<PAGE>


                                                                   Exhibit 10.1

                             BUSINESS LOAN AGREEMENT

<TABLE>
<CAPTION>
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  PRINCIPAL        LOAN DATE        MATURITY        LOAN NO.       CALL     COLLATERAL     ACCOUNT      OFFICER      INITIALS
--------------------------------------------------------------------------------------------------------------------------------
<S>                <C>             <C>             <C>            <C>       <C>            <C>          <C>         <C>
$6,647,500.00      12-31-1999      01-05-2020      360000183                                               JB1       [Illegible]
--------------------------------------------------------------------------------------------------------------------------------
        References in the shaded area are for Lender's use only and do not limit the applicability of this document to
                                                any particular loan or item.
                      Any item above containing "***" has been omitted due to text length limitations.
--------------------------------------------------------------------------------------------------------------------------------

BORROWER:  JORE CORPORATION (TIN: 61-0485293)        LENDER:  MOUNTAIN WEST BANK, N.A.
           45000 HIGHWAY 93 SOUTH                             MISSOULA BRANCH
           RONAN, MT 59864                                    301 E. BROADWAY
                                                              PO BOX 5990
                                                              MISSOULA, MT 59606-5990
================================================================================================================================
</TABLE>

THIS BUSINESS LOAN AGREEMENT DATED DECEMBER 31, 1999, IS MADE AND EXECUTED
BETWEEN JORE CORPORATION ("BORROWER") AND MOUNTAIN WEST BANK, N.A. ("LENDER")
ON THE FOLLOWING TERMS AND CONDITIONS. BORROWER HAS RECEIVED PRIOR COMMERCIAL
LOANS FROM LENDER OR HAS APPLIED TO LENDER FOR A COMMERCIAL LOAN OR LOANS OR
OTHER FINANCIAL ACCOMMODATIONS, INCLUDING THOSE WHICH MAY BE DESCRIBED ON ANY
EXHIBIT OR SCHEDULE ATTACHED TO THIS AGREEMENT ("LOAN"). BORROWER UNDERSTANDS
AND AGREES THAT: (A) IN GRANTING, RENEWING, OR EXTENDING ANY LOAN, LENDER IS
RELYING UPON BORROWER'S REPRESENTATIONS, WARRANTIES, AND AGREEMENTS AS SET
FORTH IN THIS AGREEMENT, AND (B) ALL SUCH LOANS SHALL BE AND REMAIN SUBJECT
TO THE TERMS AND CONDITIONS OF THIS AGREEMENT.

TERM. This Agreement shall be effective as of December 31, 1999, and shall
continue in full force and effect until such time as all of Borrower's Loans
in favor of Lender have been paid in full, in principal, interest, costs,
expenses, attorneys' fees, and other fees and charges, or until January 5,
2020.

      COLLATERAL RECORDS. Borrower does now, and at all times hereafter
      shall, keep correct and accurate records of the Collateral, all of
      which records shall be available to Lender or Lender's representative
      upon demand for inspection and copying at any reasonable time. The
      above is an accurate and complete list of all locations at which
      Borrower keeps or maintains business records concerning Borrower's
      collateral.

      COLLATERAL SCHEDULES. Concurrently with the execution and delivery of
      this Agreement, Borrower shall execute and deliver to Lender schedules
      of in form and substance satisfactory to the Lender. Thereafter
      supplemental schedules shall be delivered according to the following
      schedule:

CONDITIONS PRECEDENT TO EACH ADVANCE.  Lender's obligation to make the
initial Advance and each subsequent Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions
set forth in this Agreement and in the Related Documents.

      LOAN DOCUMENTS.  Borrower shall provide to Lender the following
      documents for the Loan: (1) the Note; (2) Security Agreements granting
      to Lender security interests in the Collateral; (3) financing
      statements perfecting Lender's Security interests; (4) evidence of
      insurance as required below; (5) assignments of life insurance;
      (6) guaranties; (7) together with all such Related Documents as Lender
      may require for the Loan; all in form and substance satisfactory to
      Lender and Lender's counsel.

      BORROWER'S AUTHORIZATION.  Borrower shall have provided in form and
      substance satisfactory to Lender properly certified resolutions, duly
      authorizing the execution and delivery of this Agreement, the Note and
      the Related Documents. In addition, Borrower shall have provided such
      other resolutions, authorizations, documents and instruments as Lender
      or its counsel, may require.

      PAYMENT OF FEES AND EXPENSES.  Borrower shall have paid to Lender all
      fees, charges, and other expenses which are then due and payable as
      specified in this Agreement or any Related Document.

      REPRESENTATIONS AND WARRANTIES.  The representations and warranties set
      forth in this Agreement, in the Related Documents, and in any document
      or certificate delivered to Lender under this Agreement are true and
      correct.

      NO EVENT OF DEFAULT.  There shall not exist at the time of any Advance
      a condition which would constitute an Event of Default under this
      Agreement or under any Related Document.

REPRESENTATIONS AND WARRANTIES.  Borrower represents and warrants to Lender,
as of the date of this Agreement, as of the date of each disbursement of loan
proceeds, as of the date of any renewal, extension or modification of any
Loan, and at all times any indebtedness exists:

      ORGANIZATION. Borrower is a corporation for profit which is, and at all
      times shall be, duly organized, validly existing, and in good standing
      under and by virtue of the laws of the State of Montana. Borrower is
      duly authorized to transact business in all other states in which
      Borrower is doing business, having obtained all necessary filings,
      governmental licenses and approvals for each state in which Borrower is
      doing business. Specifically, Borrower is, and at all times shall be,
      duly qualified as a foreign corporation in all states in which the
      failure to so qualify would have a material adverse effect on its
      business or financial condition. Borrower has the full power and
      authority to own its properties and to transact the business in which
      it is presently engaged or presently proposes to engage. Borrower
      maintains an office at 45000 Highway 93 South, Ronan, MT 59864. Unless
      Borrower has designated otherwise in writing, the principal office is
      the office at which Borrower keeps its books and records including its
      records concerning the Collateral. Borrower will notify Lender of any
      change in the location of Borrower's principal office. Borrower shall
      do all things necessary to preserve and to keep in full force and
      effect its existence, rights and privileges, and shall comply with all
      regulations, rules, ordinances, statutes, orders and decrees of any
      governmental or quasi-governmental authority or court applicable to
      Borrower and Borrower's business activities.

      ASSUMED BUSINESS NAMES. Borrower has filed or recorded all documents or
      filings required by law relating to all assumed business names used by
      Borrower. Excluding the name of Borrower, the following is a complete
      list of all assumed business names under which Borrower does business:
      NONE.

      AUTHORIZATION. Borrower's execution, delivery, and performance of this
      Agreement and all the Related Documents have been duly authorized by
      all necessary action by Borrower and do not conflict with, result in a
      violation of, or constitute a default under (1) any provision of
      Borrower's articles of incorporation or organization, or bylaws, or any
      agreement or other instrument binding upon Borrower or (2) any law,
      governmental regulation, court decree, or order applicable to Borrower
      or to Borrower's properties.

      FINANCIAL INFORMATION. Each of Borrower's financial statements supplied
      to Lender truly and completely disclosed Borrower's financial condition
      as of the date of the statement, and there has been no material adverse
      change in Borrower's financial condition subsequent to the date of the
      most recent financial statement supplied to Lender. Borrower has no
      material contingent obligations except as disclosed in such financial
      statements.

      LEGAL EFFECT. This Agreement constitutes, and any instrument or
      agreement Borrower is required to give under this Agreement when
      delivered will constitute, legal, valid, and binding obligations of
      Borrower enforceable against Borrower in accordance with their
      respective terms.

      HAZARDOUS SUBSTANCES. Except as disclosed to and acknowledged by Lender
      in writing, Borrower represents and warrants that: (1) During the period
      of Borrower's ownership of Borrower's Collateral, there has been no use,
      generation, manufacture, storage, treatment, disposal, release or
      threatened release of any Hazardous Substance by any person on, under,
      about or from any of the Collateral. (2) Borrower has no knowledge of,
      or reason to believe that those has been (a) any breach or violation of
      any Environmental Laws; (b) any use, generation, manufacture, storage,

<PAGE>


                                                                         PAGE 2

                            BUSINESS LOAN AGREEMENT
                                   (CONTINUED)

===============================================================================

      treatment; disposal, release or threatened release of any Hazardous
      Substance on, under, about or from the Collateral by any prior owners
      or occupants of any of the Collateral; or (c) any actual or threatened
      litigation or claims of any kind by any person relating to such matters.
      (3) Neither Borrower nor any tenant, contractor, agent or other
      authorized user of any of the Collateral shall use, generate,
      manufacture, store, treat, dispose of or release any Hazardous
      Substance on, under, about or from any of the Collateral; and any such
      activity shall be conducted in compliance with all applicable federal,
      state, and local laws, regulations, and ordinances, including without
      limitation all Environmental Laws. Borrower authorizes Lender and its
      agents to enter upon the Collateral to make such inspections and tests
      as Lender may deem appropriate to determine compliance of the Collateral
      with this section of the Agreement. Any inspections or tests made by
      Lender shall be at Borrower's expense and for Lender's purposes only
      and shall not be construed to create any responsibility or liability on
      the part of Lender to Borrower or to any other person. The
      representations and warranties contained herein are based on Borrower's
      due diligence in investigating the Collateral for hazardous waste and
      hazardous substances. Borrower hereby (1) releases and waives any
      future claims against Lender for indemnity or contribution in the
      event Borrower becomes liable for cleanup or other costs under any
      such laws, and (2) agrees to indemnify and hold harmless Lender against
      any and all claims, losses, liabilities, damages, penalties, and
      expenses which Lender may directly or indirectly sustain or suffer
      resulting from a breach of this section of the Agreement or as a
      consequence of any use, generation, manufacture, storage, disposal,
      release or threatened release of a hazardous waste or substance on the
      properties. The provisions of this section of the Agreement, including
      the obligation to indemnify, shall survive the payment of the
      indebtedness and the termination, expiration or satisfaction of this
      Agreement and shall not be affected by Lender's acquisition of any
      interest in any of the Collateral, whether by foreclosure or otherwise.

      LITIGATION AND CLAIMS. No litigation, claim, investigation,
      administrative proceeding or similar action (including those for unpaid
      taxes) against Borrower is pending or threatened, and no other event
      has occurred which may materially adversely affect Borrower's financial
      condition or properties, other than litigation, claims, or other events,
      if any, that have been disclosed to Lender in writing.

      TAXES. To the best of Borrower's knowledge, all of Borrower's tax
      returns and reports that are or were required to be filed, have been
      filed, and all taxes, assessments and other governmental charges have
      been paid in full, except those presently being or to be contested by
      Borrower in good faith in the ordinary course of business and for which
      adequate reserves have been provided.

      INFORMATION. All information heretofore or contemporaneously herewith
      furnished by Borrower to Lender for the purposes of or in connection
      with this Agreement or any transaction contemplated hereby is, and all
      information hereafter furnished by or on behalf of Borrower to Lender
      will be, true and accurate in every material respect on the date as of
      which such information is dated or certified; and none of such
      information is or will be incomplete by omitting to state any material
      fact necessary to make such information not misleading.

      LIEN PRIORITY. Unless otherwise previously disclosed to Lender in
      writing, Borrower has not entered into or granted any Security
      Agreements, or permitted the filing or attachment of any Security
      Interests on or affecting any of the Collateral directly or indirectly
      securing repayment of Borrower's Loan and Note, that would be prior or
      that may in any way be superior to Lender's Security Interests and
      rights in and to such Collateral.

      BINDING EFFECT. This Agreement, the Note, all Security Agreements (if
      any), and all Related Documents are binding upon the signers thereof,
      as well as upon their successors, representatives and assigns, and are
      legally enforceable in accordance with their respective terms.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so
long as this Agreement remains in effect, Borrower will:

      NOTICES OF CLAIMS AND LITIGATION. Promptly inform Lender in writing of
      (1) all material adverse changes in Borrower's financial condition,
      and (2) all existing and all threatened litigation, claims,
      investigations, administrative proceedings or similar actions affecting
      Borrower or any Guarantor which could materially affect the financial
      condition of Borrower or the financial condition of any Guarantor.

      FINANCIAL RECORDS. Maintain its books and records in accordance with
      GAAP, applied on a consistent basis, and permit Lender to examine
      and audit Borrower's books and records at all reasonable times.

      FINANCIAL STATEMENTS. Furnish Lender with the following:

          (1) ANNUAL STATEMENTS. As soon as available, but in no event
          later than one hundred-twenty (120) days after the end of each fiscal
          year, Borrower's balance sheet and income statement for the year
          ended, audited by a certified public accountant satisfactory to
          Lender.

      All financial reports required to be provided under this Agreement
      shall be prepared in accordance with GAAP, applied on a consistent
      basis, and certified by Borrower as being true and correct.

      ADDITIONAL INFORMATION. Furnish such additional information and
      statements, as Lender may request from time to time.

      FINANCIAL COVENANTS AND RATIOS. Comply with the following covenants and
      ratios:

          WORKING CAPITAL REQUIREMENTS. Borrower shall comply with the
          following working capital ratio requirements:

              CURRENT RATIO. Maintain a Current Ratio in excess of 0.850 to
              1.000. The term "Current Ratio" means Borrower's total Current
              Assets divided by Borrower's total Current Liabilities. This
              liquidity ratio will be evaluated as of year-end.

          TANGIBLE NET WORTH REQUIREMENTS. Borrower shall comply with the
          following net worth ratio requirements:

              DEBT/WORTH RATIO. Maintain a ratio of Debt/Worth less than
              5.000 to 1.000. The ratio "Debt/Worth" means Borrower's Total
              Liabilities divided by Borrower's Tangible Net Worth. This
              leverage ratio will be evaluated as of year-end.

          Except as provided above, all computations made to determine
          compliance with the requirements contained in this paragraph shall
          be made in accordance with generally accepted accounting principles,
          applied on a consistent basis, and certified by Borrower as being
          true and correct.

      INSURANCE. Maintain fire and other risk insurance, public liability
      insurance, and such other insurance as Lender may require with respect
      to Borrower's properties and operations, in form, amounts, coverages and
      with insurance companies acceptable to Lender. Borrower, upon request of
      Lender, will deliver to Lender from time to time the policies or
      certificates of insurance in form satisfactory to Lender, including
      stipulations that coverages will not be cancelled or diminished without
      at least ten (10) days prior written notice to Lender. Each insurance
      policy also shall include an endorsement providing that coverage in
      favor of Lender will not be impaired in any way by any act, omission or
      default of Borrower or any other person. In connection with all policies
      covering assets in which Lender holds or is offered a security interest
      for the Loans, Borrower will provide Lender with such lender's loss
      payable or other endorsements as Lender may require.

      INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports
      on each existing insurance policy showing such information as Lender
      may reasonably request, including without limitation the following:
      (1) the name of the insurer; (2) the risks insured; (3) the amount of
      the policy; (4) the properties insured; (5) the then current property
      values on the basis of which insurance has been obtained, and the
      manner of determining those values; and (6) the expiration date of the
      policy. In addition, upon request of Lender (however not more often
      than annually), Borrower will have an independent appraiser
      satisfactory to Lender determine, as applicable, the actual cash value
      or replacement cost of any Collateral. The cost of such appraisal shall
      be paid by Borrower.

      LIFE INSURANCE. As soon as practical, obtain and maintain life
      insurance in form and with insurance companies acceptable to Lender
      on the


<PAGE>


                                                                         PAGE 3

                            BUSINESS LOAN AGREEMENT
                                   (CONTINUED)

===============================================================================

      following individual in the amount indicated below and, at Lender's
      option, cause such insurance coverage to be pledged, made payable to,
      or assigned to Lender on Lender's forms. Lender, at its discretion,
      may apply the proceeds of any insurance policy to the unpaid balances
      of any Loan:

<TABLE>
<CAPTION>
                      Name/Title of Insured            Amount
                      ---------------------            ------
                      <S>                           <C>
                      Matthew B. Jore               $4,300,000.00
</TABLE>

      OTHER AGREEMENTS. Comply with all terms and conditions of all other
      agreements, whether now or hereafter existing, between Borrower and
      any other party and notify Lender immediately in writing of any default
      in connection with any other such agreements.

      LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
      operations, unless specifically consented to the contrary by Lender in
      writing.

      TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
      indebtedness and obligations, including without limitation all
      assessments, taxes, governmental charges, levies and liens, of every
      kind and nature, imposed upon Borrower or its properties, income, or
      profits, prior to the date on which penalties would attach, and all
      lawful claims that, if unpaid, might become a lien or charge upon any
      of Borrower's properties, income, or profits.

      PERFORMANCE. Perform and comply, in a timely manner, with all terms,
      conditions, and provisions set forth in this Agreement, in the Related
      Documents, and in all other instruments and agreements between Borrower
      and Lender. Borrower shall notify Lender immediately in writing of any
      default in connection with any agreement.

      OPERATIONS. Maintain executive and management personnel with substantially
      the same qualifications and experience as the present executive and
      management personnel; provide written notice to Lender of any change
      in executive and management personnel; conduct its business affairs in
      a reasonable and prudent manner.

      COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Comply with all laws,
      ordinances, and regulations, now or hereafter in effect, of all
      governmental authorities applicable to the conduct of Borrower's
      properties, business and operations, and to the use or occupancy of the
      Collateral, including without limitation, the Americans With Disabilities
      Act. Borrower may contest in good faith any such law, ordinance, or
      regulation and withhold compliance during any proceeding, including
      appropriate appeals, so long as Borrower has notified Lender in writing
      prior to doing so and so long as, in Lender's sole opinion, Lender's
      interests in the Collateral are not jeopardized. Lender may require
      Borrower to post adequate security or a surety bond, reasonably
      satisfactory to Lender, to protect Lender's interest.

      INSPECTION. Permit employees or agents of Lender at any reasonable time
      to inspect any and all Collateral for the Loan or Loans and Borrower's
      other properties and to examine or audit Borrower's books, accounts, and
      records and to make copies and memoranda of Borrower's books, accounts,
      and records. If Borrower now or at any time hereafter maintains any
      records (including without limitation computer generated records and
      computer software programs for the generation of such records) in the
      possession of a third party, Borrower, upon request of Lender, shall
      notify such party to permit Lender free access to such records at all
      reasonable times and to provide Lender with copies of any records it
      may request, all at Borrower's expense.

      COMPLIANCE CERTIFICATES. Unless waived in writing by Lender, provide
      Lender at least annually and at the time of each disbursement of Loan
      proceeds, with a certificate executed by Borrower's chief financial
      officer, or other officer or person acceptable to Lender, certifying
      that the representations and warranties set forth in this Agreement are
      true and correct as of the date of the certificate and further
      certifying that, as of the date of the certificate, no Event of Default
      exists under this Agreement.

      ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all
      respects with any and all Environmental Laws; not cause or permit to
      exist, as a result of an intentional or unintentional action or
      omission on Borrower's part or on the part of any third party, on
      property owned and/or occupied by Borrower, any environmental activity
      where damage may result to the environment, unless such environmental
      activity is pursuant to and in compliance with the conditions of a permit
      issued by the appropriate federal, state or local governmental
      authorities; shall furnish to Borrower promptly and in any event within
      thirty (30) days after receipt thereof a copy of any notice, summons,
      lien, citation, directive, letter or other communication from any
      governmental agency or instrumentality concerning any intentional or
      unintentional action or omission on Borrower's part in connection with
      any environmental activity whether or not there is damage to the
      environment and/or other natural resources.

      ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such
      promissory notes, mortgages, deeds of trust, security agreements,
      assignments, financing statements, instruments, documents and other
      agreements as Lender or his attorneys may reasonably request to
      evidence and secure the Loans and to perfect all Security interests.

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's Interest in the Collateral or if Borrower fails to
comply with any provision of the Agreement or any Related Documents,
including but not limited to Borrower's failure to discharge or pay when due
any amounts Borrower is required to discharge or pay under this Agreement or
any Related Documents, Lender on Borrower's behalf may (but shall not be
obligated to) take any action that Lender deems appropriate, including but
not limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on any Collateral
and paying all costs for insuring, maintaining and preserving any Collateral.
All such expenditures incurred or paid by Lender for such purposes will then
bear interest at the rate charged under the Note from the date incurred or
paid by Lender to the date of repayment by Borrower. All such expenses will
become a part of the Indebtedness and, at Lender's option, will (A) be
payable on demand; (B) be added to the balance of the Note and be apportioned
among and be payable with any installment payments to become due during
either (1) the term of any applicable insurance policy; or (2) the remaining
term of the Note; or (C) be treated as a balloon payment which will be due
and payable at the Note's maturity. Any Collateral also will secure payment
of these amounts. Such right shall be in addition to all other rights and
remedies to which Lender may be entitled upon Default.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent
of Lender:

      CAPITAL EXPENDITURES. Make or contract to make capital expenditures,
      including leasehold improvements, in any fiscal year in excess of
      $23,000,000.00 or incur liability for rentals of property (including
      both real and personal property) in an amount which, together with
      capital expenditures, shall in any fiscal year exceed such sum.

      TRANSFER AND LIENS. Fail to continue to own all of Borrower's assets,
      except for routine transfers, use or depletion in the ordinary course
      of Borrower's business. Borrower agrees not to create or grant to any
      person, except Lender, any lien, security interest, encumbrance, cloud
      on title, mortgage, pledge or similar interest in any of Borrower's
      property, even in the ordinary course of Borrower's business. Borrower
      agrees not to sell, convey, grant, lease, give, contribute, assign, or
      otherwise transfer any of Borrower's assets, except for sales of
      inventory or leases of goods in the ordinary course of Borrower's
      business.


<PAGE>


                                                                         PAGE 4

                            BUSINESS LOAN AGREEMENT
                                   (CONTINUED)

===============================================================================

      CONTINUITY OF OPERATIONS. (1) Engage in any business activities
      substantially different than those in which Borrower is presently
      engaged, (2) cease operations, liquidate, merge, transfer, acquire or
      consolidate with any other entity, change its name, dissolve or
      transfer or sell Collateral out of the ordinary course of business, or
      (3) pay any dividends on Borrower's stock (other than dividends payable
      in its stock), provided, however that notwithstanding the foregoing,
      but only so long as no Event of Default has occurred and is continuing
      or would result from the payment of dividends. If Borrower is a
      "Subchapter S Corporation" (as defined in the Internal Revenue Code of
      1986, as amended), Borrower may pay cash dividends on its stock to its
      shareholders from time to time in amounts necessary to enable the
      shareholders to pay income taxes and make estimated income tax payments
      to satisfy their liabilities under federal and state law which arise
      solely from their status as Shareholders of a Subchapter S Corporation
      because of their ownership of shares of Borrower's stock, or purchase or
      retire any of Borrower's outstanding shares or alter or amend Borrower's
      capital structure.

      LOANS, ACQUISITIONS AND GUARANTIES. (1) Loan, invest in or advance
      money or assets, (2) purchase, create or acquire any interest in any
      other enterprise or entity, or (3) incur any obligation as surety or
      guarantor other than in the ordinary course of business.

      CESSATION OF ADVANCES. If Lender has made any commitment to make any
      Loan to Borrower, whether under this Agreement or under any other
      agreement, Lender shall have no obligation to make Loan Advances or to
      disburse Loan proceeds if: (1) Borrower or any Guarantor is in default
      under the terms of this Agreement or any of the Related Documents or
      any other agreement that Borrower or any Guarantor has with Lender;
      (2) Borrower or any Guarantor dies, becomes incompetent or becomes
      insolvent, files a petition in bankruptcy or similar proceedings, or
      is adjudged a bankrupt; (3) there occurs a material adverse change in
      Borrower's financial condition, in the financial condition of any
      Guarantor, or in the value of any Collateral securing any Loan; or (4)
      any Guarantor seeks, claims or otherwise attempts to limit, modify or
      revoke such Guarantor's guaranty of the Loan or any other loan with
      Lender; or (5) Lender in good faith deems itself insecure, even though no
      Event of Default shall have occurred.

RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in
all Borrower's accounts with Lender (whether checking, savings, or some other
account). This includes all accounts Borrower holds jointly with someone else
and all accounts Borrower may open in the future. However, this does not
include any IRA or Keogh accounts, or any trust accounts for which the grant
of a security interest would be prohibited by law. Borrower authorizes
Lender, to the extent permitted by applicable law, to charge or setoff all
sums owing on the indebtedness against any and all such accounts, and, at
Lender's option, to administratively freeze all such accounts to allow Lender
to protect Lender's charge and setoff rights provided in this paragraph.

DEFAULT. Each of the following shall constitute an Event of Default under
this Agreement:

      PAYMENT DEFAULT. Borrower fails to make any payment when due under the
      Loan.

      OTHER DEFAULTS. Borrower fails to comply with or to perform any other
      term, obligation, covenant or condition contained in this Agreement or
      in any of the Related Documents or to comply with or to perform any
      term, obligation, covenant or condition contained in any other
      agreement between Lender and Borrower.

      FALSE STATEMENTS. Any warranty, representation or statement made or
      furnished to Lender by Borrower or on Borrower's behalf under this
      Agreement, the Note, or the Related Documents is false or misleading in
      any material respect, either now or at the time made or furnished or
      becomes false or misleading at any time thereafter.

      INSOLVENCY. The dissolution or termination of Borrower's existence as a
      going business, the insolvency of Borrower, the appointment of a
      receiver for any part of Borrower's property, any assignment for the
      benefit of creditors, any type of creditor workout, or the commencement
      of any proceeding under any bankruptcy or insolvency laws by or against
      Borrower.

      DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
      Documents ceases to be in full force and effect (including failure of
      any collateral document to create a valid and perfected security
      interest or lien) at any time and for any reason.

      CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
      forfeiture proceedings, whether by judicial proceeding, self-help,
      repossession or any other method, by any creditor of Borrower or by any
      governmental agency against any collateral securing the Loan. This
      includes a garnishment of any of Borrower's accounts, including deposit
      accounts, with Lender. However, this Event of Default shall not apply
      if there is a good faith dispute by Borrower as to the validity or
      reasonableness of the claim which is the basis of the creditor or
      forfeiture proceeding and if Borrower gives Lender written notice of the
      creditor or forfeiture proceeding and deposits with Lender monies or a
      surety bond for the creditor or forfeiture proceeding, in an amount
      determined by Lender, in its sole discretion, as being an adequate
      reserve or bond for the dispute.

      EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
      respect to any Guarantor of any of the indebtedness or any Guarantor
      dies or becomes incompetent, or revokes or disputes the validity of,
      or liability under, any Guaranty of the indebtedness.

      CHANGE IN OWNERSHIP. Any change in ownership of twenty-five percent
      (25%) or more of the common stock of Borrower, not including change in
      ownership in the shares that are publicly traded.

      ADVERSE CHANGE. A material adverse change occurs in Borrower's
      financial condition, or Lender believes the prospect of payment or
      performance of the Loan is impaired.

      INSECURITY. Lender in good faith believes itself insecure.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except
where otherwise provided in this Agreement or the Related Documents, all
commitments and obligations of Lender under this Agreement or the Related
Documents or any other agreement immediately will terminate (including any
obligation to make further Loan Advances or disbursements), and, at Lender's
option, all indebtedness immediately will become due and payable, all without
notice of any kind to Borrower, except that in the case of an Event of
Default of the type described in the "Insolvency" subsection above, such
acceleration shall be automatic and not optional. In addition, Borrower shall
have all the rights and remedies provided in the Related Documents or
available at law, in equity, or otherwise. Except as may be prohibited by
applicable law, all of Lender's rights and remedies shall be cumulative and
may be exercised singularly or concurrently. Election by Lender to pursue any
remedy shall not exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Borrower or of any
Grantor shall not affect Lender's right to declare a default and to exercise
its rights and remedies. A Default, except "Insolvency", may be cured within
thirty (30) days from the written notice of Default.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part
of this Agreement:

      AMENDMENTS. This Agreement, together with any Related Documents,
      constitutes the entire understanding and agreement of the parties as to
      the matters set forth in this Agreement. No alteration of or amendment
      to this Agreement shall be effective unless given in writing and signed
      by the party or parties sought to be charged or bound by the alteration
      or amendment.

      ATTORNEYS' FEES; EXPENSES. Borrower agrees to pay upon demand all of
      Lender's costs and expenses, including Lender's attorneys' fees and
      Lender's legal expenses, incurred in connection with the enforcement of
      this Agreement. Lender may hire or pay someone else to help enforce this
      Agreement, and Borrower shall pay the costs and expenses of such
      enforcement. Costs and expenses include Lender's attorneys' fees and
      legal expenses whether or not there is a lawsuit, including attorneys'
      fees and legal expenses for bankruptcy proceedings (including efforts
      to modify or vacate any automatic stay or injunction), appeals, and any
      anticipated post-judgment collection services. Borrower also shall pay
      all court costs and such additional fees as may be directed by the
      court.

<PAGE>

                                                                        PAGE 5

                            BUSINESS LOAN AGREEMENT
                                   (CONTINUED)

===============================================================================

      CAPTION HEADINGS. Caption headings in this Agreement are for convenience
      purposes only and are not to be used to interpret or define the
      provisions of this Agreement.

      CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's
      sale or transfer, whether now or later, of one or more participation
      interests in the Loan to one or more purchasers, whether related or
      unrelated to Lender. Lender may provide, without any limitation
      whatsoever, to any one or more purchasers, or potential purchasers, any
      information or knowledge Lender may have about Borrower or about any
      other matter relating to the Loan, and Borrower hereby waives any
      rights to privacy Borrower may have with respect to such matters.
      Borrower additionally waives any and all notices of sale of
      participation interests, as well as all notices of any repurchase of such
      participation interests. Borrower also agrees that the purchasers
      of any such participation interests will be considered as the absolute
      owners of such interests in the Loan and will have all the rights
      granted under the participation agreement or agreements governing
      the sale of such participation interests. Borrower further waives all
      rights of offset or counterclaim that it may have now or later against
      Lender or against any purchaser of such a participation interest and
      unconditionally agrees that either Lender or such purchaser may
      enforce Borrower's obligation under the Loan irrespective of the
      failure or insolvency of any holder of any interest in the Loan.
      Borrower further agrees that the purchaser of any such participation
      interests may enforce its interests irrespective of any personal claims
      or defenses that Borrower may have against Lender.

      GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED AND
      ENFORCED IN ACCORDANCE WITH FEDERAL LAW AND THE LAWS OF THE STATE OF
      MONTANA. THIS AGREEMENT HAS BEEN ACCEPTED BY LENDER IN THE STATE OF
      MONTANA.

      NO WAIVER BY LENDER. Lender shall not be deemed to have waived any
      rights under this Agreement unless such waiver is given in writing and
      signed by Lender. No delay or omission on the part of Lender in
      exercising any right shall operate as a waiver of such right or any
      other right. A waiver by Lender of a provision of this Agreement shall
      not prejudice or constitute a waiver of Lender's right otherwise to
      demand strict compliance with that provision or any other provision of
      this Agreement. No prior waiver by Lender, nor any course of dealing
      between Lender and Borrower, or between Lender and any Grantor, shall
      constitute a waiver of any of Lender's rights or of any of Borrower's or
      any Grantor's obligations as to any future transactions. Whenever the
      consent of Lender is required under this Agreement, the granting of
      such consent by Lender in any instance shall not constitute continuing
      consent to subsequent instances where such consent is required and in all
      cases such consent may be granted or withheld in the sole discretion of
      Lender.

      NOTICES. Any notice required to be given under this Agreement shall be
      given in writing, and shall be effective when actually delivered, when
      actually received by telefacsimile (unless otherwise required by law),
      when deposited with a nationally recognized overnight courier, or, if
      mailed, when deposited in the United States mail, as first class,
      certified or registered mail postage prepaid, directed to the addresses
      shown near the beginning of this Agreement. Any party may change its
      address for notices under this Agreement by giving formal written
      notice to the other parties, specifying that the purpose of the notice
      is to change the party's address. For notice purposes, Borrower agrees
      to keep Lender informed at all times of Borrower's current address.
      Unless otherwise provided or required by law, if there is more than one
      Borrower, any notice given by Lender to any Borrower is deemed to be
      notice given to all Borrowers.

      SEVERABILITY. If a court of competent jurisdiction finds any provision
      of this Agreement to be illegal, invalid, or unenforceable as to any
      circumstance, that finding shall not make the offending provision
      illegal, invalid, or unenforceable as to any other circumstance. If
      feasible, the offering provision shall be considered modified so that
      it becomes legal, valid and enforceable. If the offending provision
      cannot be so modified, it shall be considered deleted from this
      Agreement. Unless otherwise required by law, the illegality,
      invalidity, or unenforceability of any provision of this Agreement
      shall not affect the legality, validity or enforceability of any other
      provision of this Agreement.

      SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of
      any provisions of this Agreement makes it appropriate, including
      without limitation any representation, warranty or covenant, the word
      "Borrower" as used in this Agreement shall include all of Borrower's
      subsidiaries and affiliates. Notwithstanding the foregoing however,
      under no circumstances shall this Agreement be construed to require
      Lender to make any Loan or other financial accommodation to any of
      Borrower's subsidiaries or affiliates.

      SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
      behalf of Borrower shall bind Borrower's successors and assigns and
      shall inure to the benefit of Lender, its successors and assigns.
      Borrower shall not, however, have the right to assign Borrower's rights
      under this Agreement or any interest therein, without the prior written
      consent of Lender.

      SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and
      agrees that in making the Loan, Lender is relying on all
      representations, warranties, and covenants made by Borrower in this
      Agreement or in any certificate or other instrument delivered by
      Borrower to Lender under this Agreement or the Related Documents.
      Borrower further agrees that regardless of any investigation made by
      Lender, all such representations, warranties and covenants will survive
      the making of the Loan and delivery to Lender of the Related
      Documents, shall be continuing in nature, and shall remain in full
      force and effect until such time as Borrower's indebtedness shall be
      paid in full, or until this Agreement shall be terminated in the manner
      provided above, whichever is the last to occur.

      TIME IS OF THE ESSENCE. Time is of the essence in the performance of
      this Agreement.

DEFINITIONS. The following capitalized words and terms shall have the
following meanings when used in this Agreement. Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in
lawful money of the United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular,
as the context may require. Words and terms not otherwise defined in this
Agreement shall have the meanings attributed to such terms in the Uniform
Commercial Code. Accounting words and terms not otherwise defined in this
Agreement shall have the meanings assigned to them in accordance with
generally accepted accounting principles as in effect on the date of this
Agreement.

      ADVANCE. The word "Advance" means a disbursement of Loan funds made, or
      to be made, to Borrower or on Borrower's behalf on a line of credit or
      multiple advance basis under the terms and conditions of this Agreement.

      AGREEMENT. The word "Agreement" means this Business Loan Agreement, as
      this Business Loan Agreement may be amended or modified from time to
      time, together with all exhibits and schedules attached to this
      Business Loan Agreement from time to time.

      BORROWER. The word "Borrower" means Jore Corporation, and all other
      persons and entities signing the Note in whatever capacity.

      COLLATERAL. The word "Collateral" means all property and assets granted
      as collateral security for a Loan, whether real or personal property,
      whether granted directly or indirectly, whether granted now or in the
      future, and whether granted in the form of a security interest,
      mortgage, collateral mortgage, deed of trust, assignment, pledge,
      chattel mortgage, crop pledge, chattel mortgage, collateral chattel
      mortgage, chattel trust, factor's lien, equipment trust, conditional
      sale, trust receipt, lien, charge, lien or title retention contract,
      lease or consignment intended as a security device, or any other security
      or lien interest whatsoever, whether created by law, contract, or
      otherwise.

      DEFAULT. The word "Default" means the Default set forth in this
      Agreement in the section titled "Default".

      ENVIRONMENTAL LAWS. The words "Environmental Laws" mean any and all
      state, federal and local statutes, regulations and ordinances relating
      to the protection of human health or the environment, including without
      limitation the Comprehensive Environmental Response, Compensation, and
      Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
      ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986,
      Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation
      Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and
      Recovery

<PAGE>

                                                                        PAGE 6

                            BUSINESS LOAN AGREEMENT
                                   (CONTINUED)

===============================================================================

      Act, 42 U.S.C. Section 6901, et seq., or other applicable state or
      federal laws, rules, or regulations adopted pursuant thereto.

      EVENT OF DEFAULT. The words "Event of Default" mean any of the Events
      of Default set forth in this Agreement in the Default section of this
      Agreement.

      GAAP. The word "GAAP" means generally accepted accounting principles.

      GRANTOR. The word "Grantor" means each and all of the persons or
      entities granting a Security Interest in any Collateral for the Loan,
      including without limitation all Borrowers granting such a Security
      Interest.

      GUARANTOR. The word "Guarantor" means any guarantor, surety, or
      accommodation party of any or all of the Loan.

      GUARANTY. The word "Guaranty" means the guaranty from Guarantor to
      Lender, including without limitation a guaranty of all or part of the
      Note.

      INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced
      by the Note or Related Documents, including all principal and interest
      together with all other indebtedness and costs and expenses for which
      Borrower is responsible under this Agreement or under any of the
      Related Documents.

      LENDER. The word "Lender" means Mountain West Bank, N.A., its
      successors and assigns.

      LOAN. The word "Loan" means any and all loans and financial
      accommodations from Lender to Borrower whether now or hereafter
      existing, and however evidenced, including without limitation those
      loans and financial accommodations described herein or described on any
      exhibit or schedule attached to this Agreement from time to time.

      NOTE. The word "Note" means the Note executed by Borrower in the
      principal amount of $8,641,500.00 dated December 31, 1999, together
      with all renewals of, extensions of, modifications of, refinancings of,
      consolidations of, and substitutions for the note or credit agreement.

      PERMITTED LIENS. The words "Permitted Liens" mean (1) liens and
      security interests securing indebtedness owed by Borrower to Lender;
      (2) liens for taxes, assessments, or similar charges either not yet due
      or being contested in good faith; (3) liens of materialmen, mechanics,
      warehousemen, or carriers, or other like liens arising in the ordinary
      course of business and securing obligations which are not yet
      delinquent; (4) purchase money liens or purchase money security
      interests upon or in any property acquired or held by Borrower in the
      ordinary course of business to secure indebtedness outstanding on the
      date of this Agreement or permitted to be incurred under the paragraph
      of this Agreement titled "Indebtedness and Liens"; (5) liens and
      security interests which, as of the date of this Agreement, have been
      disclosed to and approved by the Lender in writing; and (6) those liens
      and security interests which in the aggregate constitute an immaterial
      and insignificant monetary amount with respect to the net value of
      Borrower's assets.

      RELATED DOCUMENTS. The words "Related Documents" mean all promissory
      notes, credit agreements, loan agreements, environmental agreements,
      guaranties, security agreements, mortgages, deeds of trust, security
      deeds, collateral mortgages, and all other instruments, agreements and
      documents, whether now or hereafter existing, executed in connection
      with the Loan.

      SECURITY AGREEMENT. The words "Security Agreement" mean and include
      without limitation any agreements, promises, covenants, arrangements,
      understandings or other agreements, whether created by law, contract,
      or otherwise, evidencing, governing, representing, or creating a
      Security Interest.

      SECURITY INTEREST. The words "Security Interest" mean, without
      limitation, any and all types of collateral security, present and
      future, whether in the form of a lien, charge, encumbrance, mortgage,
      deed of trust, security deed, assignment, pledge, crop pledge, chattel
      mortgage, collateral chattel mortgage, chattel trust, factor's lien,
      equipment trust, conditional sale, trust receipt, lien or title
      retention contract, lease or consignment intended as a security device,
      or any other security or lien interest whatsoever whether created by
      law, contract, or otherwise.

      TANGIBLE NET WORTH. The words "Tangible Net Worth" mean Borrower's
      total assets excluding all intangible assets (i.e., goodwill,
      trademarks, patents, copyrights, organizational expenses, and similar
      intangible items, but including leaseholds and leasehold improvements)
      less total debt.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS
DATED DECEMBER 31, 1999.

BORROWER:


JORE CORPORATION

By: /s/ Matthew B. Jore
   -----------------------------------------------
   Matthew B. Jore, President of Jore Corporation

LENDER:

MOUNTAIN WEST BANK, N.A.


x   /s/ Jack Byrnes, VP
   -----------------------------------------------
    Authorized Signer