[Remainderof page intentionally left blank; signature page follows]

EXHIBIT 10.2

BILL OF SALE AND TERMINATION AGREEMENT

          This BILL OF SALE AND TERMINATION AGREEMENT (this “Bill of Sale”) dated as of June 18, 2007, among Paul Royalty Fund, L.P. (formerly known as Paul Capital Royalty Acquisition Fund, L.P.), a Delaware limited partnership (“Paul 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 Paul Capital (as amended, supplemented or otherwise modified from time to time, the “Exchange Agreement”), Ortec agreed to issue and deliver to Paul 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 Paul Capital is a party, the assignment by Paul Capital of all its interest in the Assigned Interests to Ortec, and the assignment, reassignment and release by Paul Capital to Ortec and to Orcel of any and all liens, pledges or security interests that Ortec or Orcel may have granted to Paul Capital on the respective assets of Ortec or Orcel to secure their respective obligations to Paul 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. Paul 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 Paul Capital, any and all interest that Paul Capital may have in the Revenue Interests. Paul 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 Paul Capital on the respective assets of Ortec or Orcel to secure their respective obligations to Paul 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 Paul Capital, as grantee, (ii) any interest Paul Capital may have in the unregistered intellectual property assigned by Ortec to Orcel by assignment dated September 29, 2001 and (iii) any interest Paul Capital may have in the intellectual property assigned by Ortec to Orcel in the Trademark Assignment also dated August 29, 2001.