall not permit MIC to make any capital
   expenditures in any fiscal year in excess of $100,000 without the consent
   of Purchaser.

        6.5  The Company shall promptly notify Purchaser of the imposition at
   any time of any lien or encumbrance upon any of the Collateral and the
   Company shall defend MIC s assets against all claims and demands of all
   persons at any time claiming the same or any interest therein adverse to
   Purchaser.

        6.6  Without the prior written consent of Purchaser, the Company
   shall not sell, assign, transfer, mortgage, pledge, or otherwise dispose
   of MIC s assets, other than in the ordinary course of business.

        6.7  The Company shall promptly give to Purchaser notice in writing
   of any proceeding before any governmental agency or court against MIC
   which might, if determined adversely to MIC, materially and adversely
   affect MIC s financial condition, affairs or operations.

        6.8  The Company shall cause MIC to pay all taxes, assessments,
   governmental charges or levies imposed upon it or upon its income or
   profits, or upon any property belonging to it, prior to the date penalties
   attach thereto; provided, however, that MIC shall not be required to pay
   any such taxes, assessments, governmental charges or levies being
   contested in good faith and by appropriate proceedings, but only so long
   as such proceedings do not involve any material danger or material adverse
   impact on the business of MIC.

        6.9  The Company shall not permit MIC to merge or consolidate with or
   into any other corporation or entity (except to the extent that MIC is the
   successor, survivor or parent and, in such event, only if (i) the tangible
   net worth of MIC is in the Company s reasonable judgment equal to or
   greater than the tangible net worth of MIC prior to such merger or
   consolidation, and (ii) MIC remains a wholly-owned subsidiary of the
   Company.

        6.10  The Company shall cause MIC to defend MIC s assets against the
   claims and demands of all parties.

        6.11  The Company shall not permit MIC to make a loan, pay a
   dividend, or otherwise transfer any of MIC s assets to the Company or any
   affiliate thereof.

        6.12  The Company shall not permit MIC to make any loans to any
   officers, directors, employees, or affiliates of the Company or MIC or any
   affiliate of either thereof.

        6.13  The Company shall cause MIC to provide Purchaser with unaudited
   financial statements of MIC, including a balance sheet, profit and loss
   statement, statement of equity, and cash flow statement, within 45 days of
   the end of each fiscal quarter and 90 days after the end of the fiscal


   <PAGE>                             14
<PAGE>






   year.  All financial statements required hereunder shall be prepared in
   accordance with GAAP, subject to year-end adjustments in the case of
   quarterly statements.  In addition, the Company shall cause MIC to furnish
   Purchaser with a month-by-month operating budget and cash flow for each
   fiscal year, including a balance sheet and income statement) no later than
   30 days prior to the end of the previous fiscal year.

        6.14  The Company shall cause MIC to maintain insurance on its assets
   in a commercially reasonable manner in commercially reasonable amounts.

        6.15  The Company shall cause MIC to remain in material compliance
   with all applicable provisions of the Occupational Safety and Health Act
   as at any time amended ("OSHA") and the Environmental Protection Act as at
   any time amended ("EPA").

        6.16  The Company shall not permit MIC materially to change the
   nature of its business.

        6.17  The Company shall not permit MIC to purchase or acquire
   obligations or stock of, or any interest in, or make any investment in any
   entity other than (i) obligations issued or guaranteed by the United
   States of America or any agency thereof, (ii) commercial paper with
   maturities of not more than 180 days and a published rating of not less
   than A-1 or P-1 or equivalent rating, or (iii) certificates of deposit
   having maturities of not more than 180 days issued by FDIC-insured
   commercial banks with combined capital and surplus of at least $500
   million, (iv) U.S. money market funds that invest solely in obligations
   issued by the United States of America or any agency thereof, and (v)
   Eurodollar time deposits with financial institutions with a published
   rating of not less than A-1 or P-1 or equivalent rating.

        6.18  The Company shall reimburse the Purchaser on demand for
   attorneys  fees, disbursements, and other out-of-pocket expenses incurred
   in connection with the preparation, execution, delivery or enforcement of
   the terms of any of the transaction documents.

   Section 7.  Events of Default.  

        7.1  The Company shall be deemed to be in default of this Purchase
   Agreement and the Note if any of the following events ("Events of
   Default") shall occur and be continuing: 

             (a)  The Company shall fail to pay the Principal Amount of the
   Note when due in accordance with the terms thereof or hereof; or the
   Company shall fail to pay any other amount or perform any other obligation
   hereunder or under the Note or any other transaction document within five
   Business Days after any such other amount becomes due in accordance with
   the terms thereof or hereof; or 

             (b)  Any representation or warranty made or deemed made by the
   Company or MIC or in any other transaction document or which is contained
   in any certificate, document or financial or other statement furnished by
   it at any time under or in connection with this Purchase Agreement or any
   such other transaction document shall prove to have been incorrect in any


   <PAGE>                             15
<PAGE>






   material respect on or as of the date made or deemed made; or 

             (c)  The Company shall default in the observance or performance
   of any agreement contained in Section 6 or any covenant contained in any
   other transaction document; or 

             (d)  The Company or MIC shall default in the observance or
   performance of any agreement contained in this Purchase Agreement or any
   other transaction document and such default shall continue unremedied for
   a period of 30 days after the earlier of (i) the date upon which an
   executive officer of the Company has actual knowledge thereof and (ii) the
   date upon which the Agent or the Noteholder gives notice to the Company
   thereof; or 

             (e)  (I) the Company or MIC shall commence any case, proceeding
   or other action (A) under any existing or future law of any jurisdiction,
   domestic or foreign, relating to bankruptcy, insolvency, reorganization or
   relief of debtors, seeking to have any order for relief entered with
   respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
   seeking reorganization, arrangement, adjustment, winding-up, liquidation,
   dissolution, composition or other relief with respect to it or its debts,
   or (B) seeking appointment of a receiver, trustee, custodian, conservator
   or other similar official for it or for all or any substantial part of its
   assets, or the Company or MIC shall make a general assignment for the
   benefit of its creditors; or (ii) there shall be commenced against the
   Company or MIC any case, proceeding or other action of a nature referred
   to in clause (i) above which (A) results in the entry of an order for
   relief or any such adjudication or appointment or (B) remains undismissed,
   undischarged or unbonded for a period of 60 days; or (iii) there shall be
   commenced against the Company or MIC any case, proceeding or other action
   seeking issuance of a warrant of attachment, execution, distraint or
   similar process against all or any substantial part of its assets which
   results in the entry of an order for any such relief which shall not have
   been vacated, discharged, or stayed or bonded pending appeal within 60
   days from the entry thereof; or (iv) the Company or MIC shall take any
   action in furtherance of, or indicating its consent to, approval of, or
   acquiescence in, any of the acts set forth in clauses (i), (ii) , or (iii)
   above; or (v) the Company or MIC shall generally not, or shall be unable
   to, or shall admit in writing its inability to, pay its debts as they
   become due.  

        7.2  Upon the occurrence of any such Event of Default, as defined in
   Section 7.1, (A) if such Event of Default is specified in clause (i) or
   (iv) of paragraph (e) of Section 7.1 with respect to the Company,
   automatically the Note hereunder and all other amounts owing under this
   Purchase Agreement, the Note or any other transaction document (including,
   without limitation, all Obligations shall immediately become due and
   payable, and (B) if such event is any other Event of Default, the
   Noteholder may declare the Note and all other amounts owing under this
   Purchase Agreement, the Note or any other transaction document, including,
   without limitation, all Obligations, to be due and payable forthwith,
   whereupon the same shall immediately become due and payable.  

        7.3  Except as expressly provided above in this Section 7, demand,


   <PAGE>                             16
<PAGE>






   protest and all other notices of any kind are hereby expressly waived.  

   Section 8.  Notices

   Notices and other communications provided for herein shall be in writing
   and shall be delivered by hand or shall be sent by telecopy (and if sent
   by telecopy, shall be confirmed by registered mail, return receipt
   requested, or by overnight mail or courier, postage and delivery charges
   prepaid), to the following addresses: 

       if to the Company:     Metalclad Corporation 
                              Attention: Grant Kesler, President 
                              2 Corporate Plaza, Suite 125 
                              Newport Beach, California 92660 
                              Phone:  714 719-1234 
                              Fax:    714 719-1240

       with a copy to:        Gibson, Haglund & Johnson 
                              Attention: Bruce H. Haglund, Esq. 
                              Koll Center Irvine 
                              2010 Main Street, Suite 400 
                              Irvine, California 92614 
                              Phone:  714 752-1100
                              Fax:    714 752-7144 or 714 752-1188

       if to the Purchaser:   Ultra Pacific Holdings, S.A.
                              Attention: Herr Hans Gassner
                              c/o Dr. Herbert Batliner 
                              Aeulestrasse 74 
                              Post Box 86 
                              F.L. 9490 
                              Vaduz, Liechtenstien 
                              Phone:  011 41 75 236-0404
                              Fax:    011 41 75 236-0405

       with copies to:        Gilmartin, Poster & Shafto 
                              Attention: Donald B. Shafto, Esq.
                                                   th
                              One William Street, 5   Floor 
                              New York, New York 10004 
                              Phone:  212 425-3220 
                              Fax:    212 482-0848 or 212 425-3220

                              Sundt & Co. Ltd.
                              Attention: Mr. Nick Murphy
                              11 St. James s Square
                              London SW1Y 4LB United Kingdom
                              Phone:  011 44 171 930-5757
                              Fax:    011 44 171 930 1784

   Whenever any notice is required to be given hereunder, such notice shall
   be deemed given and such requirement satisfied only when such notice is
   delivered or, if sent by telecopy, when received.  Addresses may be
   changed upon notice of such change given as provided in this Section 8.  



   <PAGE>                             17
<PAGE>






   Section 9.  Amendments.

        No amendment, interpretation or waiver of any of the provisions of
   this Purchase Agreement shall be effective unless made in writing and
   signed by the parties to this Purchase Agreement.

   Section 10.  Headings.  

        The headings of the sections and sub-sections of this Purchase
   Agreement are used for convenience only and shall not affect the meaning
   or interpretation of the contents of this Purchase Agreement.  

   Section 11.  Enforcement.  

        The failure to enforce or to require the performance at any time of
   any of the provisions of this Purchase Agreement shall in no way be
   construed to be a waiver of such provisions, and shall not affect either
   the validity of this Purchase Agreement or any part hereof or the right of
   any party thereafter to enforce each and every position in accordance 
   with the terms of this Purchase Agreement.  

   Section 12.  Governing Law.

        This Agreement and the relationships of the parties in connection
   with the subject matter of this Purchase Agreement shall be governed by
   and determined in accordance with the substantive laws of the State of New
   York, in the United States of America, applicable to agreements made and
   to be performed entirely therein.  

   Section 13.  Severability.

        In case any one or more of the provisions contained in this Purchase
   Agreement should be invalid, illegal or unenforceable in any respect, the
   validity, legality and enforceability of the remaining provisions
   contained herein shall no in any way be affected or impaired thereby.  To
   the extent permitted by applicable law, the parties hereby waive any
   provision of law which may render any provision hereof invalid, illegal or
   unenforceable in any respect.

   Section 14.   Counterparts.

        This Purchase Agreement may be executed by the parties hereto in
   separate counterparts, each of which when so executed and delivered shall
   be an original, but all such counterparts shall together constitute one
   and the same instrument, and all signatures need not appear on any one
   counterpart.










   <PAGE>                             18
<PAGE>




        IN WITNESS WHEREOF, the parties hereto have caused this Purchase
   Agreement to be executed by their duly authorized representatives as of
   the day and year first above written.

   The Company:                  METALCLAD CORPORATION 

                                 By:    /s/Grant S. Kesler
                                    ----------------------------
                                      Grant S. Kesler, President


   Purchaser:                    ULTRA PACIFIC HOLDINGS S.A.

                                 By:    /s/Donald B. Shafto
                                    ----------------------------
                                      Donald B. Shafto, President 





































                                     19
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