HEI, Inc.
                             1495 Steiger Lake Lane
                               Victoria, MN 55386

                                October 25, 2000

Anthony J. Fant
1495 Steiger Lake Lane
Victoria, MN 55386

                                   EXHIBIT #2

Dear Mr. Fant:

Reference is made to that certain letter agreement (the "Agreement"), dated
September 10, 2000, between HEI, Inc. ("HEI") and yourself, whereby you sold
1,214,300 shares of Colorado MEDtech common stock (the "CMED Shares") to HEI in
exchange for 235,000 shares of HEI common stock (the "HEI Shares") and the
assumption of $3,072,650.26 of indebtedness (the "Margin Debt"). Based on the
foregoing, we agree as follows:

               1.   The Agreement is hereby rescinded and is of no further force
                    and effect.

               2.   HEI hereby agrees to release you, and you hereby agree to
                    release HEI, from all obligations and liabilities arising
                    under or related to the Agreement, including but not limited
                    to your obligation to deliver the CMED Shares to HEI and
                    HEI's obligation to deliver the HEI Shares to you and to
                    assume the Margin Debt.

               3.   You hereby agree to assume and be responsible for any and
                    all expenses incurred by HEI related to the proposed
                    exchange offer by HEI for Colorado MEDtech, Inc., including
                    but not limited to accounting, legal, proxy solicitation and
                    investment banking expenses.

               4.   This letter agreement constitutes the entire agreement
                    between HEI and you with respect to the transactions
                    contemplated hereby, and supersedes all negotiations,
                    agreements, representations, warranties and commitments,
                    whether in writing or oral, prior to the date hereof.

               5.   This letter agreement shall be governed by, and construed in
                    accordance with, the laws of the State of New York,
                    regardless of the laws that might otherwise govern under
                    applicable principles of conflict of laws thereof.

     Please acknowledge acceptance of the terms of this letter agreement by
signing in the space provided below for that purpose, whereupon this letter
agreement will constitute a binding agreement between us.


Very truly yours,

                                            HEI, INC.


                                            By:  /s/ Don Reynolds
                                               ------------------
                                               Name: Don Reynolds
                                               Title: President and COO

AGREED TO AS OF THE DATE
FIRST ABOVE WRITTEN:

  /s/ Anthony J. Fant
-----------------------------
Anthony J. Fant, individually



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