Exhibit
      10.1

    


    October
      25, 2006

    


    Via
      Messenger

    Personal
      and Confidential

    To: William
      R. Wolff

    


    Re: Separation
      Agreement and Release

    


    Dear
      Bill:

    


    As
      you
      know, your employment with MakeMusic, Inc. (“MakeMusic”) will end effective at
      the close of business on December 18, 2006. The purpose of this Separation
      Agreement and Release letter (“Agreement”) is to set forth the specific
      separation pay that MakeMusic will provide you pursuant to Section 3.02(d)
      of
      your Employment Agreement with MakeMusic dated June 9, 2004 (your “Employment
      Agreement”), provided you agree to the terms and conditions of this
      Agreement.

    


    You
      are
      being provided this Agreement now for your review and initial agreement. We
      ask
      that you indicate your agreement to this Agreement no later than November 15,
      2006, by signing, dating and returning the first signature block at the end
      of
      this Agreement. To finalize this Agreement, sometime between December 18, 2006
      and January 8, 2007, you must sign, date and return the second signature block
      at the end of this Agreement.

     

    By
      your
      signature below, you agree to the following terms and conditions:

    


    1.    End
      of
      Employment.
      

    


    a. Your
      employment with MakeMusic will end effective at the close of business on
      December 18, 2006. You will be on a paid leave of absence through December
      18,
      2006. You will remain on MakeMusic’s payroll and covered by MakeMusic’s benefits
      through December 18, 2006.

    


    b. Upon
      your
      receipt of your final paycheck which includes payment for services through
      December 18, 2006, you will have received all wages owed to you by virtue of
      your employment with MakeMusic or separation thereof. 

    


    c. Upon
      your
      receipt of payment from MakeMusic in the amount of $20,075.13, less applicable
      deductions and withholding, which represents payment for 229.43 hours of accrued
      (accrued through December 18, 2006) and unused Paid Time Off (PTO) at your
      regular rate, you will have received all benefits owed to you by virtue of
      your
      employment with MakeMusic or separation thereof.  

    


    
      
         

      

      
         

        
          

        

      

      
         

      

      Page
        2

       

    

    d. In
      January 2007, MakeMusic will calculate your calendar year 2006 bonus in
      accordance with the applicable bonus criteria as if you had remained employed
      by
      MakeMusic through December 31, 2006. Such bonus will be paid to you on or before
      March 31, 2007. 

    


    e. The
      COBRA
      period for continuation of your insurance coverage under MakeMusic’s group plans
      at your expense will begin on January 1, 2007. Information regarding your right
      to elect COBRA coverage will be sent to you via separate letter.

    


    f. Your
      rights with regard your stock options with MakeMusic are governed by your
      separate stock option agreements with MakeMusic. 

    


    g. Effective
      October 19, 2006, you resigned from your positions as Chairman of the Board
      of
      MakeMusic and a member of MakeMusic’s Board of Directors. 

    


    You
      are
      not eligible for any other payments or benefits by virtue of your employment
      with MakeMusic or separation thereof except for those expressly described in
      this Agreement. You will not receive the payments described in Section 2 if
      you
      (i) do not sign this Agreement by the due dates indicated, (ii) rescind this
      Agreement after signing it, or (iii) violate any of the terms and conditions
      set
      forth in this Agreement.

    


    2.    Separation
      Pay.
      Specifically in consideration of your signing this Agreement and subject to
      the
      limitations, obligations, and other provisions contained in this Agreement,
      MakeMusic agrees to pay you twelve (12) months of separation pay at your ending
      base salary for the period from December 19, 2006 through December 18, 2007,
      in
      the gross amount of One Hundred Eighty-Two Thousand and 00/100 Dollars
      ($182,000), less applicable deductions and withholding. Such separation pay
      will
      be paid to you in installments on MakeMusic’s normal payroll schedule beginning
      with the first pay day following the expiration of the rescission periods
      described in Section 5 below, with the
      first
      such payment to include any retroactive payments to December 19, 2006.


    


    3.    
Release
      of Claims.
      Specifically in consideration of the separation pay described in Section 2,
      by
      signing this Agreement you, for yourself and anyone who has or obtains legal
      rights or claims through you, agree to the following:

    


    a. You
      hereby do release, agree not to sue, and forever discharge MakeMusic (as defined
      below) of and from any and all manner of claims, demands, actions, causes of
      action, administrative claims, liability, damages, claims for punitive or
      liquidated damages, claims for attorney’s fees, costs and disbursements,
      individual or class action claims, or demands of any kind whatsoever, you have
      or might have against them or any of them, whether known or unknown, in law
      or
      equity, contract or tort, arising out of or in connection with your employment
      with MakeMusic, or the termination of that employment, or otherwise, and however
      originating or existing, from the beginning of time through the date of your
      signing this Agreement.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

      Page 3

       

    

    b. This
      release includes, without limiting the generality of the foregoing, any claims
      you may have for wages, bonuses, commissions, penalties, deferred compensation,
      vacation pay, separation benefits, defamation, invasion of privacy, negligence,
      emotional distress, breach of contract, estoppel, improper discharge (based
      on
      contract, common law, or statute, including any federal, state or local statute
      or ordinance prohibiting discrimination or retaliation in employment), violation
      of the United States Constitution, the Minnesota Constitution, the Age
      Discrimination in Employment Act, 29 U.S.C. § 621 et seq.,
      the
      Minnesota Human Rights Act, Minn. Stat. § 363A.01 et seq.,
      Title
      VII of the Civil Rights Act, 42 U.S.C. § 2000e et seq.,
      the
      Americans with Disabilities Act, 42 U.S.C. § 12101 et seq.,
      the
      Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq.,
      the
      Family and Medical Leave Act, 29 U.S.C. § 2601 et seq.,
      the
      National Labor Relations Act, 29 U.S.C. § 151 et seq.,
      the
      Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101
et
      seq.,
      the
      Sarbanes-Oxley Act, 15 U.S.C. § 7201 et seq.,
      the
      Fair Labor Standards Act, any claim arising under Minn. Stat. Chapters 177
      and
      181, Minn. Stat. § 176.82, and any claim for retaliation, harassment or
      discrimination based on sex, race, color, creed, religion, age, national origin,
      marital status, sexual orientation, disability, status with regard to public
      assistance or any other protected class, or sexual or other harassment. You
      hereby waive any and all relief not provided for in this Agreement. You
      understand and agree that, by signing this Agreement, you waive and release
      any
      past, present, or future claim to employment with MakeMusic.

    


    c. You
      affirm that you have not caused or permitted, and to the full extent permitted
      by law will not cause or permit to be filed, any charge, complaint, or action
      of
      any nature or type against MakeMusic, including but not limited to any action
      or
      proceeding raising claims arising in tort or contract, or any claims arising
      under federal, state, or local laws. If you file, or have filed on your behalf,
      a charge (including, without limitation, a charge of discrimination with the
      Equal Employment Opportunity Commission), complaint, or action, you agree that
      the payments described above in Section 2 are in complete satisfaction of any
      and all claims in connection with such charge, complaint, or action and
      you
      waive,
      and agree not to take, any award of money or other damages from such charge,
      complaint, or action. 

    


    d. You
      are
      not, by signing this Agreement, releasing or waiving (1) any vested interest
      you
      may have in any 401(k) or profit sharing plan by virtue of your employment
      with
      MakeMusic, (2) any rights or claims that may arise after the Agreement is
      signed, (3) the post-employment payments specifically promised to you under
      this
      Agreement, (4) the right to institute legal action for the purpose of enforcing
      the provisions of this Agreement, (5) any rights under your separate stock
      option agreements with the Company, (6) any rights under workers compensation
      benefit laws, or (7) the right to apply for state unemployment compensation
      benefits.

    


    e. MakeMusic,
      as used in this Section 3, shall mean MakeMusic, Inc. and its parent,
      subsidiaries, divisions, affiliated entities, insurers, if any, and its and
      their present and former officers, directors, shareholders, trustees, employees,
      agents, attorneys, representatives and consultants, and the successors and
      assigns of each, whether in their individual or official capacities, and the
      current and former trustees or administrators of any pension or other benefit
      plan applicable to the employees or former employees of MakeMusic, in their
      official and individual capacities.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

      Page 4

       

    

    4.    Notice
      of Right to Consult Attorney and Twenty-One (21) Calendar Day Consideration
      Period.
      By
      signing this Agreement, you acknowledge and agree that MakeMusic has informed
      you by this Agreement that (1) you have the right to consult with an attorney
      of
      your choice prior to signing this Agreement, and (2) you are entitled to
      twenty-one (21) calendar days from December 18, 2006 to consider whether the
      terms are acceptable to you. You have the right, if you choose, to sign this
      Agreement prior to the expiration of the twenty-one (21) day period. You may
      not, however, execute the second signature block of this Agreement until
      sometime between December 18, 2006 and January 8, 2007. 

    


    5.    Notification
      of Rights under the Minnesota Human Rights Act (Minn. Stat. Chapter 363A) and
      the Federal Age Discrimination in Employment Act (29 U.S.C. § 621 et
      seq.).
      You are
      hereby notified of your right to rescind the release of claims contained in
      Section 3 with regard to claims arising under the Minnesota Human Rights Act,
      Minnesota Statutes Chapter 363A, within fifteen (15) calendar days of your
      signing the second signature block of this Agreement, and with regard to your
      rights arising under the federal Age Discrimination in Employment Act, 29 U.S.C.
      § 621 et seq.,
      within
      seven (7) calendar days of your signing the second signature block of this
      Agreement. The two rescission periods shall run concurrently. In order to be
      effective, the rescission must
      (a) be
      in writing; (b) delivered to Deb Peterson, MakeMusic, Inc., 7615 Golden Triangle
      Drive, Suite M, Eden Prairie, MN 55344-3848 by hand or mail within the required
      period; and (c) if delivered by mail, the rescission must be postmarked within
      the required period, properly addressed to Deb Peterson, as set forth above,
      and
      sent by certified mail, return receipt requested. This Agreement will be
      effective upon the expiration of the 15-day period without rescission. You
      understand that if you rescind any part of this Agreement in accordance with
      this Section 5, you will not receive the separation pay described in Section
      2
      and you will be obligated to return any such payments if already
      received.

    


    6.    Return
      of Property.
      By
      signing this Agreement, you acknowledge and agree that all documents and
      materials relating to the business of, or the services provided by, MakeMusic
      are the sole property of MakeMusic. Subject to the exceptions noted below in
      this Section 6, by signing this Agreement you further agree and represent that
      you have returned to MakeMusic all of its property, including but not limited
      to, all keys, access cards, credit cards, customer records and other documents
      and materials, whether on computer disc, hard drive or other form, and all
      copies thereof, within your possession or control, which in any manner relate
      to
      the business of, or the duties and services you performed on behalf of
      MakeMusic. Notwithstanding the foregoing, MakeMusic acknowledges and agrees
      that
      you need not return, and MakeMusic is giving you free of charge, the following
      items currently in your possession: Viao
      Laptop  - model # VGN TX670P, Sony monitor, and docking
      station.

    


    7.    On-Going
      Obligations.
      You are
      hereby reminded of your on-going obligations to MakeMusic under Articles IV,
      V
      and VI of your Employment Agreement. You acknowledge and agree that if you
      violate Article IV, V and/or VI of your Employment Agreement, MakeMusic shall
      be
      entitled to all available legal and equitable remedies, including but not
      limited to suspending and recovering any and all payments made or to be made
      under Section 2 of this Agreement.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

      Page 5

       

    

    8.    Non-Disparagement
      and Confidentiality.
      You
      promise and agree not to disparage MakeMusic, its shareholders, officers,
      directors, employees, customers, products or services. You also promise and
      agree not to disclose or discuss, directly or indirectly, in any manner
      whatsoever, any information regarding either (1) the contents and terms of
      this
      Agreement, or (2) the substance and/or nature of any dispute between MakeMusic
      and any employee or former employee, including yourself. You agree that the
      only
      people with whom you may discuss this confidential information are your legal
      and financial advisors and your spouse, if applicable, provided they agree
      to
      keep the information confidential, or as otherwise required by law.


    


    9.    Remedies.
      If you
      breach any term of this Agreement, MakeMusic shall be entitled to its available
      legal and equitable remedies, including but not limited to suspending and
      recovering any and all payments and benefits made or to be made under this
      Agreement. If MakeMusic seeks and/or obtains relief from an alleged breach
      of
      this Agreement, all of the provisions of this Agreement shall remain in full
      force and effect.

    


    10.   Non-Admission.
      It is
      expressly understood that this Agreement does not constitute, nor shall it
      be
      construed as, an admission by MakeMusic or you of any liability or unlawful
      conduct whatsoever. MakeMusic and you specifically deny any liability or
      unlawful conduct.

    


    11.   Successors
      and Assigns.
      This
      Agreement is personal to you and may not be assigned by you without the written
      agreement of MakeMusic. The rights and obligations of this Agreement shall
      inure
      to the successors and assigns of MakeMusic.

    


    12.   Enforceability.
      If a
      court finds any term of this Agreement to be invalid, unenforceable, or void,
      the parties agree that the court shall modify such term to make it enforceable
      to the maximum extent possible. If the term cannot be modified, the parties
      agree that the term shall be severed and all other terms of this Agreement
      shall
      remain in effect.

    


    13.   Law
      Governing.
      This
      Agreement shall be governed and construed in accordance with the laws of the
      State of Minnesota.

    


    14.   Full
      Agreement.
      This
      Agreement contains the full agreement between you and MakeMusic and may not
      be
      modified, altered, or changed in any way except by written agreement signed
      by
      both parties. The parties agree that this Agreement supersedes and terminates
      any and all other written and oral agreements and understandings between the
      parties except for the following agreements which shall remain in full force
      and
      effect: your separate stock option agreements with MakeMusic and Articles I
      and
      IV - IX of your Employment Agreement. 

    


    15.   Acknowledgment
      of Reading and Understanding.
      By
      signing this Agreement, you acknowledge that you have read this Agreement,
      including the release of claims contained in Section 3, and understand that
      the
      release of claims is a full and final release of all claims you may have against
      MakeMusic and the other entities and individuals covered by the release. By
      signing, you also acknowledge and agree that you have entered into this
      Agreement knowingly and voluntarily.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

      Page 6

       

    

    The
      offer
      contained in this Agreement will expire at 5:00 p.m. on January 8, 2007. After
      you have reviewed this Agreement and obtained whatever advice and counsel you
      consider appropriate regarding it, please evidence your agreement to the
      provisions set forth in this Agreement no later than November 15, 2006, by
      signing, dating and returning the first signature block at the end of this
      Agreement. To finalize this Agreement, sometime between December 18, 2006 and
      January 8, 2007, you must sign, date and return the second signature block
      at
      the end of this Agreement.

    


    Bill,
      we
      thank you for your contributions to MakeMusic and wish you all the best both
      personally and professionally. 

    


    Sincerely,

    


    MAKEMUSIC,
      INC.

    


    /s/
      John
      Paulson

    John
      Paulson

    CEO

    


    FIRST
      ACKNOWLEDGMENT AND SIGNATURE

    


    By
      signing below, I, William R. Wolff, acknowledge and agree to the
      following:

    


    	·  	
            I
              have read this Separation Agreement and Release
              carefully.

          


    	·  	
            I
              agree that this Separation Agreement and Release accurately reflects
              the
              agreement between me and MakeMusic with regard to the separation of
              my
              employment.

          


    	·  	
            I
              will execute and return to MakeMusic the “Second Acknowledgment and
              Signature” sometime between December 18, 2006 and January 8, 2007.
              

          


    


    


    Accepted
      this 26th day of October, 2006.

    


    


    /s/
      William R. Wolff

    William
      R. Wolff

    


    


    [Second
      Signature Block Follows On Next Page]

    


    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Page
      7

     

    SECOND
      ACKNOWLEDGMENT AND SIGNATURE

    


    By
      signing below, I, William R. Wolff, acknowledge and agree to the
      following:

    


    	·  	
            I
              have had adequate time to consider whether to sign this Separation
              Agreement and Release.

          


    	·  	
            I
              have read this Separation Agreement and Release
              carefully.

          


    	·  	
            I
              understand and agree to all of the terms of the Separation Agreement
              and
              Release.

          


    	·  	
            I
              am knowingly and voluntarily releasing my claims against
              MakeMusic.

          


    	·  	
            I
              have not, in signing this Agreement, relied upon any statements or
              explanations made by MakeMusic except as for those specifically set
              forth
              in this Separation Agreement and Release.


          


    	·  	
            I
              intend this Separation Agreement and Release to be legally
              binding.

          


    	·  	
            I
              am signing this Separation Agreement and Release on or after my last
              day
              of employment with MakeMusic.

          


    


    


    Accepted
      this 19th day of December, 2006.

    


    


    /s/
      William R. Wolff

    William
      R. Wolff