8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               ------------------


                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) December 13, 2004

                            ORTEC INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)


          Delaware                   0-27368                    11-3068704
(State or other jurisdiction       (Commission               (I.R.S. Employer
    of incorporation)              File Number)             Identification No.)


     3960 Broadway, New York, New York                              10032
  (Address of principal executive offices)                        (Zip Code)


Registrant's telephone number, including area code: (212) 740-6999






Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[ ]  Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)

[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))










Item 1.01 Entry into a Material Definitive Agreement

              In August 2001 we entered into an agreement with Paul Royalty Fund
L.P. ("PRF") under which we sold an interest in our future revenues for
$10,000,000. On December 13, 2004, we entered into a forbearance agreement with
PRF pursuant to which PRF agreed to waive, until July 1, 2006, certain of the
covenants for which we were in default under this agreement. As a result of the
waiver of these covenants PRF cannot currently compel us, because of such
defaults, to repurchase PRF's interest in our revenues for the $10,000,000 PRF
paid plus interest on its $10,000,000 purchase price at a 30% annual rate of
return. Due to such defaults, as of September 30, 2004, the Company had recorded
cumulative accrued non-cash interest charges of $12,995,109, causing our
obligation under the revenue interest assignment to PRF to total $22,995,109,
instead of the original $10,000,000 the Company received from PRF. As a result
of the forbearance agreement our obligation to PRF will be reflected at the
original $10,000,000 invested by PRF . On a proforma basis at September 30,
2004, had the aforementioned forbearance agreement been in effect, the Company
would have recorded a one-time gain of $12,995,109. Additionally in accordance
with Emerging Issues Task Force pronouncement no. 86-30 it is likely the Company
will conclude that the post forbearance balance of $10,000,000 can be treated as
a non-current liability as of December 31, 2004.











Item 9.01      Financial Statements and Exhibits.

         (c) Exhibits.

                  Exhibit No.               Description
                  -----------               -----------
                  10.1                      Forbearance Agreement











                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


Dated:  December 14, 2004

                                                       ORTEC INTERNATIONAL, INC.



                                                       By:  /s/ Ron Lipstein
                                                       Ron Lipstein
                                                       Chief Executive Officer

EX-10

                                                                    EXHIBIT 10.1


                                                               December 13, 2004


Ortec International, Inc.
3960 Broadway
New York, NY  10032

Attn: Ronald Lipstein, CEO

Dear Mr. Lipstein:


              For the purpose of facilitating the ability of Ortec
International, Inc. ("Ortec") to obtain funds in the future from a sale by Ortec
of equity and/or the issuance by Ortec of debt and in reliance on the
representation and agreement of Ortec set forth below, subject to the provisions
of this letter, Paul Royalty Fund, L.P., formerly known as Paul Capital Royalty
Acquisition Fund, L.P. ("PRF") agrees to forbear during the Forbearance Period
(as defined herein) from exercising its rights under Section 5.07(a) of the
Amended and Restated Revenue Interests Assignment Agreement among Ortec, Orcel
LLC. and PRF dated as of February 26, 2003 (the "RIA Agreement") arising solely
from either (x) the Purchase Option Event described in clause (v) only of the
definition of "Purchase Option Event" in the RIA Agreement or (y) a Purchase
Option Event arising solely as the result of the occurrence of a Bankruptcy
Event described in clauses (v) or (vi) of the definition of Bankruptcy Event in
the RIA Agreement.

              Ortec hereby represents that since December 1, 2004, Ortec has
received an aggregate amount of net cash proceeds from the issuance of common
stock of Ortec pursuant to the exercise of warrants equal to at least One
Million, Two Hundred Thousand Dollars ($1,200,000).

              Ortec agrees to deliver prompt written notice to PRF of a Notice
Event. If Ortec fails to deliver written notification to PRF of a Notice Event
at least 5 business days in advance of the earliest to occur of the following:
(i) the occurrence of a Bankruptcy Event (other than a Bankruptcy Event
described in clauses (v) or (vi) of the definition of Bankruptcy Event in the
RIA Agreement), (ii) the occurrence of a Notice











Event described in clause (c) of the definition of Notice Event or (iii) the
taking by Ortec or Orcel of any action to cause a Bankruptcy Event (other than a
Bankruptcy Event described in clauses (v) or (vi) of the definition of
Bankruptcy Event in the RIA Agreement), then the exercise by PRF of its purchase
option rights under Section 5.07 of the RIA Agreement shall be deemed
automatically (and without further action on the part of PRF) effectuated as of
the Deemed Exercise Date.

              Except for the forbearance specifically set forth above, PRF does
not (x) waive any other rights it has under Section 5.07 of the RIA Agreement or
otherwise, or (y) make any representations or agreements.

              As used herein, the following defined terms have the meaning set
forth below:

                      "Forbearance Period" means the period commencing with the
         execution of this agreement and ending at 12:01 a.m. on the earliest of
         the following dates: (i) July 1, 2006; (ii) the date which is 15 days
         prior to the occurrence of a Bankruptcy Event (other than a Bankruptcy
         Event described in clauses (v) or (vi) of the definition of Bankruptcy
         Event in the RIA Agreement) and (iii) the Deemed Exercise Date.

                      "Notice Event" means either (a) Ortec's or Orcel's intent
         to cause or to take any action to cause a Bankruptcy Event (other than
         a Bankruptcy Event described in clauses (v) or (vi) of the definition
         of Bankruptcy Event in the RIA Agreement), (b) Ortec or Orcel being
         advised or otherwise becoming aware that a Bankruptcy Event (including
         an involuntary Bankruptcy Event, but excluding a Bankruptcy Event
         described in clauses (v) or (vi) of the definition of Bankruptcy Event
         in the RIA Agreement) has occurred or will occur shortly or (c) the
         presentation to Ortec's Board of Directors or to Orcel's manager or
         other governing body or to any one of Ortec's directors or Orcel's
         managers by the Chairman, the chief executive officer, the chief
         financial officer or any other person exercising similar functions or
         any other member of senior management, director or manager of either
         Ortec or Orcel of a proposal to commence a bankruptcy proceeding or
         otherwise cause a Bankruptcy Event (other than a Bankruptcy Event
         described in clauses (v) or (vi) of the definition of Bankruptcy Event
         in the RIA Agreement).

                      "Deemed Exercise Date" means the date which is 5 business
         days before the earlier of (a) the date on which a Bankruptcy Event
         occurs or (b) the date on which a Notice Event occurs.



                                       2










              If the foregoing accurately expresses our agreement, please
execute a copy of this letter and return it to us.

                                   Yours very truly

                                   PAUL ROYALTY FUND, L.P.

                                   By: Paul Capital Management, LLC,
                                       its General Partner

                                        By: Paul Capital Advisors, LLC.,
                                            its Manager

                                            By: /s/ Dr. Gregory Brown
                                                Name: Gregory Brown, M.D.
                                                Title: Manager


ACCEPTED AND AGREED,
ORTEC INTERNATIONAL, INC.


By /s/ Ron Lipstein
     Name: Ron Lipstein
     Title: Chief Executive Officer



- -------------------

(i) Solely for the purpose of this agreement to forbear under the circumstances
set forth herein and not for any other purpose under the Agreement: (1) clause
(v) of the definition of Bankruptcy Event shall not be construed to be a
Bankruptcy Event by reason of the inability to pay amounts owed to Paul Capital
Royalty Acquisition Fund, L.P.; and (2) clause (vi) of the definition of
Bankruptcy Event shall measure Insolvency without including the amounts owed to
Paul Capital Royalty Acquisition Fund, L.P. as an obligation.
(ii) Solely for the purpose of this agreement to forbear under the circumstances
set forth herein and for the purpose of exercising during the Forbearance Period
PRF's rights under Section 5.07(a) of the RIA Agreement arising because of the
occurrence of a Purchase Option Event arising solely as the result of the
occurrence of a Bankruptcy Event described in clauses (v) or (vi) of the
definition of Bankruptcy Event in the RIA Agreement, and not for any other
purpose under the RIA Agreement: (1) clause (v) of the definition of Bankruptcy
Event shall not be construed to be a Bankruptcy Event by reason of the inability
to pay amounts owed to Paul Royalty Fund, L.P.; and (2) clause (vi) of the
definition of Bankruptcy Event shall measure Insolvency without including the
amounts owed to Paul Royalty Fund, L.P. as an obligation.



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