BILL OF SALE AND TERMINATION AGREEMENT

EXHIBIT 10.2

XXXX OF SALE AND TERMINATION AGREEMENT

          This XXXX OF SALE AND TERMINATION AGREEMENT (this “Xxxx of Sale”) dated as of June 18, 2007, among Xxxx Royalty Fund, L.P. (formerly known as Xxxx Capital Royalty Acquisition Fund, L.P.), a Delaware limited partnership (“Xxxx Capital”), Ortec International, Inc., a Delaware corporation (“Ortec”), and Orcel LLC, a Delaware limited liability company and wholly-owned subsidiary of Ortec (“Orcel”). All capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Exchange Agreement (as defined below), except that the term “Assigned Interests” shall have the meaning ascribed to it in the Revenue Interests Assignment Agreement.

          WHEREAS, pursuant to the Amended and Restated Exchange Agreement, dated as of June 18, 2007 by and between Ortec and Xxxx Capital (as amended, supplemented or otherwise modified from time to time, the “Exchange Agreement”), Ortec agreed to issue and deliver to Xxxx Capital shares of Ortec Series A-1 Preferred Stock having an aggregate stated value of $5,000,000 and shares of Ortec Series A-2 Preferred Stock having an aggregate stated value of $5,000,000 in exchange for the cancellation and termination of the Revenue Interests Assignment Agreement and all the Related Agreements to which Xxxx Capital is a party, the assignment by Xxxx Capital of all its interest in the Assigned Interests to Ortec, and the assignment, reassignment and release by Xxxx Capital to Ortec and to Orcel of any and all liens, pledges or security interests that Ortec or Orcel may have granted to Xxxx Capital on the respective assets of Ortec or Orcel to secure their respective obligations to Xxxx Capital under the Revenue Interest Assignment Agreement and the Related Agreements (the “Exchange”);

          WHEREAS, the parties now desire to carry out the purposes of the Exchange Agreement by the execution and delivery of this instrument evidencing the Exchange;

          NOW, THEREFORE, in consideration of the foregoing premises and of other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

          1. Purchase and Exchange of Assets; Release of Security Interests. Xxxx Capital hereby sells, transfers, conveys, assigns, and delivers to Ortec, its successors and assigns, without recourse and without representation or warranty (other than as those representations and warranties expressly provided in the Exchange Agreement), and Ortec hereby purchases from Xxxx Capital, any and all interest that Xxxx Capital may have in the Revenue Interests. Xxxx Capital hereby assigns, reassigns and releases to Ortec and Orcel any and all liens, pledges or security interests that Ortec or Orcel may have granted to Xxxx Capital on the respective assets of Ortec or Orcel to secure their respective obligations to Xxxx Capital under the Revenue Interest Assignment Agreement and the Related Agreements, including (i) the interest which is the subject of the Patent Security Agreement dated August 29, 2001 between Orcel, as grantor, and Xxxx Capital, as grantee, (ii) any interest Xxxx Capital may have in the unregistered intellectual property assigned by Ortec to Orcel by assignment dated September 29, 2001 and (iii) any interest Xxxx Capital may have in the intellectual property assigned by Ortec to Orcel in the Trademark Assignment also dated August 29, 2001.

          2. Termination of Certain Related Agreements. The parties hereto agree that the following agreements are hereby cancelled and terminated according to the terms and provisions as provided therein and are of no further force or effect:

		a.	Revenue Interests Assignment Agreement.
		b.	Amended and Restated Security Agreement dated October 18, 2004, between Orcel LLC and Ortec, each as grantor, and Xxxx Capital, as grantee.
		c.	The Membership Interest Pledge Agreement between Ortec and Xxxx Capital dated as of August 29, 2001.
		d.	Patent Security Agreement between Orcel LLC, as grantor, and Xxxx Capital, as grantee, as amended as of October 27, 2004.
		e.	The Lock Box Agreement dated as of February 28, 2002, among JPMorgan Chase Bank, Xxxx Capital, Orcel LLC and Ortec.

          3. Further Assurances. Xxxx Capital, Ortec and Orcel each shall execute, acknowledge and deliver to the other parties any and all documents or instruments, and shall take any and all actions, reasonably required by such other parties from time to time, to confirm or effect the matters set forth herein, or otherwise to carry out the purposes of the Exchange Agreement and this Xxxx of Sale and Termination Agreement and the transactions contemplated thereby and hereby.

          4. Exchange Agreement. This Xxxx of Sale and Termination Agreement is entered into pursuant to and is subject in all respects to all of the terms, provisions and conditions of the Exchange Agreement, and nothing herein shall be deemed to modify any of the representations, warranties, covenants and obligations of the parties thereunder.

          5. Interpretation. In the event of any conflict or inconsistency between the terms, provisions and conditions of this Xxxx of Sale and Termination Agreement and the Exchange Agreement, the terms, provisions and conditions of the Exchange Agreement shall govern.

          6. Governing Law. This Xxxx of Sale and Termination Agreement shall be construed and enforced in accordance with, and governed by, the laws of the State of New York.

          7. Counterparts. This Xxxx of Sale and Termination Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together shall constitute a single agreement.

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          IN WITNESS WHEREOF, Xxxx Royalty, Ortec and Orcel have caused this Xxxx of Sale and Termination Agreement to be duly executed and delivered, as of the date first above written.

	XXXX ROYALTY FUND, L.P. (formerly known as Xxxx Capital Royalty Acquisition Fund, L.P.)
	By:		Xxxx Capital Management, LLC, its General Partner
			By:	Xxxx Capital Advisors, L.L.C., its Manager
				By:	/s/ Xxxxxx Xxxxxxxxx
					Name:	Xxxxxx Xxxxxxxxx
					Title:	Manager

	ORTEC INTERNATIONAL, INC.
	By:	/s/ Xxxx Xxxxxxxxxx
		Name: Xxxx Xxxxxxxxxx
		Title: CFO
	ORCEL LLC
	By:	/s/ Xxx Xxxxxxxx
		Name: Xxx Xxxxxxxx
		Title: Manager