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                                                                    Exhibit 4.26

                                 FIRST AMENDMENT
                         CONTROL DELIVERY SYSTEMS, INC.
                               SEVERANCE AGREEMENT

     This First Amendment to Severance Agreement (this "Amendment") made this
17th day of August, 2004 (the "Amendment Effective Date"), by and between Paul
Ashton ("Executive") and Control Delivery Systems, Inc. (the "Company").

     Reference is made to (a) that certain Severance Agreement dated February
20, 2004, by and between Executive and the Company (the "Severance Agreement"),
and (b) that certain Control Delivery Systems, Inc. 2001 Incentive Plan
Restricted Stock Award Agreement dated August 16, 2004 between Executive and the
Company (the "August 2004 Restricted Stock Award Agreement").

     Whereas, the Board of Directors of the Company (the "Board") has determined
that Executive's salary should be reduced below Base Salary;

     Whereas, Executive has agreed to such reduction in salary under the terms
and conditions set forth in this Amendment;

NOW, THEREFORE, in consideration of the premises and the mutual promises, terms
and conditions contained herein, the parties hereto agree as follows:

1.   Restricted Stock.

     a.   Section 11 of the August 2004 Restricted Stock Award Agreement is
          hereby deleted in its entirety and the following is substituted in
          place thereof: "Right of Repurchase of Vested Shares. Notwithstanding
          anything in this Agreement to the contrary, the Company agrees that it
          will not exercise any right that the Company has to purchase,
          repurchase or reacquire all or any part of Employee's Vested Shares."

2.   Bonus. Subject to the occurrence of the Bonus Date and provided that
     Executive is employed by the Company on the Bonus Date, Executive shall be
     eligible for a bonus equal to Bonus Amount.

     "Bonus Amount" means that amount equal to the product of (a) $301.37
     multiplied by (b) the number of calendar days that have elapsed during the
     period beginning on August 16, 2004 and ending on the Bonus Date.

     "Bonus Date" means the earliest date that the Board reasonably determines
     that the Company has the financial resources to pay Executive a bonus equal
     to the Bonus Amount.

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     The parties acknowledge and agree that any obligation to pay a bonus is
     solely that of the Company and that none of the directors or officers of
     the Company shall have any personal liability with respect thereto.

3.   Amendment to Section 1 of Severance Agreement. Section 1 of the Severance
     Agreement is hereby deleted in its entirety and the following is
     substituted in place thereof:

     a.   "1. Severance Benefits.

          i.   Severance Benefits in the event of termination on or before
               December 31, 2006. If on or before December 31, 2006, the Company
               terminates Executive's employment without Cause, or Executive
               terminates his or her employment for Good Reason, the Company
               will provide severance benefits to Executive as follows:

               1.   Notwithstanding anything to the contrary in any agreement
                    between Executive and Company, including without limitation
                    Section 6 of the August 2004 Restricted Stock Award
                    Agreement, all unvested shares of restricted stock granted
                    to Executive will automatically and immediately vest on the
                    Separation Date and no longer be subject to forfeiture,
                    including without limitation the following shares: 20,000
                    shares of restricted stock granted on August 16, 2004.

               2.   All options to purchase Company stock held by Executive will
                    automatically and immediately vest and become exercisable on
                    the Separation Date and remain exercisable for a period of
                    six months following the Separation Date (or three months in
                    the case of incentive stock options).

               3.   The Company will pay to Executive a lump-sum cash amount
                    equal to the Severance Payment within 30 days following the
                    later of (a) the Separation Date, and (b) the date Executive
                    delivers to Company a release of claims in accordance with
                    Section 16 of this Agreement. Notwithstanding the foregoing,
                    in the event the Separation Date occurs after March 31,
                    2005, the Company shall have the right to defer payment of
                    the Severance Payment until the Deferment Date, provided
                    that the Severance Payment will accrue simple interest at
                    the rate of 3 % per year, payable on the Deferment Date. The
                    parties acknowledge and agree that the obligation to pay the
                    Severance Payment is solely that of the Company and that
                    none of the directors or officers of the Company shall have
                    any personal liability with respect thereto.

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               4.   The Company will continue for a period of six months from
                    the Separation Date to provide Executive with the following
                    benefits: (1) the Company's group medical plan, and (2) life
                    insurance arrangements or disability plan arrangements
                    provided to executive-level employees of the Company. To the
                    extent that the Company is unable to provide such benefits
                    to Executive under its existing plans and arrangements, it
                    will pay Executive cash amounts equal to the cost the
                    Company would have incurred to provide those benefits.

4.   Amendment to Section 2 of the Severance Agreement. Section 2 of the
     Severance Agreement is hereby deleted in its entirety and the following is
     substituted in place thereof:

     a.   "2. Definitions.

          i.   "Applicable Base Salary" means: (a) for that period beginning
               August 16, 2004 and ending on that date which is 30 days
               following the Base Salary and Bonus Date, $140,000 and (b) for
               that period beginning on that date which is 31 days following the
               Base Salary and Bonus Date and ending on December 31, 2006, Base
               Salary.

          ii.  "Base Salary" means $250,000 provided that in the event the Board
               in its sole discretion increases Executive's Base Salary above
               $250,000, the Base Salary as so increased will be referred to as
               "Base Salary."

          iii. "Base Salary and Bonus Date" means the first date on which both
               of the following conditions are met (a) the sum of all royalty
               payments received by the Company from Bausch & Lomb after
               December 31, 2004 under that certain Amended and Restated License
               Agreement between the Company and Bausch & Lomb dated December 9,
               2003 equals five million dollars ($5,000,000), and (b) the sum of
               (i) cash, cash equivalents and short term investments, plus (ii)
               accounts receivable equals five million dollars ($5,000,000).

          iv.  "Bonus Amount" means that amount equal to the product of (a)
               $301.37 multiplied by (b) the number of calendar days that have
               elapsed during the period beginning on August 16, 2004 and ending
               on the Base Salary and Bonus Date.

          v.   "Cause" means only (a) willful malfeasance or gross negligence in
               the performance by Executive of his or her duties, resulting in
               material harm to the Company, (b) fraud or dishonesty by
               Executive with respect to the Company, or (c) Executive's
               conviction of any felony involving deception, fraud or moral
               turpitude. The Company may treat a termination of Executive's
               employment as termination for

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               Cause only after (i) giving Executive written notice of the
               intention to terminate for Cause and of his or her right to a
               hearing by the Board, (ii) at least 30 days after giving the
               notice, conducting a hearing by the Board at which Executive may
               be represented by counsel, and (iii) giving Executive 30 days'
               written notice of the results of the hearing, which shall require
               a vote of a majority of the Directors then in office other than
               Executive. For purposes of this definition of Cause, no act or
               omission shall be considered to have been "willful" unless it was
               not in good faith and Executive had knowledge at the time that
               the act or omission was not in the best interest of the Company.
               Any act or failure to act based on authority given pursuant to a
               resolution duly adopted by the Board or based on the advice of
               counsel of the Company shall be conclusively presumed to be done,
               or omitted to be done, by Executive in good faith and in the best
               interest of the Company. Cause shall not include willful failure
               due to incapacity resulting from physical or mental illness or
               any actual or anticipated failure after Notice of Termination for
               Good Reason.

          vi.  "Deferment Date" means the earliest to occur of the date (a) the
               Company files for protection under the bankruptcy laws, makes an
               assignment for the benefit of creditors, appoints or suffers
               appointment of a receiver or trustee over its property, files a
               petition under any bankruptcy or insolvency act or has any such
               petition filed against it, (b) the sum of all amounts paid to the
               Company from any source (including without limitation from Bausch
               & Lomb, financing sources or under any new or existing license or
               other commercial arrangement) after March 31, 2005 equals two
               million dollars ($2,000,000) and (c) December 31, 2005.

          vii. "Good Reason" means (i) failure by the Company to maintain
               Executive in the positions of Chief Executive Officer and
               President including holding the title of and serving as Chief
               Executive Officer and President of the Company and having
               responsibility for performing all duties typically undertaken by
               such offices or assignment to Executive of duties materially
               inconsistent with such positions, (ii) the diminution in any
               material respect of Executive's positions or authority, excluding
               for this purpose an isolated, insubstantial and inadvertent
               action not taken in bad faith and which is remedied by the
               Company promptly after receipt of notice thereof given by
               Executive, (iii) failure by the Company to (a) provide Executive
               with the Applicable Base Salary, (b) pay Executive a bonus equal
               to Bonus Amount within thirty (30) days following the Base Salary
               and Bonus Date, or (c) provide Executive with the benefits and
               other compensation (including without limitation bonus and other
               incentive compensation) Executive was receiving as of the date of
               this Agreement, or (iv) relocation of Executive's principal place
               of work to

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               a location more than 30 miles from its current location without
               Executive's consent. For purposes of this definition of Good
               Reason, "Company" means Control Delivery Systems and any
               successor of Control Delivery Systems, provided if any such
               successor has a parent, then Company shall mean the ultimate
               parent corporation.

          viii. "Maximum Bonus" means the maximum bonus payable in any year and
               is calculated assuming all bonus targets or formulas for
               determining the bonus in such year had been met if Executive and
               Board had, prior to the Separation Date, agreed on such targets
               or formulas. If no such targets or formulas have been set as of
               the Separation Date, then the maximum bonus shall be deemed to be
               the actual bonus paid to Executive during the preceding fiscal
               year. Notwithstanding anything herein to the contrary, Maximum
               Bonus shall not include the Bonus Amount.

          ix.  "Reduced Base Salary" means $140,000.

          x.   "Separation Date" means the date the Employee's employment with
               the Company ends.

          xi.  "Severance Payment" means the sum of (x) an amount equal to
               twelve months' Base Salary plus (y) a pro-rated portion of the
               Maximum Bonus that would otherwise be payable in the year that
               the Separation Date occurs, if any.

5.   Remainder of Severance Agreement Unaffected. In all other respects, the
     provisions of the Severance Agreement shall remain in full force and
     effect.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

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     In witness whereof, the parties hereto have executed this Agreement as of
the date first set forth above.


                                        By: /s/ Paul Ashton
                                            ------------------------------------
                                        Name: Paul Ashton


                                        CONTROL DELIVERY SYSTEMS, INC.


                                        By: /s/ Lori Freedman
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                                        Name: Lori Freedman
                                              ----------------------------------
                                        Title: VP, Corporate Affairs & General
                                               Counsel
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