EXHIBIT 4(8)

Security Agreement

This
Security Agreement (Security Agreement) originally made May 1, 2002 between
Integral Vision, Inc., 38700 Grand River Avenue, Farmington Hills, MI 48335
(Debtor) and The Klonoff Company, Inc., a California corporation of 11811 SE
255th Street, Kent, WA 98031, as the Representative of the Class 2
Purchasers under the Second Amended Note and Warrant Purchase Agreement between
the Debtor and the Purchasers thereunder (Secured Party) is hereby amended
and restated March __, 2008. The Debtor and The Klonoff Company, Inc. hereby
acknowledge that references to the Second Amended Note and Warrant Purchase
Agreement or Purchase Agreement in this Security Agreement shall mean all
subsequent amended and modified versions of the Second Amended Note and Warrant
Purchase Agreement, including without limitation the Fifth Amended and Restated
Note and Warrant Purchase Agreement which should be effective shortly after or
currently with this amended Security Agreement being duly executed by the
Debtor and The Klonoff Company, Inc. Both the Debtor and The Klonoff Company,
Inc. have new addresses which are shown in Section 14.d below.

Whereas,
the Debtor wishes to grant security interests in favor of the Secured Party as
provided in this Security Agreement;

For
valuable consideration acknowledged as received by the parties, they agree as
follows:

1. Definitions.

a. Article 9 of the UCC. Terms used in
the definition of Collateral below, and as those terms and any other terms are
used in this Security Agreement, whether capitalized or not, shall have the
respective meanings given such terms in Article 9 of the Uniform Commercial
Code (UCC) (or absent definition in Article 9 of the UCC, as defined in any
other article of the UCC) as enacted in the State of Michigan as of the date of
this Security Agreement, and as amended thereafter.

b. Collateral. The term, Collateral,
shall mean: all of the following assets, and rights of Debtor, wherever
located, whether now owned or hereafter acquired or arising: Accounts; Letter
of Credit; Letter-of-credit Rights; Inventory, including Work in Progress;
Supporting obligations; and all Cash Proceeds and products of the foregoing.

c. Obligations. This Security Agreement
secures all the following (all of which are referred to as Obligations):

i.
Debtors obligations to the Secured Party under (i) the promissory Note granted
under the Note and Warrant Purchase Agreements (Promissory Note) and (ii)
this Security Agreement;

ii.
all of Debtors other present and future amounts owed to Secured Party,
including without limitation, obligations as a guarantor or surety, and all
interest on any Obligations;

iii.
the repayment of (a) any amounts that Secured Party may advance or spend for
the maintenance or preservation of the Collateral and (b) any other expenses
that Secured Party may make under the provisions of the Security Agreement or
the for the benefit of Debtor;

iv.
all costs incurred by Secured Party to obtain, preserve, and enforce this
Security Agreement, collect the Obligations, and maintain and preserve the
Collateral, and including, without limitation, taxes, assessments, insurance
premiums, repairs, attorneys fees and legal costs and expenses, rent, storage
costs, and expenses of sale;

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v.
all amounts owed under any modifications, renewals or extensions of any of the
foregoing obligations;

vi.
any of the foregoing that arises after the filing of a petition by or against
Debtor under the Bankruptcy Code, even if the obligations do not accrue because
of the automatic stay under Bankruptcy Code §362 or otherwise.

2. Grant of Security Interest. Debtor
grants a security interest in the Collateral to Secured Party to secure the
payment or performance of the Obligations.

3. Perfection of Security Interests.

a. Filing of financing statement.Debtor
irrevocably authorizes Secured Party at any time to file in any jurisdiction
any financing statements, and amendments thereto, (the Financing Statement)
that indicate (i) the Collateral covered by this Agreement, regardless of
whether any particular asset in the Collateral falls within the scope of
Article 9 of the UCC of the place of filing It is agreed that a new Financing
Statement will be filed in the State of Michigan as soon as possible after this
amended Security Agreement is duly executed by the Debtor and The Klonoff
Company, Inc.

b. Letter-of-credit
rights. If the Debtor is at any time a beneficiary under a letter of credit
now or hereafter issued in favor of Debtor, the Debtor shall promptly notify
the Secured Party thereof and, at the request and option of the Secured Party,
the Debtor shall, in an agreement in form and substance satisfactory to Secured
Party in the form attached as Exhibit 3.b. (Credit Agreement), arrange for
the issuer and any confirmer of such letter of credit to consent to an
assignment to the Secured Party of the proceeds of any drawing under the letter
of credit, with the Secured Party agreeing that the proceeds of any drawing
under the letter of credit are to be applied as provided in any Credit
Agreement.

c. Other Actions as to any and all Collateral.
The Debtor shall take any other action reasonably requested by Secured Party to
insure the attachment, perfection and first priority of, and the ability of the
Secured Party to enforce, the Secured Partys security interest in any and all
of the Collateral, including without limitation, (a) executing, delivering and,
where appropriate, filing financing statements and any amendments, to the
extent the Debtors signature is required, (b) causing the Secured Partys name
to be noted as a secured party on any certificate of title for a titled
Collateral if such notation is a condition of attachment, perfection or
priority of, or ability of the Secured Party to enforce the Secured Partys
security interest in such Collateral, (c) complying with any provision of any
statute, regulation or treaty of the United States as to any Collateral if compliance
with such provision is a condition of attachment, perfection or priority of, or
ability of the Secured Party to enforce the Secured Partys security interest
in such Collateral, (d) obtaining governmental and other third party consents
and approvals, including without limitation, any consent of any licensor,
lessor or other person obligation on the Collateral, (e) obtaining waivers from
mortgagees and landlords in form and substance satisfactory to Secured Party
and (f) taking all actions required by any earlier versions of the UCC or by
other law, as applicable in any relevant UCC jurisdiction, or by other law as
applicable to any foreign jurisdiction.

4. Relation to Intellectual Property Assignment.
Along with this Security Agreement, the Debtor has previously executed and
delivered to the Secured Party the Collateral Assignment of Proprietary Rights
and Security Agreement dated March 29, 2001 (Collateral Assignment). It is
also expected that said Collateral Assignment will be amended concurrently with
this Security Agreement being amended (and that such amended Collateral
Assignment will be delivered to the Secured Party as soon as possible after it
is duly executed). Such Collateral Assignment, including amendments thereto,
shall be governed by the terms of such Collateral Assignment and not by the
terms of this Agreement.

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5. Post-Closing Covenants and Rights Concerning the
Collateral.

a. Inspection. The parties to this
Security Agreement may inspect any Collateral in the other partys possession,
at any time upon reasonable notice.

b. Personal Property. The Collateral
shall remain personal property at all times.

c. Secured Partys Collection Rights.
Secured Party shall have the right at any time to enforce Debtors rights
against Debtors account debtors and obligors.

6. Obligations
Concerning Maintenance of Collateral.

a. Risk of Loss. Debtor has the risk of
loss of the Collateral.

b. Insurance.

i.
Insurance Policies.
Debtor shall maintain insurance with respect to its properties, business, and
the Collateral, with financially sound and reputable insurers, against such
casualties and contingencies as are in accordance with general practices of
businesses engaged in similar activities of Debtor in similar geographic areas,
and shall be in such amounts, contain such terms, in such forms and for such
periods as may be reasonably satisfactory to Secured Party. Without limiting
the forgoing, Debtor shall (i) maintain casualty or physical hazard insurance
on all risk basis for all its physical property, (ii) maintain workers
compensation or similar insurance required by law, and (iii) maintain liability
insurance against claims of bodily injury, death, property damage, business
interruption insurance, and product liability insurance. The Debtor shall
furnish the Secured Party with such certificates of insurance and policies
evidencing compliance with these provisions upon Secured Partys request.

c. Secured Partys Obligations and Duties.
Secured Party has no duty to collect any income accruing on the Collateral or
preserve any rights relating to the Collateral. Notwithstanding anything to the
contrary herein, the Debtor shall remain liable under each contract or
agreement comprised in the Collateral to be observed or performed by the Debtor
thereunder. The Secured Party shall not have any obligation or liability under
any such contract or agreement by reason of or arising out of this Agreement or
the receipt by Secured Party of any payment relating to any of the Collateral.
The Secured Party shall not be obligated in any manner to perform any of the
obligations of the Debtor under or pursuant to any such contract or agreement,
to make inquiry as to the nature or sufficiency of any payment received by the
Secured Party in respect of the Collateral or as to the sufficiency of any
performance by any party under any such contract or agreement, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to Secured Party or to
which Secured Party may be entitled at time. The Secured Partys sole duty with
respect to the custody, safe-keeping and physical preservation of the
Collateral in its possession, under §9-207 of the UCC or otherwise, shall be to
deal with such Collateral in the same manner as the Secured Party deals with
similar property for its own account.

7. Debtors Representations and Warranties.
Debtor warrants and represents that:

a. Title to and transfer of Collateral.
It has rights in or the power to transfer the Collateral, and its title to the
Collateral is free of all adverse claims, liens, security interests and
restrictions on transfer or pledge except as created by this Security
Agreement.

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b. Debtor Information. Debtor is a
Michigan corporation. Its Michigan corporate identification number is 105-593.
Its Federal Identification Number is 38-2191935. Debtor maintains its principal
office at the address set forth above.

8. Debtors Covenants. Until the
Obligations are paid in full, Debtor agrees that it will:

a. preserve
its organizational existence as it currently is, and not, in one transaction or
a series of related transactions, merge into or consolidate with any other
entity, or sell all or substantially all of its assets;

b. not change
the state of its organization;

c. not change
its organization name without providing Secured Party with thirty (30) days
prior written notice; and

d. not cause
or permit any lien, security interest or encumbrance to be placed on any Collateral,
except in favor of Secured Party.

e. Unless
Debtor has obtained the specific prior written authorization of Secured Party,
Secured Party does not authorize, and Debtor agrees:

i.
not to sell, lease, license, assign, transfer or dispose of any of the
Collateral or permit any such by operation of law, except for sales of
Inventory in the ordinary course of business.

ii.
not to grant any other security interest in any of the Collateral.

f. Debtor will
furnish Secured Party with the information regarding the Collateral that
Secured Party shall from time to time request, including without limitation,
the names and addresses of Debtors account debtors and obligors and the amount
owned by each.

g. Debtor will
pay, before they become delinquent, all taxes and assessments upon the
Collateral or for its use or operation, and pay and perform when due, all
indebtedness and obligations under all leases, land contracts, or other
agreements under which Debtor has possession of any real property upon which
any of the Collateral shall at any time be located, or under any mortgages or
other interests at any time covering any such real property.

9. Secured Partys Right to Perform. If
Debtor fails to perform any obligation of Debtor under this Agreement, Secured
Party may without giving notice to or obtaining Debtors consent, perform that
obligation on behalf of Debtor. This may include without limitation, obtaining
required insurance coverage for, or taxes or assessments or other liens relative
to, the Collateral. Debtor shall reimburse Secured Party on demand of any such
expenses incurred by Secured Party, and shall pay interest on such incurred
sums at the rate of 10 per cent per annum from the date of the expense of
Secured Party until paid in full by Debtor. In no event is Secured Party
required to perform any of Debtors obligations, and in the event Secured Party
does so, it shall not be a waiver of Secured Partys right to declare an Event
of Default or seek any other remedy under the law.

10. Events of Default. The occurrence of
any of the following shall, at the option of Secured Party, be an Event of
Default (Event of Default) should any such occurrence not be fully cured
within ten days after written notice from Secured Party:

a. Any default
by Debtor, or failure to comply with any of the provisions of, or the
incorrectness of any representation or warranty contained in, (i) the Purchase
Agreement, (ii) all Related Agreements made part of the

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Purchase
Agreement (iii) the Promissory Note (iv) this Security Agreement, and (v) or
any of the other Obligations;

b. Any sale,
lease, assignment, license, transfer or disposition of any of the Collateral,
except as expressly permitted by this Security Agreement;

c. Any
attachment, execution or levy on any of the Collateral;

d. If any
guaranty that now or later secures payment or performance of all or part of the
Obligations is terminated or limited for any reason, without the written
consent of Secured Party;

e. If Debtor
dissolves, becomes insolvent, or makes an assignment for the benefits of
creditor;

f. Debtor
voluntarily or involuntarily becomes subject to any proceeding under (a) the
Bankruptcy Code (b) any insolvency or receivership proceedings or (b) any
similar remedy under federal, state, or local law;

g. Debtor
shall fail to comply with, or become subject to any administrative of judicial
proceeding under any federal, state or local (a) hazardous waste or
environmental law, (b) asset forfeiture or similar law which can result in the
forfeiture of property, or (c) other law, where noncompliance may have any
significant effect on the Collateral; or

h. Secured
Party shall receive at any time any information indicating that Secured Partys
security interest in the Collateral is not prior to all other security
interests as required by this Agreement.

11. Default Costs. Should an Event of
Default occur, Debtor shall pay to Secured Party all costs reasonably incurred
by the Secured Party for the purpose of enforcing its rights hereunder, including
without limitation;

a. costs of
foreclosure;

b. costs of
obtaining money damages; and

c. a
reasonable fee for the services of all attorneys and all other professionals
employed by Secured Party for any purpose related to this Security Agreement or
the Obligations, including without limitation, consultation, drafting
documents, sending notices or instituting, prosecuting or defending any claims,
litigation or arbitration.

12. Remedies Upon Default.

a. General. Upon any Event of Default,
Secured Party may pursue any remedy available at law or in equity (including
those available under the provisions of the UCC and this Agreement) to collect,
enforce or satisfy and Obligations then owing, whether by acceleration or
otherwise, including without limitation, the right to pursue any of the
following remedies separately, successively, cumulatively, simultaneously, or
from time to time:

i.
Accelerate all Obligations, and deem all Obligations immediately due and
payable without notice or demand;

ii.
Take any action to collect payments, income and revenues from the Collateral.
Secured Party may at any time in Secured Partys discretion transfer any
Collateral into Secured Partys name or that of a nominee, and receive the
payments, income, and revenues and hold them or apply them to the Obligations
as Secured party may determine. Secured Party may take any action to collect
from Debtors account debtors and obligors, including without limitation, if
necessary, on behalf of and in the name of Debtor, notify Debtors account
debtors

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and obligors
to make all payments directly to Secured Party, receive, open and dispose of
mail addressed to Debtor, change any address of Debtor to which mail and
payments are to be sent, and endorse notes, checks, drafts, money orders,
documents of title, instruments and any other items pertaining to payment,
shipment or storage of any Collateral. Secured Party shall have the right, but
not the obligation, to take all actions the Secured Party considers necessary
or desirable to collect upon the Collateral, including without limitation,
prosecuting actions against, or settling or compromising disputes and claims
with, Debtors account debtors and obligors.

iii.
File suit and obtain judgment and, in conjunction with any action, Secured
Party may seek any ancillary remedies provided by law, including levy of
attachment and garnishment;

iv.
Take possession of any Collateral if not already in its possession without
demand and without legal process. Upon Secured Partys demand, Debtor will
assemble and deliver the Collateral, or make the Collateral available to
Secured Party, as Secured Partys in its sole discretion directs. Debtor grants
to Secured Party the right, for this purpose, to enter into or on any premises
where Collateral may be located;

v.
Without taking possession, sell, lease or otherwise dispose of the Collateral
at public or private sale in accordance with the UCC;

vi.
Secured Party may apply any proceeds of collection or disposition of Collateral
first to any expenses incurred by Secured Party in protecting and enforcing
Secured Partys rights hereunder

13. Foreclosure Procedures.

a. No Waiver. No delay or omission by
Secured Party to exercise any right or remedy accruing upon any Event of
Default shall: (a) impair any right or remedy, (b) waive any default or operate
as an acquiescence to the Event of Default, or (c) affect any subsequent
default of the same or of a different nature.

b. Notices. Secured Party shall give
Debtor such notice of any private or public sale as may be required by the UCC.

c. No Obligation to Pursue Others.
Secured Party has no obligation to attempt to satisfy the Obligations by
collecting them from any other person liable for them and Secured Party may
release, modify or waive any collateral provide by any other person to secure
any of the Obligations, all without affecting Secured Partys rights against
Debtor. Debtor waives any right it may have to require Secured Party to pursue any
third person for any of the Obligations.

d. Compliance With Other Laws. Secured
Party may comply with any applicable state or federal law requirements in
connection with a disposition of the Collateral and compliance will not be
considered adversely to affect the commercial reasonableness of any sale of the
Collateral.

e. Warranties. Secured Party may sell the
Collateral without giving any warranties as to the Collateral. Secured Party
may specifically disclaim any warranties of title or the like. This procedure
will not be considered adversely to affect the commercial reasonableness of any
sale of the Collateral.

f. Sales on Credit. If Secured Party
sells any of the Collateral upon credit, Debtor will be credited only with
payments actually made by the purchaser and received by Secured Party. In the
event the purchaser fails to pay for the Collateral, Secured Party may resell
the Collateral and Debtor shall be credited with the proceeds of the sale.

g. Purchases by Secured Party. In the
event Secured Party purchases any of the Collateral being sold, Secured Party
may pay for the Collateral by crediting some or all of the Obligations of the
Debtor.

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h. No Marshaling. Secured Party has no
obligation to marshal any assets in favor or Debtor, or against or in payment
of any of the Obligations, or any other obligation owed by Debtor or any other
person.

14. Miscellaneous

a. Assignment.

i.
Binds Assignees.
Secured Party may assign its rights and interests under this Security
Agreement. If an assignment is made by Secured Party, Debtor shall render
performance under this Security Agreement to the assignee. This Security
Agreement shall bind and shall inure to the benefit of the heirs, legatees,
executors, administrators, successors and assigns of Secured Party and all
person who become bound as a debtor to this Security Agreement.

ii.
No Assignments by Debtor.
Secured Party does not consent to any assignment by Debtor except as expressly
provided in this Security Agreement.

b. Power of Attorney. Debtor appoints
Secured Party as Debtors irrevocable attorney-in-fact for the purposes of
executing documents necessary to perfect, amend, or continue the security
interests granted in this Agreement, or to enforce the terms of this Agreement,
including without limitation, all actions to collect from Debtors account
debtors and obligors.

c. Severability. Should any provision of
this Security Agreement be found to be void, invalid or unenforceable by a
court or panel of arbitrators of competent jurisdiction, that finding shall
only affect the provisions found to be void, invalid or unenforceable and shall
not affect the remaining provisions of this Security Agreement.

d. Notices. Any notices required by this
Security Agreement shall be deemed to be delivered when a record has been (a)
deposited in any United Sates postal box if postage is prepaid, and the notice
property addressed to the intended recipient, (b) received by telecopy, (c)
received through the Internet, and (d) when personally delivered, to the
following or at such other addresses as may from time to time be provided:

| |                        |  |                            
| | ---------------------- |  | ---------------------------
| | If to
  Secured Party: |  | The Klonoff
  Company, Inc.
| |                        |  |                            
| |                        |  | Attn: P.
  Robert Klonoff  
| |                        |  |                            
| |                        |  | 1631 North
  201st Street  
| |                        |  |                            
| |                        |  | Shoreline,
  WA 98133      
| |                        |  |                            
| | If to Debtor:          |  | Integral
  Vision, Inc.    
| |                        |  |                            
| |                        |  | 49113 Wixom
  Tech Drive   
| |                        |  |                            
| |                        |  | Wixom, MI
  48393          

e. Headings. Section headings used in
this Security Agreement are for convenience only. They are not a part of this
Security Agreement and shall not be used in construing it.

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f. Governing Law. This Security Agreement
is being executed and delivered and is intended to be performed in the State of
Michigan and shall be construed and enforced in accordance with the laws of the
Sate of Michigan.

g. Rule of Construction. No reference to
proceeds in this Agreement authorizes any sale, transfer, or other
disposition of the Collateral by the Debtor; Includes or including are not
limiting; Or is no exclusive; and All includes any and any includes
all.

h. Integration and Modifications. This
Security Agreement is the entire agreement of the Debtor and Secured Party
concerning its subject matter. Any modification to this Security Agreement must
be made in writing and signed by the parties.

The
parties have signed this Security Agreement as of the date first above written.

|                        |                                    
|----------------------- | -----------------------------------
|DEBTOR:                 | SECURED PARTY                      
|Integral
  Vision, Inc. | The Klonoff
  Company, Inc.        
|                        | As
  Representative for the Class 2
|                        | Purchasers                         

|    |                         |     |                    
|--- | ----------------------- | --- | -------------------
|By: |                         | By: |                    
|    |                         |     |                    
|    | Charles J.
  Drake      |     | P. Robert
  Klonoff
|    | Its:
  Chairman and CEO |     | Its:
  President   

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Exhibit 3.b.

Letter of Credit Control Agreement

Assignment of Right to Proceeds of a Letter
of Credit

________________,
___________

1. Assignment.
Integral Vision, Inc. (Beneficiary) assigns to _______________________________(Secured
Party) its rights to proceeds under Letter of Credit, No.
________________________issued by________________________ and
dated_____________________________, pursuant to the Security Agreement between
the Beneficiary and the Secured Party executed on ___________________.

2. Warranty.
The Beneficiary warrants that:

a.
The full sum of $_______________remains due on the letter of credit;

b.
No partial payments have been made;

c.
The credit is in full force;

d.
No one other than the Beneficiary has any interest or lien upon the credit; and

e.
There have been no amendments or modifications to the credit.

3. The
Beneficiary agrees to furnish the Secured Party with all drafts and other
documents necessary to enable the Beneficiary to obtain the proceed of the
letter of credit.

| |                                     
| | ------------------------------------
| | Integral
  Vision, Inc.             
| |                                     
| |                                     
| | Charles J.
  Drake, Chairman and CEO
| | Or Mark R.
  Doede, President       

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Notice of Assignment

_________________,
_______

To:

The right to
proceeds under______________________________, Letter of Credit
No._______________(________________, correspondent)
dated_____________________in favor of Integral Vision, Inc. have been assigned
to the undersigned who is in possession of the letter of credit. The assignment
of the right to proceeds has been duly signed by Integral Vision, Inc., the
beneficiary under your letter of credit.

You may honor
complying drafts when negotiated to us by the beneficiary and other demands for
payment only when accompanied by the letter of credit or by our written
release.

________________________________________

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