<PAGE>   1
                                                                   EXHIBIT 10.28




                        SEPARATION AND RELEASE AGREEMENT



         This SEPARATION AND RELEASE AGREEMENT (the "Agreement") is made and
entered into by and between SPATIAL TECHNOLOGY INC. ("Spatial") and JERRY T.
SISSON ("Mr. Sisson") (collectively "parties") as of the Execution Date of this
Agreement as defined in paragraph 20 below.

                              I.    RECITALS

         WHEREAS, effective June 23, 1997 Mr. Sisson has tendered his
resignation as Director, President and Chief Operating Officer, and any and all
other positions he may have held with Spatial; and

         WHEREAS, Mr. Sisson tendered his resignation voluntarily and at his
election and in his discretion; and

         WHEREAS, Spatial has accepted Mr. Sisson' resignation; and

         WHEREAS, the parties wish to make the separation amicable but
conclusive and to settle all claims between them on the terms and conditions
set forth herein; and

         WHEREAS, Mr. Sisson accepts the benefits of this Agreement with the
acknowledgment that , upon satisfaction by Spatial of Spatial's obligations in
this Agreement, Mr. Sisson will have been fully and satisfactorily compensated.

                             II.    COVENANTS

         THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows:

         1.      RESIGNATION.  Mr. Sisson has tendered and Spatial has accepted
Mr. Sisson's resignation as the Director, President and Chief Operating Officer
with Spatial effective immediately and his employment and any and all other
positions he may hold with Spatial, effective as of June 30, 1997 ("Separation
Date").

         2.      PAYMENTS AND BENEFITS.  Although Spatial has no policy or
procedure requiring payment of any severance benefits, Spatial agrees to the
following as part of this Agreement:

                 (a) LUMP SUM PAYMENT.  Spatial will pay Mr. Sisson, in the form
of a check, the sum of $55,000 minus all legally required deductions and
withholdings ("Payment"). The Payment shall be made within ten calendar days
after the Execution Date of this Agreement and will be delivered by overnight
delivery service or hand delivery.
<PAGE>   2
                 (b) CONSULTING AGREEMENT.  Spatial hereby engages Mr. Sisson 
as an independent consultant for Spatial on the following terms and conditions:

                                  (1) The term of the consulting agreement shall
                 be six (6) months, commencing July 1, 1997 and ending on
                 December 31, 1997 (the "Consulting Period").

                                  (2) Spatial shall pay Mr. Sisson the sum of
                 $9,200.00 per month on the twenty-fifty (25th) day of each
                 month, for consulting services to be provided by Mr. Sisson
                 for the month in which payment was made.  Mr. Sisson shall be
                 treated as an independent contractor, and no amounts shall be
                 withheld from any such payments.

                                  (3) If Mr. Sisson provides consulting services
                 to Spatial, which exceed eighty (80) hours per month, Mr.
                 Sisson shall present a statement to Spatial reasonable
                 detailing all consulting services performed during that month
                 and the hours expended.  Spatial shall pay Mr. Sisson the sum
                 of $115.00 per hour for all such consulting services which
                 exceed eighty (80) hours in any month provided that Spatial
                 has specifically authorized in writing Mr. Sisson to exceed 80
                 hours.  Mr. Sisson shall present such statement to Spatial
                 within fifteen (15) days of the end of the month in which the
                 consulting services were performed, and Spatial shall pay the
                 outstanding balance on the first day of the following month.

                                  (4) Mr. Sisson shall not be required to
                 provide the consulting services to Spatial unless Spatial
                 requests such consulting services in writing, specifying in
                 reasonable detail the matters for which consulting services
                 are sought.  Mr. Sisson shall perform such services as
                 requested by the Company; provided that such services shall be
                 in the general scope of the work and projects for which Mr.
                 Sisson was responsible prior to the Separation Date.

                                  (5) The incentive bonuses that Mr. Sisson
                 would have been entitled to if Mr. Sisson had remained an
                 employee during the initial six month term (up to $12,500 on
                 September 30, 1997 and December 31, 1997, $6,250 per quarter
                 of which is subject to satisfaction of certain previously
                 established "personal performance objectives" and $6,250 per
                 quarter of which is subject to the previously established
                 "company performance objectives") shall be paid to Mr. Sisson
                 upon satisfaction of such objectives; provided that, Spatial
                 and Mr. Sisson shall agree on a quarterly basis to revised
                 personal performance objectives consistent with Mr. Sisson's
                 services as a consultant.




                                      2
<PAGE>   3





                                  (6) In addition, Mr. Sisson shall be paid
                 commissions on an individual customer basis for the closing of
                 specific customer accounts that the Company has requested in
                 writing he service.  The rate of such commissions shall be
                 agreed to on a case by case basis and shall be set forth in a
                 written addendum to the consulting agreement.

                                  (7) The consulting agreement may be terminated
                 by Sisson at any time.  Spatial may terminate the agreement at
                 any time, but only after payment of all remaining sums Mr.
                 Sisson would have received through the Consulting Period.
                 After completion of the Consulting Period, Spatial and the Mr.
                 Sisson may elect to extend the consulting agreement, but only
                 upon execution of a written extension signed by each of
                 Spatial and Mr. Sisson.

                                  (8) Subject to Mr. Sisson's continuation as a
                 consultant to the Company, Mr. Sisson' stock options shall
                 continue to vest in accordance with the options existing
                 vesting schedule and the Spatial Stock Option Plan ("SOP").
                 Mr. Sisson understands that such extension of the vesting
                 provisions will cause the option to no longer be classified as
                 an incentive stock option for tax purposes.  Following
                 termination of his consulting relationship with the Company,
                 Mr. Sisson will have six months to exercise all then vested
                 shares subject to his option.  Except for the continued
                 vesting and exercise provisions set forth above, the terms,
                 limitations, prerequisites, requirements, mechanics and
                 conditions of the SOP shall apply in full to any and all other
                 aspects of the options and the exercise thereof.

                                  (9) To the extent permitted by the federal
                 COBRA law, Mr. Sisson will be eligible to continue his health
                 insurance benefits.  Spatial will pay any amounts necessary to
                 be paid to insure continuation of COBRA coverage during the
                 Consulting Period.  A COBRA notification has been provided to
                 Mr. Sisson setting forth his rights and responsibilities with
                 regard to COBRA.

                                  (10) Spatial agrees to reimburse Mr. Sisson
                 for those reasonable business expenses he necessarily or
                 reasonable incurred while consulting for Spatial provided
                 that, Mr. Sisson shall receive written approval of all
                 expenses that will obligate the Company to reimburse Mr.
                 Sisson more than $35.00 in the aggregate.




                                      3
<PAGE>   4




                                  (11) Spatial shall provide to Mr. Sisson with
                 a personal computer, operating software and fax/printer during
                 the term of the consulting agreement.  At the end of the
                 Consulting Period, Mr.  Sisson will have the option to
                 purchase the personal computer and fax/printer for the than
                 fair value of those items.

                 (c) SAVINGS PLAN.  Participation by Mr. Sisson in any Spatial
savings or retirement plan will terminate as of June 30, 1997.  At the date
hereof, Mr. Sisson has contributed $6,749.96 to the savings plan for 1997.
Spatial will gross up Mr. Sisson's last paycheck in an amount equal to
1,550.00.

                 (d) OTHER COMPENSATION.  Except as expressly provided herein,
Mr. Sisson acknowledges that he will not receive (nor is he entitled to
receive) any additional consideration, payments, reimbursements or benefits of
any kind; provided that Spatial pays Mr. Sisson the salary normally due to him
on June 30, 1997, and pays the bonus for the second quarter of 1997 when
calculated and distributed to other executives of Spatial.  Mr. Sisson
acknowledges that at the time of the Separation Date, Spatial paid to him in
full any and all wages, salary and compensation due through the Separation
Date, and all amounts due for accrued but unused vacation and time off up
through the Separation Date.

         3.      DENIAL OF LIABILITY.  Mr. Sisson acknowledges that any payment
by Spatial pursuant to this Agreement is made in compromise of disputed claims,
that in making such payment, Spatial in no way admits any liability to Mr.
Sisson and that Spatial expressly denies any such liability.

         4.      SPATIAL PROPERTY.  Prior to the Execution Date of this 
Agreement, Mr. Sisson will return to Spatial all Spatial documents (and all
copies thereof) and any other Spatial property in his possession, custody or
control, including, but not limited to, financial information, customer lists,
Spatial files, notes, cellular telephones, contracts, drawings, records,
business plans and forecasts, financial information, specifications,
computer-recorded information, software, tangible property, credit cards, entry
cards, identification badges and keys, and any materials of any kind which
contain or embody any proprietary or confidential material of Spatial (and all
reproductions thereof).

         5.      NON-SOLICITATION.  Mr. Sisson agrees that for one year after 
the Separation Date of this Agreement, he will not, either directly or through
others, solicit or attempt to solicit any employee, consultant, or independent
contractor of Spatial to terminate his or her relationship with Spatial in
order to become an employee, consultant or independent contractor to or for any
other person or entity.

         6.      PROPRIETARY INFORMATION OBLIGATIONS.  Mr. Sisson acknowledges 
that he continues to be bound by the terms of the Proprietary Information and
Inventions




                                      4
<PAGE>   5



Agreement, executed by Mr. Sisson on July 6, 1993 and a copy of which is
attached hereto as Exhibit A.

         7.      NONDISPARAGEMENT.  Mr. Sisson and Spatial agree that neither
party will at any time disparage the other to third parties in any manner likely
to be harmful to the other party, their business reputation, or the personal or
business reputation of its directors, shareholders, and employees.
Notwithstanding the prohibition in the preceding sentence, each party shall
respond accurately and fully to any question, inquiry, or request for
information when required by legal process. Spatial agrees that it will confirm
Mr.  Sisson' dates of employment, position and the fact of the organizational
restructuring if it receives an inquiry.

         8.      CONFIDENTIALITY.  The provisions of this Agreement shall be 
held in strictest confidence by Mr. Sisson and Spatial and shall not be
publicized or disclosed in any manner whatsoever.  Notwithstanding the
prohibition in the preceding sentence:  (a) the parties may disclose this
Agreement in confidence to their respective attorneys, accountants, auditors,
tax preparers, and financial advisors; (b) Spatial may disclose this Agreement
as necessary to fulfill standard or legally required corporate reporting or
disclosure requirements; and (c) the parties may disclose this Agreement
insofar as such disclosure may be necessary to enforce its terms or as
otherwise required by law.

         9.      RELEASE OF CLAIMS.  In consideration for the consideration 
set forth in this Agreement above and the mutual covenants of  Spatial and Mr.
Sisson, Mr. Sisson hereby releases, acquits and forever discharges Spatial, its
affiliated corporations and entities, its and their officers, directors,
agents, servants, attorneys, employees, shareholders, successors and assigns of
and from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys' fees, damages, indemnities and obligations of every kind
and nature, in law, equity, or otherwise, known or unknown, suspected and
unsuspected, disclosed and undisclosed, liquidated or contingent, arising out
of or in any way related to agreements, events, acts or conduct at any time
prior to and including the Execution Date, including but not limited to:  any
and all such claims and demands directly or indirectly arising out of or in any
way connected with Mr.  Sisson' employment with Spatial or the termination of
that employment; claims or demands related to salary, bonuses, commissions,
stock, stock options, or any ownership interests in Spatial, vacation pay,
fringe benefits, expense reimbursements, sabbatical benefits, severance
benefits, or any other form of compensation; claims pursuant to any federal,
any state or any local law, statute, common law or cause of action including,
but not limited to, the federal Age Discrimination in Employment Act of 1967,
as amended ("ADEA") under the terms set forth in paragraph 10 below, the
federal Civil Rights Act of 1964, as amended; the federal Americans with
Disabilities Act of 1990; the Colorado Wage Claim Act, Colo. Rev. Stat. Section
8-4-101 et seq.; tort law; contract law; wrongful discharge; discrimination;
harassment; fraud; defamation; libel; emotional distress; and breach of the
implied covenant of good faith and fair dealing.  The release and discharge set
forth above specifically excludes (i) the obligations of Spatial under this
Agreement; (ii) the obligations of Spatial contained in the Indemnification
Agreement between Spatial and





                                      5
<PAGE>   6



Mr. Sisson dated the 17th day of October 1996, and (iii) Spatial's obligations
under its 401(k) plan to Mr. Sisson, each of which shall remain in full force
and effect.

         10.     ADEA WAIVER AND RELEASE.  Mr. Sisson acknowledges that he is
knowingly and voluntarily waiving and releasing any rights he may have under
the federal Age Discrimination in Employment Act of 1967, as amended ("ADEA
Waiver and Release").  Mr. Sisson acknowledges that the consideration given for
this ADEA Waiver and Release, provided for in paragraph 2(a) and 2(b) above, is
in addition to anything of value to which Mr. Sisson was already entitled.  The
parties agree and acknowledge that Mr. Sisson has been advised by this writing,
as required by the ADEA that: (a) this ADEA Waiver and Release does not apply
to any claims under ADEA that may arise after the date that Mr. Sisson signs
this Agreement; (b) Mr. Sisson has the right to and is advised to consult with
an attorney prior to executing this Agreement; (c) Mr. Sisson has twenty-one
calendar days to consider this ADEA Waiver and Release (although he may choose
to voluntarily execute this ADEA Waiver and Release earlier); and (d) Mr.
Sisson has seven calendar days following the date that each party signed this
Agreement to revoke this ADEA Waiver and Release by sending, via certified
United States mail, written notice of revocation to the attention of CEO,
Spatial, 2425 55th Street, Suite 100, Boulder, CO  80301.  The parties
acknowledge and agree that revocation by Mr. Sisson of the ADEA Waiver and
Release is not effective to revoke his waiver or release of any other claims
pursuant to this Agreement.

         11.     TAX CONSEQUENCES.  Mr. Sisson expressly acknowledges that 
Spatial has not made, nor herein makes, any representation about the tax
consequences of any payment made by Spatial to Mr. Sisson pursuant to this
Agreement.

         12.     VOLUNTARY AND KNOWINGLY.  Mr. Sisson acknowledges that in 
executing this Agreement, he has reviewed it and understands its terms and has
had an opportunity to seek advice of counsel of his own choosing, and was fully
advised of his rights under law, and acted knowingly and voluntarily.

         13.     DUTY TO EFFECTUATE.  The parties agree to perform any lawful
additional acts, including the execution of additional agreements, as are
reasonably necessary to effectuate the purpose of this Agreement.

         14.     ENTIRE AGREEMENT.  This Agreement, including Exhibit A, 
constitutes the complete, final and exclusive embodiment of the entire
agreement between Mr. Sisson and Spatial with regard to the subject matter
hereof. Notwithstanding the foregoing, nothing contained herein shall terminate
or otherwise modify the Indemnification Agreement between Spatial and Mr.
Sisson effective as of October 17, 1996.  This Agreement is entered into
without reliance on any promise or representation, written or oral, other than
those expressly contained herein.  It may not be modified except in a writing
signed by Mr. Sisson and a duly authorized officer of Spatial.





                                      6
<PAGE>   7




         15.     SUCCESSORS AND ASSIGNS.  This Agreement shall bind the heirs,
personal representatives, successors, assigns, executors and administrators of
each party, and insure to the benefit of each party, its heirs, successors and
assigns.

         16.     APPLICABLE LAW.  This Agreement shall be deemed to have been
entered into and shall be construed and enforced in accordance with the laws of
the State of Colorado.

         17.     FORUM.  Any action to enforce or requiring interpretation of 
this Agreement must be brought in a forum located within the State of Colorado.

         18.     SEVERABILITY.  If any provision of this Agreement is 
determined to be invalid or unenforceable, in whole or in part, this
determination will not affect any other provision of this Agreement, and the
provision in question shall be modified so as to be rendered enforceable.

         19.     ENFORCE ACCORDING TO TERMS.  The parties intend this Agreement
and exhibits to be enforced according to their terms.

         20.     EXECUTION DATE.  This Agreement is effective on the later 
date of the dates that each party signed this Agreement ("Execution Date").

         21.     SECTION HEADINGS.  The section and paragraph headings 
contained in this Agreement are for reference purposes only and shall not
affect in any the meaning or interpretation of this Agreement.

         22.     ATTORNEYS' FEES.  In the event legal action is brought to 
enforce the terms of this Agreement, the prevailing party shall be entitled to
recover reasonable costs of such action, including attorneys' fees.

         23.     SPATIAL'S RELEASE OF SISSON.  Except as otherwise set forth 
in this Agreement, Spatial hereby releases, acquits and forever discharges Mr.
Sisson of and from any and all claims, liabilities, demands, causes of action,
costs, expenses, attorneys' fees, damages, indemnities and obligations of every
kind and nature, in law, equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed, arising out of or in any way related to
agreements, events, acts or conduct at any time prior to and including the
execution date of this Agreement of his employment, provided that he was acting
in the scope of his employment .


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]





                                      7
<PAGE>   8





         IN WITNESS WHEREOF, the parties have duly authorized and caused this
Agreement to be executed as follows:

JERRY T. SISSON, an individual         SPATIAL TECHNOLOGY INC.,
                                    
                                       a Delaware corporation
                                    
                                    
                                    
                                    
                                    
By: /s/ JERRY T. SISSON                By: /s/ RICHARD M. SOWAR         
   ---------------------------------      --------------------------------------
   Jerry T. Sisson                        Richard M. Sowar, Chief Executive 
                                            Officer
                                    
                                    
                                    

Date: June 23, 1997                    Date: June 23, 1997







                                      8
<PAGE>   9
                                                      EXHIBIT A OF EXHIBIT 10.28



                            PROPRIETARY INFORMATION
                            AND INVENTIONS AGREEMENT

                                                                    July 6, 1993

SPATIAL TECHNOLOGY INC.
2425 55th Street, Building A
Boulder, CO  80301

Ladies and Gentlemen:

         The following confirms an agreement between me and Spatial Technology
Inc., a Delaware corporation ( the "Company," which term includes the Company's
subsidiaries, successors and assigns), which is a material part of the
consideration for my employment by the Company:

         1.      "Proprietary Information" is information that was or is
developed by, became or becomes known by, or was or is assigned or otherwise
conveyed to the Company, and which has commercial value in the Company's
business.  Proprietary Information includes, without limitation, trade secrets,
financial information, product plans, customer lists, marketing plans and
strategies, forecasts and other business information, improvements, inventions,
formulas, ideas, circuits, mask works, works of authorship, processes, computer
programs, algorithms, techniques, schematics know-how and data.  I understand
that my employment creates a relationship of confidence and trust between me
and the Company with respect to Proprietary Information of the Company or its
customers which may be learned by me during the period of my employment.

         2.      In consideration of my employment by the Company and the
compensation received by me from the Company from time to time, I hereby agree
as follows:

         (a).    All Proprietary Information and all patents, copyrights, trade
secret rights, rights with respect to masks works and other rights ( including
throughout, without limitation, any extensions, renewals, continuations or
divisions of any of the foregoing) in connection therewith shall be the sole
property of the Company.  I hereby assign to the Company any rights I may have
or acquire in such Proprietary Information.  At all times, both during my
employment by the Company and after its termination, I will keep in confidence
and trust and will not use or disclose any Proprietary Information or anything
relating to it without the written consent of the Company, except as may be
necessary in the ordinary course of performing my duties to the Company.

         (b).    In the event of the termination of my employment by me or by
the Company for any reason, I shall return all documents, records, apparatus,
equipment and other physical property, or any reproduction of such property,
whether or not pertaining to Proprietary Information, furnished to me by the
Company or produced by myself or others in connection with my employment, to
the Company immediately as and when requested by the Company.

         (c).    I will promptly disclose to the Company, or any persons
designated by it, all "inventions", which includes all improvements,
inventions, formulas, ideas, circuits, mask works, works of authorship,
processes, computer programs, algorithms, techniques, schematics, know-how and
data, whether or not patentable, made or conceived or reduced to practice or
developed by me, either alone or jointly with others, during the term of my
employment and for one (1) year thereafter.  To the extent the Company does not
have rights therein hereunder, such disclosure shall be received by the Company
in confidence and does not extend the assignment made in Section (e) below.

         (d).    During the term of my employment and for one (1) year
thereafter, I will not encourage or solicit any employee of the Company to
leave the Company for any reason or to devote less than all of
<PAGE>   10
any such employee's efforts to the affairs of the Company, provided that the
foregoing shall not affect any responsibility I may have as an employee of the
Company with respect to the bona fide hiring and firing of Company personnel.

         (e).    I agree that all Inventions which I make, conceive, reduce to
practice or develop ( in whole or in part, either alone or jointly with others)
during my employment shall be the sole property of the Company and to the
extent permitted by law shall be "works made for hire".  The Company shall be
the sole owner of all patents, copyrights, trade secret rights with respect to
mask works and other intellectual property or other rights in connection
therewith.  I hereby assign to the Company any rights I may have or acquire in
such Inventions.  I agree to perform, during and after my employment, all acts
deemed necessary or desirable by the Company to permit and assist it, at the
Company's expense, in obtaining and enforcing patents, copyrights, trade secret
rights, rights with respect to mask works or other rights on such Inventions
and/or any other Inventions I have or may at any time assign to the Company in
any and all countries.  Such acts may include, but are not limited to,
execution of documents and assistance or cooperation in legal proceedings.  I
hereby irrevocably designate and appoint the Company and its duly authorized
officers and agents, as my agents and attorneys-in-fact to act for and in my
behalf and instead of me, to execute and file any applications or related
filings and to do all other lawfully permitted acts to further the prosecution
and issuance of patents, copyrights, trade secret rights, rights with respect
to mask works or other rights thereon with the same legal force and effect as
if executed by me.

         (f).    I attach hereto as Exhibit A a complete list of all Inventions
or improvements to which I claim ownership and that I desire to remove from the
operation of the Agreement, and I covenant that such list is complete.  If no
such list is attached to this Agreement, I represent that I have no such
Inventions and improvements at the time of signing this Agreement.

         (g).    I represent that my performance of all the terms of this
Agreement will not breach any agreement of obligation to keep in confidence
proprietary information acquired by me in confidence or in trust prior to my
employment by the Company.  I have not entered into, and I agree I will not
enter into, any agreement either written or oral in conflict herewith or in
conflict with my employment with the Company.

         3.      In consideration of the foregoing, the Company agrees that it
will not request as part of my employment that I divulge or make use of
confidential information of any of my former employers that has commercial
value to the business of the former employer who developed such information.

         4.      This Agreement shall be effective as of the first day of my
employment by the Company, and shall be binding upon me, my heirs, executors,
assigns, and administrators and shall inure to the benefit of the Company, its
subsidiaries, successors and assigns.

         5.      I acknowledge and understand that the Company will incur
irreparable harm and damage in the event that I breach or violate any of the
terms or conditions of this agreement, and I hereby agree that in addition to
any rights or remedies of law the Company may have for such breach or
violation, the Company shall be entitled to seek equitable remedies, including
the enforcement of this Agreement by injunction, specific performance, or any
other similar relief.

Dated: July 6, 1993

                                         /s/ Jerry T. Sisson
                                         ---------------------------------------

                                                                      , Employee
                                         -----------------------------
Accepted and Agreed to :

Spatial Technology Inc.

By 
   ----------------------------------
<PAGE>   11


                                   Exhibit A

Spatial Technology Inc.
2425 55th Street Building A
Boulder, CO  80301

Ladies and Gentlemen:

         1.      The following is a complete list of all inventions or
improvements relevant to the subject matter of my employment by Spatial
Technology Inc. ( the "Company") that have been made or conceived or first
reduced to practice by me alone or jointly with others prior to my employment
by the Company that I desire to remove from the operation of the Company's
Proprietary Information and Inventions Agreement.

    X            No inventions or improvements.
---------
                 See below:
---------


                 Additional sheets attached.
---------
         2.      I propose to bring to my employment the following materials
                 and documents of a former employer:

    X            No materials or documents.
---------
                 See below.
---------

                                        /s/ Jerry T. Sisson
                                        ----------------------------------------
                                                                      , Employee
                                        ------------------------------