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                                                                    EXHIBIT 10.4

                               Abbott Laboratories
                              200 Abbott Park Road
                              Abbott Park, IL 60064

                                  July 30, 2002

Triangle Pharmaceuticals, Inc.
4 University Place
4611 University Drive
Durham, North Carolina 27707

Ladies and Gentlemen:

Abbott Laboratories (the "Lender") hereby advises Triangle Pharmaceuticals, Inc.
(the "Company") that the Lender has approved, subject to the conditions outlined
in this letter, a committed credit facility (the "Facility"). The amount
available under the Facility shall not exceed $42,500,000. The Facility shall
terminate on two years after the later of the U.S. Product Approval or the
European Union Products Approval, as hereinafter defined. The Facility shall be
available under the following terms and conditions (certain capitalized terms
being used as set forth in SECTION 7):

1.   LOANS.

     The Company may from time to time before the Termination Date request
Loans, and the Lender will make such Loans to the Company on the terms and
conditions set forth in this Agreement. The aggregate amount of the Loans made
hereunder shall not exceed $42,500,000, subject to reduction pursuant to SECTION
1.6; PROVIDED, HOWEVER, that no Loans shall be available until either the Food
and Drug Administration shall have approved the use of Coviracil for HIV (the
"US Product Approval") or the product approval of Coviracil for HIV for the
European Union (the "European Union Product Approval") shall have been obtained.
Upon and following receipt of the US Product approval, $30,000,000 of the
$42,500,000 Facility will be available. $12,500,000 of the $42,500,000 Facility
will be available upon and following receipt of the European Union Product
Approval. No Loan shall be made if, after giving effect to said Loan and the
application of the proceeds thereof, the Company and its Subsidiaries shall hold
Cash in excess of $40,000,000. The Company may borrow and repay in accordance
with the terms hereof, and amounts repaid may be reborrowed subject to the terms
and conditions otherwise applicable to Loans under this Agreement. In the event
that other lenders at any time shall have provided the Company with credit lines
other than the Facility, the Company shall utilize such credit lines, to the
extent available at reasonably comparable rates, before requesting Loans under
the Facility.

     1.1    BORROWING PROCEDURES. Each Loan shall be on at least fifteen (15)
Business Days prior telephonic notice (promptly confirmed in writing) from any
Authorized Officer received by the Lender. Each such notice shall specify (i)
the borrowing date, which shall be a Business Day, and (ii) the amount of the
Loan. Each Loan shall be in the amount of $500,000 or an integral multiple
thereof. The Company may request Loans even if the Company and its

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Subsidiaries hold in excess of $40,000,000 Cash at the time of such request, so
long as after giving effect to such Loans and the application of proceeds
thereof, the Company and its Subsidiaries no longer hold in excess of
$40,000,000 in Cash.

     1.2    INTEREST

            (a)   PRIOR TO MATURITY. The unpaid principal of each Loan shall
     bear interest prior to maturity at a rate per annum equal to the Treasury
     Rate in effect from time to time plus 6.00%. Accrued interest shall be
     payable quarterly on the last day of each fiscal quarter and at maturity.
     "Treasury Rate", for the purposes of this Agreement and the Note, shall
     mean for each calendar year, the 10-Year Treasury constant maturity
     interest rate, as published in the weekly series of Federal Reserve
     Statistical Releases (H.15) "Selected Interest Rates" (or any comparable
     substitute or replacement publication of the Federal Reserve System) on the
     first Business Day of such year and, if not published on such date, the
     first Business Day thereafter. If such rate no longer shall be so
     published, the Lender shall estimate the equivalent rate. The Lender shall
     compute this rate and notify the Company of the applicable rate and
     interest due at least 5 business days before each interest payment date.

            (b)   AFTER MATURITY. Any principal of any Loan which is not paid
     within five (5) Business Days of the date when due, whether at the stated
     maturity, upon acceleration or otherwise, shall bear interest from and
     including the date such principal shall have become due to (but not
     including) the date of payment thereof in full at a rate per annum equal to
     the Treasury Rate from time to time in effect plus 8.00% per annum. After
     maturity, accrued interest shall be payable on demand.

            (c)   MAXIMUM RATE. In no event shall the interest rate applicable
     to any amount outstanding hereunder exceed the maximum rate of interest
     allowed by applicable law, as amended from time to time. Any payment of
     interest or in the nature of interest in excess of such limitation shall be
     credited as a payment of principal unless the Company shall request the
     return of such amount.

            (d)   METHOD OF CALCULATING INTEREST AND FEES. Interest on each Loan
     and all fees shall be computed on the basis of a year consisting of 360
     days and paid for actual days elapsed.

     1.3    DISBURSEMENTS AND PAYMENTS

     The Lender shall transfer the proceeds of each Loan as directed by an
Authorized Officer. Each Loan shall be due on a date two years after the US
Product Approval or two years after the European Union Product Approval, i.e.,
the Loans shall be due two years after the first such approval until the full
amount of the Loans permitted to be made upon such approval have been paid, then
the remainder of the Loans shall be due two years after the second approval. Any
payment that shall be due on a day, which is not a Business Day, shall be
payable on the next Business Day. If at any time, the outstanding Loans exceed
the amount of the Facility as reduced pursuant to SECTION 1.6, the Company shall
within five (5) Business Days prepay the

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Loans by an amount equal to such excess. Payments shall be applied first to
accrued interest, then to principal.

     1.4    PREPAYMENT

     The Company may prepay the Loans at any time without penalty or premium. If
on the last day of any month the Company shall hold Cash in excess of
$40,000,000, the Company shall, within five (5) Business Days following the
determination of such excess, prepay the Loans by an amount equal to such
excess.

     1.5    NOTE

     The Company's obligations with respect to the Loans shall be evidenced by a
note in the form attached as Exhibit A (the "Note"). The amount shall be
endorsed by the Lender on the schedule attached to the Note, or at the Lender's
option, in its records, which schedule or records shall be conclusive, absent
manifest error.

     1.6    REDUCTION OF FACILITY. Upon the Company entering into any agreement
with any Person (other than the Lender) with respect to the commercialization of
Coviracil, the Facility (and the availability associated with the U.S. Product
Approval or the European Union Product Approval as applicable) shall be reduced
on a dollar for dollar basis (i) on the receipt of any license fee, signing
bonus, milestone payment or other non-dilutive forms of payment from such Person
(other than in the form of services provided or extended payment terms, none of
which shall lead to such reduction), (ii) on the availability of any line of
credit provided by such Person (other than any line of credit of up to
$35,000,000 secured by accounts receivable created by the sale of Coviracil and
otherwise permitted by this Agreement) and (iii) on any share premium (which,
for this purpose shall mean any premium over the average price of shares of
common stock of the Company in the immediately preceding thirty (30) days
received by the Company on the sale of its stock to such Person). By way of
example, if the Company receives, as part of such an agreement a milestone
payment of $10,000,000 upon U.S. Product Approval, a $5,000,000 line of credit
12 months after the U.S. Product Approval and no payment based on the European
Union Product Approval, then the Facility would be reduced by $10,000,000 upon
the U.S. Product Approval and by $5,000,000 one year thereafter. The amount
available upon European Product Approval would not change.

2.   TAXES.

     All payments by the Company of principal of, and interest on, the Loans and
all other amounts payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by the Lender's net income or receipts (such
non-excluded items being called "Taxes"). If any withholding or deduction from
any payment to be made by the Company hereunder is required in respect of any
Taxes pursuant to any applicable law, rule or regulation, then the Company will

            (a) pay directly to the relevant authority the full amount required
to be so withheld or deducted;

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            (b) promptly forward to the Lender an official receipt or other
     documentation satisfactory to the Lender evidencing such payment to such
     authority; and

            (c) pay to the Lender such additional amount or amounts as is
     necessary to ensure that the net amount actually received by the Lender
     will equal the full amount the Lender would have received had no such
     withholding or deduction been required.

Moreover, if any Taxes are directly asserted against the Lender or on any
payment received by the Lender hereunder, the Lender may pay such Taxes and the
Company will promptly pay such additional amount (including any penalty,
interest or expense) as is necessary in order that the net amount received by
the Lender after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount the Lender would have received had no
such Taxes been asserted.

     If the Company fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Lender the required receipts or other
required documentary evidence, the Company shall indemnify the Lender for any
incremental Tax, interest, penalty or expense that may become payable by the
Lender as a result of any such failure.

3.   CONDITIONS PRECEDENT.

     3.1    INITIAL LOAN.

     The obligation of the Lender to make the initial Loan shall be subject to
the prior or concurrent satisfaction of each of the following conditions
precedent:

            (a) The Company shall have delivered to the Lender a certificate
     dated the date of this Agreement of its Secretary or Assistant Secretary as
     to (i) resolutions of its Board of Directors then in full force and effect
     authorizing the execution, delivery and performance of this Agreement, the
     Note, and each of the other Loan Documents; and (ii) the incumbency and
     signatures of those of its officers authorized to act with respect to this
     Agreement, the Note and each of the Loan Documents executed by it, upon
     which certificate the Lender may conclusively rely until it shall have
     received a further certificate of the Secretary or Assistant Secretary of
     the Company canceling or amending such prior certificate.

            (b) The Lender shall have received the Note duly executed and
     delivered by the Company.

     3.2    EACH LOAN.

     The obligation of the Lender to make any Loan (including the initial Loan)
shall be subject to a certification by the Company that the following statements
are true and correct before and after giving effect to such Loan: (i) the
representations and warranties set forth in Section 4 shall be true and correct
with the same effect as if then made (unless stated to relate solely to an
earlier date, in which case such representations and warranties shall be true
and correct as of such earlier date); (ii) no Event of Default or Unmatured
Event of Default shall have occurred and be continuing; (iii) the amount of Cash
held by the Company shall be a

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specified amount less than $40,000,000; and (iv) the Company shall have no
overdue amounts (i.e. amounts unpaid for more than five (5) Business Days
following the due date) then owed to the Lender hereunder or under the
Manufacturing and Supply Agreement, the Termination Agreement or the Finishing
and Packaging Agreement.

4.   REPRESENTATIONS.

     The Company represents and warrants to the Lender that:

     4.1    ORGANIZATION.

     It is duly organized and in good standing under the laws of its state of
incorporation and duly qualified to do business in each jurisdiction where such
qualification is necessary.

     4.2    AUTHORIZATION.

     The execution and delivery of this Agreement, the Note and the other Loan
Documents and the performance by the Company of its obligations hereunder and
thereunder are within the Company's powers and have been duly authorized by all
necessary action on the Company's part, and do not and will not contravene or
conflict with the Company's organizational documents or violate or constitute a
default under any law, rule or regulation any presently existing requirement or
restriction imposed by judicial, arbitral or other governmental instrumentality
or any agreement, instrument or indenture by which the Company is bound.

     4.3    ENFORCEABILITY.

     This Agreement is the Company's legal, valid and binding obligation,
enforceable in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar state
or federal debtor relief laws from time to time in effect which may affect the
enforcement of creditors' rights in general and the availability of equitable
remedies.

     4.4    FINANCIAL STATEMENTS.

     The financial statements of the Company as at March 31, 2002, copies of
which were included in the Company's Quarterly Report in Form 10-Q for the
quarter ended on such date, have been prepared in accordance with generally
accepted accounting principles consistently applied, and present fairly the
financial condition of the Company at the date thereof and the results of its
operations for the period then ended. In the period commencing on the date of
such financial statements and ending on the date of this Agreement, there has
been no material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Company (provided that under no
circumstances shall the transactions contemplated by this Agreement, the
Termination Agreement, the Supply and Manufacturing Agreement or the Finishing
and Packaging Agreement, or the consequences thereof be deemed adverse to the
Company for the purposes of this sentence.)

     4.5    USE OF PROCEEDS. The Company shall use the proceeds of the Loans for
working capital purposes, including without limitation for normal operating
expenses.

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5.   COVENANTS.

     From the date of this Agreement and thereafter until the termination of the
Facility and until the Obligations are paid in full, the Company agrees that it
(and any of its Subsidiaries that may exist prior to the termination of this
Agreement) will:

     5.1    FINANCIAL INFORMATION. Furnish to the Lender:

            (a) as soon as available and in any event within 45 days after the
     end of each fiscal quarter (or, at any time that any Loan is outstanding
     under this Agreement, within 30 days following any fiscal month) of the
     Company, a calculation by the Company of the amount of Cash held by the
     Company and its Subsidiaries at the end of such period;

            (b) upon the occurrence of a Unmatured Event of Default or Event of
     Default, notice of such Unmatured Event of Default or Event of Default; and

            (c) upon effectiveness of the U.S. Product Approval and European
     Union Product Approval, notice thereof.

     5.2    INDEBTEDNESS. Not incur or permit to exist any Indebtedness except:

            (a) the Indebtedness hereunder;

            (b) Indebtedness in an amount not in excess of $35,000,000 secured
     by accounts receivable generated by the sale of Coviracil;

            (c) Indebtedness in amounts not in excess of $2,750,000 under that
     certain Master Loan and Security Agreement No. 83834 with Wells Fargo
     Equipment Finance, Inc., in the form delivered to the Lender;

            (d) Indebtedness subordinated in right and time of payment to the
     Indebtedness hereunder (provided that such Indebtedness may be paid in the
     ordinary course so long as no Event of Default shall have occurred and be
     continuing hereunder);

            (e) Trade accounts payable and other arrangements for the payment of
     accounts payable made in the ordinary course of business; and

            (f) Indebtedness in existence on the date hereof and listed on
     EXHIBIT 5.2.

     5.3    COMPLIANCE WITH LAWS. Comply with all applicable laws, except where
failure to so comply is not reasonably likely to have a material adverse effect
on the financial condition, operations, assets, business or properties of the
Company

     5.4    LINES OF CREDIT. Use reasonable efforts to obtain other financing
permitted under SECTION 5.2 to the extent that, in the reasonable opinion of the
Company, such financing can be obtained at reasonable terms.

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     5.5    LIENS. Not create, incur, assume or suffer to exist any Lien upon
any of its property, revenues or assets, whether now owned or hereafter
acquired, except:

            (a)   Liens on accounts receivable securing payment of Indebtedness
     permitted under SECTION 5.2(b);

            (b)   Liens in existence on the date hereof and listed on EXHIBIT
     5.5.

            (c)   Liens for taxes, assessments or other governmental charges or
     levies not at the time delinquent or hereafter payable without penalty or
     being diligently contested in good faith by appropriate proceedings and for
     which adequate reserves in accordance with generally accepted accounting
     principles shall have been set aside on its books;

            (d)   Liens of carriers, warehousemen, mechanics, materialmen and
     landlords incurred in the ordinary course of business for sums not overdue
     or being diligently contested in good faith by appropriate proceedings and
     for which adequate reserves in accordance with generally accepted
     accounting principles shall have been set aside on its books;

            (e)   Liens incurred in the ordinary course of business in
     connection with workmen's compensation, unemployment insurance or other
     forms of governmental insurance or benefits, or to secure performance of
     tenders, statutory obligations, leases and contracts (other than for
     borrowed money) entered into in the ordinary course of business or to
     secure obligations on surety or appeal bonds;

            (f)   judgment Liens in existence less than 15 days after the entry
     thereof or with respect to which execution has been stayed or the payment
     of which is covered in full (subject to a customary deductible) by
     insurance maintained with responsible insurance companies;

            (g)   Liens constituting encumbrances in the nature of zoning
     restrictions, easements and rights or restrictions of record on the use of
     real property, which in the aggregate are not substantial in amount and
     which do not, in any case, detract from the value of such property or
     materially impair the use thereof in the ordinary conduct of business;

            (h)   Other Liens not referred to in (a) through (g), above;
     provided that the Indebtedness secured by such Liens, in the aggregate,
     shall not exceed $1,000,000 at any one time outstanding; and

            (i)   Liens created solely for the purpose of extending, renewing or
     replacing in whole or in part Indebtedness secured by any Lien referred to
     in the foregoing clauses (a), (b) and (h), above.

     5.6    INVESTMENTS. Not make, incur, assume or suffer to exist any
Investment in any other Person, except:

            (a)   Investments existing on the Effective Date and identified in
     EXHIBIT 5.6;

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            (b)   Cash;

            (c)   Investments in the ordinary course of business related to the
     existing business of the Borrower; and

            (d)   Other investments not referred to in (a) through (c) above,
     provided that the aggregate amount of such investments shall not exceed
     $5,000,000

6.   EVENTS OF DEFAULT.

     6.1    EVENTS. Each of the following shall constitute an Event of Default:

            (a)   The Company fails to pay when due any principal of, or within
     five (5) Business Days following the date when due interest on, any Loan or
     any other amount payable hereunder or under the Note;

            (b)   Any representation or warranty of the Company made or deemed
     made hereunder or under any other writing or certificate furnished by or on
     behalf of the Company to the Lender for the purposes of or in connection
     with this Agreement shall at any time prove to have been incorrect in any
     material respect when made or deemed made;

            (c)   The Company defaults in the due performance or observance of
     any other agreement contained herein or in any other Loan Document or
     defaults in the payment or performance of any material obligation under the
     Manufacturing and Supply Agreement, the Termination Agreement or the
     Finishing and Packaging Agreement and such default shall continue for
     thirty (30) days after notice thereof shall have been given to the Company
     from the Lender;

            (d)   The Company defaults in the payment when due (subject to any
     applicable grace period), whether by acceleration or otherwise, of any
     other Indebtedness of the Company the aggregate amount of which is in
     excess of $2,500,000; or a default shall occur in the performance or
     observance of any obligation or condition with respect to such other
     Indebtedness if the effect of such default in performance or observance is
     to accelerate maturity of any such Indebtedness or to permit the holder or
     holders of such Indebtedness, or any trustee or agent for such holders, to
     cause such Indebtedness to become due and payable prior to its expressed
     maturity;

            (e)   Any judgment or order for the payment of money in excess of
     $5,000,000 shall be rendered against the Company and either

                  (i)   enforcement proceedings shall have been commenced by any
            creditor upon such judgment or order; or

                  (ii)  there shall be any period of thirty (30) consecutive
            days during which a stay of enforcement of such judgment or order,
            by reason of a pending appeal or otherwise, shall not be in effect;
            or

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            (f)   The Company shall

                  (i)   become insolvent or generally fail to pay, or admit in
            writing its inability or unwillingness to pay, debts as they become
            due;

                  (ii)  apply for, consent to or acquiesce in the appointment of
            a trustee, receiver, sequestrator or other custodian for the Company
            or any property thereof, or make a general assignment for the
            benefit of creditors;

                  (iii) in the absence of such application, consent or
            acquiescence, permit or suffer to exist the appointment of a
            trustee, receiver, sequestrator or other custodian for the Company
            or for a substantial part of the property thereof, and such trustee,
            receiver, sequestrator or other custodian shall not be discharged
            within 30 days;

                  (iv)  permit or suffer to exist the commencement of any
            bankruptcy, reorganization, debt arrangement or other case or
            proceeding under any bankruptcy or insolvency law, or any
            dissolution, winding up or liquidation proceeding, in respect of the
            Company and, if any such case or proceeding is not commenced by the
            Company, such case or proceeding shall be consented to or acquiesced
            in by the Company or shall result in the entry of an order for
            relief or shall remain for 60 days undismissed; or

                  (v)   take any action authorizing, or in furtherance of, any
            of the foregoing.

            (g)   The Company, or any successor thereto, shall fail to pay in
     full all outstanding principal, accrued interest and other amounts payable
     under this Agreement within thirty (30) days following (i) any Change of
     Control or (ii) any merger or consolidation with any other Person or
     purchase or other acquisition of all or substantially all of the assets of
     another Person, if such Person is engaged in a business not substantially
     similar to the business engaged in by the Company.

     6.2    REMEDIES.

     Upon the occurrence of an Event of Default under SECTION 6.1(f), the
commitment of the Lender to make Loans shall be terminated and the Note and all
other obligations hereunder shall become immediately due and payable in full;
and upon the occurrence of any other Event of Default, the commitment of the
Lender to make Loans may be terminated by the Lender and the Lender may declare
the Note and the principal of and accrued interest on each Loan, and all other
amounts payable hereunder, to be forthwith due and payable in full.

7.   DEFINITIONS.

     As used in this Agreement:

     "AUTHORIZED OFFICER" means each officer or employee of the Company who is
authorized to request Loans, to confirm in writing any such request and to agree
to rates of interest, as set

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forth on the schedule of Authorized Officers most recently delivered by the
Company to the Lender.

     "BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which the commercial banks are required or permitted to close in Chicago.

     "CASH" means cash, cash equivalents, and short and long term fixed
investments.

     "CHANGE OF CONTROL" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of forty percent (40%) or more of the outstanding shares of voting
stock of the Company.

     "CONTINGENT LIABILITY" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person.

     "DOLLARS" means lawful money of the United States of America.

     "EVENT OF DEFAULT" means an event described in Section 6.1.

     "FACILITY" has the meaning set forth in the initial paragraph of this
Agreement.

     "FINISHING AND PACKAGING AGREEMENT" means an agreement with respect to
finishing and packaging of FTC to be negotiated between the Lender and the
Company.

     "HEDGING AGREEMENT" means any interest rate, currency or commodity swap
agreement, cap agreement or collar agreement, and any other agreement or
arrangement designed to protect a Person against fluctuations in interest rates,
currency exchange rates or commodity prices.

     "HEDGING OBLIGATION" means, with respect to any Person, any liability of
such Person under any Hedging Agreement.

     "INVESTMENT" means, relative to any Person,

            (a)   any loan or advance made by such Person to any other Person
     (excluding commission, travel and similar advances to officers and
     employees made in the ordinary course of business);

            (b)   any Contingent Liability of such Person; and

            (c)   any ownership or similar interest held by such Person in any
     other Person.

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     "INDEBTEDNESS" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, whether or not evidenced by
bonds, debentures, notes or similar instruments, (b) all obligations of such
Person as lessee under capital leases which have been or should be recorded as
liabilities on a balance sheet of such Person in accordance with generally
accepted accounting practices, (c) all indebtedness secured by a lien or
security interest on the property of such Person, whether or not such
indebtedness shall have been assumed by such Person, (d) all obligations,
contingent or otherwise, with respect to the face amount of all letters of
credit (whether or not drawn) and banker's acceptances issued for the account of
such Person, (e) all Hedging Obligations of such Person, excluding any portion
thereof which would be accounted for as interest under generally accepted
accounting principles or for which hedge accounting under generally accepted
accounting principles is applicable, (f) all Suretyship Liabilities of such
Person and (g) all Debt of any partnership of which such Person is a general
partner.

     "LIEN" means any security, interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), or
charge against or interest in property to secure payment of a debt or
performance of an obligation.

     "LOAN" means a loan by the Lender to the Company made pursuant to SECTION
1.

     "LOAN DOCUMENTS" means this Agreement, the Note and each other agreement,
document or instrument delivered in connection with the establishment of the
Facility pursuant to this Agreement, and does not include the Termination
Agreement, the Manufacturing and Supply Agreement or the Finishing and Packaging
Agreement.

     "MANUFACTURING AND SUPPLY AGREEMENT" means the Manufacturing and Supply
Agreement dated the date hereof between the Lender and the Company.

     "NOTE" has the meaning set forth in SECTION 1.5.

     "OBLIGATIONS" means all obligations (monetary or otherwise) of the Company
arising under or in connection with this Agreement, the Note and each of the
other Loan Documents.

     "PERSON" means any natural person, corporation, association, limited
liability company, joint venture or other business entity.

     "SUBSIDIARY" means any corporation, association, partnership, limited
liability company, joint venture or other business entity of which more than 50%
of the voting stock, membership interests or other equity interests is owned or
controlled directly or indirectly by the Company, or one or more of the
Subsidiaries of the Company, or a combination thereof.

     "SURETYSHIP LIABILITY" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's obligation in respect of any Suretyship

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Liability shall (subject to any limitation set forth therein) be deemed to be
the principal amount of the debt, obligation or other liability supported
thereby.

     "TAXES" has the meaning set forth in Section 2.

     "TERMINATION AGREEMENT" means the Termination Agreement dated the date
hereof between the Lender and the Company.

     "UNMATURED EVENT OF DEFAULT" means an event which with notice, the lapse of
time or both would constitute an Event of Default.

8.   GENERAL.

     8.1    INSTRUCTIONS

     The Company hereby authorizes the Lender to rely upon telephonic or written
instructions of any person identifying himself or herself as an Authorized
Officer and upon any signature which the Lender believes to be genuine, and the
Company shall be bound thereby in the same manner as if such person where
authorized or such signature were genuine.

     8.2    PAYMENTS.

     Payments hereunder and under the Note shall be made in immediately
available funds in Dollars.

     8.3    INDEMNIFICATION.

     In consideration of the execution and delivery of this Agreement by the
Lender and the extension of credit hereunder, the Company hereby indemnifies,
exonerates and holds the Lender and each of its officers, directors, employees
and agents (collectively, the "Indemnified Parties") free and harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith (irrespective of
whether such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable attorneys' fees and
disbursements (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Loan or any investigation,
litigation or proceeding related to any environmental cleanup, audit, compliance
or other matter relating to the protection of the environment or the release by
the Company of any hazardous material, except for any such Indemnified
Liabilities arising for the account of a particular Indemnified Party by reason
of the relevant Indemnified Party's gross negligence or willful misconduct and
any Indemnified Liabilities asserted by the Company itself. If and to the extent
that the foregoing undertaking may be unenforceable for any reason, the Company
hereby agrees to make the maximum contribution to the payment in satisfaction of
each of the Indemnified Liabilities which is permissible under applicable law.

                                       12
<Page>

     8.4    NOTICES.

     All notices and other communications provided to any party hereto under
this Agreement or any other Loan Document shall be in writing or by facsimile
and addressed, delivered or transmitted to such party at its address or
facsimile number set forth below or at such other address or facsimile number as
may be designated by such party in a notice to the other party in writing:

     If to Triangle:

            Triangle Pharmaceuticals, Inc.
            4 University Place
            4611 University Drive
            Durham, North Carolina 27707
            Telephone:  (919) 493-5980
            Telefax:    (919) 493-5925
            Attention:  Chief Operating Officer
            Copy to:    General Counsel

     Copy to:

            Gerald F. Roach
            Smith Anderson Blount Dorsett Mitchell & Jernigan L.L.P.
            2500 First Union Capital Center
            Raleigh, NC 27601
            Telephone:  (919) 821-6668
            Telefax:    (919) 821-6800

     If to Abbott:

            Abbott Laboratories
            Dept. R50A, Bldg. AP34
            200 Abbott Park Road
            Abbott Park, IL  60064-6187
            Telephone: (847) 938-0101
            Telefax: (847) 937-1771

            Attention:  Vice President
                               Global Licensing/New Business Development

     Copy to:

            General Counsel
            Abbott Laboratories
            Dept. 364; Bldg. AP6D
            100 Abbott Park Road
            Abbott Park, IL 60064

                                       13
<Page>

            Telephone:  (847) 937-8906
            Telefax:    (847) 938-6277

     8.5    SURVIVAL.

     The Obligations of the Company under Sections 2, and 8.3 shall survive any
payment of the principal of and interest on the Loans and the termination of
this Agreement.

     8.6    COUNTERPARTS.

     This Agreement may be executed in any number of separate counterparts, each
of which when so executed and delivered shall be an original, and all such
counterparts shall together constitute one and the same instrument.

     8.7    WAIVER.

     No modification or waiver with respect to this Agreement or any other Loan
Document shall be effective unless in writing, and any waiver by the Lender of
any rights hereunder or under any other Loan Document shall not constitute a
waiver of any other rights of the Lender from time to time.

     8.8    DISPUTE RESOLUTION

     The Company and the Lender recognize that a bona fide dispute as to certain
matters may arise from time to time during the term of this Agreement which may
relate to either party's rights and/or obligations hereunder. The Company and
the Lender agree that any dispute that arises in connection with this Agreement,
which cannot be amicably resolved by management discussions shall be resolved by
binding Alternative Dispute Resolution ("ADR") in the manner described in
EXHIBIT 8.8.

     8.9    APPLICABLE LAW.

     This Agreement, the Note and each other Loan Document shall be governed by
the internal laws of the State of Delaware applicable to contracts made and to
be performed entirely within such State.

                                       14
<Page>

     Please acknowledge your agreement to the foregoing by signing and returning
a copy of this letter.

                                     ABBOTT LABORATORIES

                                     By: /s/ Jeffrey M. Leiden
                                         ---------------------------------------
                                     Title:  President & Chief Operating Officer
                                             -----------------------------------
                                             Pharmaceuticals Products Group
                                             ------------------------------
                                     Address:
                                             -----------------------------------
                                     Facsimile No.:
                                                   -----------------------------

Agreed to this 30th day of
July, 2002

TRIANGLE PHARMACEUTICALS, INC.

By: /s/ Chris A. Rallis
    --------------------------------------
Title:President and Chief Operating Officer
      ------------------------------------
Address:
        ----------------------------------
Facsimile No.:
              ----------------------------

                                       S-1<Page>

                                                                    EXHIBIT 10.5

                         TRIANGLE PHARMACEUTICALS, INC.

                              EMPLOYMENT AGREEMENT

          EMPLOYMENT AGREEMENT, dated as of this 5th day of August, 2002,
between Triangle Pharmaceuticals, Inc., a Delaware corporation (the "COMPANY"),
and Daniel G. Welch (the "EXECUTIVE").

                                R E C I T A L S:

          WHEREAS, the Company believes that the future growth, profitability
and success of the Company's business will be enhanced by its employment of the
Executive; and

          WHEREAS, the Company desires to employ the Executive and the Executive
has indicated his willingness to be so employed, on the terms and conditions set
forth herein.

          NOW, THEREFORE, on the basis of the foregoing premises and in
consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:

          Section 1.   EMPLOYMENT. The Company hereby agrees to employ the
Executive and the Executive hereby accepts employment with the Company, on the
terms and subject to the conditions hereinafter set forth. Subject to the terms
and conditions contained herein, the Executive shall serve as Chairman and Chief
Executive Officer of the Company and, in such capacity, shall report directly to
the Board of Directors of the Company (the "BOARD") and shall have such duties
and responsibilities as are typically performed by a chairman and chief
executive officer of a corporation similar to the Company, together with such
additional duties and responsibilities, commensurate with the Executive's
position as Chairman and Chief Executive Officer of the Company, as may
reasonably be assigned to the Executive from time to time by the Board. The
principal location of the Executive's employment shall be at the Company's
principal executive offices located in Durham, North Carolina, although the
Executive understands and agrees that he may be required to travel from time to
time for business reasons.

          Section 2.   TERM. The term of the Executive's employment hereunder
shall commence on August 5, 2002 (the "COMMENCEMENT DATE") and shall continue
until terminated in accordance with Section 6 hereof (the "EMPLOYMENT TERM").

          Section 3.   COMPENSATION. During the Employment Term, the Executive
shall be entitled to the following compensation and benefits:

          (a)     SALARY. The Company shall pay to the Executive a salary (the
"SALARY") of $425,000 per annum. The Salary will be reviewed annually and may be
increased at the discretion of the Board. The Salary shall be payable in
accordance with the payroll practices of the Company as the same shall exist
from time to time. In no event shall the Salary be decreased during the
Employment Term.

<Page>

          (b)     BONUS PLAN; SIGNING BONUS.

          (i)     The Executive shall be eligible for an annual incentive bonus
award from the Company in respect of each fiscal year during the Term of
Employment (the "ANNUAL BONUS"). The Executive's target Annual Bonus for each
such year shall be an amount equal to 50% of his Salary for such year. The Board
and the Executive will use their reasonable best efforts to agree on annual
objectives for such bonus, not later than 60 days from the beginning of each
year (or, in the case of 2002, no later than 60 days from the date hereof).
Annual objectives may be refined during the year to reflect changing priorities
and circumstances, by mutual agreement of the Executive and the Board. At the
discretion of the Board, the Executive's Annual Bonus amount for each such year
may be less than or greater than the target amount, depending upon the degree of
attainment of annual objectives. The amount of Annual Bonus shall be
communicated to the Executive within the first 90 days of each such year. The
Executive's Annual Bonus for 2002 shall be prorated based on the number of days
worked in that year. The Executive shall receive the Annual Bonus in respect of
any year at the same time as bonuses are paid to other executive officers of the
Company, but in no event later than ninety (90) days following the end of the
fiscal year for which the Annual Bonus is payable.

          (ii)    Within fifteen (15) days of the Commencement Date, the Company
shall pay the Executive a signing bonus of $50,000.

          (c)     OPTIONS. On the Commencement Date, the Company shall grant the
Executive an option (the "Option") to purchase 2,300,000 shares of common stock
of the Company, at an exercise price per share equal to the closing selling
price per share of the common stock on the Commencement Date, as such price is
reported on Nasdaq National Market. Subject to continued employment, the option
shall vest and be exercisable as to one-sixtieth (1/60th) of the underlying
shares on each monthly anniversary of the Commencement Date and shall be subject
to the terms and conditions of the notice of grant and stock option agreement,
attached hereto as Exhibits A and B, respectively (together, the "Option
Agreement"). The Executive will also be eligible to receive annual option grants
based on performance and grants for achievement of significant milestones as
determined by the Board.

          (d)     BENEFITS. The Executive shall be entitled to participate in
the health, life insurance, pension and other benefit plans and programs
provided to senior executives of the Company on terms no less favorable than
those available to such executives. The Executive shall also be entitled to six
weeks vacation and the same number of holidays, sick days and other benefits as
are generally allowed to senior executives of the Company in accordance with the
Company policy in effect from time to time.

          (e)     RELOCATION EXPENSES. The Company shall reimburse Executive for
reasonable and customary expenses incurred in connection with his relocation to
the Durham, North Carolina area; provided that the total amount payable to
Executive, including a gross-up for taxes incurred by him in connection with
such reimbursement, shall not exceed $300,000.

                                       -2-
<Page>

          Section 4.   EXCLUSIVITY. During the Employment Term, the Executive
shall devote his full time to the business of the Company, shall faithfully
serve the Company, shall in all respects conform to and comply with the lawful
and reasonable directions and instructions given to him by the Board in
accordance with the terms of this Agreement, shall use his best efforts to
promote and serve the interests of the Company and shall not, without the prior
written approval of the Board, engage in any other business activity, whether or
not such activity shall be engaged in for pecuniary profit, except that the
Executive may (i) participate in the activities of professional trade
organizations related to the business of the Company and (ii) engage in personal
investing activities, provided that activities set forth in these clauses (i)
and (ii), either singly or in the aggregate, do not interfere in any material
respect with the services to be provided by the Executive hereunder.

          Section 5.   REIMBURSEMENT FOR EXPENSES. The Executive is authorized
to incur reasonable expenses in the discharge of the services to be performed
hereunder, including expenses for travel, entertainment, lodging and similar
items, in accordance with the Company's expense reimbursement policy, as the
same may be modified by the Board from time to time. The Company shall reimburse
the Executive for all such proper expenses upon presentation by the Executive of
itemized accounts of such expenditures in accordance with the financial policy
of the Company, as in effect from time to time.

          Section 6.   TERMINATION.

          (a)     DEATH. The Executive's employment shall automatically
terminate upon his death.

          (b)     DISABILITY. If the Executive is unable to perform the duties
required of him under this Agreement because of any physical or mental
disability or infirmity that prevents the performance of the Executive's duties
for a period of (i) ninety (90) consecutive calendar days or (ii) one hundred
twenty (120) non-consecutive business days during any twelve (12) month period,
the Company may terminate Executive's employment immediately upon written
notice. Any question as to the existence, extent or potentiality of the
Executive's disability upon which the Executive and the Company cannot agree
shall be determined by a qualified, independent physician selected by the
Company and approved by the Executive (which approval shall not be unreasonably
withheld). The determination of any such physician shall be final and
conclusive.

          (c)     CAUSE. The Company may terminate the Executive's employment at
any time, with or without Cause. Termination of the Executive's employment
hereunder shall be effective upon delivery of such notice of termination, except
that, in the event of termination pursuant to this Section 6(c) for Cause, the
Company shall deliver to the Executive written notice setting forth the basis
for such termination, which notice shall specifically set forth the nature of
action constituting Cause. If such actions are curable, the Executive shall have
a period of thirty (30) calendar days to cure such actions and shall have the
right, during such period, to be heard before the Board at a place and time to
be designated by the Board and subject to Executive's approval, which approval
shall not be unreasonably withheld. If Executive does not attempt to cure such
actions or fails to cure such actions to the satisfaction of the Board,
Executive's employment shall be deemed terminated for Cause on the thirtieth
(30) day following the date specified in the original notice of termination. The
Company, in its reasonable discretion, shall

                                       -3-
<Page>

have the right to relieve Executive of all duties and responsibilities during
such period and deny him access to Company premises, and any such actions taken
by the Company shall not constitute "Good Reason" (as hereinafter defined) under
this Agreement. For purposes of this Agreement, "CAUSE" shall mean (i) the
Executive's willful failure (except where due to a disability), gross neglect or
refusal to perform his duties hereunder; (ii) any willful or intentional act of
the Executive that has the effect of injuring the reputation or business of the
Company or its affiliates in any material respect; (iii) public or consistent
drunkenness by the Executive or his illegal use of narcotics which is, or could
reasonably be expected to become, materially injurious to the reputation or
business of the Company or which impairs, or could reasonably be expected to
impair, the performance of the Executive's duties hereunder; (iv) conviction of,
or plea of guilty or NOLO CONTENDERE to, the commission of a felony by the
Executive; (v) the commission by the Executive of an act of fraud, embezzlement
or dishonesty against the Company; or (vi) the Executive's breach of (A) any of
the covenants contained in Section 7 hereof, (B) any provisions of the
Confidentiality Agreement (as defined in Section 7 hereof) or (C) the
representations set forth in Section 10 hereof.

          (d)     GOOD REASON. The Executive may terminate his employment for
Good Reason, but only if the Company receives written notice from the Executive
describing in detail the specific nature of the action constituting Good Reason,
and such action is not corrected by the Company within thirty (30) days of
receipt of such notice (the "CURE PERIOD"). Such notice must be given to the
Company within ninety (90) days of the action allegedly constituting Good
Reason. For this purpose, "GOOD REASON" shall mean without the Executive's
consent, (i) a change in the Executive's title, or a material diminution in his
duties, responsibilities, Salary or target Annual Bonus, (ii) a change whereby
Executive no longer reports directly to the Board, (iii) a relocation of the
Company's principal executive offices to a location more than thirty (30) miles
from Durham, North Carolina, or (iv) the failure of the Company to obtain the
assumption in writing of its obligation to perform under the employment
agreement by any successor to all or substantially all of the assets of the
Company; PROVIDED, HOWEVER, that Good Reason shall not include a termination of
the Executive's employment hereunder pursuant to Section 6(b) or (c) hereof. The
date of termination of the Executive's employment under this Section 6(d) shall
be the effective date of any resignation specified in writing by the Executive,
which may not be less than thirty (30) days after receipt by the Company of
written notice of such resignation; PROVIDED, HOWEVER, that such resignation
shall not be effective and the action constituting Good Reason shall be deemed
to have been cured if such action is corrected by the Company during the Cure
Period.

          (e)     RESIGNATION. The Executive shall have the right to terminate
his employment other than for Good Reason upon sixty (60) days' prior written
notice to the Company.

          (f)     PAYMENTS.

          (i)     In the event that the Executive's employment terminates for
any reason, the Company shall pay to the Executive all accrued but unpaid Salary
through the date of termination of the Executive's employment and any unpaid or
unreimbursed expenses incurred in accordance with Section 5 hereof (the "ACCRUED
OBLIGATIONS").

                                       -4-
<Page>

          (ii)    In the event the Executive's employment is terminated by the
Company without Cause (other than pursuant to Section 6(b) hereof), or by the
Executive with Good Reason, in addition to the Accrued Obligations, the
Executive shall (A) continue to receive the Salary (less any applicable
withholding or similar taxes) at the rate in effect hereunder on the date of
such termination periodically, in accordance with the Company's prevailing
payroll practices, and shall continue to receive medical and dental benefits at
no additional cost to the Executive, in each case for a period of eighteen (18)
months following the date of such termination, and (B) receive a prorated Annual
Bonus for the year of termination, based on the number of days worked during
such year, calculated on the basis of 100% achievement of the target Annual
Bonus, such payment to be made at the time the Annual Bonus would otherwise have
been paid for such year. The Executive's right to receive severance, continued
medical and dental benefits and prorated bonus pursuant to this Section 6(f)(ii)
shall be expressly conditioned upon the Executive's compliance with the
provisions of Section 7 hereof and his execution of a general release in favor
of the Company and its affiliates and related parties in such form as is
reasonably required by the Company, and the expiration of any waiting periods
contained in such release.

          (iii)   In the event of any termination of employment, the Executive
shall be under no obligation to mitigate amounts payable under this Section 6(f)
by seeking other employment or otherwise and, except as provided in Section 7(d)
hereof, there shall be no offset against amounts due to the Executive hereunder
on account of subsequent employment or otherwise; PROVIDED, HOWEVER, that
medical and dental benefits shall cease if Executive secures full-time
employment during the 18-month period following his termination.

          (iv)    Upon any termination of employment, the Executive's rights
with respect to the Option shall be governed by the terms of the Option
Agreement.

          (g)     SURVIVAL OF OPERATIVE SECTIONS. Upon any termination of the
Executive's employment, the provisions of Section 6(f) and Section 7 through
Section 17 of this Agreement shall survive to the extent necessary to give
effect to the provisions thereof.

          Section 7.   SECRECY AND NON-COMPETITION.

          (a)     NO COMPETING EMPLOYMENT. The Executive acknowledges that the
agreements and covenants contained in this Section 7 are essential to protect
the value of the Company's business and assets and, by his current employment
with the Company and its subsidiaries, the Executive has obtained and will
obtain such knowledge, contacts, know-how, training and experience and there is
a substantial probability that such knowledge, know-how, contacts, training and
experience could be used to the substantial advantage of a competitor of the
Company and to the Company's substantial detriment. Therefore, the Executive
agrees that during the Employment Term and for the period ending on the first
anniversary of the termination of the Executive's employment hereunder, the
Executive shall not, anywhere in the world, participate or engage, directly or
indirectly, for himself or on behalf of or in conjunction with any person,
partnership, corporation or other entity, whether as an employee, agent,
officer, director, shareholder, partner, joint venturer, investor or otherwise,
in any business activities related to the anti-viral segment of the
pharmaceutical industry, or any other major segment of such industry in which
the Company or any of its subsidiaries was engaged, or had decided to

                                       -5-
<Page>

become engaged in a material way, during the Employment Term, as evidenced by
written Company documentation.

          (b)     NO INTERFERENCE. During the Employment Term and for the period
ending on the second anniversary of the termination of the Executive's
employment hereunder, the Executive shall not, whether for his own account or
for the account of any other individual, partnership, firm, corporation or other
business organization (other than the Company), directly or indirectly solicit,
endeavor to entice away from the Company or its subsidiaries, or otherwise
directly interfere with the relationship of the Company or its subsidiaries with
any person who, to the knowledge of the Executive, is, or was within the then
most recent twelve-month period, employed by or otherwise engaged to perform
services for the Company or its subsidiaries (including, but not limited to, any
independent sales representatives or organizations) or who is, or was within the
then most recent twelve-month period, a clinical, medical, scientific or
business advisor to, the Company, or any of its subsidiaries; provided that the
Executive may engage clinical, medical, scientific or business advisors who had
or have a business relationship with the Company for work unrelated to the
pharmaceutical segments described in Section 7(a). The placement of any general
classified or "help wanted" advertisements and/or general solicitations to the
public at large shall not constitute a violation of this Section 7(b) unless the
Executive's name is contained in such advertisements or solicitations.

          (c)     CONFIDENTIAL INFORMATION. As a condition of the Executive's
employment hereunder, the Executive will execute, prior to the Commencement
Date, the Company's standard Confidentiality and Invention Assignment Agreement
(the "CONFIDENTIALITY AGREEMENT"). During the Term of Employment and following
any termination of the Executive's employment, the Executive agrees to comply
with the terms and conditions of the Confidentiality Agreement.

          (d)     Upon a material breach by Executive of any provisions of this
Section 7, Executive shall (i) be liable to the Company for an amount equal to
the aggregate of all gains realized by Executive, within the 24-month period
immediately preceding such breach, from the exercise of any options (including
the Option) or vesting of any other equity awards, and (ii) forfeit his right to
receive any termination payments described in Section 6(f)(ii) which have not
been paid prior to the date of such breach.

          Section 8.   INJUNCTIVE RELIEF. Without intending to limit the
remedies available to the Company, the Executive acknowledges that a breach of
any of the covenants contained in Section 7 hereof may result in material
irreparable injury to the Company or its subsidiaries or affiliates for which
there would be no adequate remedy at law, that it would not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach or threat thereof, in addition to the damages described in Section 7(d)
hereof, the Company shall be entitled to obtain a temporary restraining order
and/or a preliminary or permanent injunction, without the necessity of proving
irreparable harm or injury as a result of such breach or threatened breach of
Section 7 hereof, restraining the Executive from engaging in activities
prohibited by Section 7 hereof and providing other relief as may be required
specifically to enforce any of the covenants in Section 7 hereof.

                                       -6-
<Page>

          Section 9.   EXTENSION OF RESTRICTED PERIOD. In addition to the
remedies the Company may seek and obtain pursuant to Section 8 of this
Agreement, the Restricted Period shall be extended by any and all periods during
which the Executive shall be found by a court to have been in violation of any
of the covenants contained in Section 7 hereof.

          Section 10.  REPRESENTATIONS AND WARRANTIES OF THE EXECUTIVE. The
Executive represents and warrants to the Company as follows:

          (a)     This Agreement, upon execution and delivery by the Executive,
will be duly executed and delivered by the Executive and (assuming due execution
and delivery hereof by the Company) will be the valid and binding obligation of
the Executive enforceable against the Executive in accordance with its terms.

          (b)     Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby nor the performance of this
Agreement in accordance with its terms and conditions by the Executive will (i)
require the approval or consent of any governmental body or of any other person
or (ii) conflict with or result in any breach or violation of, or constitute (or
with notice or lapse of time or both would constitute) a default under, any
agreement, instrument, judgment, decree, order, statute, rule, permit or
governmental regulation applicable to the Executive. Without limiting the
generality of the foregoing, the Executive is not a party to any
non-competition, non-solicitation, no-hire or similar agreement that restricts
in any way the Executive's ability to engage in any business or to solicit or
hire the employees of any person. In the performance of his duties under this
Agreement, Executive shall not use any confidential or proprietary information
which he may have obtained in connection with his employment with any prior
employer.

          The representations and warranties of the Executive contained in this
Section 10 shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.

          Section 11.  SUCCESSORS AND ASSIGNS; NO THIRD-PARTY BENEFICIARIES.
This Agreement shall inure to the benefit of, and be binding upon, the
successors and assigns of each of the parties, including, but not limited to,
the Executive's heirs and the personal representatives of the Executive's
estate; PROVIDED, HOWEVER, that neither party shall assign or delegate any of
the obligations created under this Agreement without the prior written consent
of the other party. Notwithstanding the foregoing, the Company shall have the
unrestricted right to assign this Agreement and to delegate all or any part of
its obligations hereunder to any of its subsidiaries or affiliates, but in such
event such assignee shall expressly assume all obligations of the Company
hereunder and the Company shall remain fully liable for the performance of all
of such obligations in the manner prescribed in this Agreement. Nothing in this
Agreement shall confer upon any person or entity not a party to this Agreement,
or the legal representatives of such person or entity, any rights or remedies of
any nature or kind whatsoever under or by reason of this Agreement.

          Section 12.  WAIVER AND AMENDMENTS. Any waiver, alteration,
amendment or modification of any of the terms of this Agreement shall be valid
only if made in writing and signed by the parties hereto; PROVIDED, HOWEVER,
that any such waiver, alteration, amendment or

                                      -7-
<Page>

modification is consented to on the Company's behalf by the Board. No waiver by
either of the parties hereto of its rights hereunder shall be deemed to
constitute a waiver with respect to any subsequent occurrences or transactions
hereunder unless such waiver specifically states that it is to be construed as a
continuing waiver.

          Section 13.  SEVERABILITY; GOVERNING LAW; DISPUTE RESOLUTION.

          (a)     The Executive acknowledges and agrees that the covenants set
forth in Section 7 hereof are reasonable and valid in geographical and temporal
scope and in all other respects. If any of such covenants or such other
provisions of this Agreement are found to be invalid or unenforceable by a final
determination of a court of competent jurisdiction (a) the remaining terms and
provisions hereof shall be unimpaired and (b) the invalid or unenforceable term
or provision shall be deemed replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

          (b)     Except for any disputes arising out of a breach or alleged
breach by the Executive of any provisions of Section 7 of this Agreement or of
the Confidentiality Agreement, as to which the Company shall be entitled to seek
a restraining order and/or an injunction in any court of competent jurisdiction,
all disputes arising under this Agreement shall be resolved by arbitration under
the Commercial Arbitration Rules of the American Arbitration Association. The
costs of any such arbitration shall initially be borne equally by the Company
and the Executive, and each side shall initially bear its own legal and other
related costs; PROVIDED, HOWEVER, that the prevailing party in any such dispute
shall be entitled to reimbursement from the losing party of all such
arbitration, legal and other related costs incurred in connection therewith.

          Section 14.  NOTICES.

          (a)     All communications under this Agreement shall be in writing
and shall be delivered by hand or mailed by overnight courier or by registered
or certified mail, postage prepaid:

          (i)     if to the Executive, at his home address for payroll purposes,
or at such other address as the Executive may have furnished the Company in
writing, with copy to Robert Edmonds, Esq., Edmonds & Company, P.C., 420 Fifth
Avenue, New York, New York 10018;

          (ii)    if to the Company, at its principal executive offices in
Durham, North Carolina, marked for the attention of the Board, or at such other
address as it may have furnished in writing to the Executive.

          (b)     Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier, on the
first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of such
mailing.

                                       -8-
<Page>

          Section 15.  SECTION HEADINGS. The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof, or affect the meaning or interpretation of
this Agreement or of any term or provision hereof.

          Section 16.  ENTIRE AGREEMENT. This Agreement, together with the
Exhibits attached hereto, constitutes the entire understanding and agreement of
the parties hereto regarding the employment of the Executive. This Agreement
supersedes all prior negotiations, discussions, correspondence, communications,
understandings and agreements between the parties relating to the subject matter
of this Agreement.

          Section 17.  COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same instrument.

                        [Signatures appear on next page.]

                                       -9-
<Page>

                    [Signature page to Employment Agreement]

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                TRIANGLE PHARMACEUTICALS, INC.

                                By: /s/ Jonathan S. Leff
                                   -------------------------------------
                                   Name:  Jonathan S. Leff
                                   Title: Chairman, Executive Search Committee
                                          of the Board of Directors

/s/ Daniel G. Welch
--------------------------
           Daniel G. Welch

                                      -10-

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