<PAGE>
 
                                                                    Exhibit 10.1
                                                                    ------------
                              SEPARATION AGREEMENT
                              --------------------

          This Separation Agreement ("Agreement") is entered into by and between
Julie Cummins Brady ("Employee") and Apertus Technologies Incorporated
("Employer").

          WHEREAS, Employee serves as Vice President and General Counsel of
Employer; and

          WHEREAS, Employee and Employer desire to provide for the mutual
termination of Employee's employment as of the close of business on December 31,
1997 ("Termination Date") and to fully and finally settle all issues,
differences and actual and potential claims between them, including, but in no
way limited to, any claim that might arise out of Employee's employment with
Employer and the termination thereof.

          NOW, THEREFORE, in consideration of the mutual promises contained
herein, Employer and Employee agree as follows:

          1.   Employee's employment with Employer will terminate upon the close
of business on the Termination Date.  Except as provided in paragraph 3,
Employee shall continue to perform her duties as a full time employee diligently
and to the best of her abilities through the Termination Date.  On the the first
business day after the Termination Date, Employee shall receive a pay out for
accrued and unused vacation and for all deferred compensation.

          2.   Employer agrees that as a severance payment, it shall continue to
pay to Executive her base salary through September 30, 1998, and shall continue
to provide health insurance benefits for Employee and her dependents through
September 30, 1998, subject to deductions for federal income tax, FICA and state
income tax.  Employee shall make the same contribution for health insurance
benefits as she would if she continued as an employee of Employer, which shall
be a deduction from payments of base salary.  Outstanding stock options held by
Employee shall fully vest as of the Termination Date, the exercise price thereof
shall have the benefit of the Company's repricing plan and such options shall
remain exercisable through September 30, 1998. Employee agrees that her rights
to all other benefits shall terminate effective at the close of business on the
Termination Date.  The payments and benefits specified in this Agreement shall
discharge any obligations of Employer to Employee for compensation, unused or
accrued vacation or any other expectations of remuneration or benefit on the
part of Employee.

          3.   Beginning after November 28, 1997, Employer agrees that,
consistent with her overall duties, Employee may have reasonable time off for
job interviews related to new employment.

          4.   With respect to any statment about Employee's employment,
Employer shall only provide the dates of employment and position held, state
that separation from Employer's employment was due to the elimination of the
position as Employer became a smaller, more focused company and state that
Employee made a valuable contribution to Employer during the period of her
employment.  With 
<PAGE>
 
respect to any statement about Employee's employment, Employee shall only
provide the dates of employment and position held, state that separation from
Employer's employment was due to the elimination of the position as Employer
became a smaller, more focused company and state that Employer provided a
satisfying employment experience.

          5.   This Agreement shall not in any way be construed as an admission
by Employer that it has acted wrongfully with respect to Employee, and Employer
specifically disclaims any liability to or wrongful acts against Employee or any
other person, on the part of itself, or its employees.

          6.   The terms of this Agreement shall remain strictly confidential
between the parties hereto and shall not be disclosed to third persons unless
required by law.

          7.   Employee hereby affirms that her rights to payments or benefits
from Employer are specified exclusively and completely in this Agreement.  Any
modification of, or addition to, this Agreement must be in writing signed by
Employee and by the authorized representative of Employer.

          8.   This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of Minnesota.  Nothing contained in this
Agreement is intended to violate any applicable law.  Should any part of this
Agreement be declared or be determined by any court to be illegal or invalid,
the validity of the remaining parts, terms, or provisions shall not be affected
thereby and the said illegal or invalid part, term, or provision shall be deemed
not to be a part of this Agreement.

          9.   Employee has read the foregoing Agreement and has consulted with
an attorney before executing this Agreement.  Employee understands the meaning
of the terms of this Agreement and their effect and agrees that the provisions
set forth in the Agreement are written in understandable language to Employee.
Employee enters into this Agreement freely and voluntarily.

          10.  As an essential inducement to Employee to enter into this
Agreement, and as consideration for the foregoing promises of Employer, Employee
agrees that, by this Agreement, Employee and Employer intend to settle any and
all claims Employee has or may have against Employer as a result of its hiring
Employee, Employee's employment with Employer and the cessation of Employee's
employment with Employer.  Concurrently herewith, Employer and Employee are
executing and delivering a Mutual Release.  This Agreement shall become
effective 15 days from the date hereof provided that Employee does not rescind
the Mutual Release in accordance with its terms.

          11.  This Agreement shall inure to the benefit of Employee's heirs,
executors and assigns.

          12,  Any dispute under this Agreement shall be resolved fully and
finally by an arbitrator selected pursuant to, and in an arbitration governed
by, the Commercial Arbitration Rules of the American Arbitration Association.
<PAGE>
 
               IN WITNESS WHEREOF, the parties have executed this Agreement by
their signature below.


Dated:   October 10, 1997                  /s/ Julie Cummins Brady
       ------------------------            ----------------------------------
                                               Julie Cummins Brady


Dated:   10/10/97                          APERTUS TECHNOLOGIES
       ---------------------               INCORPORATED     
                                           

                                           By:  /s/ Robert D. Gordon
                                               ------------------------------
                                           Its:    CEO
                                               ------------------------
<PAGE>
 
                                 MUTUAL RELEASE
                                 --------------


          Julie Cummins Brady ("Employee") and Apertus Technologies Incorporated
together with its predecessors, successors, subsidiaries and affiliates and all
officers, employees and agents of those persons and companies ("Employer")
hereby fully and completely release and waive any and all claims, complaints,
causes of action or demands of whatever kind which either has or may have
against the other,  arising out of any actions, conduct, decisions, behavior or
events occurring to the date of each's respective execution of this Mutual
Release, except the Separation Agreement of even date herewith.

          Each signatory to this Mutual Release understands and accepts that
this Release specifically covers but is not limited to any and all claims,
complaints, causes of action or demands which she/it has or may have against the
above-referenced released parties relating in any way to the terms, conditions
and circumstances of Employee's employment and the termination of her employment
with Employer, whether based on statutory or common law claims for employment
discrimination, wrongful discharge, breach of contract, breach of any express or
implied promise, misrepresentation, fraud, retaliation, breach of public policy,
infliction of emotional distress, defamation, promissory estoppel, invasion of
privacy, negligence, or any other theory, whether legal or equitable; provided,
however, that Employee does not release any right to indemnification arising
under the Minnesota Business Corporation Act she may have.

          By their signature below, the parties signing below acknowledge that
they fully understand and accept the terms of this Mutual Release, and they
represent and agree that their signatures are freely, voluntarily and knowingly
given.

          By her signature below, Employee further acknowledges that she has
been provided a full opportunity to review and reflect on the terms of this
Release and to seek the advice of legal counsel of her choice, which advice she
has been encouraged to obtain.

          Employee understands that she may rescind this Mutual Release if she
does so in writing, delivered by registered mail to Employer within 15 days of
the date of her signature on this Mutual Release.


Dated:   October 10, 1997            /s/ Julie Cummins Brady
       -----------------------      --------------------------------
                                         Julie Cummins Brady

Dated:   10/10/97                   APERTUS TECHNOLOGIES         
       ---------------------        INCORPORATED                    

                                    By:  /s/ Robert D. Gordon
                                        -----------------------------
                                    Its:  CEO
                                        -----------------------------