<PAGE>
                                                                    EXHIBIT 10.1


                       [RELIABLE POWER SYSTEMS, INC. LOGO]


This Amended and Restated Letter Agreement (this "Amended and Restated Letter
Agreement") is executed this 5th day of October, 2001 (the "Effective Date"), by
and among Thomas J. Wiens, a Colorado resident ("Wiens"), First Western
Industries, LLC ("First Western"), New West Capital Partner, LLC ("New West
Capital Partner"), New West Capital, LLC ("New West Capital") (Wiens, First
Western, New West Capital Partner and New West Capital, together, the
"Surrendering Shareholders"), Reliable Power Systems, Inc., a Colorado
corporation (the "Company"), John R. Walter, an Illinois resident ("Walter"),
David H. Hoffmann, an Illinois resident ("Hoffmann"), and Joseph D. Livingston,
a Colorado resident ("Livingston"). Each party hereto shall be referred to as a
"Party" and all parties collectively, the "Parties".

WHEREAS, the Surrendering Shareholders and the Company entered into that certain
Letter Agreement, dated as of September 28, 2001 (the "Letter Agreement");

WHEREAS, for the reasons described below, the Surrendering Shareholders and the
Company originally intended to include Walter, Hoffmann and Livingston in the
Letter Agreement and the Surrendering Shareholders originally intended to
surrender a portion of the Surrendered Shares (defined below) to each of Walter,
Hoffmann and Livingston and the remaining portion of the Surrendered Shares to
the Company;

WHEREAS, in order to better reflect the intentions of the Parties, the
Surrendering Shareholders, as of the date hereof, have not surrendered the
Surrendered Shares to the Company as provided for in the Letter Agreement, and
accordingly, consistent with such intentions, the Surrendering Shareholders and
the Company wish to amend and restate in its entirety the Letter Agreement;

WHEREAS, the Company is currently experiencing significant financial
difficulties and is in need of additional financing;

WHEREAS, despite diligent efforts, the Company has been unable to secure
sufficient additional financing;

WHEREAS, the Company requires individuals to affiliate, or continue their
affiliation, with the Company whose affiliation in terms of reputation, contacts
and business acumen will assist the Company in its efforts to obtain additional
financing;

WHEREAS, within the business community, each of Walter, Hoffmann and Livingston
are highly regarded and experienced individuals and their affiliation or
continued affiliation with the Company will assist the Company in obtaining
additional financing;



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WHEREAS, Wiens, Graydon Neher and Robert Broderich each delivered his respective
letter of resignation as a director of the Company, effective immediately
between September 28, 2001 and October 4, 2001;

WHEREAS, each of Walter and Livingston has agreed to serve as a director of the
Company's Board of Directors (the "Board") immediately following the execution
of this Amended and Restated Letter Agreement;

WHEREAS, for the reasons discussed above, inter alia, and as a material
inducement to Walter, Hoffmann and Livingston to execute this Amended and
Restated Letter Agreement, the Surrendering Shareholders have determined that it
is in their best interests and the best interests of the Company to execute this
Amended and Restated Letter Agreement and surrender to the Company, Walter,
Hoffmann and Livingston their respective ownership in the Surrendered Shares in
accordance with the terms of this Amended and Restated Letter Agreement; and

WHEREAS, after careful analysis and deliberation, and the advice of its
professional advisors, the Board has determined that it is in the best interests
of the Company and its shareholders to execute this Amended and Restated Letter
Agreement upon the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the Parties agree as follows:

     1.   SURRENDER OF OWNERSHIP OF SHARES OF THE COMPANY'S STOCK. Upon
          execution of this Amended and Restated Letter Agreement, each of the
          Surrendering Shareholders have surrendered his or its respective
          ownership of the following shares of common stock of the Company
          (together, the "Surrendered Shares"), or Wiens shall cause such
          Surrendering Shareholder to surrender its respective ownership in the
          Surrendered Shares, to each of Walter, Hoffmann, Livingston and the
          Company, duly endorsed for transfer or accompanied by an assignment in
          blank separate from the certificate, in the amounts set forth below,
          all of which Wiens warrants and represents are beneficially owned by
          him or under his direct control:

                   NAME OF PARTY ACCEPTING SURRENDERED SHARES

<Table>
<Caption>
SURRENDERING
SHAREHOLDER                            COMPANY         WALTER        HOFFMANN      LIVINGSTON
------------                          ----------     ----------     ----------     ----------
<S>                                   <C>            <C>            <C>            <C>
First Western                            187,000      2,000,000      2,000,000              0
New West Capital Partner               1,500,000              0              0              0
New West Capital                         100,000              0              0              0
Wiens                                  1,000,000              0              0      2,000,000
</Table>

          Following the surrender of the Two Million Seven Hundred and Eighty
          Seven Thousand (2,787,000) shares (the "Company Surrendered Shares")
          by the Surrendering Shareholders to the Company, the Company
          Surrendered Shares



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          shall become part of the Company's pool of shares, which it shall be
          authorized to issue in accordance with the Company's Articles of
          Incorporation and By-laws.

     2.   REMAINING OWNERSHIP BY WIENS. Following the surrender of the
          Surrendering Shares, except as expressly set forth in Section 6 of
          this Amended and Restated Letter Agreement regarding the stock
          transfer of 213,000 shares of the Company's common stock, Wiens
          (through his beneficial ownership of the shares of Company common
          stock held by First Western) shall retain beneficial ownership of
          1,213,000 shares of the Company's common stock previously owned by
          him.

     3.   ASSUMPTION BY COMPANY OF THE COMPASS BANK LOAN. Pursuant to that
          certain loan made by Compass Bank to the Company in the principal
          amount of $685,000 (the "Compass Bank Loan"), Wiens is currently the
          personal guarantor of such Compass Bank Loan. The Company hereby
          agrees to assume from Wiens all liability associated with such Compass
          Bank Loan and to execute such documents as are required to eliminate
          the personal liability of Wiens for the Compass Bank Loan, as well as
          the release of the pledge of any of Wiens' or any of the Surrendering
          Shareholders' assets, including any cash amounts pledged by Wiens or
          one of the Surrendering Shareholders. The elimination of Wiens'
          personal liability for the Compass Bank Loan shall be completed no
          later than 10 business days after the closing of one or more debt or
          equity financings in a total amount of not less than $4,000,000 that
          close subsequent to the Effective Date. Until Wiens is free and clear
          of all liabilities under the Compass Bank Loan and such pledged assets
          are released, the Company agrees that it will not commit any acts that
          will cause a material default thereunder.

     4.   REPAYMENT OF FUNDS ISSUED PURSUANT TO LINE OF CREDIT ISSUED BY FIRST
          WESTERN. Pursuant to that certain Line of Credit issued by First
          Western to the Company, effective as of February 7, 2001 ("Line of
          Credit"), First Western issued credit in the total amount of $250,000.
          The Company shall repay to Wiens (through First Western) the amount of
          $50,000 (the "Repayment") and the remaining balance on the Line of
          Credit shall be forgiven by First Western. Subject to such loan
          forgiveness, the Repayment shall be made to Wiens (through First
          Western) no later than 10 business days after the closing of one or
          more debt or equity financings in a total amount of not less than
          $4,000,000 that close subsequent to the Effective Date.

     5.   ADDITIONAL REIMBURSEMENTS. In addition to the Repayment of the Line of
          Credit, the Company agrees to reimburse Wiens for additional amounts
          that he, either in his individual capacity or through one or more of
          his affiliated entities, loaned to the Company in furtherance of its
          business operations in a total amount not to exceed $75,000 (the
          "Supplemental Repayment"). The Company's obligations with respect to
          the Supplemental Repayment shall be subject to reasonable and accurate
          documentation to be submitted by Wiens that clearly demonstrates that
          such additional amounts were used in the furtherance of the Company's
          business operations. The Supplemental Repayment shall be made to Wiens
          (or to the appropriate affiliated entity of Wiens as directed by
          Wiens) no later than 10 business days after the closing of one or more
          debt or equity



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          financings in a total amount of not less than $4,000,000 that close
          subsequent to the Effective Date.

     6.   THIRD PARTY STOCK TRANSFERS. Wiens agrees to sell the shares and all
          of his rights in and to the shares to the persons at the times and at
          the prices set forth in SCHEDULE 6 attached hereto (the "Third Party
          Share Transfers"). The Company shall hold such shares of common stock
          currently owned by Wiens in escrow for the express purpose of such
          Third Party Share Transfer and shall have the right to oversee the
          individual transfers and sales in accordance with SCHEDULE 6. In this
          regard, Wiens expressly assumes any and all obligations that the
          Company may have had to issue such shares directly and agrees to
          cooperate with the Company to effectuate each and every transfer and
          sale made pursuant to the Third Party Stock Transfers.

     7.   RIGHT OF FIRST REFUSAL. Wiens agrees to give, or cause to be given to,
          the Company the right to purchase his or any other Surrendering
          Shareholders' shares of the Company's common stock in the event that
          he or it wishes to sell all or a portion of such shares.

     8.   REGISTRATION RIGHTS. The Company agrees to use commercially reasonable
          efforts to allow Wiens to sell 100,000 shares of the Company's common
          stock in any Secondary Offering, subject to Wiens entering into an
          underwriter's agreement, underwriter's cutbacks and priority
          registration rights for private placement investors in any future
          public equity offering.

     9.   REPRESENTATIONS AND WARRANTIES OF THE SURRENDERING SHAREHOLDERS. The
          Surrendering Shareholders, jointly and severally, represent and
          warrant to each of Walter, Hoffmann and Livingston that the statements
          contained in this Section 9 are true and correct as of the Effective
          Date:

               (a) Each of the Surrendering Shareholders has full power, right
               and authority to execute and deliver this Amended and Restated
               Letter Agreement, and to perform his or its obligations hereunder
               and all other agreements and documents required to be executed or
               delivered by such Surrendering Shareholder pursuant to this
               Amended and Restated Letter Agreement or such other agreements,
               and all such action has been duly authorized and, if necessary,
               all action has been taken by the members and managers of each
               Surrendering Shareholder that is a limited liability company.
               This Amended and Restated Letter Agreement and such other
               documents and agreements have been duly executed by each of the
               Surrendering Shareholders and constitute the legal, valid and
               binding obligations, enforceable against each Surrendering
               Shareholder in accordance with the terms thereof.

               (b) Except for the items described on SCHEDULE 9(b) attached
               hereto, each of the Surrendering Shareholders is the beneficial
               and record owners of his or its respective Surrendered Shares and
               such Surrendered Shares are not subject to any lien, encumbrance,
               security interest or any other claim by any person or entity, or
               any restriction on transfer (other than restrictions under the
               Securities Act of 1933, as amended, and applicable state
               securities laws).



CONFIDENTIAL AND PROPRIETARY

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               (c) Each of the Surrendering Shareholders is not subject to any
               agreement, mortgage, lien, lease or other restriction that would
               prevent the consummation of the transactions contemplated by this
               Amended and Restated Letter Agreement, and such transactions
               would not violate any agreement by which it or any of its
               properties are bound or conflict or violate any judgment, order,
               writ, injunction, decree, rule, or regulation of any court or
               governmental agency, or instrumentality, or the certificate of
               formation or limited liability company agreement of any of the
               Surrendering Shareholders that are limited liabilities companies.

               (d) As of the date of this Amended and Restated Letter Agreement,
               the Surrendering Shareholders together own of record and
               beneficially only Ten Million (10,000,000) shares of common
               stock, and no other equity securities of the Company, and
               immediately following the execution of this Amended and Restated
               Letter Agreement and surrender of the Surrendered Shares, no
               other Surrendering Shareholders except First Western, and
               therefore Wiens, as the beneficial owner of One Million Two
               Hundred and Thirteen Thousand (1,213,000) shares of common stock
               held by First Western, will own any equity securities of the
               Company or any other warrants, purchase rights, subscription
               rights, conversion rights, exchange rights or other contracts or
               commitments to acquire any equity securities of the Company. None
               of the Surrendering Shareholders has any other warrants, purchase
               rights, subscription rights, conversion rights, exchange rights
               or other contracts or commitments that could require the
               Surrendering Shareholders to acquire any additional common stock
               of the Company or sell any of its own common stock of the
               Company.

     10.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
          and warrants to each of Walter, Hoffmann and Livingston that the
          statements contained in this Section 10 are true and correct as of the
          Effective Date.

               (a) The Company has full power, right and authority to execute
               and deliver this Amended and Restated Letter Agreement, and to
               perform its obligations hereunder and all other agreements and
               documents required to be executed or delivered by the Company
               pursuant to this Amended and Restated Letter Agreement or such
               other agreements, and all such action has been duly authorized,
               and if necessary, all required action has been taken by the Board
               and the Company's shareholders. This Amended and Restated Letter
               Agreement and such other documents and agreements have been duly
               executed by the Company and constitutes the legal, valid and
               binding obligations, enforceable against the Company in
               accordance with the terms thereof, and do not violate the
               Company's articles of incorporation or by-laws.

               (b) The Company is not subject to any agreement, mortgage, lien,
               lease or other restriction that would prevent the consummation of
               the transactions contemplated by this Amended and Restated Letter
               Agreement, and such transactions would not violate any agreement
               by which it or any of its properties are bound or conflict or
               violate any judgment, order, writ, injunction, decree, rule, or
               regulation of any court or governmental agency, or
               instrumentality.



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               (c) SCHEDULE 10(c) attached hereto sets forth for the Company (i)
               the number of shares of authorized common stock of each class of
               its common stock, (ii) the number of issued and outstanding
               shares of each class of its common stock, (iii) the number of
               shares of its common stock held in treasury, (iv) the number of
               shares of authorized preferred stock of each series of its
               preferred stock; (v) the number of issued and outstanding shares
               of each series of its preferred stock, and (vi) all outstanding
               stock options and warrants. The Company has delivered to each of
               Walter, Hoffmann and Livingston correct and complete copies of
               the articles of incorporation and bylaws of the Company as
               amended to date. All of the issued and outstanding shares of
               common stock of the Company have been duly authorized and are
               validly issued, fully paid and nonassessable. Except as set forth
               on SCHEDULE 10(c), there are no outstanding or authorized
               options, warrants, purchase rights, subscription rights,
               conversion rights, exchange rights or other contracts or
               commitments that could require the Company to issue, sell or
               otherwise cause to become outstanding any of its own common stock
               or any other capital stock. There are no outstanding stock
               appreciation, phantom stock, profit participation or similar
               rights with respect to the Company. There are no voting trusts,
               proxies or other agreements or understandings with respect to the
               voting of any of the Company Shares. The minute books, stock
               certificate books and stock record books of the Company are
               correct and complete. The Company does not control directly or
               indirectly or have any direct or indirect equity participation in
               any entity, partnership, corporation, limited liability company,
               person or similar entity.

               (d) The Company has filed all required forms, reports and
               documents (including proxy statements) with the Securities and
               Exchange Commission (the "SEC") since February 7, 2001 (all
               forms, reports and documents filed by the Company with the SEC,
               the "Company SEC Documents"). As of their respective dates, the
               Company SEC Documents complied in all material respects with the
               requirements of the Securities Act of 1933, as amended (the
               "Securities Act"), or the Securities Exchange Act of 1934, as
               amended, as the case may be, and, at the respective times they
               were filed (or, in the case of any Company SEC Document that has
               been amended or superseded, as of the date of such amending or
               superseding filing), none of the Company SEC Documents contained
               any untrue statement of a material fact or omitted to state a
               material fact required to be stated therein or necessary to make
               the statement therein, in light of the circumstances under which
               they were made, not misleading. The financial statements
               (including, in each case, any notes thereto) of the Company
               included in the Company SEC Documents complied as to form in all
               material respects with applicable accounting requirements and the
               published rules and regulations of the SEC with respect thereto,
               were prepared in accordance with United States generally accepted
               accounting principles ("GAAP") (except, in the case of the
               unaudited statements, as permitted by Form 10-QSB of the SEC)
               applied on a consistent basis during the period involved (except
               as may be indicated therein or in the notes thereto) and fairly
               presented in all material respects the financial position of the
               Company as of the respective dates thereof and the results of
               operations and cash flows for the periods then ended (subject, in
               the case of unaudited statements, to the absence of footnotes and
               to normal year-end audit adjustments and to any other adjustments
               described therein),



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<PAGE>

               except as disclosed in the Company SEC Documents filed prior to
               the date hereof. Except as disclosed in the Company SEC Documents
               as required by GAAP, the Company has not, since February 7, 2001,
               made any change in the accounting practices or policies applied
               in the preparation of financial statements.

     11.  REPRESENTATIONS AND WARRANTIES OF WALTER, HOFFMANN AND LIVINGSTON.
          Each of Walter, Hoffmann and Livingston represents and warrants
          severally to the Surrendering Shareholders that the statements
          contained in this Section 11 are true and correct as of the Effective
          Date:

               (a) He has full power, right and authority to execute and deliver
               this Amended and Restated Letter Agreement, and to perform his
               obligations hereunder and all other agreements and documents
               required to be executed or delivered by him pursuant to this
               Amended and Restated Letter Agreement or such other agreements,
               without the consent or approval of any person, entity or court of
               competent jurisdiction. This Amended and Restated Letter
               Agreement and such other documents and agreements have been duly
               executed by him and constitutes the legal, valid and binding
               obligation, enforceable against him in accordance with the terms
               thereof.

               (b) He meets one of the following tests and therefore qualifies
               as an "accredited investor" as defined under Regulation D of the
               Securities Act:

               (i) he is a natural person who has individual income in excess of
               $200,000 in each of the two most recent years, or joint income
               with his spouse in excess of $300,000 in each of these years, and
               has a reasonable expectation of reaching the same income level in
               the current year; or

               (ii) he is a natural person whose individual net worth or joint
               net worth with his spouse, exceeds $1,000,000 at the time of this
               Amended and Restated Letter Agreement.

     12.  GENERAL INDEMNIFICATION. Each of the Parties (each, an "Indemnifying
          Party") agrees to indemnify the other Party and such other Party's
          officers and directors (the "Indemnified Parties") from and against
          any liability, damage or deficiency, all actions, suits, proceedings,
          demands, assessments, judgments, costs and expenses including
          reasonable attorney's fees incident to any of the foregoing, resulting
          from any misrepresentations, breach of covenant or warranty or
          non-fulfillment of any agreement on the part of the Indemnifying Party
          or any of its affiliated entities.

     13.  TAX INDEMNIFICATION. The Company hereby agrees to indemnify and hold
          harmless each of Walter, Hoffmann and Livingston from and against any
          increase in his federal and state income tax liability resulting from
          a tax audit with respect to his receipt of his respective portion of
          the Surrendered Shares pursuant to this Amended and Restated Letter
          Agreement. Furthermore, any payment under this Section 13 (the "Tax
          Indemnity Payment") shall be "grossed-up" to reflect the fact that any
          such Tax Indemnity Payment will be taxable to each of Walter, Hoffmann
          and Livingston. Accordingly, the amount of the Tax Indemnity Payment
          shall be calculated by dividing the additional federal and



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          state income taxes imposed on each of Walter, Hoffmann and Livingston
          by the reciprocal of the highest marginal federal and state income tax
          rate then in effect. (For example, if the highest marginal federal and
          state rate is 40%, the reciprocal is 1-.4=.6. Thus if Walter, Hoffmann
          or Livingston has $10,000 of additional income taxes, the grossed-up
          Tax Indemnity Payment would be $10,000 / .6 = $16,667.)

          Notwithstanding the above, the Company's indemnity obligation under
          this Section 13 shall be limited to any income tax benefit actually
          received by the Company for a corresponding increase in its tax
          deductions due to the inclusion of additional income in the tax return
          for each of Walter, Hoffmann and Livingston. The Company's tax benefit
          shall be calculated using the "with and without" method, which
          measures the tax benefit by determining the difference in tax whether
          or not such deduction is included in the return or not. A tax benefit
          will be deemed to exist only when the related deduction is allowed on
          the Company's tax return and such deduction causes an actual lessening
          of tax. An amount equal to such tax benefits received by the Company
          in any taxable year shall be payable to each of Walter, Hoffmann and
          Livingston within 10 days after the Company files its income tax
          return for such year.

     14.  RELEASE OF CLAIMS BY THE SURRENDERING SHAREHOLDERS. Except for his or
          its rights and benefits under this Amended and Restated Letter
          Agreement, for and in consideration of the benefits provided herein,
          each of the Surrendering Shareholders, on behalf of himself or itself,
          and his or its heirs and dependents, executors, administrators and
          assigns, as well as his or its affiliated companies and such
          companies' respective shareholders, officers, directors, partners,
          employees, agents, attorneys, successors and assigns (the "Releasing
          Surrendering Shareholders"), hereby releases and discharges each of
          the Company, Walter, Hoffmann and Livingston, and any of his or its
          heirs and dependents, executors, administrators and assigns, as well
          as the Company's, and Walter's, Hoffmann's and Livingston's companies
          and the Company's and Walter's, Hoffmann's or Livingston's companies
          affiliates' shareholders, officers, directors, partners, employees,
          agents, attorneys, successors and assigns (collectively, the "Company
          or New Shareholder Releasees"), from any and all rights, claims,
          causes of action, liability, damages, attorney's fees and costs of any
          kind or nature, whether known or unknown, which the Releasing
          Surrendering Shareholders ever had or now have against the Company or
          New Shareholder Releasees by reason of any actual or alleged act,
          omission, transaction, practice, conduct, occurrence or other matter
          occurring up to and including the date of this Amended and Restated
          Letter Agreement.

     15.  RELEASE OF CLAIMS BY THE COMPANY. Except for its rights and benefits
          under this Amended and Restated Letter Agreement, for and in
          consideration of the benefits provided herein, the Company, on behalf
          of itself as well as its affiliated companies and the Company's and
          such affiliated companies' respective shareholders, officers,
          directors, partners, employees, agents, attorneys, successors and
          assigns (the "Releasing Company"), hereby releases and discharges each
          of the Surrendering Shareholders, himself or itself, and his or its
          heirs and dependents, executors, administrators and assigns, as well
          as his or its affiliated companies and such companies' respective
          shareholders, officers, directors, partners, employees, agents,
          attorneys, successors and assigns (the



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          "Surrendering Shareholder Releasees") from any and all rights, claims,
          causes of action, liability, damages, attorney's fees and costs of any
          kind or nature, whether known or unknown, which the Releasing Company
          ever had or now have against the Surrendering Shareholder Releasees by
          reason of any actual or alleged act, omission, transaction, practice,
          conduct, occurrence or other matter occurring up to and including the
          date of this Amended and Restated Letter Agreement.

     16.  RELEASE OF CLAIMS BY EACH OF WALTER, HOFFMANN AND LIVINGSTON. Except
          for his respective rights and benefits under this Amended and Restated
          Letter Agreement, for and in consideration of the benefits provided
          herein, each of Walter, Hoffmann and Livingston, on behalf of himself
          and his heirs and dependents, executors, administrators and assigns,
          as well as his affiliated companies and such affiliated companies'
          respective shareholders, officers, directors, partners, employees,
          agents, attorneys, successors and assigns (the "Releasing
          Individuals"), hereby releases and discharges each of the Surrendering
          Shareholders, himself or itself, and his or its heirs and dependents,
          executors, administrators and assigns, as well as his or its
          affiliated companies and such companies' respective shareholders,
          officers, directors, partners, employees, agents, attorneys,
          successors and assigns (the "Surrendering Shareholder Releasees") from
          any and all rights, claims, causes of action, liability, damages,
          attorney's fees and costs of any kind or nature, whether known or
          unknown, which the Releasing Individual ever had or now have against
          the Surrendering Shareholder Releasees by reason of any actual or
          alleged act, omission, transaction, practice, conduct, occurrence or
          other matter occurring up to and including the date of this Amended
          and Restated Letter Agreement.

     17.  NON-DISPARAGEMENT. The Parties agree and covenant (i) not to disparage
          one another to any person, company or entity; (ii) to do nothing that
          could adversely affect the goodwill or reputation of the Company,
          Wiens or any of his companies, Walter or any of his companies,
          Hoffmann or any of his companies, or Livingston or any of his
          companies, as the case may be; and (iii) to do nothing that could
          adversely affect the morale of employees of the Company or of Wiens',
          Walter's, Hoffmann's or Livingston's other companies, as the case may
          be.

     18.  CONFIDENTIALITY. The Parties agree to keep the terms of this Amended
          and Restated Letter Agreement strictly confidential, except insofar as
          such disclosure is required by law. Such confidentiality shall not
          pertain to the Parties' accountants, attorneys or governmental taxing
          authorities; provided, however, that each person so informed shall be
          bound to the confidentiality obligations herein and an unauthorized
          disclosure by such person shall be deemed to be a breach of this
          Amended and Restated Letter Agreement. The Parties further agree not
          to disclose any of their companies' confidential and/or proprietary
          information, which shall be deemed to mean all non-public information
          (in whatever form) relating to or arising from each of the applicable
          companies' business, including, without limitation, trade secrets
          used, developed or acquired by such company in connection with its
          business, together with any analyses, records or data generated from
          such information and material; information concerning the manner and
          details of such company's operation, organization and management;
          financial information and/or documents and non-public policies,
          procedures and other printed, written or electronic material generated
          or



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          used in connection with such company's business; such company's
          business plans and strategies; and all other information concerning
          such company's concepts, prospects, customers, employees, agents,
          contractors, earnings, products, services, equipment, systems and/or
          prospective and executed contracts and other business arrangements.

     19.  NON-SOLICITATION. For a one year period from the date of execution of
          this Amended and Restated Letter Agreement, each of the Surrendering
          Shareholders with respect to the Company, and the Company with respect
          to each of the Surrendering Shareholders agrees that it will not,
          directly or indirectly, without the other applicable Party's prior
          written consent, (i) cause or attempt to cause any employee or agent
          of the other Party to terminate his or her relationship with the other
          Party; or interfere or attempt to interfere with the relationship
          between the other Party and any of its employees or agents; or hire or
          attempt to hire any employee or agent of the other Party; or (ii)
          solicit business from or conduct business from any customer or client
          served by the other Party at any point during the Parties' association
          with one another prior to the date of this Amended and Restated Letter
          Agreement or interfere or attempt to interfere with any business that
          the other Party conducted with a customer or client during the
          applicable Parties' association with one another prior to the
          execution of this Amended and Restated Letter Agreement. In this
          regard, Wiens expressly agrees that he will not solicit business from,
          or interfere with the Company's relationship with, On-Line Power,
          Perfect Power and/or any of such companies' respective agents,
          subcontractors and/or employees.

     20.  GOVERNING LAW. This Amended and Restated Letter Agreement shall be
          governed and construed in accordance with the laws of the State of
          Colorado, excluding its choice of law rules, and be binding upon the
          parties hereto and their respective successors and assigns.

     21.  ARBITRATION. Except for the parties' rights to obtain injunctive
          relief to enforce the confidentiality obligations and agreement not to
          compete, this Agreement may be enforced only by final and binding
          arbitration pursuant to the rules of the American Arbitration
          Association (AAA), before a single arbitrator selected under AAA
          rules, in Denver Colorado metropolitan area, including without
          limitation Castle Rock, Colorado. The Arbitrator's Award may be
          enforced in the U.S. District Court for the District of Colorado
          pursuant to the Federal Arbitration Act, 9 U.S.C. Section 1, et seq.
          By submitting all disputes to arbitration, the parties give up the
          right to a trial by jury. The arbitrator shall award statutory costs,
          the arbitrator's fees and attorney's fees to the prevailing party to
          the same extent as provided by applicable law as if that party had
          prevailed in court.

     22.  ADVICE OF COUNSEL. EACH PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT, IN
          EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK
          THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD
          ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT
          SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR
          PREPARATION HEREOF.



CONFIDENTIAL AND PROPRIETARY

                                       10
<PAGE>

     23.  FEES AND EXPENSES. The Parties hereto agree that each Party shall bear
          and pay all expenses that have been incurred or that are in the future
          incurred by or on behalf of such Party in connection with this Amended
          and Restated Letter Agreement or any additional costs and expenses
          incurred in connection with other transactions or documents entered
          into in connection with this Amended and Restated Letter Agreement;
          provided, however, the Company shall reimburse each of Walter,
          Hoffmann and Livingston for all professional fees, including, without
          limitation, attorneys' fees, accounting fees or financial
          advisor/appraisal fees, incurred by Walter, Hoffmann and Livingston in
          connection with the negotiation and completion of this Amended and
          Restated Letter Agreement and any related transactions or agreements
          entered into in connection with this Amended and Restated Letter
          Agreement.

     24.  MISCELLANEOUS. The Parties agree that this Amended and Restated Letter
          Agreement is fair and reasonable and has been entered into freely and
          voluntarily after good faith, arms length negotiations. Each Party
          agrees that it is the owner of any claims released by this Amended and
          Restated Letter Agreement and that it has not assigned any such claims
          to any other person or entity. The Parties agree that, in entering
          into this Agreement, they have not relied upon any representations,
          warranties, promises and/or any other conditions made by the other
          party that are not specifically set forth in this Amended and Restated
          Letter Agreement. The Parties agree to execute such further documents
          that are necessary to effectuate the intentions and terms and
          conditions set forth herein. The Parties agree that there are no
          collateral oral agreements between them with respect to the subject
          matter of this Amended and Restated Letter Agreement or otherwise
          (including, but not limited to, any previously contemplated agreements
          between Wiens and the Company, Walter, Hoffmann or Livingston). This
          Amended and Restated Letter Agreement may be executed in any number of
          counterparts, each of which shall be an original, but all of which
          together shall constitute one instrument.




CONFIDENTIAL AND PROPRIETARY

                                       11
<PAGE>

The Parties have executed this Amended and Restated Letter Agreement the date
first written above.

                                     RELIABLE POWER SYSTEMS, INC.


                                     By:
                                         ---------------------------------------
                                                   DAVID MAZUR

                                     Title:  Director and President


                                     EXECUTION BY THE COMPANY WITNESSED BY:

                                     ----------------------------------
                                     NAME:






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                                       12
<PAGE>

                                     ACCEPTED AND AGREED TO BY:



                                     -------------------------------------------
                                     THOMAS J. WIENS, in his individual
                                     capacity


                                     EXECUTION BY THOMAS J. WIENS WITNESSED BY:

                                     ----------------------------------
                                     NAME:



                                     FIRST WESTERN INDUSTRIES, LLC,



                                     By:
                                         ---------------------------------------
                                                   THOMAS J. WIENS

                                     Title:
                                            ------------------------------------


                                     EXECUTION BY FIRST WESTERN INDUSTRIES, LLC
                                     WITNESSED BY:

                                     ----------------------------------
                                     NAME:




                                     NEW WEST CAPITAL PARTNER, LLC

                                     By:
                                         ---------------------------------------
                                                   THOMAS J. WIENS

                                     Title:
                                            ------------------------------------


                                     EXECUTION BY NEW WEST CAPITAL PARTNER, LLC
                                     WITNESSED BY:

                                     ----------------------------------
                                     NAME:





CONFIDENTIAL AND PROPRIETARY

                                       13
<PAGE>

                                     NEW WEST CAPITAL, LLC


                                     By:
                                         ---------------------------------------
                                                   THOMAS J. WIENS

                                     Title:
                                            ------------------------------------


                                     EXECUTION BY NEW WEST CAPITAL, LLC
                                     WITNESSED BY:

                                     ----------------------------------
                                     NAME:



                                     -------------------------------------------
                                     JOHN R. WALTER, in his individual capacity


                                     EXECUTION BY JOHN R. WALTER
                                     WITNESSED BY:

                                     ----------------------------------
                                     NAME:



                                     -------------------------------------------
                                     DAVID H. HOFFMANN, in his individual
                                     capacity


                                     EXECUTION BY DAVID H. HOFFMANN
                                     WITNESSED BY:

                                     ----------------------------------
                                     NAME:


                                     -------------------------------------------
                                     JOSEPH D. LIVINGSTON, in his individual
                                     capacity


                                     EXECUTION BY JOSEPH D. LIVINGSTON
                                     WITNESSED BY:

                                     ----------------------------------
                                     NAME:



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                                       14
<PAGE>

                                   SCHEDULE 6
                           THIRD PARTY SHARE TRANSFERS


<Table>
<Caption>
                           # OF STOCK OPTIONS
NAME                            GRANTED            OPTION PRICE         VESTING
----                       ------------------      ------------         -------
<S>                        <C>                    <C>                 <C>
Luke Botica                      75,000                $0.54          immediately
Robin Wiens                      25,000                $0.54          immediately
David Groom                      65,000                $0.54          immediately
John Ransom                      15,000                $0.54            3 years
Matthew Elledge                   5,000                $0.54            3 years
Scott McClure                    10,000                $0.54            3 years
Gregg Copps                       5,000                $0.54            3 years
Jodi Ladner                       5,000                $0.54            3 years
Shane Ladner                      5,000                $0.54            3 years
Jodi Angle                        3,000                $1.00            3 years
                                -------
Total stock options
granted by Wiens to
non-employees:                  213,000
                                =======
</Table>







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                                       15
<PAGE>

                                  SCHEDULE 9(b)
                      SURRENDERING SHAREHOLDERS EXCEPTIONS


                                      None.





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<PAGE>

                                 SCHEDULE 10(c)
                             COMPANY CAPITALIZATION



(i) The number of shares of authorized common stock of each class of the
Company's common stock is 65,000,000 shares of no par value common stock.

(ii) The number of issued and outstanding shares of each class of the Company's
common stock is 10,758,679, as of September 30, 2001.

(iii) There are no shares of Company common stock held in treasury.

(iv) The number of shares of authorized preferred stock of each series of the
Company's preferred stock is 15,000,000 shares of no par value preferred stock.

(v) The number of issued and outstanding shares of each series of the Company's
preferred stock includes:

Series  A Preferred Stock:               0
Series B Preferred Stock:          300,000

(vi) The total number of outstanding stock options and warrants include:

716,923 stock options, and

pursuant to Private Debt Offering, there are 17.9 warrants that give each
promissory note holder the option to acquire 10,000 shares of common stock per
warrant at $3.50.





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                                       17