<PAGE>   1

                                                                    EXHIBIT 10.4

[NOTE: CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN MARKED TO INDICATE THAT
CONFIDENTIALITY HAS BEEN REQUESTED FOR THIS CONFIDENTIAL INFORMATION. THE
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.]

                           PRINCETON VIDEO IMAGE, INC.
                       L-VIS(TM) SYSTEM LICENSE AGREEMENT


This Agreement is made this 4th day of February, 2001 by and between Princeton
Video Image, Inc. ("PVI") and Cablevision Systems Corporation ("Cablevision").

1.       DEFINITIONS.

         In addition to the terms defined elsewhere in this Agreement, the
following terms shall have the following meanings:

         1.1 "Additional Units" has the meaning assigned to such term in Section
2.8(b).

         1.2 "Advertiser" means any Third Party for which an insertion of an
Electronic Image is made by Licensees for consideration in any form; provided,
however, such shall not be deemed to include cable television subscribers solely
by virtue of their payment of cable subscription fees.

         1.3 "Affiliate," with respect to any person or Company, shall mean any
person or Company controlled by such first person or Company. For these
purposes, "control" shall refer to (a) the possession, directly or indirectly,
of the power to direct the management, policies or television operations of a
person or Company, whether through the ownership of voting securities, by
contract or otherwise, or (b) the ownership, directly or indirectly, of at least
50% of the voting securities or other ownership interest of a Company. For
purposes of this Agreement, National Sports Partners (or its affiliate which
operates the national "Fox Sports Net") shall be considered to be an Affiliate
of Cablevision.

         1.4 "Company" means any form of organization, entity or business,
whether or not conducted for profit.

         1.5 "Documentation" means all operator and user manuals, training
materials, guides, specifications and other materials created or owned by PVI
and provided to licensees generally to use and operate the L-VIS(TM) System.

         1.6 "Editing Agent" means any individual or Company that is responsible
for actual, physical manipulation of the L-VIS(TM) System in order to make
insertions of Electronic Images.

         1.7 "Electronic Image" means an image that is electronically inserted
into Telecasts through use of the L-VIS(TM) System.

         1.8 "Enhancements" has the meaning assigned to such term under Section
3.4 (a).

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         1.9 "Equipment" means the computer hardware and other equipment
included in the L-VIS(TM) System, as identified on all Schedules B as may be
executed by the parties from time to time pursuant to Section 2.8 of this
Agreement.

         1.10 "Equipment Fee" means PVI's direct cost for the Equipment (as
reasonably determined by PVI) from time to time.

         1.11 "General Improvements" means all material revisions, updates,
upgrades and other modifications to the Software included in the L-VIS(TM)
System from time to time, and the Equipment embodying and Documentation with
respect to same, that PVI generally makes available to licensees without charge
(other than reimbursement of PVI's reasonable expenses and/or charges for the
Equipment).

         1.12 "Initial Unit" means the one L-VIS(TM) System that PVI is
licensing to Licensees effective upon the date on which the Term commences,
pursuant to this Agreement.

         1.13 "Licensed Affiliates" means any present and future Affiliate of
Cablevision so long as it remains an Affiliate of Cablevision and agrees in
writing to be bound by the terms and conditions of this Agreement.

         1.14 "Licensees" means Cablevision and its Licensed Affiliates.

         1.15 "Licensed Network" means a then current television network
Affiliate of Cablevision. Current examples include Bravo Network, American Movie
Classics, and MSG Network.

         1.16 "Licensed Telecast" means the Telecast of any event or content
other than (i) Telecasts, intended for exclusive or primary distribution within
a specified territory outside the Territory as to which PVI has entered or
enters into an exclusive license, of events that originate within such specified
territory without the consent of the holder of such exclusive license or (ii)
Telecasts of content with respect to which Cablevision or a Licensed Affiliate
is not the primary rights holder, which is both (a) to be disseminated on a
Network not owned or controlled by Cablevision or a Licensed Affiliate and (b)
distributed by a System Operator other than Cablevision or a Licensed Affiliate.

         1.17 "L-VIS(TM) System" means the Equipment, the Software, the
Documentation and the General Improvements, modifications or improvements
therein or derivatives thereof which, collectively allow real-time or
post-production electronic insertion of Electronic Images into Telecasts in
which video is inserted and executed "upstream", prior to distribution of the
program to individual, or groups of, viewers. For the avoidance of doubt,
Schedule A describes certain technology and functionality which is included as
part of the L-VIS System and certain other technology and functionality which is
specifically excluded from the meaning of the L-VIS System.

         1.18 "Network" shall mean a broadcast channel for the dissemination of
video programming content through a television system, cable system, satellite
system or other such similar broadcasting system.


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         1.19 "Revenues" means all of the consideration that Licensees receive,
from Advertisers attributable to the use of the Units licensed to Licensees
hereunder, including without limitation advertising fees, premiums, user
charges, fees, and up-front payments (to the extent non-refundable). If the
exploitation of the Units licensed to Licensees hereunder is sold in combination
with other goods or services, Licensees shall, in good faith, reasonably
allocate the appropriate portion of such consideration as Revenue.

         1.20 "Revenue Sharing Rate" means


                  [CONFIDENTIAL TREATMENT REQUESTED]


         1.21 "Software" means the computer software, in object code form,
included in the L-VIS(TM) System as of the date of the shipment of a Unit, and
all General Improvements made subsequent to the date of this Agreement, if any.

         1.22 "System Operator" shall mean an entity providing a system for
distributing Networks to end users, such as the Cablevision cable distribution
system.

         1.23 "Telecast" means the dissemination of audio-visual content via
television transmission (whether broadcast, narrow-cast, cable, satellite,
closed circuit or otherwise) and, only for purposes of this Agreement, the term
shall specifically include distribution of audio-visual content primarily
through movie theaters. All other means of transmitting content (including,
without limitation, primarily through the Internet or any similar or successor
means) shall be expressly excluded from the definition of Telecast and the scope
of Licensee's license hereunder.

         1.24 "Term" means the term of this Agreement, which shall commence on
the date first written above.

         1.25 "Territory" means the United States of America, its territories
and possessions, and Canada.

         1.26 "Third Party" means any person or Company who or which is neither
a party nor an Affiliate of a party.

         1.27 "Trademarks" means all trademarks or trade names that PVI uses,
from time to time, with respect to the L-VIS(TM) System.

         1.28 "Unit" means one complete L-VIS(TM) System. "Units" means the
Initial Unit and the Additional Units (as defined herein), if any,
collectively.

2.       LICENSE AND LEASE GRANTS.

         2.1 Grant of L-VIS(TM) System License. Subject to the terms and
conditions set forth in this Agreement (including, without limitation, Section
2.2), PVI hereby grants to Cablevision


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and its Licensed Affiliates a non-exclusive, non-transferable license to use the
L-VIS System, including, without limitation, the Software, Equipment,
Documentation and General Improvements and any technology or know-how that is
owned or controlled by PVI and is necessary or useful for the exploitation
thereof, solely for combined use as an L-VIS(TM) System and in connection with
the Telecast of Licensed Telecasts during the Term. Licensees shall use the
L-VIS(TM) System for their own use or for the use of other Licensees. Licensees
shall not use the L-VIS(TM) System to provide services to non-Licensees.

         2.2 Reservation of Rights.

                  (a) All rights and licenses not expressly granted in Sections
2.1 and 2.14 are hereby expressly reserved by PVI.

                  (b) Further, notwithstanding the non-exclusive license granted
to Licensees in Section 2.1, Licensees acknowledge and agree that: (i) PVI has
specifically reserved the right to use the Software, Equipment and the
Trademarks in conjunction with its and/or Third Parties' use of the L-VIS(TM)
System in connection with the Telecast within the Territory of content or
events, whether or not Licensed Telecasts, without any obligation to compensate
Licensees in connection with such use; and (ii) Licensees shall have no right to
use the L-VIS(TM) System in connection with the Telecast of content or events
that are not Licensed Telecasts unless PVI or a Third Party licensee of PVI
expressly grants Licensees such right.

         2.3 Restrictions on Use. In addition to other restrictions and
limitations which may be imposed by this Agreement:

                  (a) Unless otherwise provided herein, Licensees shall not: (i)
make or distribute to others copies of the Software or the Documentation aside
from back-up copies of the Software; (ii) modify, adapt, merge, translate,
decode, reverse engineer, decompile, disassemble or create derivative works
based upon the Software, the Documentation, the Equipment, any General
Improvement or any other part of the L-VIS(TM) System; (iii) use the L-VIS(TM)
System or any part thereof in the construction, development, maintenance,
running or execution of any application other than the Software; or (iv) market
the Software, the Equipment, any General Improvement or the L-VIS(TM) System, or
any part thereof, other than in connection with the insertion of Electronic
Images into Licensed Telecasts, in accordance with the terms and conditions of
this Agreement.

                  (b) Unless agreed to by PVI in advance, in writing, or
otherwise permitted in accordance with the other terms of this Agreement,
Licensees shall not: (i) sublicense, lease, sell, assign, rent or otherwise
transfer to others, or otherwise dispose of, the Software, the Documentation,
the Equipment, any General Improvement or any other part of the L-VIS(TM)
System; (ii) use the L-VIS(TM) System for any purpose other than in connection
with the Licensed Telecasts within the Territory; or (iii) transfer, assign,
relicense or otherwise dispose of its rights under this Agreement.


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         2.4 Compliance with Standards.

                  (a) Licensees shall use, and shall cause any Editing Agent to
use, the L-VIS(TM) System only in accordance with PVI's reasonable and customary
continuity standards, as may be in effect from time to time during the Term.

                  (b) Licensees acknowledge that any use of the L-VIS(TM) System
in violation of applicable laws or regulations and commonly recognized
governmental, community or industry standards would cause severe and irreparable
injury to PVI's reputation and legitimate business interests. Notwithstanding
anything contained in this Agreement to the contrary, and in addition to
Licensee's obligations under 2.4(a), Licensees shall not knowingly use, and it
shall not allow any Editing Agent to knowingly use, the L-VIS(TM) System in any
manner inconsistent with any applicable laws or regulations and any commonly
recognized governmental, community or industry standards, or in a manner that
has not been approved by the rightsholders, sponsors, advertisers and
broadcasters of the Licensed Telecast in question.

                  (c) During the Term, Licensees shall maintain, at their sole
cost and expense, advertising injury insurance (or its equivalent in the
Territory) with such coverage and such limits as are customarily maintained by
television advertisers in the Territory.

         2.5 Obligations of Licensees.

                  (a) Licensees and/or their respective designee(s) shall be
solely responsible for selling the available Electronic Image capacity for
Licensed Telecasts. Licensees and PVI will cooperate and coordinate, from time
to time, as the parties deem reasonably appropriate to develop and implement
Licensee's commercialization plan.

                  (b) Licensees and/or their respective designee(s) shall be
responsible for obtaining and maintaining any governmental authorizations
(including, without limitation, any equipment export or import licenses), and
for negotiating any arrangements with Telecast rightsholders, necessary to
enable Licensees to use the L-VIS(TM) System as contemplated in this Agreement,
including, without limitation, obtaining any and all required rights and
permissions (all such authorizations, arrangements, rights and permissions,
collectively, "Required Permissions").

                  (c) It is understood that Licensees may have arrangements with
one or more Editing Agents for Licensed Telecasts. The license rights granted by
PVI to Licensees to use the L-VIS(TM) System shall be extended to such Editing
Agents solely for their use in connection with Licensed Telecasts and the
provisions of Sections 2.3, 2.4, 2.6, 2.12, 2.14(b), 3.7, 3.8, 4.2, 4.4 and 5
shall apply to such Editing Agent. Each Licensee shall be responsible for
compliance by its Editing Agents with such terms.

                  (d) Subject to the other terms of this Agreement, Licensees
shall maintain complete editorial control over the use of the L-VIS(TM) System
in connection with Licensed Telecasts, including the right to determine the
location, content and appearance of the Electronic Images.


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         2.6 Inspection Right. PVI shall have the right to inspect, at its own
expense and at reasonable times and following reasonable notice, all sites where
the L-VIS(TM) System is being used pursuant to this Agreement, in order to
verify that such use complies in all respects with the requirements under this
Agreement.

         2.7 Good Faith Incidental Telecasts. The parties acknowledge that
Telecasts and related distribution of content cannot be made to conform exactly
to geographic boundaries or distribution methods. As a result, a Licensee's good
faith use of the L-VIS(TM) System pursuant to the license granted in Section 2.1
may result in the Telecast of Electronic Images in geographic areas not
permitted under the definition of Licensed Telecasts. No such good faith,
incidental Telecast by a Licensee shall constitute a breach of any obligation of
the Licensee or Licensees under this Agreement, and the Licensees shall not be
required to make any payment to or otherwise separately compensate PVI or any
Third Party on account thereof.

         2.8 Lease of Equipment; Additional Units.

                  (a) Subject to the terms and conditions set forth in this
Agreement, PVI hereby leases to such Licensee as Cablevision shall designate the
Equipment which embodies the Initial Unit solely for use in conjunction with
Licensees' use of the L-VIS(TM) System and solely in connection with Licensed
Telecasts. The Equipment comprising the Initial Unit will be described and
identified by serial number on a Schedule B that the parties will execute in
conjunction with delivery of the Initial Unit.

                  (b) During the Term and so long as Licensees are not in
material default under any of the terms or conditions of this Agreement, any
Licensee may request, from time to time, that PVI lease to such Licensee
additional Units. PVI shall exercise reasonable commercial efforts to provide
Licensees with the number of additional Units (such additional Units, the
"Additional Units") that Licensees request. Delivery of Additional Units shall
be made in accordance with Section 2.9. Additional Schedules B shall be executed
by the parties, from time to time, for all Additional Units delivered to
Licensees pursuant to this Section 2.8(b).

         2.9 Delivery of Unit(s); Risk of Loss; Casualty Insurance.

                  (a) PVI shall use commercially reasonable efforts to deliver
the Initial Unit as soon as practicable after the date of this Agreement. In
connection with the delivery of any Additional Units, PVI shall provide
Licensees with written notice of a firm delivery date at least 30 days prior to
such delivery. PVI shall ship the Initial Unit and any Additional Unit(s),
F.O.B. PVI's facility, Lawrenceville, New Jersey, USA, to the appropriate
Licensee at the delivery location designated therefor on the applicable Schedule
B. The Licensee shall be responsible for all freight expenses and any and all
import duty or tax assessed by the delivery location country relating to such
shipment. PVI shall be responsible for delivery, set-up and testing the
Equipment on-site.

                  (b) Upon delivery of the Initial Unit or the Additional
Unit(s), as the case may be, to a Licensee, the Licensee shall assume all risks
of loss, theft, destruction of and damage to the Unit(s) so delivered unless the
loss or damage arises from the actions of PVI employees or contractors.


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         2.10 Training.

                  (a) PVI shall provide training in the use and operation of the
L-VIS(TM) System to members of Licensee's technical staff or Editing Agents, as
Licensees may reasonably request from time to time, to enable such individuals
to use and operate the L-VIS(TM) System properly. The dates and locations for
such training shall be as mutually agreed upon by the parties. Licensees shall
pay PVI for PVI's direct costs (as reasonably determined by PVI) to provide such
training, including labor costs, travel, meal and lodging expenses of any PVI
personnel in connection with providing such training.

                  (b) In addition, for a period not to exceed 30 days after each
delivery of a Unit as reasonably requested by a Licensee, PVI shall make one of
its representatives available to such Licensee at a single location to provide
technical assistance in connection with the installation and operation of such
Unit, should such Licensee so request. PVI shall provide such assistance at no
additional cost to such Licensee, except that such Licensee shall be responsible
for all expenses incurred by the PVI representative for travel, meals and
lodging in connection with providing such assistance.

         2.11 Maintenance Support.

                  (a) Each Licensee shall maintain the Unit(s) it receives in
good operating condition, at its sole expense. PVI shall make its technical
personnel available during PVI's normal business hours for telephone
consultations with Licensees' technical staff at no charge. In the event that
on-site technical support is required by a Licensee during the Term, PVI shall
provide such support at PVI's direct costs (as reasonably determined by PVI) for
such services, including expenses of PVI's personnel for travel, meals and
lodging incurred in connection with providing such services.

                  (b) At a Licensee's request, PVI shall use reasonable
commercial efforts to make its technical personnel available to such Licensee,
at no charge to such Licensee, during non-business hours for emergency telephone
consultations during the Telecast of a specific event.

                  (c) At a Licensee's request, PVI will provide its technical
personnel to render services necessary to move or operate Unit(s) for a
Licensee's benefit. Such services shall be provided at PVI's direct costs for
such services (as reasonably determined by PVI); provided, however, that if PVI
provides Enhancements it shall be compensated for such services as provided
under Section 3.4.

                  (d) Notwithstanding any provision contained in this Agreement
to the contrary, after the initial Term, PVI shall only be obligated to provide
maintenance, training and support services under this Agreement if it then
provides support for L-VIS Systems for customers and licensees generally.

         2.12 Ownership.

                  (a) Licensees acknowledge and agree that PVI owns the
L-VIS(TM) System, including all of the Software, Equipment, Documentation and
any General Improvements, and


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all copies thereof, all updates and modifications thereto made by or on behalf
of PVI and all right, title and interest in and to all patents, patent rights,
copyrights, Trademarks, service marks, trade secrets and confidential or
proprietary information relating thereto. Except as specifically set forth in
Section 2.1 of this Agreement, Licensees acknowledge that, by virtue of this
Agreement, Licensees do not have, and will not obtain, any right, title or other
proprietary interest in or to any of the foregoing, except as may be provided
under the Joint Collaboration and License Agreement to be entered by the
parties.

                  (b) If PVI supplies Licensees with reasonable labels, plates
or other markings stating that the Equipment is owned by PVI, Licensees shall
affix and keep affixed the same in a prominent place on the Equipment. PVI shall
have the right, at all reasonable times and following reasonable notice, to
inspect the Units and observe Licensee's use of the L-VIS(TM) System. Licensees
grant PVI the right to execute and file such statements or instruments, and take
such other actions, to provide public notice of, and protect PVI's interest in,
the Equipment, including without limitation against the rights of landlords.

                  (c) The Equipment is, and shall at all times be and remain,
personal property notwithstanding that the Equipment or any part thereof may now
be, or hereafter become, in any manner affixed or attached to real property or
any improvements thereon.

         2.13 Improvements.

                  (a) From time to time as reasonably requested by Licensees,
PVI shall deliver to Licensees, and provide Licensees' technical staff with any
necessary training concerning, any General Improvements that exist during the
Term. Licensees acknowledge and agree that PVI shall not be obligated to create
any General Improvements. PVI shall provide General Improvements to Licensees
without charge, except that Licensees shall reimburse PVI for its direct costs
in connection with providing such General Improvements, and with the purchase,
shipment, insurance, etc. of any Equipment embodying such General Improvements,
promptly after PVI's presentation of an invoice for such expenses provided, that
Licensees shall have, pursuant to this Agreement, a license to any improvements
to the extent such improvements relate to the functionality of the L-VIS System
(as described in Schedule A).

                  (b) The parties shall execute additional Schedules B, if
necessary, to reflect any Equipment delivered to Licensees pursuant to this
Section 2.13.

                  (c) In the event PVI develops any non-exclusive special
improvements for the L-VIS(TM) System that are not General Improvements, PVI
will offer Licensees the opportunity to obtain a separate license for such
special improvements on terms no less favorable than those offered to any third
party (provided that Licensees are considered under this Agreement hereby to be
licensed to such improvements to the extent they improve on the existing
functionality of the L-VIS System).

         2.14 Grant of Trademark License.

                  (a) Subject to the terms and conditions set forth in this
Agreement (including, without limitation, Section 2.2), PVI hereby grants to
Licensees a non-exclusive, non-


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transferable license to use the Trademarks in connection with Licensees'
exploitation of the L-VIS(TM) System under the license granted in Section 2.1.

                  (b) Licensees shall use the Trademarks only in such form and
manner as shall be approved from time to time by PVI, including without
limitation the identification of PVI as the owner of such Trademarks, and in
accordance with all applicable laws and regulations in the Territory. Licensees
shall not use the Trademarks in any manner that may jeopardize the significance,
distinctiveness or validity thereof. All of Licensees' uses of the Trademark
shall inure to the benefit of PVI. Licensees shall not use the Trademarks in
combination with any other trademark, trade name or logo of its own or of any
Third Party to create a composite trademark or logo, without the prior written
consent of PVI. If any Licensee becomes aware of any infringement of the rights
of PVI in the Trademarks in the Territory, such Licensee will promptly notify
PVI in writing and will join and assist PVI at PVI's sole cost and expense, if
such assistance is required, in taking steps as PVI may reasonably request for
the protection of PVI's rights.

                  (c) PVI makes no warranty with regard to the validity of the
Trademarks or the registration thereof.

3.       INITIATION FEE; EQUIPMENT FEE; ROYALTIES; ENHANCEMENT FEES; PAYMENT.

         3.1 Initiation Fee. In partial consideration of the licenses and rights
granted by PVI to Licensees under this Agreement, Cablevision shall pay PVI an
initiation fee of US $7,500,000 ("Initiation Fee") as follows: $2,500,000 shall
be paid upon the First Closing as defined under that certain Stock and Warrant
Purchase Agreement between PVI Holding, LLC, a wholly-owned indirect subsidiary
of Cablevision, and PVI dated this date (the "Stock Purchase Agreement"), and
$5,000,000 shall be paid upon the Second Closing as defined under the Stock
Purchase Agreement (provided, that if there is no Second Closing for any reason
other than solely attributable to default by Cablevision, the second $5,000,000
payment shall be considered irrevocably waived). Payment of the Initiation Fee
shall be creditable against the payment of any future royalty, revenue sharing
obligation, enhancement fee, equipment fee or other monetary obligation of any
Licensees to PVI under this Agreement or any other agreement between the parties
as they may so provide therein. The Initiation Fee payable hereunder shall also
be creditable against the payment of future royalty, revenue sharing obligation,
enhancement fee, equipment fee or other monetary obligation of Licensees under
the Joint Collaboration and License Agreement to be entered into by the parties.

         3.2 Equipment Fee. Licensees shall pay PVI a one-time non-refundable
Equipment Fee with respect to each Unit licensed to Licensees upon delivery.

         3.3 Revenue Sharing; Minimum Revenue Sharing.

                  (a) In partial consideration of the licenses and rights
granted by PVI to Licensees pursuant to this Agreement, each Licensee shall pay
to PVI a royalty consisting of a portion of all such Licensee's Revenues in an
amount equal to the greater of (i) Revenues multiplied by the Revenue Sharing
Rate, or (ii) all payments made by Advertisers in connection


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with the insertion of Electronic Images through use of a Unit licensed to such
Licensee hereunder (regardless of how such payments are characterized)
multiplied by the Revenue Sharing Rate.

                  (b) Without the prior written consent of PVI, Licensees shall
not accept or solicit any non-monetary consideration directly in connection with
the use of the L-VIS(TM) System other than as would be reflected in Revenues,
except for commercially reasonable use for demonstrations to potential
Advertisers or as otherwise permitted by Section 3.4.

         3.4 Non-Revenue Use; Enhancement Fees.

                  (a) In addition to Revenue Sharing Payments, Licensees shall
pay PVI a fee in connection with any insertion of Electronic Images in Licensed
Telecasts for which Licensees do not receive Revenue (e.g. non-sponsored virtual
first down lines, speed of pitch displays, etc. viewer enhancements)
("Enhancements"). If PVI provides services to provide insertion of any such
Enhancement, Licensees shall pay PVI a fee equal to [CONFIDENTIAL TREATMENT
REQUESTED] of PVI's direct costs (as reasonably determined by PVI) to provide
such Enhancement to Licensees (provided that such rate shall be reduced to
[CONFIDENTIAL TREATMENT REQUESTED] for the first 6 months after first use of any
Enhancement by any Licensee). If Licensees insert an Enhancement without use of
PVI's services, Licensees shall pay PVI a fee equal to [CONFIDENTIAL TREATMENT
REQUESTED] of PVI's reasonable estimated cost to have provided services to
insert such Enhancement (provided that such fee shall be waived for the first 6
months after first use of any Enhancement by any Licensee). For purposes of this
provision, PVI's costs may include allocable amortization costs of equipment not
already leased to Licensees hereunder which is used by PVI directly in
connection with providing the Enhancement to Licensees and all direct out of
pocket costs associated with such insertion, including labor, as reasonably
determined by PVI, from time to time. If Enhancements are provided by PVI,
Licensees shall make payment of Enhancement Fees within 30 days of invoice by
PVI. If Enhancements are provided by Licensees, Licensees shall make payment of
applicable fees as provided in Section 3.5.

                  (b) Notwithstanding the provisions of Sections 3.3 (b) and 3.4
(a), Licensees may use the L-VIS(TM) System to promote or advertise the
businesses or programming of Cablevision or the Licensed Affiliates, without
charge, provided that after the first 6 months of the initial Term, Licensees
may use a maximum of 25% of the Electronic Image insertions (rounded up to the
nearest whole avail) in any Licensed Event (measured by avails set by the
Licensee which are actually used) for such purpose.

         3.5 Payments. Except as provided in Section 3.3(b), all revenue sharing
payments and Enhancement fees due under this Agreement shall be paid quarterly,
within 30 days after the end of each calendar quarter. Each such payment shall
be accompanied by a statement showing, for the subject calendar quarter, the
sales of Electronic Images, the amount of Revenues generated by such sales, use
of Enhancements, permitted no-charge promotional use, and the amount of revenue
sharing payments due on Revenues and fees due on Enhancements.

         3.6 Mode of Payment. Licensees shall make all payments required under
this Agreement as directed by PVI from time to time in United States Dollars.


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         3.7 Records Retention. During each year of the Term, and for a period
of 24 months after each such year, Licensees shall keep complete and accurate
records pertaining to Revenues and to permit PVI to confirm compliance with the
terms of this Agreement and the accuracy of payment calculations hereunder.

         3.8 Audit Request. During each year of the Term and for a period of 24
months after each such year, at the reasonable request of PVI, Licensees shall
permit PVI or a reputable, independent, certified public accountant or firm
appointed by PVI, to examine such records as may be necessary to confirm the
correctness of any payment due or made to PVI by Licensees hereunder or
Licensees' compliance with the Terms of this Agreement.

         3.9 Cost of Audit. PVI shall bear any and all expenses associated with
the conduct of the performance of any audit contemplated by Section 3.8;
provided, however, that should any such audit disclose a ten percent or greater
aggregate underpayment by Licensees to PVI for the audit period in question, or
material non-compliance by Licensees with the terms of this Agreement, Licensees
shall reimburse PVI for all such audit expenses.

         3.10 [CONFIDENTIAL TREATMENT REQUESTED]


4.       LIMITED WARRANTY; INTELLECTUAL PROPERTY; DISCLAIMERS; EXCLUSIONS.

         4.1 Limited Warranty.

                  (a) PVI represents and warrants that it owns all of the patent
rights, copyrights and trade secrets, or has the right to grant licenses
therefor, which comprise the L-VIS(TM) System, and which are necessary to grant
the licenses for the L-VIS(TM) System as provided in this Agreement.

                  (b) PVI warrants that the Units will, during the Term, be free
from defects and operate substantially in accordance with the Documentation,
when operated as a unit with the intended software on the intended hardware and
operating system environment. PVI does not warrant, however, that operation of
the Units shall be uninterrupted or error free. This warranty shall not apply if
errors or problems result from Licensees' negligence or improper use of the
Units. Licensees shall notify PVI in writing of its claim for any such failure
to conform. If any Unit, or any part thereof, fails to perform in accordance
with this warranty, Licensees' exclusive remedy, and PVI's sole obligation under
this warranty, shall be limited to the correction or replacement, as soon as
practicable, of such Unit or part thereof which is cause of the error. If PVI is
unable, after expenditure of reasonable commercial efforts, to replace the
defective part or correct program errors in the L-VIS(TM) System, Licensees may,
elect to continue use of the Unit with such defects and errors, as is, or
terminate this Agreement. PVI's warranty obligation with


                                       11
<PAGE>   12

respect to a specific Unit shall be void if such Unit, or any portion thereof,
is modified by Licensees without PVI's written consent.

         4.2 Limitation of Warranty. THE LIMITED WARRANTY PROVIDED IN SECTION
4.1 IS THE ONLY WARRANTY WITH RESPECT TO THE L-VIS(TM) SYSTEM AND THE UNITS. PVI
DOES NOT MAKE, AND LICENSEES DO NOT RECEIVE, ANY OTHER WARRANTY, EXPRESS OR
IMPLIED, AND ALL OTHER WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO THE L-VIS(TM) SYSTEM OR ANY PORTION THEREOF,
THE UNITS, THE DOCUMENTATION OR ANY SERVICES FURNISHED UNDER THIS AGREEMENT ARE
EXPRESSLY EXCLUDED.

         4.3 Intellectual Property Enforcement, Infringement; Indemnification.

                  (a) With respect to any claims of infringement in the
Territory with respect to a patent, copyright, or trade secret which covers the
L-VIS(TM) System or any portion thereof, PVI shall have the first right, but not
the duty, to institute infringement actions against Third Parties. If PVI does
not institute an infringement proceeding against an offending Third Party,
Licensees shall have the right, but not the duty, to institute such an action,
provided that PVI shall also appear as a party as licensor and shall have the
right to assume control of any infringement proceeding instituted by Licensees
by reimbursing Licensees for all of the costs and expenses incurred by Licensees
in connection therewith.

                  (b) PVI shall defend, at its expense, any action brought
against Licensees to the extent that such action is based on a claim that the
use of the L-VIS(TM) System, within the scope of this Agreement, infringes any
patent, trade secret or copyright, other than claims to the extent arising from
Licensee's failure to obtain Required Permissions.

                  (c) PVI shall indemnify Licensees from and against any costs,
damages or fees incurred, including amounts paid in settlement (provided, so
long as PVI is defending such action at PVI's expense and has confirmed that
such action is fully subject to PVI's indemnification obligation hereunder, that
any such settlement made at PVI's expense is approved by PVI, such approval not
to be unreasonably withheld), by Licensees in any action under this Section 4.3
which are attributable to claims that the use of the L-VIS(TM) System (including
any General Improvements), within the scope of this Agreement, infringes any
patent, trade secret or copyright, other than claims to the extent arising from
Licensee's failure to obtain Required Permissions. Licensees shall notify PVI
promptly in writing of any such claim, (provided that such notice shall not
constitute a condition precedent to indemnification hereunder) and shall provide
at PVI's expense, all available information, and reasonable assistance and
authority to enable PVI to defend it. Licensees shall also permit PVI to defend,
compromise or settle such claims as long as such compromise or settlement is at
no cost to Licensees, includes a complete release of Licensees and does not
purport to materially restrict any Licensee's future activity.

                  (d) The costs and expenses of any action under this Section
4.3 (including reasonable fees of attorneys and other professionals) shall be
borne by the party instituting and maintaining, or defending, such action, as
the case may be. If, however, the parties together


                                       12
<PAGE>   13

institute and maintain or defend such action, such costs and expenses shall be
borne by the parties in such proportions as they may reasonably agree in
writing. Each party shall execute all necessary and proper documents and take
such actions as shall be appropriate to allow the other party to institute and
maintain, or defend, such action, provided such other party has the right to do
so under this Section 4.3. Any award paid by Third Parties as a result of any
such action (whether by way of settlement or otherwise) shall be paid to the
party who instituted and maintained, or defended, such action, as the case may
be. If, however, both parties did so, then such award shall be allocated between
the parties in proportion to their respective injuries and contributions to the
costs and expenses incurred in such action, or as they may have otherwise
agreed.

                  (e) In the event that the L-VIS(TM) System, or any part
thereof, becomes or in PVI's opinion is likely to become the subject of a claim
of infringement, PVI may: (i) procure for Licensees, at no cost to Licensees,
the right to continue to use the L-VIS(TM) System, (ii) replace or modify the
L-VIS(TM) System, at no cost to Licensees, to make the L-VIS(TM) System
non-infringing, provided that the same functions at comparable levels are
performed by the replaced or modified system, or (iii) if the right to continue
to use cannot be reasonably procured or the L-VIS(TM) System cannot be
reasonably replaced or modified, terminate this Agreement.

                  (f) THIS SECTION 4.3 STATES THE ENTIRE LIABILITY OF PVI WITH
RESPECT TO INFRINGEMENT OF PATENTS, TRADE SECRETS OR COPYRIGHTS BY THE L-VIS(TM)
SYSTEM OR ANY PORTION THEREOF, AND PVI SHALL HAVE NO ADDITIONAL LIABILITY WITH
RESPECT TO ANY ALLEGED OR PROVEN INFRINGEMENT.

         4.4 Exclusion and Disclaimer of Damages.

                  (a) PVI SHALL NOT HAVE ANY LIABILITY FOR INDIRECT, INCIDENTAL,
SPECIAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, INCLUDING, WITHOUT LIMITATION, LOSS
OF ANTICIPATED REVENUE OR OTHER DAMAGES ARISING FROM THE LOSS OF USE OF THE
L-VIS(TM) SYSTEM, EVEN IF PVI HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.

                  (b) PVI'S TOTAL LIABILITY FOR DAMAGES UNDER THIS AGREEMENT
SHALL NOT IN ANY EVENT EXCEED THE TOTAL AMOUNT OF PAYMENTS RECEIVED BY PVI FROM
LICENSEES UNDER THIS AGREEMENT.

                  (c) THE FOREGOING LIMITS CONTAINED IN CLAUSES (a) AND (b)
ABOVE SHALL NOT APPLY TO THE EXTENT DAMAGES RESULT FROM PVI'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.

         4.5 Allocation of Risk. The parties acknowledge and agree that the
pricing and other terms of this Agreement have been established to reflect the
allocation of risk set forth in this Section 4 and elsewhere in this Agreement.

5.       CONFIDENTIAL AND PROPRIETARY INFORMATION.

         5.1 Confidential and Proprietary Information.


                                       13
<PAGE>   14

                  (a) Licensees acknowledge and agree that the L-VIS(TM) System
constitutes a valuable asset of PVI and that the information contained in the
L-VIS(TM) System, and any other information that PVI has disclosed or discloses
to Licensees prior to the date hereof or during the Term, as the case may be,
which PVI indicated or indicates at the time of disclosure is confidential, is
confidential and proprietary information of PVI (all such information
collectively, the "Information"). Each Licensee agrees that during the Term and
for a period of five years after any termination of this Agreement, it will not,
without PVI's prior written consent, directly or indirectly, (i) reveal, report,
publish, disclose or transfer any Information to any Third Party other than
Licensee's agent or representative, or (ii) use any Information for any purpose
or for the benefit of any Third Party, except as expressly authorized in this
Agreement. Each Licensee shall make reasonable efforts to notify and inform its
agents, representatives and employees who have access to the L-VIS(TM) System or
any Information of such Licensee's limitations, duties and obligations regarding
non-disclosure and use of the Information. Licensees shall not, and shall not
permit any of their respective agents, representatives or employees, to remove
any proprietary or other legends or restrictive notices contained in or included
in any Information. In no event shall Licensees use less care to maintain the
confidentiality of the Information than they use to maintain the confidentiality
of their own confidential and proprietary information.

                  (b) "Confidential and Proprietary Information" shall not
include any information which (a) was rightfully in the Licensee's possession
prior to receipt from PVI other than through prior disclosure by PVI; (b) now is
or hereafter becomes available to the public (including, without limitation, any
information filed with any governmental agency and available to the public)
other than as the result of a disclosure by the Licensee in breach hereof, (c)
becomes available to the Licensee on a nonconfidential basis from a source other
than PVI which the Licensee does not believe is prohibited from disclosing such
information to the Licensee prior to, any disclosures made by PVI to the
Licensee of such information. Additionally, PVI agrees that the Licensee shall
have no obligation with respect to any disclosure of Confidential and
Proprietary Information to the extent it is required to be disclosed by the
Licensee by order of a court of competent jurisdiction, administrative agency or
governmental body, or by any law, rule or regulation, or by subpoena, or any
other administrative or legal process, or by applicable regulatory or
professional standards, or in connection with any judicial or other proceeding;
provided that if Licensee is required to make any such disclosure of information
Licensee will give reasonably prompt notice of such requirement to PVI to permit
PVI to make application to contest or limit such disclosure.

         5.2 Verification. PVI shall have the right to have its representatives
visit the sites where the Units are located at all reasonable times and upon
reasonable notice to verify the appropriate use and protection of the
Information.

         5.3 Specific Performance. Licensees acknowledge that monetary damages
alone would not adequately compensate PVI in the event of a breach by Licensees
of this Section 5 or Section 2.3(a), and that, in addition to all other remedies
available to PVI at law or in equity, PVI shall be entitled to seek injunctive
relief for the enforcement of its rights, without the posting of bond or other
security, and to seek an accounting of profits made during the period of such
breach.


                                       14
<PAGE>   15

6.       TERMINATION.

         6.1 Expiration. The Term of this Agreement shall continue to the fifth
anniversary of the date on which the Term commences and shall automatically
continue for successive additional 5 year periods indefinitely unless
Cablevision gives written notice of its election not to so continue at least 90
days prior to the expiration of the initial 5 year period or any additional 5
year period for which the Term has been so extended.

         6.2 Breach. Either party shall have the right to terminate this
Agreement if the other party is in default of any material obligation hereunder
and such default has not been cured by the other party within 30 days after
receipt of notice of such default (or, if such default cannot reasonably be
cured within such 30-day period, if the party in default does not commence and
diligently continue actions to cure such default during such 30-day period). PVI
shall notify Cablevision, in addition to the relevant Licensee, of any alleged
default. Either party may regard the other party as being in default under this
Agreement if the other party becomes insolvent, makes a general assignment for
the benefit of creditors, suffers or permits the appointment of a receiver for
its business or assets, or becomes subject to any proceeding under any
bankruptcy or insolvency law, whether domestic or foreign, or has wound up or
otherwise liquidated, voluntarily or otherwise.

         6.3 Effect of Termination. Upon the expiration or termination of this
Agreement for any reason, Licensees shall immediately discontinue use of the
L-VIS(TM) System and shall return all of the Units and all Documentation to PVI
at a location designated by PVI, F.O.B. destination, freight prepaid, within 30
days after such expiration or termination. Licensees shall assume all risks of
loss or damage until delivery at such location. Thereafter, Licensees shall
retain no rights in or to the L-VIS(TM) System or the Documentation. In the
event of termination of this Agreement by PVI for breach by Licensees, such
termination shall be in addition to and not in lieu of any other remedies, at
law or in equity, available to PVI. In the event of any termination of this
Agreement, for any reason, by PVI, (a) PVI shall immediately refund to
Cablevision the unused portion of the Initiation Fee and (b) shall immediately
refund the remaining undepreciated value of the Equipment.

         6.4 Surviving Rights and Obligations. The parties' respective rights
and obligations regarding insurance (specifically, Section 2.4(c)), ownership
(2.12), Trademarks (2.14(b)), revenue sharing payments and records (3.4 - 3.10),
limitation of remedies (4.2 and 4.4), intellectual property enforcement and
infringement (4.3), confidentiality (5), termination (6.3 and 6.4) and other
miscellaneous rights and obligations (7.1, 7.4, 7.6, 7.10, 7.11, 7.12 and 7.17
shall survive expiration or termination of this Agreement. Termination,
relinquishment or expiration of this Agreement for any reason shall be without
prejudice to any rights which shall have accrued to the benefit of either party
prior to such termination, relinquishment or expiration. Such termination,
relinquishment or expiration shall not relieve either party from obligations
which are expressly indicated to survive termination or expiration of this
Agreement.

7.       MISCELLANEOUS.

         7.1 Relationship. This Agreement shall not be construed as creating a
partnership, joint venture or employment relationship between the parties, and
nothing contained herein shall


                                       15
<PAGE>   16

be construed as causing either party to be the employee, agent or representative
of the other. Neither party shall make any warranties or representations, or
incur any obligations whatsoever, on behalf of or in the name of the other
party.

         7.2 Representations and Warranties. Each party hereby represents and
warrants to the other as follows:

                  (a) Such party has the power to execute, deliver and perform
this Agreement in accordance with its terms;

                  (b) Such party's execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, have
been duly authorized by all requisite corporate action on the part of such
party, have received all required governmental approvals and do not and will not
violate any provision of law or other agreement to which such party is subject;

                  (c) Such party has obtained all governmental approvals
required in connection with the execution of this Agreement and the performance
of all of such party's obligations hereunder; and

                  (d) This Agreement, when executed by such party, shall
constitute the valid and legally binding obligation of such party, enforceable
in accordance with its terms.

         7.3 Assignment. Licensees may not grant, assign, sublicense or
otherwise convey this Agreement or its rights and obligations hereunder, in
whole or in part, to any Third Party, except as specifically provided otherwise
in this Agreement. Any such purported assignment by Licensees shall be void.
This Agreement shall be binding upon the successors and permitted assigns of the
parties, and the name of a party appearing herein shall be deemed to include the
names of such party's successors and permitted assigns to the extent necessary
to carry out the intent of this Agreement.

         7.4 Indemnification by Licensees; No Limitation of Liability.

                  (a) In addition to the specific remedies stated in this
Agreement, Licensees shall indemnify and hold PVI harmless from and against any
demands, claims or liability resulting from or arising out of the Licensee's
breach of its obligations under Sections 2.4(c) and 2.9(b).

                  (b) In no event shall the maximum coverage provided by any
policy(ies) of insurance that Licensees are required to maintain hereunder
constitute a limitation on Licensees' liability under this Agreement.

         7.5 Force Majeure. Neither party shall be liable to the other for loss
or damages or shall have any right to terminate this Agreement for any default
or delay attributable to any act of God, flood, fire, explosion, strike,
lockout, labor dispute, shortage of raw materials, casualty or accident, war,
revolution, civil commotion, act of public enemies, blockage or embargo,
injunction, law, order, proclamation, regulation, ordinance, demand or
requirement of any government or subdivision, authority or representative of any
such government, or any other


                                       16
<PAGE>   17

cause beyond the reasonable control of such party, if the party affected shall
give prompt notice of any such cause to the other party. The party giving such
notice shall thereupon be excused from such of its obligations hereunder as it
is thereby disabled from performing for so long as it is so disabled and for 30
days thereafter; provided, however, that if any event of force majeure prevents
Licensees from materially performing their obligations under this Agreement for
a period in excess of 18 months, PVI shall have the right to terminate this
Agreement upon 30 days' notice to Licensees. Notwithstanding the foregoing,
nothing in this Section 7.5 shall excuse or suspend the obligation to make any
payment due hereunder in the manner and at the time provided.

         7.6 Notices. All notices and communications required or permitted under
this Agreement shall be in writing and delivered by any method providing for
proof of delivery. Any notice shall be deemed to have been given on the date of
receipt. Notices shall be delivered to a party at the address for such party as
set forth in the Stock Purchase Agreement (or at such other address for a party
as shall be specified by like notice, provided that notices of a change of
address shall be effective only upon receipt thereof).

         7.7 Waiver. No provision of this Agreement shall be waived by any act,
omission or knowledge of a party or its agents or employees except by an
instrument in writing expressly waiving such provision and signed by the waiving
party. The waiver by either party of the breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other or
subsequent breach thereof.

         7.8 Severability. The provisions of this Agreement are severable, and
if any one or more of these provisions is held to be invalid or unenforceable,
in whole or in part, the remaining provisions and any partially enforceable
provision shall be and remain binding and enforceable.

         7.9 Further Actions. Each party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

         7.10 Governing Law. The rights and obligations of the parties hereto
shall be governed by and construed in accordance with the laws of the State of
New York without regard to conflicts of law principles.

         7.11 Compliance with Law. Nothing in this Agreement shall be deemed to
permit a party to export, re-export or otherwise transfer any Unit without
compliance with all applicable laws.

         7.12 Taxes. In addition to the other amounts payable under this
Agreement, Licensees shall pay, or reimburse PVI for, all sales, use, value
added, excise, personal property or similar taxes (other than taxes on or based
upon PVI's net income) which may be levied or imposed by any taxing authority
with respect to the transactions and payments contemplated by this Agreement.

         7.13 Amendment. No amendment, modification or supplementation of any
provision of this Agreement shall be valid or effective unless made in writing
and signed by a duly


                                       17
<PAGE>   18


authorized officer of PVI and Cablevision. Each additional Schedule B executed
by the parties pursuant to the terms of this Agreement shall constitute an
amendment of this Agreement.

         7.14 Descriptive Headings. The descriptive headings of this Agreement
are for convenience only, and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.

         7.15 Counterparts. This Agreement and all of the Schedules hereto may
be executed simultaneously in two counterparts, either one of which need not
contain the signature of more than one party, but both such counterparts taken
together shall constitute one and the same instrument.

         7.16 Entire Agreement. This Agreement, including all of the Schedules
hereto, as may be added to or amended from time to time, constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence, understandings and
agreements, whether oral or written, between the parties respecting the subject
matter hereof.

         7.17 No Third Party Beneficiaries. Nothing in this Agreement, express
or implied, is intended to, or shall, confer upon any Third Party (other than
the Licensed Affiliates) any legal or equitable right, benefit or remedy of any
nature whatsoever.


                                      * * *

ACCEPTED AND AGREED TO                      ACCEPTED AND AGREED TO
PVI:                                        LICENSEE:
By:  /s/ Lawrence L. Epstein                By: /s/ William J. Bell
    -------------------------------             --------------------------------
Name: Lawrence L. Epstein                   Name: William J. Bell
Title: VP, Finance/CEO                      Title: Vice Chairman
Date: February 4, 2001                      Date: February 4, 2001


                                       18
<PAGE>   19

                           PRINCETON VIDEO IMAGE, INC.
                            SYSTEM LICENSE AGREEMENT

                                   SCHEDULE A
                         DESCRIPTION OF LICENSED SYSTEM

The current L-VIS(TM) products, which are the subject of this Agreement, are all
current television broadcast applications based on PVI's hardware and software
technology in which the inserts are placed in the video upstream, prior to the
distribution of the program. The inserts either are distributed to the entire
audience or the inserts may be targeted or narrow-casted. In the case of
targeted or narrow-casted inserts, it is only in the sense that multiple video
feeds are generated upstream, each feed including the insert, going to a target
audience. Inserts changed for subsequent reruns of the original programs are
included in these products as long as the inserts are put in upstream. In all
cases of the current products, the insert is done at the same location that the
position of the insert is determined. These current products are distinguished
from future PVI products not included within the license granted under this
Agreement. Such future products include, inter alia, those where the position of
the insertion is determined upstream and the insertion is executed downstream.
These downstream insertion products may insert features into video at numerous
locations, including a satellite down link, a cable head end, a neighborhood
distribution site, at individual homes, or even individual receivers within a
home. PVI has already developed technology and intellectual property relating to
this general class of downstream insertion products. PVI anticipates that the
implementation and expansion of these downstream insertion products will be one
of the subjects of a separate agreement with Licensees. The L-VIS Equipment,
Software and Documentation licensed under this Agreement shall be deemed to
include any future systems created by PVI, only to the extent that such future
systems materially implement the above-described functionality of upstream
insertion.


                                       19
<PAGE>   20

                           PRINCETON VIDEO IMAGE, INC.
                            SYSTEM LICENSE AGREEMENT

                                   SCHEDULE B
                              EQUIPMENT CERTIFICATE

                                       FOR

                                  INITIAL UNIT

Delivery Location: __________

Description:

                  One L-VIS(TM) System comprised of the following:

                       Component                            Serial No.


ACCEPTED AND AGREED TO                      ACCEPTED AND AGREED TO
PVI:                                        LICENSEES:
By: _______________________________         By: ________________________________
Name:______________________________         Name: ______________________________
Title: ____________________________         Title: _____________________________
Date: _____________________________         Date: ______________________________


                                       20