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                                                                    EXHIBIT 4.26

                            [ON ILOG S.A. LETTERHEAD]

Dear Dr. Bixby:

         In connection with the acquisition by ILOG S.A. (the "Company") of
substantially all of the assets of CPLEX Optimization, Inc. ("CPLEX") pursuant
to the Asset Purchase Agreement dated August 4, 1997 (the "Agreement"), and
because it is in the Company's and your best interests, I have summarized below
the terms and conditions of your continued access and rights to the CPLEX
software and technology.

         1. Consistent with your employment with the Company, you will be
granted access to the source code for a period expiring on the latest of (x)
five years from the Closing Date (as defined under the Agreement) and (y) the
date of termination of your employment by the Company provided, however, that
should your employment be terminated for "cause" (as defined in your Employment
Agreement with the Company's Subsidiary) or by your voluntary resignation, then
your access to the source code shall be withdrawn.

         2. Upon your written request made to the Company, the Company will
grant non-transferable object code licenses to academic institutions for
purposes of promotion of research and (a) regular updates will be made available
to such licensees for so long as your employment continues with Company; and (b)
a perpetual license of the current version of the software will be granted to
such licensees upon termination of your employment with the Company.

         3. Upon your written request made to Company, an unlimited number of
non-transferable object code licenses will be granted to Rice University on the
same terms and subject to the same conditions as the academic licenses referred
to in 2 above provided, however, that such licenses are CPU specific, with
updates provided for the duration of your association with Rice. After
termination of your association with Rice, such licenses will be perpetual but
will be without any commitment to update.

         4. You will be granted perpetual object code CPU specific licenses with
updates for a "modest" number of CPU's.

         5. You will be granted perpetual access to the problem test bed. For
purposes of this paragraph "test bed" means the collection of proprietary
problems existing at the time of termination of your employment with Company.
Upon such termination, you will be entitled to retain a copy of the test bed.



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         6. Non-CPU specific object code licenses will be granted for your two
TSP co-workers so long as they remain co-workers.

         7. You will be entitled to give talks and teach classes related to the
CPLEX LP/MIP as you have done in the past provided that such discussions may not
relate to any products or derivative products beyond those that you would
otherwise have access to in accordance with the above provisions.

         The above access and rights to CPLEX software and technology are
conditional upon the following:

         a) such access and rights will be exercised in a manner consistent with
the protection of the Company's confidential information and the protection of
its intellectual property rights;

         b) such access and rights will be used for academic research purposes
only and may not be used by you or licensed or otherwise used by or on behalf of
any third party for any commercial purpose; and

         c) following the termination of your employment with the Company for
any reason you will be subject to the same confidentiality obligations as those
in force during your employment.

         This letter is addressed to you personally and is not for the benefit
of any third party and does not of itself constitute the grant of a license.

                                 Sincerely,

                                      /s/  Pierre Haren
                                 ---------------------------------

                                 Pierre Haren
                                 Chief Executive Officer


READ, UNDERSTOOD AND AGREED



   /s/ Robert Bixby
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Robert Bixby