EXHIBIT 4(7)

COLLATERAL ASSIGNMENT OFPROPRIETARY RIGHTS AND SECURITY AGREEMENT

THIS
COLLATERAL ASSIGNMENT OF PROPRIETARY RIGHTS AND SECURITY AGREEMENT (the

Agreement), dated as of March 29, 2001 as amended March 5, 2008, is made by
Integral Vision, Inc., a Michigan corporation (the Company), in favor of J.
M. Warren Law Offices, P.C., (the Agent) as agent for the present and future
holders of the notes issued under the Note and Warrant Purchase Agreement and
subsequent amendments and restatements thereto (Noteholders), dated effective
as of the Closing Date as to each Noteholder (the Purchase Agreement), among
the Company, the Agent and the Noteholders.

Recitals:

| |    |                                                                                                                                                     
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------
| | A. | The Company,
 the Agent and the Noteholders are parties to the Purchase Agreement.                                                                  
| |    |                                                                                                                                                     
| | B. | It is a
 condition to the closing of the transactions contemplated by the Purchase
 Agreement that the Company executes and delivers this Agreement.

NOW,
THEREFORE, in consideration of the premises and to induce the Noteholders to
make extensions of credit to the Company under the Purchase Agreement, and for
the other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company agrees with the Agent and the Noteholders
as follows:

1. Defined
Terms. In addition to those terms defined elsewhere in the Agreement, terms
defined in the Purchase Agreement shall have their defined meanings when used
herein (unless otherwise defined herein) and the following terms shall have the
following meanings, unless the context otherwise requires:

Collateral means all of the wholly owned Trademarks, Copyrights, Patents and Intellectual
Property Rights, whether now existing or hereafter created or acquired by the
Company (including, without limitation, such of the foregoing as are listed on
Schedule A attached hereto and made a part hereof).

Copyrights
 means all wholly owned United States copyrights, registered or unregistered, in
and to all copyrightable work now owned or hereafter acquired by the Company,
including all registrations and applications therefore and all licenses thereof
and (a) any renewals or extensions of the registrations therefore that may be
secured under the laws now or hereafter in effect in the United States, (b) all
income, royalties, damages and payments now and hereafter due or payable under
and with respect thereto, including, without limitation, payments under all
licenses entered into in connection therewith and damages and payments for
past, present or future infringements thereof, (c) the right to sue and recover
for past, present and future infringements thereof, and (d) all rights
corresponding thereto throughout the world.

Companys
Obligations means all loans, debts, principal, interest (including any

- 1 -

---



interest that,
but for the provisions of the Bankruptcy Code, would have accrued), premiums,
liabilities, obligations (including the performance of the covenants of the
Company contained in the Purchase Agreement or in the Loan Documents), fees,
lease payments, guaranties, covenants, and duties owing by the Company to the
Noteholders or the Agent in its capacity as Agent hereunder or under the
Purchase Agreement, of any kind and description (whether pursuant to or
evidenced by the Purchase Agreement, the Notes, any of the other Loan
Documents, any other note or other instrument, or by any other agreement
between the Noteholders or the Agent and the Company, and whether or not for
the payment of money), whether direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, and including any debt,
liability, or obligation owing from the Company to others that the Noteholders
or the Agent may have obtained by assignment or otherwise, and further
including all interest not paid when due.

Intellectual
Property Rights means all wholly owned intellectual property rights other
than Trademarks, Copyrights and Patents, now owned or hereafter acquired by the
Company, including, without limitation, trade secrets, know-how and
confidential business information, computer software, data and documentation
(including electronic media) and licenses thereof, and (a) all income,
royalties, damages and payments now and hereafter due or payable under and with
respect thereto, including, without limitation, payments under all licenses
entered into in connection therewith and damages and payments for past or
future infringements thereof, (b) the right to sue and recover for past,
present and future infringements thereof, and (c) all rights corresponding
thereto throughout the world.

Patents
means all wholly owned United States patents and patent applications, now owned
or hereafter acquired by the Company, including, without limitation, the
inventions and improvements described and claimed therein, all licenses thereof
and (a) the reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, (b) all income, royalties, damages and payments
now and hereafter due or payable under and with respect thereto, including,
without limitation, payments under all licenses entered into in connection
therewith and damages and payments for past, present or future infringements
thereof, (c) the right to sue and recover for past, present and future
infringements thereof, and (d) all rights corresponding thereto throughout the
world.

Trademarks
means all wholly owned trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks, logos,
other source or business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles of like nature,
trademark registrations and applications for registration owned by the Company
and all licenses thereof, together with the goodwill of the business connected
with the use of, and symbolized by, the foregoing, and (a) the registration
renewals thereof, (b) all income, royalties, damages, and payments now and
hereafter due or payable under and with respect thereto including, without
limitation, payments under all licenses entered into in connection therewith
and damages and payments for past, present or future infringements thereof, (c)
the right to sue and recover for past, present and future infringements
thereof, and (d) all rights corresponding thereto throughout the world.

- 2 -

---



2.
Collateral Assignment of Security Interest in Trademarks, Copyrights and
Patents and Intellectual Property Rights. To secure the prompt and complete
payment and performance when due (whether at stated maturity, by acceleration
or otherwise) of all the Companys Obligations, the Company hereby grants to
the Agent for the benefit of the Noteholders and their assignees a continuing
security interest in the Collateral, and, subject to Section 7 hereof, shall
assign, transfer and convey to the Noteholders all right, title and interest,
in the United States and throughout the world, in, to and under the Collateral.

3.
Continuing Liability. The Company hereby expressly agrees that, anything
herein to the contrary notwithstanding, it shall remain liable under each
license, interest and obligation assigned to the Noteholders hereunder to
observe and perform all the conditions and obligations to be observed and
performed by the Company thereunder, all in accordance with and pursuant to the
terms and provisions thereof. The Agent and the Noteholders shall have no obligations
or liability under any such license, interest or obligation by reason of or
arising out of this Agreement or the assignment thereof to the Noteholders or
the receipt by the Noteholders of any payment relating to any such license,
interest or obligation pursuant hereto, nor shall the Agent or Noteholders be
required or obligated in any manner to perform or fulfill any of the
obligations of the Company thereunder or pursuant thereto, or to make any
payment, or to make any inquiry as to the nature or sufficiency of any payment
received by any of them or the sufficiency of any performance by any party
under any such license, interest or obligation, or to present or file any
claim, or to take any action to collect or enforce any performance of the payment
of any amounts which may have been assigned to the Company or to which the
Company may be entitled at any time or times.

4.
Representations and Warranties. The Company hereby represents and
warrants to the Agent and the Noteholders:

(a)
All of the Companys Copyrights, Patents and Trademarks (whether or not
registered), which are material to its business, are listed on Schedule A
hereto, as updated from time to time.

(b)
Except for Permitted Liens, the Company owns free and clear of all Liens all
right, title and interest in, or has full right and authority to use, all
Collateral necessary or desirable for the conduct of its business as currently
conducted or as currently proposed to be conducted.

5.
Updated Information and Filings. The Company agrees that it will deliver
to the Agent and the Noteholders an updated Schedule A to this Agreement on at
least a quarterly basis, and more often if requested by the Noteholders. The
Company also agrees that it will take such actions as requested by the Agent or
the Noteholders to allow the Agent for the benefit of the Noteholders to record
and perfect its Lien on the Companys Copyrights, Patents, Trademarks and
Intellectual Property Rights, including, without limitation, filing and
registering its rights with appropriate governmental entities.

6.
Restrictions on Future Agreements. The Company agrees that until all of
the Companys Obligations have been paid in full and the Purchase Agreement has
been terminated, it will not, without the Noteholders evidencing more than 65%
of the notes held by Noteholders then outstanding prior written consent, enter
into any agreement, including, without limitation, any license agreement, which
is inconsistent with the Companys Obligations under this Agreement or which is
prohibited by the Purchase Agreement.

- 3 -

---



7.
Effect of Collateral Assignment and Remedies. (a) If an Event of Default
has occurred and is continuing, the Agent and the Noteholders may exercise, in
addition to all other rights and remedies granted to them in this Agreement,
the Purchase Agreement and any other Loan Document, all rights and remedies of
a secured party under the Uniform Commercial Code or any other applicable law.
Without limiting the generality of the foregoing, the Company expressly agrees
that in such event the Agent may forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, or may forthwith sell, lease,
assign or sell or otherwise dispose of and deliver said Collateral (or contract
to do so), or any part thereof, in one or more public or private sale or sales,
at any exchange, brokers board or at its offices or elsewhere at such prices
as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk, and the Agent shall apply the net proceeds
(after expenses) of any such sale, lease, assignment or other disposition
against the Companys Obligations in such order as the Agent in its sole
discretion shall determine and the Company shall remain liable for any
deficiency thereon; provided, however, that, in applying the net proceeds of
any such sale or disposition, the Agent shall allocate the proceeds thereof pro rataamong the Noteholders on the
basis of the principal amount of each Note then outstanding. The Agent and the
Noteholders shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity or
redemption in the Company, which right or equity is hereby expressly waived and
released. To the extent permitted by applicable law, the Company waives all
claims, damages and demands against the Agent and the Noteholders arising out
of the repossession, retention or sale of the Collateral. The Company agrees
that the Agent need not give more than ten days notice of the time and place
of any public sale or of the time after which a private sale may take place and
that such notice is reasonable notification of such matter.

(b)
During the continuance of an Event of Default, the Company hereby authorizes
the Agent to make, constitute and appoint any officer or agent of the Agent as
the Agent may select, in the Agents sole discretion, as the Companys true and
lawful attorney-in-fact, with power; (i) to endorse the Companys name on all
applications, documents, papers and instruments necessary or desirable for the
Agent in the use of Collateral; (ii) to notify any licensee of the Company that
such licensee should make future payments under the license directly to the
Agent; (iii) to take any other actions with respect to the Collateral as the
Agent and the Noteholders deem to be in their best interest; and (iv) to
assign, pledge, convey or otherwise transfer title in or dispose of the
Collateral to any Person. The Company hereby approves and ratifies all that
such attorney shall lawfully do or cause to be done by virtue of this
Agreement. This power of attorney shall be irrevocable until all of the
Companys Obligations have been paid in full and all of the financing
arrangements between the Company and the Agent and the Noteholders have been
terminated. The Company agrees that, in addition to all other rights and
remedies granted to the Agent and the Noteholders in this Agreement, the
Purchase Agreement and any other Loan Document, the Agent and the Noteholders
shall be entitled to specific performance and injunctive and other equitable
relief, and the Company further agrees to waive any requirement for the
securing or posting of any bond or other security in connection with the
obtaining of any such specific performance and injunctive or other equitable
relief.

8.
Release of Collateral. The Agent and the Noteholders hereby agrees that
if the Company proposes to sell any of the Collateral other than in the
ordinary course of business, the Agent and the Noteholders will release their
interests in such Collateral and will sign any documents and take any further
action necessary to effectuate such release upon payment of 90% of the net
proceeds received by the Company from the sale of such Collateral, up to the
full amount of the Companys Obligations to the Noteholders. It is agreed that
the Company may

- 4 -

---



place source
code for software in escrow at the request of the Noteholders of its products
without violating this Agreement.

9.
Indemnification. The Company shall indemnify and hold harmless the Agent
and the Noteholders from and against any and all losses, claims, damages,
liabilities and expenses (including, without limitation, reasonable attorneys
fees and expenses) sustained, suffered or incurred by the Agent and the
Noteholders arising out of, with respect to, or resulting from any commercially
reasonable exercise by the Agent and the Noteholders of their rights under this
Agreement, including without limitation, after a default by the Company, the
exercise by the Agent and the Noteholders of their rights to sell, lease,
assign, give option or options to purchase, or sell and otherwise dispose of
the Collateral. In any suit, proceeding or action brought by the Agent and the
Noteholders to enforce their rights in the Collateral, the Company will save,
indemnify and hold the Agent and Noteholders harmless from and against all
expenses, loss or damage suffered by reason of any defense, set-off,
counterclaim, recoupment or reduction or liability whatsoever of any third
party, arising out of a breach by the Company of any obligation or arising out
of any other agreement, indebtedness or liability at any time owing to or in
favor of such third party or its successors from the Company; provided that the
Company shall have no obligation under this Section 9 to indemnify any Person
under this Agreement for liabilities arising from the gross negligence or
willful misconduct of such Person or arising from the breach by any such Person
of its obligations under applicable law ( including the obligation to act in a
commercially reasonable manner in the disposition of certain Collateral).

10.
Powers Coupled with an Interest. All authorizations and agencies herein
contained with respect to the Collateral are irrevocable and powers coupled
with an interest.

11.
Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

12.
Section Headings, etc. The Section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof. All references to
Sections, Schedules and Exhibits are to Sections, Schedules and Exhibits in or
to this Agreement unless otherwise specified.

13.
No Waiver: Cumulative Remedies. The Agent and the Noteholders shall not
by any act (except a written instrument pursuant to Section 14 hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Event of Default or in any breach of the
terms an conditions hereof. A waiver by the Agent or the Noteholders of any
right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy which the Agent and the Noteholders would otherwise have
had on any future occasion. No failure to exercise nor any delay in exercising
on the part of the Agent and the Noteholders any right, power or privilege
hereunder, shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
future exercise thereof or the exercise of any other-right, power or privilege.
The rights and remedies hereunder provided are cumulative and may be exercised
singly or concurrently, and are not exclusive of any rights and remedies
provided by the Purchase Agreement, any other Loan Document or applicable law.

- 5 -

---



14.
Waivers and Amendments; Successors and Assigns; Governing Law. None of
the terms or provisions of this Agreement may be waived, altered, modified or
amended except by a written instrument, duly executed by the Company, the Agent
and the Noteholders evidencing more than 65% of the notes held by Noteholders
then outstanding, provided, however, that no such amendment or waiver shall
amend any term in this Agreement (or any provision hereof or thereof waived)
that does not treat all notes held by Noteholders then outstanding at the time
of such amendment or waiver pursuant to this Agreement without partiality. This
Agreement and all obligations of the Company hereunder shall be binding upon
the successors and assigns of the Company, and shall, together with the rights
and remedies of the Agent and the Noteholders hereunder, inure to the benefit of
the Agent and the Noteholders and their successors and assigns, provided that
the Company may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of the Agent. THIS AGREEMENT SHALL
BE GOVERNED BY, AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
INTERNAL LAWS (AND NOT THE LAWS OF CONFLICT) OF THE STATE OF MICHIGAN.

15.
Notices. Etc. Any demand, notice or communication to be made or given
hereunder shall be in writing and shall be given in accordance with the
Purchase Agreement.

16.
Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.

17.
Waiver of Jury Trial. THE PARTIES HERETO ACKNOWLEDGE THAT THE RIGHT TO
TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT THIS RIGHT MAY BE WAIVED. THE
AGENT, THE NOTEHOLDERS AND THE COMPANY EACH HEREBY KNOWINGLY, VOLUNTARILY AND
WITHOUT COERCION, WAIVES ALL RIGHTS TO A TRIAL BY JURY OF ALL DISPUTES ARISING
OUT OF OR IN RELATION TO THIS AGREEMENT OR ANY OTHER AGREEMENTS BETWEEN THE
PARTIES. NO PARTY SHALL BE DEEMED TO HAVE RELINQUISHED THE BENEFIT OF THIS
WAIVER OF JURY TRIAL UNLESS SUCH RELINQUISHMENT IS IN A WRITTEN INSTRUMENT
SIGNED BY THE PARTY TO WHICH SUCH RELINQUISHMENT WILL BE CHARGED.

The
parties hereto have caused this Agreement to be executed and delivered as of
the date first set forth above.

|                              |  |                                  |  | 
|----------------------------- |  | -------------------------------- |  | 
|INTEGRAL
 VISION, INC.        |  | J. M. Warren
 Law Offices, P.C.,
|                              |  | As Agent for
 the Noteholders   
|                              |  |                                 
|By:                           |  | By:                             
|                              |  |                                  |  | 
|Name:
 Charles J. Drake       |  | Name:
 J. Michael Warren        
|Title:
 Chairman of the Board |  | Title:
 President               

- 6 -

---