MEDIATION SETTLEMENT AGREEMENT

Digital shall and hereby does release all of its right, title and interest in and to each unit of leased equipment returned by Digital to CIT in accordance with the Agreed Order of Replevin, each unit of leased equipment underlying Master Equipment Lease Agreement Schedule No. 007, each unit of leased equipment otherwise in CIT’s possession as of the Closing, and each unit of equipment underlying Purchase Order #1049595, including the equipment described on attached Exhibit 2 (collectively, the “Returned Equipment”). Digital acknowledges that CIT may sell the Returned Equipment in an orderly manner as it deems appropriate over the length of time it deems appropriate. Digital shall provide to CIT at Closing a bill of sale for the equipment underlying Purchase Order #1049595.

CIT shall and hereby does release all of its right, title and interest (including any claims or liens) in and to each unit of leased equipment that it originally leased to Digital pursuant to the Leases which is not Returned Equipment (such equipment is more fully described in Exhibit 3 attached hereto, which Exhibit 3 is true and correct absent manifest error and provided each such unit of equipment is not in CIT’s possession as of the Closing) (the “Released Equipment”), and CIT shall and hereby does assign all of its right, title and interest to the Released Equipment to Digital. CIT represents and w arrants to Digital that it holds title to the Released Equipment in accordance with the Leases and that it has not granted any liens or encumbrances on the Released Equipment. The Released Equipment is otherwise provided to Digital “AS-IS, WHERE-IS”. CIT shall further execute and deliver UCC-3 termination statements, as necessary in Digital’s reasonable judgment, to release such equipment from all UCC-1 Financing Statements that CIT caused to be filed against Digital, as debtor.

Commencing as of the Closing, Digital shall provide a newly-issued one-year standard warranty for each unit of Returned Equipment that is (i) re-delivered by CIT to Digital; and (ii) shipped by Digital to the end purchaser. The shipping shall be at CIT’s cost and expense. Upon completion of Digital’s work on a unit of Returned Equipment, CIT will either arrange for Federal Express pick-up and delivery to the end purchaser or will pay such cost to Digital at the time of delivery to the end purchaser. Any such warranty shall be limited in amount to $2,000.00 per unit, and shall in any event terminate by no later than December 31, 2005. Moreover, Digital shall be required to issue such a warranty only with respect to Returned Equipment that has not been tampered with or modified in any way since the time it was received by CIT pursuant to the Agreed Order of Replevin, or, as to equipment underlying Lease Schedule No. 007, since delivered to CIT.

At or as soon as practicable after the Closing, Digital shall supply to CIT for the Returned Equipment the missing cords, damaged components, manuals, literature, and warranty materials listed on Exhibit 4 attached hereto. Digital shall also confirm, prior to shipping a unit, that the software running on each unit of Returned Equipment is to manufacturer’s specification for such unit.

CIT represents, warrants and covenants to Digital that each unit of Returned Equipment delivered by CIT to Digital pursuant to this ¶3 has not been and shall not be leased to any other party since the date such equipment was returned to CIT pursuant to the Agreed Order of Replevin, or, as to equipment underlying Lease Schedule No. 007, since delivered to CIT through the date such equipment is re-delivered by CIT to Digital pursuant to the first sentence of ¶3.1 above. Digital shall have no obligation under ¶3.1 to provide a warranty for any Returned Equipment that has been leased to any other party in breach of this ¶3.3.

As used in this ¶3, the term “Returned Equipment” shall not include any unit of equipment underlying Purchase Order #1049595. As to the equipment underlying Purchase Order #1049595, the original warranty shall survive and remain in place according to its terms and conditions.

Digital agrees that if pursuant to the Term Sheet, any binding agreement arising out of the Term Sheet, or pursuant to any other agreement it shall authorize or execute, or take any action, whether through its officers, directors, or other agents to authorize or execute, (i) the conversion of any debt (secured or unsecured) owing by it to Optel as of the Closing (the “Optel Debt”) into equity of Digital or (ii) the exercise of any warrants or other equity securities issued by Digital to Optel pursuant to the Term Sheet (the “Warrants”) into equity of Digital, either in a principal amount greater than $5 million in the aggregate or at a conversion price of less than $1.00 per share during the period beginning on the Closing and ending thirty (30) days following the Effecti ve Date (as defined in the Rights Agreement) (as such 30-day period may be extended pursuant to Section 1.6(b) of the Rights Agreement) (the “Lock-Up Period”), then, an Optel Default (as defined below) shall have occurred and Digital shall issue additional shares of restricted common stock of Digital to CIT in accordance with ¶5.2 below. Notwithstanding the foregoing, nothing in this ¶5 shall in any way prohibit or restrict Digital from authorizing or executing any agreement with Optel that provides for the conversion of all or any portion of the Optel Debt at any time other than during the Lock-Up Period or provides for the sale or other issuance of the Warrants, other warrants or other equity securities of Digital to Optel at any time (but not the exercise of the Warrants during the Lock-Up Period). CIT acknowledges that it is familiar with the Optel Debt and the Term Sheet, and the transactions contemp lated therein, as disclosed by Digital in its filings with the SEC.

In the event that Digital permits Optel to convert any of the Optel Debt or exercise the Warrants in violation of ¶5.1 above (an “Optel Default”), then, as liquidated damages and not as a penalty, Digital shall, within five (5) days of the earlier to occur of (i) conversion of the Optel Debt and exercise of the Warrants in the aggregate amount or dollar value in violation of ¶5.1 above or (ii) CIT’s written demand therefore, promptly take all corporate action necessary to, and will, issue to CIT an additional 2,500,000 shares of restricted common stock of Digital to CIT. To fully effectuate the terms of this ¶5, Digital shall execute and deliver pleadings and other documents in form and substance satisfactory to CIT and to CIT’s counsel, Devine Goodman Pallot & Wells, P.A., consenting to the entry of an order, injunction, or judgment di recting Digital to issue the 2,500,000 shares of restricted common stock of Digital to CIT upon an Optel Default, if any. Digital fully consents to and waives any requirement of bond or other security for any such order, injunction or judgment to take effect.

Subject to ¶7.3 below, CIT, by and through its duly elected officers, for itself, its present and former parents, subsidiaries, affiliates, members, officers, directors, employees, agents, successors, and assigns (the “CIT Group”), hereby fully releases and does forever discharge Digital, Optel and each of their respective present and former parents, subsidiaries, affiliates, shareholders, officers, directors, employees, agents, successors, attorneys, and assigns and each and all of them, of and from any and all past, present or future claims, debts, rights, liabilities, damages, costs, expenses, attorneys’ fees, causes of action, and lawsuits, of every kind, nature, or description, whether known or unknown, suspected or unsuspected, fixed or contingent, which the CIT Group ever had, now has or may hereafter acquire, upon or by reason of any matter, cause , event or thing whatsoever accruing, occurring or arising from the beginning of the world to the date of the Closing, directly or indirectly related to the Leases, the Returned Equipment, the Claim, the Action, the Optel Debt, or the issuance of the Term Sheet, and any and all claims based upon or in any way relating to any of the foregoing; provided, however, that this release shall not apply to (i) Digital’s or Optel’s obligations to CIT under this Agreement or (ii) any monetary or non-monetary obligations of Digital with respect to any lease, equipment or warranty claims or transactions between Digital and CIT which are not the subject of the Action.

Digital and Optel, by and through their duly elected officers, for themselves, their present and former parents, subsidiaries, affiliates, members, officers, directors, employees, agents, successors, and assigns (the “Digital Group”), hereby fully release and do forever discharge CIT and its present and former parents, subsidiaries, affiliates, shareholders, officers, directors, employees, agents, successors, attorneys, and assigns and each and all of them, of and from any and all past, present or future claims, debts, rights, liabilities, damages, costs, expenses, attorneys’ fees, causes of action, and lawsuits, of every kind, nature, or description, whether known or unknown, suspected or unsuspected, fixed or contingent, which the Digital Group ever had, now has or may hereafter acquire, upon or by reason of any matter, cause, event or thing whatsoever accru ing, occurring or arising from the beginning of the world to the date of the Closing, directly or indirectly related to the Leases, the Returned Equipment, the Claim, the Action, and any and all claims based upon or in any way relating to any of the foregoing; provided, however, that this release shall not apply to (i) CIT’s obligations to Digital or Optel under this Agreement or (ii) any monetary or non-monetary obligations of CIT with respect to any lease, equipment or warranty claims or transactions between Digital and CIT which are not the subject of the Action.

Digital acknowledges that the fundamental premise of this Agreement, including CIT’s release of Digital and Optel as provided in ¶7.1 above, is the irrevocable receipt by CIT of the payment sum provided for in ¶1 above and the Returned Equipment, and the issuance of the Shares (collectively, the “CIT Payment”) as well as the continued operation of Digital outside of a bankruptcy case. In the event a bankruptcy case is filed by or against Digital within the 90-day preference period provided in Section 547 of Title 11 of the United States Code following the transfer to CIT of the CIT Payment, Digital shall obtain from the Bankruptcy Court a final order binding on Digital, the U.S. Trustee, any committees appointed or to be appointed by the Bankruptcy Court, all creditors, and any subsequently appointed Chapter 11 or 7 trustee(s) setting an absolute bar date for the commencement of any action against CIT to disgorge or return all or any portion of the CIT Payment or otherwise against CIT in connection with the CIT Payment, which bar date shall be scheduled for a date not later than the earlier of (i) sixty (60) days after the filing of the bankruptcy petition or (ii) the date for approval of any disclosure statement by Digital (the “Action Bar Date”). The remainder of this ¶7.3 shall apply only if Digital is a debtor in a bankruptcy case filed by or against it within the 90-day preference period provided in Section 547 of Title 11 of the United States Code following the transfer to CIT of the CIT Payment and (i) an action is brought against CIT prior to expiration of the Action Bar Date (or the Bankruptcy Court determines to allow an untimely filed action) or (ii) Digital fails to obtain an Action Bar Date on the terms set forth above. Then, and only then, t he release by CIT provided in ¶7.1 above as to the Preference Voting Amount and the Preference Amount (each as defined below) shall be deemed null, void and of no further force or effect, without requiring any further action or notice by any party hereto, and CIT shall have an allowed claim for all purposes in connection with the administration of the bankruptcy case or voting on any disclosure statement or plan in the amount of $10,590,363 (which amount represents the net of the Claim less a deemed value of $2.5 million for each of the Returned Equipment and the Shares) (the “Preference Voting Amount”). In addition, for the purpose of distribution under a plan or otherwise, Digital shall owe CIT an amount equal to the sum of (i) $5,590,630 plus (ii) the amount that CIT actually transfers on account of any judgment or order entered against it in connection with the CIT Payment (the “Preference Amount”).