Exhibit 10.5

AGREEMENT OF SETTLEMENT AND RELEASE

This Agreement of Settlement and Release (“Settlement/Release”), effective as of
August 31, 2010 (“Effective Date”), is entered into by and between Heartland
Payment Systems, Inc., a Delaware corporation (“HPS”), and DFS Services LLC, a
Delaware corporation (“Discover”).

WHEREAS, the parties entered into that certain Service Agreement, dated May 1,
2000, as amended, and that certain Acquirer Agreement, dated April 28, 2008
(such agreements and any Discover rules or regulations incorporated therein, as
amended, hereinafter collectively referred to as the “Agreements”) in connection
with HPS’ provision of secure processing and merchant acquiring services related
to credit card transactions on the Discover® Network, and

WHEREAS, HPS announced on January 20, 2009 that it experienced an intrusion into
its computer systems during 2008 (“Data Incident”), which intrusion Discover
alleges placed at risk of compromise data relative to certain Discover® Card
accounts; and

WHEREAS HPS reported to Discover that a total of 3,454,997 Discover Network Card
accounts were processed by HPS during the period May 14, 2008 through
October 29, 2008 (“the At-Risk Discover Card Accounts”), certain of which were
issued by (i) Discover Bank, (ii) HSBC Bank Nevada, N.A., (“HSBC”) and (iii) GE
Money Bank and GE Capital Financial Services, Inc. (“GE”).

WHEREAS, a dispute has arisen between the parties with respect to HPS’
obligations under the Agreements with respect to the Data Incident (the
“Dispute”); and

WHEREAS, the parties wish to amicably, fully, and finally settle the Dispute;

NOW, THEREFORE, the parties hereto agree as follows:

1. HPS shall pay Discover by wire transfer the sum of five-million-dollars
($5,000,000.00) (“Discover Settlement Proceeds”) within five (5) business days
of the Effective Date of this Settlement/Release. Within five (5) business days
of Discovers receipt of the Discover Settlement Proceeds, Discover will remit
(i) to HSBC the sum of one-hundred-three-thousand and thirty-seven dollars
($103,037), and (ii) to GE the sum of
two-hundred-seventy-seven-thousand-one-hundred and twenty dollars ($277,120).
HPS’ payment of the Discover Settlement Proceeds is in full and final
satisfaction of any and all claims of Discover and HPS arising from or relating
to the Data Incident or the Dispute.

2. In consideration of HPS’ payment of the Discover Settlement Proceeds,
Discover, on behalf of (i) itself, (ii) each of its past, present, and future
affiliates (including Discover Bank), successors, predecessors, and assigns, and
(iii) any other person or entity claiming by authority of, on behalf of, or
through Discover or the Agreements (all of the persons and entities described in
clauses (i)-(iii) of this sentence being defined herein as the “Discover
Releasors”) hereby releases and discharges HPS and its direct, indirect, present
and former, parents, subsidiaries, affiliates, predecessors and successors,
employees, partners, directors, officers, principals, and assignees
(collectively, the “HPS Releasees”), jointly and severally, free and harmless
from and against and

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covenants that none of the Discover Releasors will hereafter assert against any
of the HPS Releasees, any and all rights, claims, debts, demands, acts,
agreements, liabilities, losses, obligations, damages, costs, fees (including
without limitation, those of attorneys), expenses, actions, and/or causes of
action of every kind or nature whatsoever, present or future, both in law and
equity, known or unknown, suspected or unsuspected (“Claims”), that any of the
Discover Releasors may have against any of the HPS Releasees arising from or
relating to the Data Incident or the Dispute (the “Released Discover Claims”).

a. Discover represents and warrants that it is authorized to execute this
release on behalf of the Discover Releasors and that none of the Discover
Releasors have assigned or otherwise transferred (voluntarily, involuntarily or
by operation of law) any right, title, or interest in any Released Discover
Claim.

b. Discover covenants and agrees that none of the Discover Releasors will assert
any of the Released Discover Claims against, or otherwise seek to obtain any
monetary recovery or other relief by reason of any of the Released Discover
Claims from the HPS Releasees.

c. Discover represents and warrants that Discover Bank, HSBC and GE issued at
least ninety-eight (98) percent of the At-Risk Discover Card Accounts.

3. As further consideration for HPS’ payment of the Discover Settlement
Proceeds, Discover has secured releases from HSBC and GE respectively for the
benefit of HPS. Discover hereby indemnifies the HPS Releasees against and agrees
to hold the HPS Releasees harmless from any and all losses, damages, costs, fees
(including without limitation, those of attorneys), or expenses of any kind that
any of the HPS Releasees may incur by reason of any Claims that HSBC or GE (or
any of their past, present, and future affiliates, successors, predecessors, and
assigns) may have against any of the HPS Releasees arising from or relating to
the Data Incident or the Dispute (respectively, the “Indemnified HSBC Claims”
and the “Indemnified GE Claims”), provided, however that Discovers liability
under this sentence shall not exceed $103,037 in the case of the Indemnified
HSBC Claims and shall not exceed $277,120 in the case of the Indemnified GE
Claims.

4. In consideration of Discover accepting payment of the Discover Settlement
Proceeds in settlement of the Dispute, HPS, on behalf of itself and its
affiliates, successors, predecessors, and assignees (collectively, the “HPS
Releasors”), hereby releases and discharges Discover, HSBC Bank Nevada, N.A., GE
Money Bank and GE Capital Financial Services, Inc. and their direct, indirect,
present and former, parents, subsidiaries, affiliates, predecessors and
successors, employees, partners, directors, officers, principals, and assignees
(collectively, the “Discover Releasees”), jointly and severally, free and
harmless from and against any and all rights, claims, debts, demands, acts,
agreements, liabilities, losses, obligations, damages, costs, fees (including
without limitation, those of attorneys), expenses, actions, and/or causes of
action of every kind or nature whatsoever, present or future, both in law and
equity, known or unknown, suspected or unsuspected, that any of the HPS
Releasors may have against any of the Discover Releasees arising from or
relating to the Dispute (the “Released HPS Claims”).

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5. Each party acknowledges and agrees that this Settlement/Release, including
the consideration transferred hereunder, is a compromise of the Dispute and that
neither the Settlement/Release nor the compromise of the Dispute hereunder shall
be construed as an admission of liability or non-liability on the part of either
party, nor shall it be admissible as evidence in any proceeding except a
proceeding to enforce or for breach of this Settlement/Release.

6. Except as set forth in paragraph 2 of this Settlement/Release with respect to
rights, claims, debts, demands, acts, agreements, liabilities, losses,
obligations, damages, costs, fees, expenses, actions, and/or causes of action of
every kind or nature arising from or relating to the Dispute, this
Settlement/Release shall not alter, amend or otherwise constitute a waiver or
modification of the parties rights and obligations under the Agreements or
applicable Network Operating Regulations, Acquirer Operating Regulations (f/k/a
Operating Regulations for Acquirers), Dispute Rules Manual or any other
agreements between the parties.

7. Each party hereby represents and warrants to the other that: (a) it has had
an opportunity to obtain independent legal advice from attorneys of its choice
with respect to the advisability of entering into the Release; (b) it has not
relied upon any statement, representation, or promise of any other party not
expressly contained herein; (c) it has not assigned or otherwise transferred
(voluntarily, involuntarily or by operation of law) any right, title, or
interest in any claim which it has, may have, or may have had with respect to
the Dispute; (d) it is a sophisticated business, has negotiated individually
each of the material provisions of this Settlement/Release on an arm’s length
basis with the advice of competent counsel, in order to meet its needs, and that
no ambiguity in the drafting of this Settlement/Release shall be construed
against the drafter; (e) it has carefully read this Settlement/Release, knows
and understands the contents thereof, has had a full and fair opportunity to
inquire about the facts and circumstances giving rise to the Dispute and
concerning this Settlement/Release, and freely executes this Settlement/Release;
and (f) the individual who signs this Settlement/Release on its behalf has the
authority to bind that party to this Settlement/Release.

8. This Settlement/Release is governed by and shall be construed and enforced in
accordance with the laws of the State of Illinois, without giving effect to the
principles of conflicts of law. Any action hereunder by either party shall be
brought in the appropriate federal or state court located in the County and
State of Illinois, and each party hereby consents to the exclusive jurisdiction
of such court and waives any claim of lack of jurisdiction or forum non
conveniens.

9. No waiver of any breach of any term or provision of this Settlement/Release
shall be construed to be, nor shall be, a waiver of any other breach of this
Settlement/Release. No waiver shall be binding unless in writing and signed by
the party waiving the breach. In the event any provision of this
Settlement/Release is held to be void, voidable, or unenforceable, the remaining
provisions shall remain in full force and effect provided that the void,
voidable, or unenforceable provision is not material to the subject matter
hereof. This Settlement/Release constitutes the entire agreement between the
parties relating to the subject matter hereof and supersedes any previous
agreements, understandings, or courses of dealing relating to the subject matter
hereof. This Settlement/Release binds, and inures to the benefit of, the parties
and their respective successors and assigns. This Settlement/Release may be
executed in any number of counterparts,

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each of which shall be deemed an original and all of which together shall be
deemed to be one and the same instrument. This Settlement/Release constitutes
the entire agreement among the parties with respect to the subject matter of
this Settlement/Release and supersedes any and all prior discussions,
negotiations, proposals, undertakings, understandings and agreements, whether
written or oral, with respect to the Released Discover Claims arising out of the
Data Incident (other than any existing confidentiality obligations with respect
to such subject matter).

10. HPS and Discover shall consult each other before issuing, and give each
other the opportunity to review and comment upon, any press release or other
public statements with respect to the Dispute or this Settlement/Release, and
shall not issue any such press release or make any such public statement prior
to such consultation, except as such party may in its good faith judgment
conclude may be required by law or regulation, court process or by obligations
pursuant to any listing agreement with any national securities exchange, in
which case the issuing party shall, to the extent practicable, use its
reasonable efforts to consult with the other party before issuing any such
release or make any such public statement. The parties agree that the initial
press release with this Settlement/Release attached as an Exhibit thereto, to be
issued with respect to this Settlement/Release shall be in the form attached as
Exhibit A hereto.

11. All capitalized terms used by not defined herein have the meanings ascribed
to them in the Agreement.

12. The recitals are incorporated into this Settlement/Release as if fully set
forth herein.

IN WITNESS WHEREOF, the undersigned have executed this Settlement/Release
effective as of the Effective Date.

 

DFS SERVICES LLC     HEARTLAND PAYMENT SYSTEMS, INC. By:  

/s/ Diane Offereins

    By:  

/s/ Robert H.B. Baldwin Jr.

Name:  

DIANE OFFEREINS

    Name:   Robert H.B. Baldwin Jr. Title:  

Executive Vice President

    Title:   President & Chief Financial Officer Date:  

8/31/10

    Date:  

8/31/10