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                                                                    Exhibit 10.8

                         NEW COMMERCIALIZATION AGREEMENT

     This NEW COMMERCIALIZATION AGREEMENT (the "Agreement"), effective as of
January 1, 2003 (the "Effective Date"), is made by and between Fuso
Pharmaceutical Industries, Ltd., a corporation organized under the laws of
Japan, with a principal place of business at 3-11, 2-Chome, Morinomiya, Joto-ku
Osaka 536-8523 Japan and its registered head office at 7-10, 1-Chome,
Doshomachi, Chuo-ku, Osaka 541-0045 Japan ("Fuso"), and GenVec, Inc., a Delaware
corporation, with a principal place of business at 65 West Watkins Mill Road,
Gaithersburg, Maryland 20878 ("GenVec").

                                   BACKGROUND

     A.      GenVec has expertise in the field of gene therapy and is developing
novel, proprietary materials and methods for use in the treatment of human
cancer.

     B.      Fuso is in the business of developing manufacturing and
commercializing pharmaceuticals in Japan.

     C.      GenVec and Fuso established a collaborative relationship on
September 26, 1997 to conduct research and develop certain gene therapy products
for the treatment of human cancer, which Fuso shall have the right to
commercialize in the Territory (as defined below) and GenVec shall have the
right to commercialize outside the Territory.

     D.      GenVec and Fuso desire to extend such collaboration under the terms
and conditions of this Agreement.

     NOW THEREFORE, for and in consideration of the covenants, conditions, and
undertakings hereinafter set forth, it is agreed by and between the parties as
follows:

1.   DEFINITIONS

     1.1     INCORPORATION BY REFERENCE. For purposes of this Agreement, the
capitalized terms used in this Agreement which are not defined herein shall have
the meanings set forth in the Collaboration Agreement.

[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS. OMITTED TEXT IS INDICATED BY A "*".

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     1.2     "AFFILIATE" shall mean any corporation or other entity which is
directly or indirectly controlling, controlled by or under the common control of
a party hereto. For the purpose of this Agreement, "control" shall mean the
direct or indirect ownership of at least fifty percent (50%) of the outstanding
shares or other voting rights of the subject entity to elect directors, or if
not meeting the preceding, any entity owned or controlled by or owning or
controlling at the maximum control or ownership right permitted in the country
where such entity exists.

     1.3     "BIOLOGICAL LICENSE APPLICATION" or "BLA" shall mean the Japanese
equivalent of a Biological License Application, as defined in the U.S. Food,
Drug and Cosmetic Act and the regulations promulgated thereunder, and any
corresponding foreign application, registration or certification in the
Territory.

     1.4     "* VECTOR" shall mean either a * Vector or a * Vector, in either
case that incorporates the nucleic acid sequence for * and does not incorporate
any other nucleic acid sequence encoding a protein intended for or otherwise
conferring therapeutic benefit.

     1.5     "COLLABORATION AGREEMENT" shall mean that certain New Collaboration
Agreement entered by Fuso and GenVec of even date herewith.

     1.6     "COLLABORATION PRODUCT" shall mean a *-TNF Vector developed in the
Research Program intended for use in the Field which the Steering Committee has
designated as such pursuant to Section 2.4 of the Collaboration Agreement. In
addition, pursuant to Section 2.4 of the Collaboration Agreement, a Product
Configuration that is a * Vector also may be treated as a Collaboration Product.

     1.7     "CONFIDENTIAL INFORMATION" shall mean (i) any proprietary or
confidential information or material in tangible form disclosed hereunder that
is marked as "Confidential" at the time it is delivered to the receiving party,
(ii) proprietary or confidential information disclosed orally hereunder which is
identified as confidential or proprietary when disclosed and such disclosure of
confidential information is confirmed in writing within thirty (30) days by the
disclosing party, or (iii) was Confidential Information under that certain
Commercialization Agreement between the parties dated September 26, 1997 as that
term was defined therein.

     1.8     "* VECTOR" shall mean a replication-deficient adenovector that: (i)
has been *.

     1.9     "*-TNF VECTOR" shall mean a * Vector that incorporates the nucleic
acid sequence encoding TNFalpha and does not incorporate any other nucleic acid
sequence encoding a protein intended for or otherwise conferring therapeutic
benefit.

     1.10    "DEVELOPMENT PLAN" shall mean the written plan for development of a
particular Collaboration Product prepared pursuant to Section 2.4.2 of the
Collaboration Agreement.

     1.11    "FIELD" shall mean Gene Therapy for the treatment of human
cancer, *.

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     1.12    "FUSO TECHNOLOGY" shall mean Fuso Patent Rights and Fuso Know-How:

             1.12.1 "FUSO PATENT RIGHTS" shall mean (i) all patents and patent
applications conceived and reduced to practice by Fuso alone, or Fuso and/or its
agents, in connection with this Agreement or the Collaboration Agreement or in
connection with the Past Research Program, and (ii) any divisions,
continuations, continuations-in-part, reissues, reexaminations, extensions or
other governmental actions which extend any of the subject matter of the patent
applications or patents in (i) above, and any substitutions, confirmations,
registrations or revalidations of any of the foregoing, in each case, which are
owned or controlled, in whole or part, by license, assignment or otherwise by
Fuso, to the extent Fuso has the right to license or sublicense, and subject to
any limitations of (a) such license, assignment or other grant to Fuso, and (b)
any license or sublicense granted by Fuso at any time to any other entity or
entities in the settlement of patent-related disputes (e.g., an actual or
potential patent interference or opposition, or patent infringement suit) or
otherwise materially relevant to Fuso's business. For the avoidance of doubt,
the Fuso Patent Rights shall not include Fuso Know-How or any Gene Therapy
Technology.

             1.12.2 "FUSO KNOW-HOW" shall mean confidential information and
materials, including, but not limited to, pharmaceutical, chemical, biological
and biochemical products, technical and non-technical data, and information
relating to the results of tests, assays, methods and processes, and drawings,
plans, diagrams, specifications and/or other documents containing said
information and data, discovered, developed or acquired by Fuso alone, or Fuso
and/or its agents, in connection with this Agreement or the Collaboration
Agreement or in connection with the Past Research Program, which Fuso has the
right to license or sublicense, and subject to any limitations of (a) such
license, assignment or other grant to Fuso, and (b) any license or sublicense
granted by Fuso at any time to any other entity or entities in the settlement of
patent-related disputes (e.g., an actual or potential patent interference or
opposition, or patent infringement suit) or otherwise materially relevant to
Fuso's business. For the avoidance of doubt, Fuso Know-How shall not include any
Fuso Patent Rights or any Gene Therapy Technology.

     1.13    "GENE THERAPY" shall mean the introduction of a nucleic acid
sequence encoding a protein intended for or otherwise conferring therapeutic
benefit into a person for therapeutic purposes (i) by in vivo introduction for
incorporation into cells of such person, or (ii) by ex vivo introduction into
cells for transfer into a person.

     1.14    "GENE THERAPY TECHNOLOGY" shall have the meaning set forth in
Section 7.1.2 below.

     1.15    "GENVEC TECHNOLOGY" shall mean GenVec Patent Rights, GenVec
Know-How and Gene Therapy Technology:

             1.15.1 "GENVEC PATENT RIGHTS" shall mean (i) all patents and patent
applications listed on Exhibit A hereto, or conceived and reduced to practice by
GenVec alone, or GenVec and/or its agents in connection with this Agreement or
the Collaboration Agreement or in connection with the Past Research Program, and
(ii) any divisions, continuations, continuations-in-part, reissues,

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reexaminations, extensions or other governmental actions which extend any of the
subject matter of the patent applications or patents in (i) above, and any
substitutions, confirmations, registrations or revalidations of any of the
foregoing, in each case, which are owned or controlled, in whole or part, by
license, assignment or otherwise by GenVec, to the extent GenVec has the right
to license or sublicense, and subject to any limitations of (a) such license,
assignment or other grant to GenVec, and (b) any license or sublicense granted
by GenVec at any time to any other entity or entities in the settlement of
patent-related disputes (e.g., an actual or potential patent interference or
opposition, or patent infringement suit) or otherwise materially relevant to
GenVec's business. For the avoidance of doubt, the GenVec Patent Rights shall
not include GenVec Know-How.

             1.15.2 "GENVEC KNOW-HOW" shall mean confidential information and
materials, including, but not limited to, pharmaceutical, chemical, biological
and biochemical products, technical and non-technical data, and information
relating to the results of tests, assays, methods and processes, and drawings,
plans, diagrams, specifications and/or other documents containing said
information and data, discovered, developed or acquired by GenVec alone, or
GenVec and/or its agents, in connection with this Agreement or the Collaboration
Agreement or in connection with the Past Research Program, which GenVec has the
right to license or sublicense, and subject to any limitations of (a) such
license, assignment or other grant to GenVec, and (b) any license or sublicense
granted by GenVec at any time to any other entity or entities in the settlement
of patent-related disputes (e.g., an actual or potential patent interference or
opposition, or patent infringement suit) or otherwise materially relevant to
GenVec's business. For the avoidance of doubt, GenVec Know-How shall not include
any GenVec Patent Rights.

     1.16    "* VECTOR" shall mean a replication-deficient adenovector that has
been *.

     1.17    "JOINT TECHNOLOGY" shall mean the Joint Patent Rights and Joint
Know-How.

             1.17.1 "JOINT PATENT RIGHTS" shall mean (i) all patents and patent
applications conceived and reduced to practice jointly by Fuso (and/or its
agents) and GenVec (and/or its agents) in connection with this Agreement or the
Collaboration Agreement or in connection with the Past Research Program, and
(ii) any divisions, continuations, continuations-in-part, reissues,
reexaminations, extensions or other governmental actions which extend any of the
subject matter of the patent applications or patents in (i) above, and any
substitutions, confirmations, registrations or revalidations of any of the
foregoing. For the avoidance of doubt, the Joint Patent Rights shall not include
the Joint Know-How or any Gene Therapy Technology.

             1.17.2 "JOINT KNOW-HOW" shall mean confidential information and
materials, including, but not limited to, pharmaceutical, chemical, biological
and biochemical products, technical and non-technical data, and information
relating to the results of tests, assays, methods and processes, and drawings,
plans, diagrams, specifications and/or other documents containing said
information and data, discovered, developed or acquired jointly by Fuso (and/or
its agents), and GenVec (and/or its agents), in connection with this Agreement
or the Collaboration Agreement or in connection with the Past Research Program.
For the avoidance of doubt, the Joint Know-How shall not include the Joint
Patent Rights or any Gene Therapy Technology.

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     1.18    "MHLW" shall mean the Japanese Ministry of Health, Labour and
Welfare, or any corresponding foreign registration or foreign regulatory
authority in the Territory.

     1.19    "NET SALES" shall mean the gross revenue accrued by Fuso or its
Affiliates or Sublicensees for all Collaboration Products sold by Fuso and its
Affiliates and Sublicensees in arm's length sales to bona fide independent third
parties, and for any and all services related to the Collaboration Products
performed by or on behalf of Fuso or its Affiliates and Sublicensees, *. Net
Sales shall also include *.

In the case of * of products or services which include Collaboration Products,
Fuso may with notice to GenVec * the bona fide list price of a Collaboration
Product by the average percentage * of all products of Fuso and/or its
Affiliates or Sublicensees in a particular "bundle," calculated as follows:

                         *

where A equals the *, and B equals the * in such "bundle." Fuso shall provide
GenVec documentation, reasonably acceptable to GenVec, establishing such average
* with respect to each "bundle." If Fuso cannot so establish the average * of a
"bundle," Net Sales shall be based on the * list price of the Collaboration
Product in the "bundle." If a Collaboration Product in a "bundle" is not sold
separately and no bona fide list price exists for such Collaboration Product,
the parties *.

     1.20    "PAST RESEARCH PROGRAM" shall mean the "Research Program" under
that certain Collaboration Agreement between the parties dated September 26,
1997 as that term is defined therein.

     1.21    "PRODUCT CONFIGURATION" shall mean any potential product for use in
the Field containing a combination of one or more nucleic acid sequences
encoding a protein intended for or otherwise conferring therapeutic benefit and
other elements (e.g., a gene delivery vehicle and/or a gene expression
cassette).

     1.22    "RETAINED TERRITORY" shall mean, on a Collaboration
Product-by-Collaboration Product basis, Japan, Korea and Taiwan until the
earlier of (i) * with respect to a particular Collaboration Product, or (ii) *,
and thereafter shall have the same meaning as Territory with regard to such
Collaboration Product.

     1.23    "STEERING COMMITTEE" shall have the meaning set forth in Section
2.2.1 in the Collaboration Agreement.

     1.24    "SUBLICENSEE" shall mean a third party to whom Fuso has granted a
license or sublicense under the GenVec Technology or Joint Technology to make,
use and/or sell a Collaboration Product subject to Section 2.2 below. As used in
this Agreement, Sublicensee shall also include a third party to whom Fuso has
granted the right to distribute the Collaboration Product, provided that such
third party has the responsibility for marketing and/or promotion of the

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Collaboration Product within the territory for which such distribution rights
are granted. For the avoidance of doubt, wholesellers or retailers who do not
take such responsibility shall not be deemed as Sublicensees. Furthermore,
* shall not be Sublicensees.

     1.25    "TERRITORY" shall mean Japan, and, where the option set forth in
Section 5.2.1 is exercised by Fuso, Korea and/or Taiwan, as the case may be.

     1.26    "TNFERADE" shall mean an anti-cancer agent which (i) is the GV11
Vector incorporating a nucleic acid sequence encoding TNFalpha presently
known as TNFerade(TM) (Ad.egr.TNF.11D) or (ii) comprises another replication
deficient adenovector, that is not a * Vector, and the nucleic acid sequence
encoding TNFalpha and is under development or being commercialized at any
time during the term of this Agreement by GenVec and/or its other
collaborators as an alternative to TNFerade(TM).

     1.27    "VALID CLAIM" shall mean a claim of a pending patent application or
a claim of an issued and unexpired patent within the GenVec Technology or Joint
Patent Rights which has not been held unpatentable, invalid or unenforceable by
a court or other government agency of competent jurisdiction in an unappealed or
unappealable decision and has not been admitted to be invalid or unenforceable
through reissue, re-examination, disclaimer or otherwise; provided, however,
that if the holding of such court or agency is later reversed by a court or
agency with appropriate authority, the claim shall be reinstated as a Valid
Claim with respect to Net Sales accruing after the date of such reversal.

2.   LICENSE GRANTS

     2.1     COMMERCIALIZATION LICENSES TO FUSO. Subject to the terms and
conditions of this Agreement, GenVec hereby grants to Fuso an exclusive,
royalty-bearing license under the GenVec Technology and GenVec's interest in the
Joint Technology, to make (subject to Article 6), have made (subject to Section
2.2.2) use, sell and otherwise commercialize Collaboration Products for all uses
in the Field in the Territory.

     2.2     SUBLICENSES AND *.

             2.2.1  SUBLICENSEES. Fuso may sublicense the rights to make, use
and/or sell granted in Section 2.1 to third parties, with the prior written
consent of GenVec, which consent shall not be unreasonably withheld. Fuso may
sublicense the rights granted in Section 2.1 to make Collaboration Products to
Affiliates of Fuso without the consent of GenVec, provided that such sublicense
shall remain in effect for only so long as such entity remains an Affiliate of
Fuso. Each sublicense granted by Fuso shall be consistent with all the terms and
conditions of this Agreement. Fuso shall remain responsible to GenVec for all of
each such Sublicensee's applicable financial and other obligations under this
Agreement.

             2.2.2  *. Subject to Article 6, Fuso may have Collaboration
Products * only to Fuso, its Affiliates or permitted Sublicensees; provided
that (i) such * agree in writing to be bound by the confidentiality
obligations set forth in

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Article 9 hereof as if they were a party to this Agreement, (ii) Fuso shall
notify the name and financial strength of each * to GenVec prior to the
commencement of the *, and (iii) Fuso shall remain responsible to GenVec for
any failure by * to conform to such obligation.

     2.3     OTHER LICENSES.

             2.3.1  GENE THERAPY TECHNOLOGY. In the event that Fuso desires to
*, Fuso shall notify GenVec, and the parties agree to negotiate in good faith
for a period of *, or such longer period as the parties may agree, the terms and
conditions on which GenVec would grant such a license to Fuso; provided,
however, in no event shall GenVec be obligated to negotiate or grant a license
for any * which might compete with *.

             2.3.2  FUSO TECHNOLOGY. Subject to the provisions of Section 7.1.2
below, Fuso hereby grants to GenVec the following licenses under the Fuso
Technology and Fuso's interest in the Joint Technology:

                    (a)  a * license to make, have made, use, sell and otherwise
commercialize Collaboration Products, *; and

                    (b)  a * license, subject to Section 5.6.2 below, to make,
have made, use, sell and otherwise commercialize Collaboration Products *; and

                    (c)  a * license to make, have made, use, sell, research and
otherwise commercialize products *; and

                    (d)  *, a * license to make, have made, use, sell and
otherwise commercialize products *. The financial obligations due Fuso with
respect to the license in this Section 2.3.2(d) shall be negotiated in good
faith by the parties; provided, in the event the parties are unable to agree,
such terms shall be established pursuant to Article 12.

             2.3.3  GenVec may sublicense the rights granted in Section 2.3.2 to
third parties, without the prior written consent of Fuso. Each sublicense
granted by GenVec shall be consistent with all the terms and conditions of this
Agreement and no Sublicensee may grant further sublicenses without the prior
written consent of GenVec. GenVec shall remain responsible to Fuso for all of
each such sublicensee's applicable financial and other obligations under this
Agreement.

     2.4     COVENANT NOT TO SUE. In partial consideration for the grant of
rights hereunder, Fuso agrees not to enforce against GenVec or its Affiliates
any patent right owned or controlled by Fuso or its Affiliates during the term
of this Agreement that GenVec or its Affiliates may infringe in practicing the
inventions claimed in the GenVec Patent Rights.

     2.5     RETAINED RIGHTS. It is understood and agreed that GenVec shall
retain the exclusive right (i) to make, have made, use, sell and otherwise
commercialize the Collaboration Products for

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all uses within the Field outside the applicable Retained Territory; (ii)
subject to Sections 2.4.3, 2.4.4, and 2.4.5 of the Collaboration Agreement, to
make, have made, use, sell and otherwise commercialize the Collaboration
Products for use outside the Field, both in and outside the applicable Retained
Territory; (iii) to make, have made, use and sell Collaboration Products to Fuso
in connection with the activities conducted by GenVec pursuant to this
Agreement, unless and until Fuso assumes manufacture of the Collaboration
Products pursuant to Article 6, and (iv) to practice any method, process or
procedure within, and otherwise develop, exploit and/or commercialize the Gene
Therapy Technology.

     2.6     NO IMPLIED LICENSES. Fuso acknowledges that the licenses granted by
GenVec in Section 2.1 are limited to the Field and the applicable Retained
Territory. No rights or licenses with respect to the GenVec Technology or the
Fuso Technology or other intellectual property owned by GenVec or Fuso are
granted or shall be deemed granted hereunder or in connection herewith, other
than those rights expressly granted in this Agreement or the Collaboration
Agreement.

3.   PAYMENTS

     3.1     ROYALTIES.

             3.1.1  ROYALTIES ON NET SALES. In partial consideration of the
rights granted under the GenVec Patent Rights and GenVec Know-How in this
Agreement, Fuso shall pay running royalties to GenVec equal to * percent (*%) of
Net Sales of Collaboration Products by Fuso and its Affiliates and Sublicensees.

             3.1.2  * ROYALTY; * SALES. * shall be payable under Section 3.1.1
above with respect to sales of the Collaboration Product among Fuso, its
Affiliates and Sublicensees for resale. In no event shall * be due GenVec
hereunder with respect to any Collaboration Product.

             3.1.3  ROYALTY TERM. The obligation of Fuso to pay royalties
under this Article 3 shall continue for each Collaboration Product on a
Collaboration Product-by-Collaboration Product and country-by-country basis,
until the later of (i) such time as there are no Valid Claims covering the
manufacture, sale or use of such Collaboration Product in such country, or
(ii) * from the first commercial sale of such Collaboration Product in such
country.

             3.1.4  *. It is understood and agreed that regardless of any
offsets to which Fuso is entitled, the royalty payments made to GenVec under
Section 3.1.1 in any quarter * by Fuso and its Affiliates and Sublicensees in
the applicable quarter.

             3.1.5  THIRD PARTY ROYALTIES. Except as provided in Section 2.3.2
of the Collaboration Agreement, * shall be responsible for the payment of any
royalties, license fees and milestone and other payments due to third parties
under licenses or similar agreements necessary for the manufacture, use or sale
of Collaboration Products in the Territory. *.

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     3.2     INITIAL PAYMENTS. Within thirty (30) days following the first
occurrence in * with respect to each Collaboration Product, Fuso shall pay to
GenVec one and one-half million dollars ($1,500,000). Fuso shall promptly
notify GenVec upon the achievement of the foregoing milestone with respect to
each Collaboration Product.

4.   PAYMENTS; BOOKS AND RECORDS

     4.1     ROYALTY REPORTS AND PAYMENTS. After the first commercial sale by
Fuso or its Affiliates or Sublicensees of a Collaboration Product for which
royalties are payable under Article 3, Fuso shall make quarterly written reports
to GenVec within thirty (30) days after the end of each calendar quarter,
stating in each such report, by country, the number, description and aggregate
Net Sales of such Collaboration Product sold during the calendar quarter.
Simultaneously with the delivery of each such report, Fuso shall pay to GenVec
the total royalties, if any, due to GenVec for the period of such report. If no
royalties are due, Fuso shall so report.

     4.2     PAYMENT METHOD; LATE PAYMENTS. All amounts due GenVec hereunder
shall be paid in U.S. dollars by wire transfer in immediately available funds to
an account designated by GenVec. Any payments or portions thereof due hereunder
which are not paid on the date such payments are due under this Agreement shall
bear interest at a rate equal to the lesser of prime rate as reported by the
Chase Manhattan Bank, New York, plus * percent (*%) per year, or the maximum
rate permitted by law, calculated on the number of days such payment is
delinquent, compounded monthly.

     4.3     CURRENCY CONVERSION. If any other currency conversion shall be
required in connection with the calculation of royalties hereunder, such
conversion shall be made using the exchange rate for conversion of the foreign
currency into U.S. Dollars, quoted for current transactions for buying U.S.
dollars, as reported in The Wall Street Journal for the last business day of the
calendar quarter to which such payment pertains.

     4.4     RECORDS; INSPECTION. Fuso shall keep (and cause its Affiliates and
its Sublicensees to keep) complete, true and accurate books of account and
records for the purpose of determining the royalty amounts payable under Article
3. Such books and records shall be kept reasonably accessible for at least three
(3) years following the end of the calendar quarter to which they pertain. Such
records will be open for inspection during such three (3) year period by a
representative or agent of GenVec for the purpose of verifying the royalty
statements. Such inspections may be made no more than once each calendar year,
at reasonable times mutually agreed by Fuso and GenVec. GenVec's representative
or agent will be obliged to execute a reasonable confidentiality agreement prior
to commencing any such inspection. GenVec shall bear the costs and expenses of
inspections conducted under this Section 4.4 unless a variation or error
producing an underpayment in royalties payable exceeding * percent (*%) of the
amount payable for any quarter is established in the course of any such
inspection, whereupon all costs relating to the inspection and any unpaid
amounts that are discovered will be paid by Fuso, together with interest on such
unpaid amounts at the rate specified in Section 4.2 above.

     4.5     WITHHOLDING TAXES.

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             4.5.1  ROYALTIES. Any payments due GenVec by Fuso pursuant to
Section 3.1 above shall be made after deduction for any withholding taxes or
similar governmental charge ("Withholding Tax") due thereon. Fuso shall provide
GenVec a certificate evidencing payment of any such Withholding Taxes.
Notwithstanding the foregoing, if such payments by GenVec would reduce the
royalty received by GenVec on any Net Sales below * percent (*%) of Net Sales
(after such withholding or other governmental charge), then Fuso shall pay to
GenVec any such additional amounts as may be necessary to provide GenVec a
royalty of no less than * percent (*%) of such Net Sales (after such withholding
or other governmental charge). In such event, if GenVec receives a tax credit
from the U.S. Government for any such additional payments, then GenVec shall
promptly notify Fuso and reimburse Fuso for such amount. GenVec agrees to use
reasonable efforts to obtain any available tax credit.

             4.5.2  MILESTONES. All payments required to be made to GenVec
pursuant to Section 3.2 shall be made after deduction for any withholding taxes
or similar governmental charge required by applicable law. Fuso shall promptly
inform GenVec of the amount and basis of any such deduction, and provide GenVec
a certificate evidencing payment of any such Withholding Taxes.

     4.6     SALES TAXES. Any sales taxes (such as consumption tax or value
added tax), use taxes, transfer taxes, duties or similar governmental charges
required to be paid in connection with the transfer to Fuso of any Collaboration
Products manufactured by GenVec hereunder shall be the sole responsibility of
Fuso. In the event that GenVec is required to pay any such amounts, Fuso shall
promptly remit payment to GenVec of such amounts.

5.   COMMERCIALIZATION

     5.1     COLLABORATION PRODUCT DEVELOPMENT BY FUSO. Except as expressly
provided otherwise in this Agreement, Fuso shall be responsible for all costs of
conducting development of Collaboration Product(s) in the Territory in
accordance with the applicable Development Plan(s), including, without
limitation expenses incurred in conducting clinical trials (e.g., clinical
trials in the Territory, and clinical trials conducted outside the Territory
which provide data for regulatory approvals in the Territory). In addition, Fuso
shall be responsible, at its sole expense, for all commercialization of such
Collaboration Product(s) in the Field in the Territory so long as Fuso retains
rights thereto under this Agreement. During the term of this Agreement, Fuso
shall keep GenVec fully informed of its activities subject to this Agreement
and, in addition, on or before January 31 of each year, Fuso shall provide
GenVec with a written report detailing such events and activities. When a
registration package requesting approval for commercial sale of any
Collaboration Product is first filed in any country within the Territory, and
when approval is received therefore, Fuso will immediately notify GenVec in
writing.

     5.2     DUE DILIGENCE.

             5.2.1  OPTION. Fuso shall have the option to add both or either of
Korea and Taiwan to the Territory by notice to GenVec identifying the pertinent
country(ies) and Collaboration Product.

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Such option must be exercised with respect to a particular Collaboration Product
no later than the *. If Fuso fails to exercise such option with respect to a
particular Collaboration Product within the applicable period, or Fuso's rights
terminate in Japan with respect to a particular Collaboration Product prior to
the date that Fuso exercises its option for such Collaboration Product, then
Fuso shall lose its option with respect to such Collaboration Product in Korea
and Taiwan.

             5.2.2  REASONABLE EFFORTS. Fuso shall use all reasonable efforts
to: (i) obtain regulatory approvals to market Collaboration Product(s) in each
country the Territory, and (ii) after obtaining regulatory approvals for such
Collaboration Product(s), launch such Collaboration Product(s) in each country
in the Territory. Upon the launching of such Collaboration Product(s), Fuso
shall use reasonable efforts to promote and meet the market demand therefor in
the respective country(ies). In connection therewith, Fuso shall use efforts not
less than those efforts Fuso makes with respect to its own pharmaceutical
products of comparable commercial potential, stage of development and patent
protection.

             5.2.3  LACK OF DILIGENCE. In the event that Fuso fails to use
reasonable efforts to exercise its diligence obligations under Section 5.2.2
with respect to a particular Collaboration Product as to a particular country of
the Territory, GenVec may terminate this Agreement with respect to such
Collaboration Product as to such country in accordance with Section 11.2. In
such event, GenVec shall thereafter have the exclusive rights to commercialize
such Collaboration Product in the said country, alone or with third parties.

             5.2.4  LICENSES. In the event that any of Fuso's rights terminate
with respect to a particular Collaboration Product pursuant to Section 5.2.3
above, at GenVec's request, Fuso shall grant to GenVec an exclusive (even as to
Fuso), fully-paid, royalty-free license, with the right to sublicense, under
Fuso's interest in any Joint Technology and Fuso Technology necessary or useful
to make, have made, import, use, offer for sale, sell and otherwise
commercialize such Collaboration Products in the Field in the said country.

     5.3     REGULATORY FILINGS.

             5.3.1  USE OF DOCUMENTS. Each party and its Affiliates, and,
subject to such party's obligations to third parties, its licensees and
sublicensees, shall have the right, without charge, to refer to, access, cross
reference, and use documents relating to each Collaboration Product filed by a
party or its Affiliates, its licensees or Sublicensees with regulatory entities
with respect to activities conducted in connection with the Research Program,
including clinical studies and other supporting information, and any written
communications to and with the MHLW, FDA and other comparable regulatory bodies.

             5.3.2  OUTSIDE THE RESEARCH PROGRAM. Subject to its obligations to
third parties, each party and its Affiliates, licensees and sublicensees shall
have the right to refer to, access, cross reference, and use documents filed
with regulatory entities relating to each Collaboration Product, filed by a
party or its Affiliates or Sublicensees in agreed jurisdictions, with respect to
activities conducted outside the Research Program, including clinical studies
and other supporting

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information, and any written communications to and with the MHLW, FDA and other
comparable regulatory bodies.

     5.4     NO OTHER GENE THERAPY PRODUCTS. Except as specifically provided in
this Agreement or otherwise agreed in writing, neither Fuso nor its Affiliates
or Sublicensees shall commercialize any Gene Therapy product studied in the
Research Program, except as a Collaboration Product in accordance with this
Agreement, which is identical or substantially similar to a Product
Configuration studied in the Research Program. As used herein, "substantially
similar" shall mean a product which contains a gene studied in the Research
Program (or a fragment or derivative or homolog thereof), in each case, which
encodes a peptide or nucleic acid with biological activity substantially
equivalent to such gene (or fragment or homolog or derivative).

     5.5     GENVEC COMMERCIALIZATION. Subject to Sections 2.3.1(a) and 2.4.2 of
the Collaboration Agreement, GenVec shall be responsible, at its sole expense,
for conducting all development of any Collaboration Product outside the Field,
both in and outside the Territory (including, without limitation, clinical
trials), and all commercialization of such Collaboration Product outside the
Field, both in and outside the Territory.

     5.6     NON-COMPETE.

             5.6.1  Fuso shall not, directly or indirectly, develop or
commercialize, or enter into any collaboration agreement or other agreement with
any third party for the manufacture, development or commercialization, of any
product comprising a nucleic acid sequence encoding TNF or * or a modification
or derivative thereof during the period beginning on the Effective Date and
ending the later of * after the end of the Agreement Term or the termination or
expiration of the Commercialization Agreement, other than a Collaboration
Product developed and commercialized pursuant to this Agreement and the
Collaboration Agreement.

             5.6.2  GenVec shall not in the Field in the Territory, directly or
indirectly, develop or commercialize, or enter into any collaboration agreement
or other agreement with any third party for the manufacture, development or
commercialization of: (i) any product that is exactly the same as a
Collaboration Product during the Agreement Term and the term of the
Commercialization Agreement, (ii) any product that is a * Vector that
incorporates a nucleic acid sequence encoding TNFalpha or * or is a * Vector
that incorporates a nucleic acid sequence encoding * during the period beginning
on the Effective Date and ending the earlier of the expiration or termination of
the Collaboration Agreement or December 31, 2005 or, in the case of a product
that incorporates a nucleic acid sequence encoding *, the earlier of such dates
and the date Fuso ceases activities with respect to the * Vector currently under
investigation by Fuso as a potential Collaboration Product, (iii) any product
that is a * Vector that incorporates a nucleic acid sequence encoding TNFalpha,
or is a version of TNFerade that is engineered for regional/systemic
application(s), with respect to the same indication(s) for which a Collaboration
Product that incorporates a nucleic acid sequence encoding TNFalpha is being
developed and commercialized in the Field in the Territory during the period
beginning on * and ending *, and (iv) any product that is a * Vector that
incorporates a nucleic acid sequence encoding * or is a * Vector that
incorporates a nucleic acid sequence encoding *, with

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respect to the same indication(s) for which a Collaboration Product that
incorporates a nucleic acid sequence encoding * is being developed and
commercialized in the Field in the Territory during the period beginning on
the Effective Date and ending the expiration or termination of the
Commercialization Agreement, unless the Steering Committee after December 31,
2005 determines that such product has significant medical (e.g., efficacy or
safety) or commercial advantages over such Collaboration Product; in each
case other than a Collaboration Product developed and commercialized pursuant
to this Agreement and the Collaboration Agreement.

     5.7     ACKNOWLEDGMENT. It is understood and agreed that the provisions of
Sections 2.4.3, 2.4.4, 2.4.5 and 2.4.6 of the Collaboration Agreement establish
certain limits on the development and commercialization activities of the
parties with respect to certain Product Configurations and Gene Therapy
products.

6.   *

     6.1     * FUSO.

             6.1.1  CLINICAL TRIALS IN THE TERRITORY. Fuso shall have the
first right, but not the obligation to * in clinical trials * in the
Territory, on a Collaboration Product-by-Collaboration Product basis, subject
to GenVec's approval not to be unreasonably withheld. GenVec's decision to
approve or disapprove * Fuso shall be based on Fuso's * and/or the period
Fuso may require to *. If Fuso elects not to * such *, or GenVec does not
approve of * of such * Fuso, GenVec shall have the first right, but not the
obligation to * in clinical trials * in the Territory, on a Collaboration
Product-by-Collaboration Product basis, subject to Fuso's approval, not to be
unreasonably withheld. Fuso's decision to approve or disapprove * GenVec
shall be based on GenVec's ability to * the *. In the event that GenVec
declines to * a particular *, or Fuso does not approve of the * of such * by
GenVec, then, subject to Section 6.1.2, Fuso may *, reasonably acceptable to
GenVec, to * such *.

             6.1.2  *. If Fuso has * by a * pursuant to Section 6.1.1 above,
it will require that such * the * only to Fuso, its Affiliates or permitted
Sublicensees. In addition (i) such * shall agree in writing to be bound by
the confidentiality obligations set forth in Article 9 hereof as if they were
a party to this Agreement, (ii) Fuso shall notify GenVec of the name and
financial strength of each * prior to the commencement of the *, and
(iii) Fuso shall remain responsible to GenVec for any failure by * to conform
to such obligation.

             6.1.3  TRANSFER OF *. If Fuso * pursuant to Section 6.1.1 above,
the parties shall negotiate in good faith the compensation to be paid to
GenVec for the * and *, and shall cooperate with each other in order that
Fuso may initiate * of the * as soon as practicable; provided, GenVec shall
not be obligated to transfer any * which is subject to a contractual obligation
with a third party.

             6.1.4  * AGREEMENT. If Fuso * from GenVec pursuant to
Section 6.1.1, the parties shall promptly negotiate in good faith the terms
of a * agreement which shall set forth the terms and conditions of such *. In
the event the parties fail to enter into a written * agreement within six (6)
months from the date that Fuso provides GenVec notice of its wish to enter
into such a * agreement, or such longer period as the parties may agree, then
GenVec shall have no obligation to * the * for *.

                                     - 13 -
<Page>

             6.1.5  * TO GENVEC. At GenVec's request, Fuso shall, at its
option, * to GenVec for use outside the field and/or outside the Territory,
on terms to be agreed in good faith by the parties.

             6.1.6  OTHER GENVEC *. At GenVec's request, the parties agree to
conduct good faith negotiations regarding the appointment of * by GenVec as a
* of other agreed GenVec products; provided, however that GenVec shall be
under no obligation to appoint * as its *, and Fuso shall be under no
obligation to * such appointment unless the parties mutually agree on terms
and conditions governing such appointment.

     6.2     FUSO RESPONSIBILITIES. If Fuso undertakes to * the *, Fuso shall
be responsible for * associated therewith. All Collaboration Products * will
conform with all MHLW regulations and all applicable foreign laws and
regulations. Fuso shall keep GenVec fully informed of the * and developments
relating thereto and GenVec shall have the right on reasonable prior notice
to visit the * during ordinary business hours and review any relevant records
relating to *(excluding records relating to the * own proprietary *).

     6.3     POST TERMINATION MANUFACTURING. Following the termination of this
Agreement due to the expiration of Fuso's royalty obligations in all countries
in the Territory pursuant to Section 11.1 due to completion of the full payment
term, Fuso shall have the right to make and have made Collaboration Products.

7.   INTELLECTUAL PROPERTY

     7.4     OWNERSHIP OF INVENTIONS.

             7.4.1  RESEARCH PROGRAM TECHNOLOGY. Subject to Section 7.1.2 below,
(i) title to all inventions and intellectual property made solely by GenVec
employees or its agents in connection with the Research Program without
inventive contribution by Fuso employees or its agents shall be owned by GenVec;
(ii) title to all inventions and intellectual property made solely by Fuso
employees or its agents in connection with the Research Program without
inventive contribution by GenVec employees or its agents shall be owned by Fuso;
and (iii) title to all inventions and intellectual property made jointly by
employees or the agents of Fuso and GenVec in connection with the Research
Program, shall be jointly owned by GenVec and Fuso.

             7.4.2  GENE THERAPY TECHNOLOGY. Notwithstanding Section 7.1.1
above, GenVec shall own all inventions and intellectual property made in
connection with this Agreement during the term of this Agreement (i) solely by
GenVec employees or agents or jointly by employees or agents of Fuso and GenVec
that relate to the introduction of genetic material of nucleic acid composition,
or a portion thereof, into a vector and/or cell to create a desired effect or
identify an unknown effect, including techniques and processes relating to the
manufacture, evaluation and use thereof, and methods relating to all of the
foregoing, (ii) by either or both of the parties and/or their agents that relate
to or are made using materials transferred to Fuso by or on behalf of GenVec, or
(iii) by either or both of the parties and/or their agents that relate to or are
made using Collaboration Products, * Vector, * Vector, *-TNF Vector or * Vector
(collectively, "Gene Therapy Technology"). Fuso hereby assigns to GenVec all its
right, title and interest it may otherwise hold in or to such Gene Therapy
Technology and any patent applications or patents relating thereto. Fuso shall,
at the request of GenVec, execute, and deliver or cause to be delivered, all
such consents, documents or

                                     - 14 -
<Page>

further instruments of assignment or transfer, and take or cause to be taken all
such actions GenVec reasonably deems necessary or desirable in order for GenVec
to obtain the full benefits of the assignment herein.

             7.4.3  INVENTORSHIP. Inventorship and rights of ownership of
inventions and other intellectual property rights conceived and/or reduced to
practice in connection with the Research Program shall be determined in
accordance with the patent and other intellectual property laws of the United
States or Maryland, as applicable, as long as the laws of the Territory permit
application of such laws. Subject to the licenses granted in Article 2, except
as expressly provided in this Agreement, it is understood that neither party
shall have any obligation to account to the other for profits, or to obtain any
approval of the other party to license, permit sublicensing, or exploit a Joint
Technology for applications outside of the Field by reason of joint ownership of
any such intellectual property.

     7.5     PATENT PROSECUTION

             7.5.1  SOLE INVENTIONS. Fuso or GenVec, as the case may be, shall,
be responsible for preparing, filing, prosecuting and maintaining of the patent
applications and patents, solely owned by it, worldwide in such countries as it
deems appropriate, and conducting any interferences, reexaminations, reissues,
oppositions or requests for patent term extensions relating to the Fuso
Technology or GenVec Technology (respectively), using counsel of its choice, at
its expense; provided, such expenses may be included in the Research Program
funding described in Section 2.3 of the Collaboration Agreement.

             7.5.2  PATENT RIGHTS FOR JOINT TECHNOLOGY.

                    (a)  The parties will cooperate to file, prosecute and
maintain patent applications covering the Joint Technology(ies) in the United
States, European Union (in Europe through a European Patent Convention
application) and Japan (collectively, the "Core Countries") and other countries
agreed by the parties. The parties shall agree which party shall be responsible
for conducting such activities with respect to a particular Joint Technology.
The party conducting such activities shall keep the other party fully informed
as to the status of such patent matters, including, without limitation, by
providing the other party the opportunity, at the other party's expense, to
review and comment on any documents relating to the Joint Technology which will
be filed in any patent office at least thirty (30) days before such filing, and
promptly providing the other party copies of any documents relating to Joint
Technology which the party conducting such activities receives from such patent
offices, including notice of all interferences, reissues, reexaminations,
oppositions or requests for patent term extensions. The parties will share
equally all expenses and fees associated with the filing, prosecution, issuance
and maintenance of any patent application and resulting patent for a Joint
Technology in the Core Countries and other agreed countries and such amounts
shall be included within the Research Program funding described in Section 2.3
of the Collaboration Agreement.

                                     - 15 -
<Page>

                    (b)  In the event that either party wishes to seek patent
protection with respect to any Joint Technology outside the Core Countries, it
shall notify the other party hereto. If both parties wish to seek patent
protection with respect to such Joint Technology in such country or countries,
activities shall be subject to Section 7.2.2(a) above. If only one party wishes
to seek patent protection with respect to such Joint Technology in such country
or countries, it may file, prosecute and maintain patent applications and
patents with respect thereto, at its own expense. In any such case, the party
declining to participate in such activities shall not grant any third party a
license under its interest in the applicable Joint Technology in the applicable
country or countries without the prior written consent of the other party, which
consent shall not be unreasonably withheld.

     7.6     ENFORCEMENT.

             7.6.1  SOLELY OWNED TECHNOLOGY. Subject to 7.3.2 below, in the
event that any GenVec Technology or Fuso Technology (in this Section, both
referred to as "Technology") necessary for manufacture, use and sale of a
Collaboration Product is infringed or misappropriated by a third party in any
country in the Territory, or is subject to a declaratory judgment action arising
from such infringement in such country, Fuso or GenVec, as the case may be,
shall promptly notify the other party hereto. The party which owns or controls
such Technology (the "Owner") shall have the initial right (but not the
obligation) to enforce such Technology, or defend any declaratory judgment
action with respect thereto, at its expense. In the event that the Owner fails
to initiate a suit to enforce such Technology against a commercially significant
infringement in the Field by a third party in any jurisdiction in the Territory
within * of a request by the other party (the "Licensee") to do so, Licensee
may, subject to the Owner's agreements with third parties, initiate such suit in
the name of the Owner of such Technology against such infringement, at the
expense of such Licensee. The party involved in any such claim, suit or
proceeding, shall keep the other party hereto reasonably informed of the
progress of any such claim, suit or proceeding. Any recovery by such party
received as a result of any such claim, suit or proceeding shall be used first
to reimburse such party for all expenses (including attorneys and professional
fees) incurred in connection with such claim, suit or proceeding and if the
party initiating the suit was the owner of the subject Technology, all of the
remainder shall be retained by such owner, and if the party initiating the suit
is the Licensee, * percent (*%) of the remainder shall be paid to the owner of
the subject Technology and * percent (*%) retained by the Licensee. If the
Licensee initiates such suit in the name of the Owner of such Technology against
such infringement, the Licensee shall not enter into any agreement which makes
any admission regarding (i) wrongdoing on the part the Owner, or (ii) the
invalidity, unenforceability or absence of infringement of the Owner's
Technology, without the prior written consent of the Owner, which consent shall
not be unreasonably withheld. The parties shall cooperate with each other in
connection with any such claim, suit or proceeding and shall keep each other
reasonably informed of all material developments in connection with any such
claim, suit or proceeding.

             7.6.2  JOINTLY OWNED TECHNOLOGY. Notwithstanding 7.3.1 above, in
the event that any technology that is jointly owned by GenVec and Fuso under
Section 7.1 of this Agreement is infringed or misappropriated by a third party,
Fuso and GenVec shall discuss whether, and, if so, how, to enforce such Joint
Technology or defend such Joint Technology in an infringement action,
declaratory judgment or other proceeding. In the event only one party wishes to
participate in such

                                     - 16 -
<Page>

proceeding, it shall have the right to proceed alone, at its expense, and may
retain any recovery; provided, at the request and expense of the participating
party, the other party agrees to cooperate and join in any proceedings in the
event that a third party asserts that the co-owner of such Joint Technology is
necessary or indispensable to such proceedings.

     7.7     INFRINGEMENT CLAIMS. If the manufacture, sale or use of any
Collaboration Product in the Territory pursuant to this Agreement results in any
claim, suit or proceeding alleging patent infringement against GenVec or Fuso,
such party shall promptly notify the other party hereto. If Fuso is not named as
a party in such a claim, suit or proceeding, Fuso may, at its own expense and
through counsel of its own choice, seek leave to intervene in such claim, suit
or proceeding. GenVec agrees not to oppose such intervention. If Fuso, and not
GenVec, is named as a party to such claim, suit or proceeding, Fuso shall have
the right to control the defense and settlement of such claim, suit or
proceeding, at its own expense, using counsel of its own choice, however GenVec,
at its own expense and through counsel of its own choice, may seek to intervene
if the claim, suit or proceeding relates to the commercialization of the
Collaboration Product in the Field, and in such event, Fuso agrees not to oppose
such intervention. If Fuso is named as a party and GenVec shall, at any time,
tender its defense to Fuso, then Fuso shall defend GenVec in such claim, suit or
proceeding, at Fuso's own expense and through counsel of its own choice, and
Fuso shall control the defense and settlement of any such claim, suit or
proceeding; provided, Fuso shall not enter into any agreement which makes any
admission regarding (i) wrongdoing on the part GenVec, or (ii) the invalidity,
unenforceability or absence of infringement of any GenVec Patent Rights or
patent claiming a Joint Technology, without the prior written consent of GenVec,
which consent shall not be unreasonably withheld. The parties shall cooperate
with each other in connection with any such claim, suit or proceeding and shall
keep each other reasonably informed of all material developments in connection
with any such claim, suit or proceeding.

8.   REPRESENTATIONS AND WARRANTIES

     8.1     WARRANTIES.

     8.1.1   GENVEC. GenVec warrants and represents to Fuso that (i) it has the
full right and authority to enter into this Agreement and grant the rights and
licenses granted herein; (ii) as of the Effective Date, except for the
interference proceedings pending in the U.S. Patent and Trademark Office, there
are no existing or threatened actions, suits or claims pending against it with
respect to the GenVec Technology or its right to enter into and perform its
obligations under this Agreement and (iii) it has not previously granted, and
will not grant during the term of this Agreement, any right, license or interest
in or to GenVec Technology or Joint Technology, or any portion thereof, which
are in conflict with the rights or licenses granted under this Agreement.

     8.1.2   FUSO. Fuso warrants and represents to GenVec that (i) it has the
full right and authority to enter into this Agreement, and (ii) it has not
previously granted, and will not grant during the term of this Agreement, any
right, license or interest in or to Fuso Technology or Joint Technology, or any
portion thereof, which are in conflict with the rights or licenses granted under
this Agreement.

                                     - 17 -
<Page>

     8.2     EFFECT OF REPRESENTATIONS AND WARRANTIES. It is understood that if
the representations and warranties under this Article 8 are not true and
accurate and GenVec or Fuso incurs liabilities, costs or other expenses as a
result of such falsity, GenVec or Fuso, as the case may be, shall indemnify,
defend and hold the other party harmless from and against any such liabilities,
costs or expenses incurred, provided that the indemnifying party receives prompt
notice of any claim against GenVec or Fuso, as the case maybe, resulting from or
related to such falsity, the cooperation of the indemnified party, as requested
in connection with any such claim, and the sole right to control the defense or
settlement thereof.

     8.2     DISCLAIMER OF WARRANTIES. GENVEC AND FUSO EXPRESSLY DISCLAIM ANY
WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE
CONFIDENTIAL INFORMATION, OR FUSO TECHNOLOGY OR GENVEC TECHNOLOGY, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT, OR FITNESS
FOR A PARTICULAR PURPOSE, VALIDITY OF FUSO TECHNOLOGY OR GENVEC TECHNOLOGY,
PATENTED OR UNPATENTED, OR NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS
OF THIRD PARTIES.

9.   CONFIDENTIALITY

     9.1     CONFIDENTIAL INFORMATION. Except as expressly provided herein, the
parties agree that the receiving party shall keep completely confidential and
shall not publish or otherwise disclose and shall not use for any purpose except
for the purposes contemplated by this Agreement any Confidential Information
furnished to it by the disclosing party hereto pursuant to this Agreement,
except that to the extent that it can be established by the receiving party by
competent proof that such Confidential Information:

             (a)    was already known to the receiving party, other than under
an obligation of confidentiality, at the time of disclosure;

             (b)    was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;

             (c)    became generally available to the public or otherwise part
of the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement;

             (d)    was independently developed by the receiving party without
reference to any information or materials disclosed by the disclosing party; or

             (e)    was subsequently disclosed to the receiving party by a
person other than a party without breach of any legal obligation to the
disclosing party.

                                     - 18 -
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     9.2     PERMITTED DISCLOSURES. Each party hereto may disclose the other's
Confidential Information to the extent such disclosure is reasonably necessary
in connection with the conduct of the Research Program activities to be
conducted at any academic institution approved by the Steering Committee, in
filing or prosecuting patent applications, prosecuting or defending litigation,
complying with applicable governmental regulations or otherwise submitting
information to tax or other governmental authorities, conducting clinical
trials, making a permitted sublicense, securing funding or otherwise exercising
its rights hereunder, provided that if a party is required to make any such
disclosure of another party's confidential information, other than pursuant to a
confidentiality agreement, it will give reasonable advance notice to the latter
party of such disclosure and, save to the extent inappropriate in the case of
patent applications, will use its best efforts to secure confidential treatment
of such information prior to its disclosure (whether through protective orders
or otherwise).

     9.3     NON-DISCLOSURE. Each of the parties hereto agrees not to disclose
to any third party the financial terms of this Agreement without the prior
written consent of each other party hereto, except to advisors, investors and
others on a need to know basis under circumstances that reasonably ensure the
confidentiality thereof, or to the extent required by law. Without limitation
upon any provision of this Agreement, each of the parties hereto shall be
responsible for the observance by its employees of the foregoing confidentiality
obligations. Notwithstanding the foregoing, the parties shall agree upon a press
release to announce the execution of this Agreement, together with a
corresponding Q&A outline for use in responding to inquiries about the
Agreement; thereafter, GenVec and Fuso may each disclose to third parties the
information contained in such press release and Q&A without the need for further
approval by the other.

10.  INDEMNIFICATION

     10.1    INDEMNIFICATION OF FUSO. GenVec shall indemnify and hold Fuso and
its Affiliates, and their respective directors, officers, employees, agents and
counsel, and the successors and assigns of the foregoing (the "Fuso
Indemnitees"), harmless from and against any and all liabilities, damages,
losses, costs or expenses (including reasonable attorneys' and professional fees
and other expenses of litigation and/or arbitration) resulting from a claim,
suit or proceeding brought by a third party against a Fuso Indemnitee, arising
from or occurring as a result of: (i) GenVec's conduct of the Research Program,
(ii) the development, manufacture, marketing and/or commercialization of any
Collaboration Product by GenVec or its Affiliates or licensees other than Fuso
and its Affiliates (including without limitation product liability claims), or
(iii) the failure of Collaboration Products manufactured by GenVec to meet the
relevant specifications, except, in each case, to the extent caused by the
negligence or willful misconduct of Fuso.

     10.2    INDEMNIFICATION OF GENVEC. Fuso shall indemnify and hold GenVec and
its Affiliates and their respective directors, officers, employees, agents and
counsel and the successors and assigns of the foregoing (the "GenVec
Indemnitees"), harmless from and against any and all liabilities, damages,
losses, costs or expenses (including reasonable attorneys' and professional fees
and other expenses of litigation and/or arbitration) resulting from a claim,
suit or proceeding brought by a third party against a GenVec Indemnitee, arising
from or occurring as a result of; (i) Fuso's conduct of the

                                     - 19 -
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Research Program, or (ii) the development, manufacture, marketing and/or
commercialization of any Collaboration Product by Fuso or its Affiliates or
Sublicensees (including without limitation, product liability claims), except,
in each case, to the extent caused by the negligence or willful misconduct of
GenVec.

     10.3    PROCEDURE. A party (the "Indemnitee") that intends to claim
indemnification under this Article 10 shall promptly notify the other party (the
"Indemnitor") in writing of any loss, claim, damage, liability or action in
respect of which the Indemnitee or any of its Affiliates, Sublicensees or their
directors, officers, employees, agents or counsel intend to claim such
indemnification, and the Indemnitor shall have the right to participate in, and,
to the extent the Indemnitor so desires, to assume the defense thereof with
counsel mutually satisfactory to the parties. The indemnity agreement in this
Article 10 shall not apply to amounts paid in settlement of any loss, claim,
damage, liability or action if such settlement is made without the consent of
the Indemnitor, which consent shall not be withheld unreasonably. The failure to
deliver written notice to the Indemnitor within a reasonable time after the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such Indemnitor of any liability to the Indemnitee under
this Article 10. At the Indemnitor's request, the Indemnitee under this Article
10, and its employees and agents, shall cooperate fully with the Indemnitor and
its legal representatives in the investigation and defense of any action, claim
or liability covered by this indemnification and provide full information with
respect thereto.

11.  TERM AND TERMINATION

     11.1    TERM. This Agreement shall be effective as of the Effective Date
and, unless otherwise terminated earlier pursuant to the other provisions of
this Article 11, shall continue in full force and effect on a Collaboration
Product-by-Collaboration Product and country-by-country basis until the date
Fuso and its Affiliates and Sublicensees has no remaining royalty obligations in
such country. Following the expiration of royalty obligations in any country,
Fuso shall have a non-exclusive, non-transferable, fully paid license under the
GenVec Know-How solely to commercialize the Collaboration Product in the Field
in such country.

     11.2    TERMINATION FOR CAUSE. Either party may terminate this Agreement in
the event the other party has materially breached or defaulted in the
performance of any of its obligations hereunder, and such default has continued
for sixty (60) days after written notice thereof was provided to the breaching
party by the nonbreaching party. Any termination shall become effective at the
end of such sixty (60) day period unless the breaching party has cured any such
breach or default prior to the expiration of the sixty (60) day period.
Notwithstanding the above, in the case of a failure to pay any amount due
hereunder the period for cure of any such default following notice thereof shall
be ten (10) days and, unless payment is made within such period, the termination
shall become effective at the end of such period.

     11.3    TERMINATION FOR INSOLVENCY. If voluntary or involuntary proceedings
by or against a party are instituted in bankruptcy under any insolvency law, or
a receiver or custodian is appointed for such party, or proceedings are
instituted by or against such party for corporate reorganization or

                                     - 20 -
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the dissolution of such party, which proceedings, if involuntary, shall not have
been dismissed within sixty (60) days after the date of filing, or if such party
makes an assignment for the benefit of creditors, or substantially all of the
assets of such party are seized or attached and not released within sixty (60)
days thereafter, the other party may immediately terminate this Agreement
effective upon notice of such termination.

     11.4    PERMISSIVE TERMINATION. After the second anniversary of the
Effective Date, Fuso may, at its sole discretion, terminate this Agreement at
any time with ninety (90) days' prior notice.

     11.5    TERMINATION RELATING TO SALES OF COMPETING COLLABORATION PRODUCTS.
GenVec may, at its sole discretion, terminate this Agreement with ninety (90)
days notice in the event of any breach by Fuso of Section 5.6.

     11.6    EFFECT OF BREACH OR TERMINATION.

             11.6.1 ACCRUED OBLIGATIONS. Termination of this Agreement for any
reason shall not release any party hereto from any liability which, at the time
of such termination, has already accrued to the other party or which is
attributable to a period prior to such termination, nor preclude either party
from pursuing any rights and remedies it may have hereunder or at law or in
equity which accrued or are based upon any event occurring prior to such
termination.

             11.6.2 RETURN OF MATERIALS. Upon any termination of this Agreement,
Fuso and GenVec shall promptly return to the other party all materials and
Confidential Information (except as provided in 11.1 above) received from the
other party (except one copy of which may be retained by legal counsel for
archival purposes); provided, however, that the foregoing shall only apply to
GenVec in the event this Agreement is properly terminated by Fuso pursuant to
Section 11.2 or 11.3.

             11.6.3 STOCK ON HAND. In the event this Agreement is terminated for
any reason, Fuso and its Affiliates and Sublicensees shall have the right to
sell or otherwise dispose of the stock of any Collaboration Products then on
hand subject to Articles 3 and 4 and the other applicable terms of this
Agreement.

             11.6.4 LICENSES.

                    (a)  The licenses granted Fuso herein shall terminate in the
event of a termination pursuant to Section 11.2 or 11.3, or any termination of
the Research Program by Fuso prior to the second anniversary of the Effective
Date. In the event of a termination of the Research Program by Fuso after the
second anniversary of the Effective Date, the licenses granted Fuso shall remain
in effect, subject to the terms and conditions herein, with respect to all
Collaboration Products designated by the Steering Committee prior to the
effective date of such termination.

                    (b)  The licenses granted to GenVec in Section 2.3 shall
terminate only in the event of a termination by Fuso pursuant to Section 11.2 or
11.3.

                                     - 21 -
<Page>

                    (c)  If more than one Collaboration Product is being
commercially developed or exploited by Fuso or its Affiliates and Sublicensees
hereunder and GenVec terminates this Agreement pursuant to Section 11.2 due to a
breach relating only to a single Collaboration Product, or pursuant to Section
11.5 due to a particular competing product, then GenVec shall be entitled to
terminate this Agreement only with respect to the applicable Collaboration
Product.

     11.7    SURVIVAL. Sections 2.4, 2.5, 2.6, 5.2.3, 5.3, 5.4, 7.1, 7.2.2,
7.3.2, 11.6 and 11.7 and Articles 4, 8, 9, 10, 12 and 13 shall survive the
expiration or termination of this Agreement for any reason.

12.  DISPUTE RESOLUTION

     12.1    MEDIATION. If a dispute arises out of or relates to this Agreement,
or the breach thereof, and if said dispute cannot be settled through
negotiation, the parties agree first to try in good faith to settle the dispute
by mediation under the Commercial Mediation Rules of the American Arbitration
Association before resorting to arbitration.

     12.2    ARBITRATION. Any dispute under this Agreement (except any dispute
relating to the validity or enforceability of any patent) which is not settled
by mutual consent shall be finally settled by binding arbitration. Such
arbitration shall be conducted in accordance with the International Arbitration
Rules of the Asia/Pacific Center by three (3) arbitrators appointed in
accordance with said rules and held in San Francisco, California. At least one
of the arbitrators shall be an independent expert in pharmaceutical product
development (including clinical development and regulatory affairs). The
arbitrators shall determine what discovery will be permitted, consistent with
the goal of limiting the cost and time which the parties must expend for
discovery; provided the arbitrators shall permit such discovery as they deem
necessary to permit an equitable resolution of the dispute. Any written evidence
originally in a language other than English shall be submitted in English
translation accompanied by the original or a true copy thereof. The costs of the
arbitration including administrative and arbitrators' fees, shall be shared
equally by the parties and each party shall bear its own costs and attorneys'
and witness' fees incurred in connection with the arbitration. A disputed
performance or suspended performances pending the resolution of the arbitration
must be completed within thirty (30) days following the final decision of the
arbitrators or such other reasonable period as the arbitrators determine in a
written opinion. Any arbitration subject to this Article shall be completed
within one (1) year from the filing of notice of a request for such arbitration.
No punitive damages may be granted by the arbitrators. The arbitration
proceedings and the decision shall not be made public without the joint consent
of the parties and each party shall maintain the confidentiality of such
proceedings and decision unless otherwise permitted by the other party. The
parties agree that the decision shall be the sole, exclusive and binding remedy
between them regarding any and all disputes, controversies, claims and
counterclaims presented to the arbitrators. Any award may be entered in a court
of competent jurisdiction for a judicial recognition of the decision and an
order of enforcement.

                                     - 22 -
<Page>

13.  MISCELLANEOUS

     13.1    GOVERNING LAW. This Agreement and any dispute arising from the
performance or breach hereof shall be governed by and construed in accordance
with the laws of the State of California, without reference to conflicts of laws
principles.

     13.2    WAIVER. Neither party may waive or release any of its rights or
interests in this Agreement except in writing. The failure of either party to
assert a right hereunder or to insist upon compliance with any term or condition
of this Agreement shall not constitute a waiver of that right or excuse a
similar subsequent failure to perform any such term or condition.

     13.3    ASSIGNMENT. This Agreement shall not be assignable by either party
to any third party hereto without the written consent of the other party hereto;
except either party may assign this Agreement, without such consent, to (i) an
Affiliate of such party; or (ii) an entity that acquires all or substantially
all of the business or assets of such party to which this Agreement pertains,
whether by merger, reorganization, acquisition, sale, or otherwise and that
agrees in writing to be strictly bound by the terms and conditions of this
Agreement. The terms and conditions of this Agreement shall be binding on and
inure to the benefit of the permitted successors and assigns of the parties.

     13.4    NOTICES. Any notices, requests and other communications hereunder
shall be in writing and shall be personally delivered or sent by international
express delivery service, registered or certified mail, return receipt
requested, postage prepaid, in each case to the respective address specified
below, or such other address as may be specified in writing to the other parties
hereto:

     FUSO:          Fuso Pharmaceutical Industries, Ltd.
                         3-11, 2-Chome, Morinomiya, Joto-ku
                         Osaka 536, Japan
                         Attn: President

     With a copy to:     Director, Research and Development Center

     GENVEC:             GenVec, Inc.
                         65 West Watkins Mill Road
                         Gaithersburg, Maryland 20878, U.S.A.
                         Attn: President

     With a copy to:     Senior Vice President, Corporate Development

     13.5    PERFORMANCE WARRANTY. Fuso and GenVec hereby respectively warrant
and guarantee the performance of any and all rights and obligations of this
Agreement by their Affiliate(s), Sublicensees, and other sublicensees.

     13.6    FORCE MAJEURE. Neither party shall be liable to the other for
failure or delay in the performance of any of its obligations under this
Agreement for the time and to the extent such failure

                                     - 23 -
<Page>

or delay is caused by earthquake, riot, civil commotion, war, hostilities
between nations, governmental law, order or regulation, embargo, action by the
government or any agency thereof, act of God, storm, fire, accident, labor
dispute or strike, sabotage, explosion or other similar or different
contingencies, in each case, beyond the reasonable control of the respective
party. The party affected by force majeure shall provide the other party with
full particulars thereof as soon as it becomes aware of the same (including its
best estimate of the likely extent and duration of the interference with its
activities), and will use its best endeavors to overcome the difficulties
created thereby and to resume performance of its obligations as soon as
practicable. If the performance of any obligation under this Agreement is
delayed owing to a force majeure for any continuous period of more than six (6)
months, the parties hereto shall consult with respect to an equitable solution
including the possible termination of this Agreement.

     13.7    INDEPENDENT CONTRACTORS. Nothing contained in this Agreement is
intended implicitly, or is to be construed, to constitute Fuso or GenVec as
partners in the legal sense. No party hereto shall have any express or implied
right or authority to assume or create any obligations on behalf of or in the
name of any other party or to bind any other party to any contract, agreement or
undertaking with any third party.

     13.8    ADVICE OF COUNSEL. GenVec and Fuso have each consulted counsel of
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one party or another
and will be construed accordingly.

     13.9    OTHER OBLIGATIONS. Except as expressly provided in this Agreement
or as separately agreed upon in writing between GenVec and Fuso, each party
shall bear its own costs incurred in connection with the implementation of the
obligations under this Agreement.

     13.10   INDEPENDENT RESEARCH. Except as expressly provided for herein or in
the Collaboration Agreement, each party acknowledges and agrees that Fuso and
GenVec shall have the right to engage in their own research and development
activities outside the Research Program. Neither party shall, by virtue of this
Agreement, have any right, title or interest in or to such independent
activities or to the income or profits derived therefrom.

     13.11   SEVERABILITY. In the event that any provisions of this Agreement
are determined to be invalid or unenforceable by a court of competent
jurisdiction, the remainder of the Agreement shall remain in full force and
effect without said provision. The parties shall in good faith negotiate a
substitute clause for any provision declared invalid or unenforceable, which
shall most nearly approximate the intent of the parties in entering this
Agreement; provided, if the parties are unable to agree on such a substitute
clause and the deletion of the provision held invalid or unenforceable would
produce material adverse financial consequences for one party, such party shall
have the right to terminate the Agreement with one hundred eighty (180) days
notice.

     13.12   PATENT MARKING. Fuso agrees to mark and have its Affiliates and
Sublicensees mark all Collaboration Products they sell or distribute pursuant to
this Agreement in accordance with the applicable statute or regulations in the
country or countries of manufacture and sale thereof.

                                     - 24 -
<Page>

     13.13   FURTHER ASSURANCES. At any time or from time to time on and after
the date of this Agreement, either party shall at the request of the other party
(i) deliver to the requesting party such records, data or other documents
consistent with the provisions of this Agreement, (ii) execute, and deliver or
cause to be delivered, all such consents, documents or further instruments of
assignment, transfer or license, and (iii) take or cause to be taken all such
actions, as the requesting party may reasonably deem necessary or desirable in
order for the requesting party to obtain the full benefits of this Agreement and
the transactions contemplated hereby.

     13.14   TRADEMARKS. Fuso and its Affiliates shall have the right to market
the Collaboration Product under their own labels and trademark(s). All
Collaboration Product packages shall carry the notice "Licensed from GenVec,
Inc." or a similar slogan, in a typeface and size agreed by the parties.

     13.15   FOREIGN CORRUPT PRACTICES ACT. In conformity with the United States
Foreign Corrupt Practices Act, Fuso and its employees and agents shall not
directly or indirectly make any offer, payment, promise to pay, or authorize
payment, or offer a gift, promise to give, or authorize the giving of anything
of value for the purpose of influencing an act or decision of an official of any
government within the Territory or the United States Government (including a
decision not to act) or inducing such official to use his influence to affect
any such governmental act or decision in order to obtain, retain, or direct any
such business.

     13.16   EXPORT LAWS. Notwithstanding anything to the contrary contained
herein, all obligations of GenVec and Fuso are subject to prior compliance with
United States export regulations and such other United States and Japanese laws
and regulations as may be applicable, and to obtaining all necessary approvals
required by the applicable agencies of the government of the United States or
Japan. GenVec and Fuso, respectively, shall each use its best efforts to obtain
such approvals from its own government. Each party shall cooperate with the
other party and shall provide assistance to the other party as reasonably
necessary to obtain any required approvals.

     13.17   APPROVALS. Each party shall be responsible, at its expense, for
obtaining any approvals from its own government which may be required under
applicable law, and shall use its best efforts to obtain all necessary approvals
as soon as possible after the execution of this Agreement.

     13.18   ENTIRE AGREEMENT. This Agreement, including the attached Exhibits,
and the Collaboration Agreement of even date herewith, constitute the entire
agreement between the parties with respect to the subject matter hereof, and
supersede all prior or contemporaneous understandings or agreements, whether
written or oral, between Fuso and GenVec with respect to such subject matter.
Each party specifically agrees that the Collaboration Agreement and the
Commercialization Agreement between the parties, each dated September 26, 1997,
and the Letter Agreement and Amendment of Letter Agreement dated April 1, 2002
and September 9, 2002 respectively, each of which references such agreements,
are hereby terminated as of the Effective Date. Each party acknowledges that, to
its knowledge, the other party performed all its financial and research

                                     - 25 -
<Page>

obligations thereunder. The foregoing shall in no way limit those obligations
that expressly survive the termination of such agreements.

     13.19   HEADINGS. The captions to the several Sections and Articles hereof
are not a part of this Agreement, but are included merely for convenience of
reference only and shall not affect its meaning or interpretation.

     13.20   COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall be deemed an original and which together shall constitute
one instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their authorized representatives as of the Effective Date.

FUSO PHARMACEUTICAL                             GENVEC, INC.
INDUSTRIES, LTD.

By:    /s/ Mikio Toda                    By:    /s/ Paul H. Fischer
      -----------------------------            ------------------------

Name:  Mikio Toda                        Name:  Paul H. Fischer
      -----------------------------            ------------------------

Title: President and Representative      Title: President and C.E.O.
       Director                                ------------------------
      -----------------------------

                                     - 26 -<Page>
                                                                 Exhibit 10(iii)

                                                                   June 23, 2003

Mr. Morton P. Hyman
Chairman & Chief Executive Officer
Overseas Shipholding Group, Inc.
511 Fifth Avenue
New York, NY  10017

Dear Mr. Hyman:

In light of your long and valued service to Overseas Shipholding Group, Inc.
("OSG"), and your expressed desire to retire from your positions as Chairman of
the Board of Directors (the "Chairman") and Chief Executive Officer ("CEO") of
OSG, and to separate from your employment with OSG no later than the end of this
year, this letter agreement and the General Release attached hereto set forth
the arrangement agreed to by OSG and you regarding such retirement and
separation.

1.   (a) You shall continue to serve as Chairman and CEO of OSG, at your current
     rate of salary, until the earliest to occur of (i) December 31, 2003, (ii)
     the date on which a successor Chairman and CEO is appointed by the Board of
     Directors of OSG (the "Board") and commences employment with OSG, or (iii)
     your date of death (the "Retirement Date"). You may continue to serve as a
     director of OSG (without compensation) through the regularly scheduled 2004
     annual meeting of the shareholders of OSG. If your Retirement Date occurs
     prior to December 31, 2003 (and other than due to your death), your duties
     as an ongoing employee shall be mutually determined by you and the Board,
     but in any event your salary shall continue at its current rate through the
     earlier to occur of December 31, 2003 or your date of death. You shall also
     be entitled to receive your bonus for 2003, to be based solely on OSG's
     financial performance, as computed by the Compensation Committee utilizing
     the applicable provisions of the bonus formula currently in existence under
     OSG's Incentive Compensation Plan, which will be paid to you on the date on
     which bonuses for 2003 are payable to other senior executives of OSG.

     (b) Prior to your Retirement Date, all matters of a strategic nature
     received by you will be referred to the Board for its consideration and
     review.

2.   Your employment with OSG shall end as of December 31, 2003 or, if earlier,
     your date of death. Except in the event of your earlier death or as
     otherwise set forth herein, December 31, 2003 shall be the termination date
     for purposes of your participation in and

<Page>

     coverage as an active employee under all employee benefit plans and
     programs sponsored by OSG or its subsidiaries, including but not limited
     to, vacation accrual, tuition reimbursement, participation in any pension
     plan or savings plan, and eligibility for short-term and long-term
     disability benefits and life insurance. All benefits due you shall be paid
     or made available to you in accordance with the terms of those established
     policies or plans of OSG. Moreover, any benefit continuation or conversion
     rights existing under such policies or plans will be made available to you
     in accordance with the terms of such established policies or plans.

3.   You shall resign as an officer and director of any subsidiaries, affiliates
     and  related  companies  of OSG,  including  but not  limited  to,  Tankers
     International  and Aframax  International,  effective as of the  Retirement
     Date.

4.   During the period from January 1, 2004 through June 30, 2004 (the
     "Transition Period"), you shall serve as an independent consultant to OSG,
     and as such shall be reasonably available at mutually-agreed times and
     places to consult with your successor on matters relating to your
     experience as Chairman and CEO. During the Transition Period, OSG shall pay
     you a monthly consulting fee (payable as soon as practicable after the end
     of each such month) which shall be based on your current annual salary
     (i.e., the total fee will be equal to $600,000) and reimburse you, in
     accordance with OSG's reimbursement and expense policies, for all
     reasonable expenses incurred by you in performing the consulting services
     described herein.

5.   Subject to your execution of the General Release following your separation
     of employment and your election not to exercise your right to revoke the
     General Release as described therein, you shall be entitled to a lump sum
     cash payment of $1,200,000, payable on the first business day following the
     eighth day after your execution of such General Release.

6.   On January 5, 2004, in full settlement of your rights and benefits under
     the Overseas Shipholding Group, Inc. Supplemental Executive Retirement Plan
     and the Overseas Shipholding Group, Inc. Supplemental Executive Retirement
     Plan Plus, OSG shall pay you, in cash, a lump sum of $15,852,846, minus the
     present value of your accrued benefit under the Pension Plan for Employees
     of OSG Ship Management, Inc. as of December 31, 2003 (the "Pension Plan"),
     calculated pursuant to the Pension Plan using the Pension Plan's actuarial
     assumptions applicable to payment of a retirement benefit thereunder in the
     form of a lump sum.

7.   Effective as of the Retirement Date, all of your OSG stock options that are
     not yet vested will become fully vested and exercisable. Thereafter, all of
     your OSG options shall be subject to the terms and conditions of the
     applicable stock option plans, provided that such options shall remain
     exercisable until the earlier of January 4, 2005 or the end of their
     original ten-year terms.

8.   OSG shall provide you with the use of a suitable, mutually agreed-upon
     office off of the OSG premises and full-time secretary (who shall be your
     current secretary unless you determine otherwise) at OSG's expense (subject
     to an all-inclusive monthly billing

<Page>

     system acceptable to OSG) for the period beginning on the Retirement Date
     and ending on June 30, 2004.

9.   OSG shall pay all reasonable legal fees and expenses of Simpson Thacher &
     Bartlett LLP incurred by you in connection with the negotiations of this
     letter agreement and the General Release; provided, however, that such fees
     shall not exceed $25,000.

10.  You shall retain all rights to indemnification under applicable law or
     under OSG's Certificate of Incorporation or By-Laws, as they may be amended
     or restated from time to time. In addition, OSG shall maintain Director's
     and Officer's liability insurance on your behalf, at the level in effect
     for all other officers and directors of OSG from time to time, through
     December 31, 2003 and throughout the period of any applicable statute of
     limitations.

11.  (a) You agree not to disclose any information, files, documents and other
     materials proprietary to OSG and not in the public domain which relate to
     OSG or its business and which are treated as confidential by OSG, its
     subsidiaries, affiliates or related companies, except (i) with the prior
     consent of OSG or (ii) as otherwise required by law or legal process.
     Nothing in the preceding sentence shall be deemed to limit what you may
     discuss with the other directors of OSG.

     (b) Through June 30, 2005 you agree not to use any proprietary or
     confidential information relating to OSG, its subsidiaries, affiliates or
     related companies ("Confidential Information") in any commercial activity
     in which you engage, other than on behalf of OSG, whether as an officer,
     employee, director, owner, partner or otherwise; provided, however, that
     Confidential Information shall not include any information which is or has
     been acquired by you other than only through your position as an officer or
     director of OSG, its subsidiaries or affiliates.

12.  (a) Until such time as OSG files this document with the Securities and
     Exchange Commission, (i) except as may be required by law or legal process,
     OSG shall keep the terms of this letter agreement confidential and not
     disclose such terms to anyone other than directors, officers, employees,
     attorneys, advisors, auditors and agents of OSG, its subsidiaries,
     affiliates and related companies, without your prior consent, each of whom
     shall be requested by OSG to maintain such information in confidence, and
     (ii) you agree to keep the terms of this letter agreement confidential and
     not to disclose its contents to anyone without OSG's prior consent, except
     members of your immediate family, your attorney, financial consultant or
     other professional advisor and any potential employer, each of whom shall
     be requested by you to maintain such information in confidence.

     (b) Notwithstanding anything herein to the contrary, either party to this
     letter agreement (and any employee, representative, or other agent of any
     party to this letter agreement) may disclose to any and all persons,
     without limitation of any kind, the tax treatment and tax structure of the
     transactions contemplated by this letter agreement and all materials of any
     kind (including opinions or other tax analyses) that are provided to it
     relating to such tax treatment and tax structure. However, any such
     information relating to the tax

<Page>

     treatment or tax structure is required to be kept confidential to the
     extent necessary to comply with any applicable federal or state securities
     laws.

13.  You agree not to make, participate in the making of, or encourage any other
     person to make, any statements, written or oral, which criticize, disparage
     or defame the goodwill or reputation of OSG, its subsidiaries, affiliates
     or related companies, or any of their respective directors, officers and
     employees. OSG agrees not to make, participate in the making of, or
     encourage any other person to make, any statements, written or oral, which
     criticize, disparage or defame your reputation.

14.  The parties to this letter agreement shall issue a joint public
     announcement regarding your retirement. The parties agree that no public
     disclosure, press release or discussions with the press will be made or
     occur with respect to this letter agreement and the General Release without
     the other party's prior written consent, except as required by law.

15.  (a) Any breach of the provisions of sections 11, 12, 13 and 16 hereof by
     you or any person to whom you have made a permitted disclosure of the terms
     of this letter agreement shall be considered a material breach of this
     letter agreement. In the event of such breach, and due to the difficulties
     in calculating damages that might be sustained (directly or indirectly) as
     a result of such breach, you specifically consent to the entry of
     injunctive relief against you, in addition to any and all of OSG's remedies
     under the law, and you further agree that OSG may obtain the foregoing
     relief without the posting of a bond.

     (b) Any breach of the provisions of sections 10, 12 and 13 hereof by OSG or
     any person to whom OSG has made a permitted disclosure of the terms of this
     letter agreement shall be considered a material breach of this letter
     agreement. In the event of such breach, and due to the difficulties in
     calculating damages that might be sustained (directly or indirectly) as a
     result of such breach, OSG specifically consents to the entry of injunctive
     relief against it, in addition to any and all of your remedies under the
     law, and OSG further agrees that you may obtain the foregoing relief
     without the posting of a bond.

16.  (a) During the period from the date hereof through the first anniversary of
     the Retirement Date, you agree not to directly or indirectly: (i) enter the
     employ of, or render services to, any business that competes with the
     business of OSG or any of its subsidiaries, affiliates or related companies
     as of the Retirement Date in any geographical area that is within any
     geographical area where OSG or any of its subsidiaries, affiliates or
     related companies provides its products or services (a "Competitive
     Business"); or (ii) acquire a financial interest in, or otherwise become
     actively involved with, any Competitive Business as an individual, partner,
     shareholder, officer, director, principal, agent, trustee or consultant.

     (b) Notwithstanding anything to the contrary in this letter agreement, you
     may directly or indirectly own, solely as an investment, securities of any
     Competitive Business which is publicly traded on a national or regional
     stock exchange or on the over-the-counter market if you (i) are not a
     controlling person of, or a member of a group which controls,

<Page>

     such Competitive Business and (ii) do not, directly or indirectly, own 5%
     or more of any class of securities of such Competitive Business.

17.  During the period from the date hereof through the fifth anniversary of the
     last day of the Transition Period, you agree not to solicit directly or
     indirectly for employment any person who is employed by or under contract
     with OSG or any of its subsidiaries or affiliates (other than (a) your
     secretary or (b) for the benefit of OSG or any of its subsidiaries or
     affiliates).

18.  You agree to return all property belonging to OSG as of the last day of the
     Transition Period; except that you may purchase from OSG any office
     furniture currently in your office and any laptop computers (devoid of OSG
     property) which you currently use, each at the depreciated book value of
     such property on the books of OSG.

19.  The parties to this letter agreement shall execute the General Release as
     soon as practicable following your separation of employment hereunder.

20.  This letter agreement and the General Release contain the entire agreement
     between you and OSG and supersede any and all prior agreements or
     understandings, other than that certain agreement dated as of October 21,
     1996 between OSG and you, as amended through June 21, 2002, relating to a
     Change of Control of OSG (the "Change of Control Agreement"), with respect
     to the subject matter hereof and the terms and provisions of this letter
     agreement may not be modified or amended, except in a writing signed by
     both parties; provided, however, that (a) clause (iii) of Section 2 of the
     Change of Control Agreement hereby shall be amended to read "one hundred
     twenty (120) days after the Retirement Date (as defined in the letter
     agreement dated June 23, 2003 between the Company and the Executive) if a
     Change of Control does not occur on or prior to such date" and (b) the
     payments under Sections 4 and 5 of this letter agreement shall offset any
     payments to you under the Change of Control Agreement.

21.  You represent and warrant that (a) you have carefully read this letter
     agreement in its entirety and you fully understand the significance of all
     of the terms and conditions hereof, and (b) you are signing this letter
     agreement voluntarily and of your own free will, and assent to all the
     terms and conditions contained herein.

22.  No waiver by either party of any breach by the other party of its
     obligations hereunder shall be deemed a waiver of any prior or subsequent
     breach. Except to the extent otherwise specifically provided herein, any
     waiver must be in writing and signed by you or an authorized officer of
     OSG, as the case may be.

23.  Nothing contained in this letter agreement or the General Release shall (a)
     affect your rights to indemnification in your continued capacity as a
     director of OSG and (b) affect or limit your ability to perform your duties
     and obligations as a director of OSG.

24.  All payments made by OSG to you pursuant to this letter agreement shall be
     subject to appropriate deductions for FICA, Federal, state and local income
     taxes.

<Page>

25.  You shall not be required to mitigate the amount of any payment provided
     for pursuant to this letter agreement by seeking other employment or
     otherwise and the amount of any payment provided for pursuant to this
     letter agreement shall not be reduced by any amounts earned by you for
     subsequent employment or otherwise.

26.  This letter agreement and the General Release shall be governed by,
     construed and enforced in accordance with, the laws of the State of New
     York applicable to contracts to be performed therein.

27.  This letter agreement and all the provisions hereof shall inure to the
     benefit of, and be binding upon, the successors, permitted assigns, heirs,
     executors and administrators of the parties hereto.

If you agree to the foregoing, please so indicate by dating and signing both
enclosed copies of this letter agreement. One copy of the letter agreement
should be returned to the undersigned. The second original is for you.

On behalf of OSG, I wish to thank you for your many years of valuable service to
OSG, and wish you well in your future endeavors.

Sincerely,

OVERSEAS SHIPHOLDING GROUP, INC.

By:      /s/ ROBERT N. COWEN
         ---------------------
         Name:  Robert N. Cowen
               -----------------
         Title: Senior Vice President and Chief Operating Officer
               ----------------------------------------------------

I hereby agree to be bound by the terms and conditions of the above letter
agreement.

Date:  June 23, 2003                     /s/ MORTON P. HYMAN
                                         --------------------
                                         Morton P. Hyman

<Page>

                                                                       EXHIBIT A

                                 GENERAL RELEASE
                                 ---------------

Reference is made to the letter agreement, dated June 23, 2003, which you
countersigned on June 23, 2003, between Overseas Shipholding Group, Inc.
("OSG") and you (herein referred to as the "Agreement").

OSG hereby agrees as follows:

         OSG, on behalf of itself and any affiliated companies and their past
         and present parents and subsidiaries, agrees to forever release you,
         your wife, children, estate, agents, attorneys, heirs, executors,
         successors and assigns from any and all claims, demands, causes of
         action, controversies, agreements, promises and remedies, in connection
         with or in relationship to your capacity as (a) an employee or officer
         of OSG or any of its subsidiaries, affiliates and related companies and
         (b) a director of OSG or any of its subsidiaries, affiliates and
         related companies, which they may have as of the date hereof, whether
         known or unknown (collectively, the "Company Release"); provided,
         however, that the Company Release shall not apply with respect to any
         conduct on your part which is grossly negligent, fraudulent or illegal,
         or includes willful misconduct or is otherwise violative of any
         applicable laws or rules or regulations issued under such laws.

You hereby agree as follows:

         You, on your behalf, as well as your heirs, executors, administrators,
         successors and assigns, hereby irrevocably and unconditionally release
         and discharge OSG, OSG Ship Management, Inc., their predecessors and
         transferors and affiliated and related companies, all of their
         respective shareholders, officers, directors, employees, agents,
         principals, advisors, parents and subsidiaries, and each of their
         respective heirs, executors, administrators, successors and assigns
         (collectively, the "Company Released Parties" and each, a "Company
         Released Party"), from all claims, demands, causes of action,
         controversies, agreements, promises and remedies, in connection with or
         in relationship to your capacity as an employee, shareholder, officer
         or director of any of the Company Released Parties which you may have
         as of the date hereof, whether known or unknown, including under any
         statute, rule, order, law or ordinance, express or implied contract,
         public policy or otherwise (collectively, "Employee Claims"). This
         General Release applies to all Employee Claims, including any and all
         Employee Claims relating to the terms and conditions of your employment
         with any of the Company Released Parties or the termination of your
         employment; any and all Employee Claims for discrimination on the basis
         of age, alienage, color, creed, disability, gender, handicap, marital
         status, national origin, race, religion, sex or sexual orientation; any
         and all claims arising under Title VII of the Civil Rights Act of 1964,
         the Age Discrimination in Employment Act, the Equal Pay Act, the
         Rehabilitation Act, the Americans with Disabilities Act, the New York
         State Human Rights Act, the New York City Human Rights Law, all as
         amended, and any other federal, state or local statute, ordinance,
         rule, regulation or order relating to employment; and any and all
         Employee Claims for attorney's fees, costs or disbursements.

<Page>
                                                                               2

         You agree that you will not, from any source or proceeding, seek or
         accept any award or settlement with respect to any Employee Claim
         covered hereunder. In addition, except as otherwise prohibited by law,
         you represent and warrant that you will not sue or commence any
         proceeding (judicial or administrative), or participate in any action,
         suit or proceeding, against any of the Company Released Parties, with
         respect to any act, event, occurrence, or any alleged failure to act,
         released hereunder.

         Notwithstanding the foregoing, nothing herein shall be deemed to
         release the Company Released Parties in respect of your rights (i)
         under the Agreement including, but not limited to, your rights pursuant
         to section 23 of the Agreement, (ii) to indemnification, in your
         capacity as a current or former director or officer of any of the
         Company Released Parties, under the by-laws and articles of
         incorporation of each Company Released Party, as in effect from time to
         time, or pursuant to indemnification policies maintained by one or more
         of the Company Released Parties, (iii) to any unpaid salary and other
         compensation (including any bonus under OSG's Incentive Compensation
         Plan), (iv) to reimbursement pursuant to the policies of any Company
         Released Party for expenses incurred by you prior to January 1, 2004 or
         pursuant to section 4 of the Agreement, and (v) to any benefits payable
         to you pursuant to any qualified pension plan or employee benefit plan
         maintained by the Company Released Parties.

         You represent and warrant that you have carefully read this General
         Release in its entirety; that you have had an opportunity to consider
         fully the terms of this General Release for twenty-one (21) days; that
         you have been advised by OSG in writing to consult with an attorney of
         your choosing in connection with this General Release; that you fully
         understand the significance of all of the terms and conditions of the
         Agreement and this General Release; that you have discussed it with
         your independent legal counsel, or you have had a reasonable
         opportunity to do so; that you have had answered to your satisfaction
         any questions that you have asked with regard to the meaning and
         significance of any of the provisions of the Agreement and this General
         Release; and that you are signing this General Release voluntarily and
         of your own free will and you assent to all the terms and conditions
         contained in the Agreement and herein.

         You further acknowledge that after executing the General Release you
         have seven (7) days to revoke it by delivery of a Notice of Revocation
         to the Released Parties, directed to the attention of [____], prior to
         the eighth (8th) day after execution and delivery by you of the General
         Release. You understand that if so revoked by you, this General Release
         shall be deemed to be null and void.

<Page>

                                                                               3

If you agree to the foregoing, please so indicate by dating and signing both
enclosed copies of this General Release. One copy of the General Release should
be returned to the undersigned. The second original is for you.

Sincerely,

OVERSEAS SHIPHOLDING GROUP, INC.

By:      _______________________________

         Name:  ________________________

         Title: ________________________

Agreed to and accepted by:

_______________________________
Morton P. Hyman

Date:  ____________________

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