Exhibit 10.5

WAIVER AND AMENDMENT TO

THE EMPLOYMENT AGREEMENT

This Waiver and Amendment to the Employment Agreement (“Agreement”) is made as
of March 17, 2014, by and between Draw Another Circle, LLC, a Delaware limited
liability company (“Parent”), Hastings Entertainment, Inc., a Texas corporation
(the “Company”), and Philip McConnell (“Executive,” and together with Parent and
the Company, the “Parties”). Concurrently with the execution and delivery of
this Agreement, the Parties are entering into that certain Agreement and Plan of
Merger (the “Merger Agreement”), pursuant to which Hendrix Acquisition Corp., a
Texas corporation and a wholly owned subsidiary of Parent, is to be merged (the
“Merger”) with and into the Company with the Company surviving the Merger (the
“Surviving Corporation”) on the terms and subject to the conditions set forth in
the Merger Agreement. Certain capitalized terms used herein and not defined
herein shall have the meanings given to them in the Merger Agreement.

RECITALS

WHEREAS, in connection with the Merger, Executive’s equity in the Company is
being cancelled in exchange for the Merger Consideration;

WHEREAS, the Company and Executive previously entered into an Employment
Agreement, dated August 1, 2008 (as amended from time to time, the “Employment
Agreement”), which requires the Company to pay certain severance payments if
Executive separates from employment with the Company after a Change of Control
(as defined in the Employment Agreement);

WHEREAS, as an inducement to Parent to consummate the Merger, Executive has
agreed that the Merger will not trigger any payments under Section 6.3 of the
Employment Agreement and has agreed to waive any and all rights and payments
arising from the Merger with respect to Section 6.3 of the Employment Agreement;

WHEREAS, in connection with the Closing, the Parties intend to negotiate new
compensation and severance payments for Executive; and

WHEREAS, Executive is executing and delivering this Agreement in order to induce
Parent to consummate the Merger, with all of the attendant financial benefits to
Executive as an employee and shareholder of the Company, and as a future
employee of the Company.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and intending to be legally bound, the Parties
hereby agree as follows:

1. Executive agrees and acknowledges that upon or after the consummation of the
Merger, any adjustments in Executive’s duties, responsibilities, reporting
relationship and position resulting from the Merger, and the Company’s becoming
a Surviving Corporation do not constitute a Change of Control as defined in
Section 6.3.1 of the Employment Agreement such that any such adjustments will
not trigger a Change of Control Termination as described in Section 6.3.2 of the
Employment Agreement.

 

1.

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2. For the avoidance of doubt, Executive hereby waives any and all claims for
(i) severance payments or other benefits under Section 6.3, 6.3.1, and 6.3.2 of
the Employment Agreement or (ii) severance payments or other benefits under any
other agreements with the Company payable to Executive based upon the
consummation of a Change of Control or any transaction similar to a Change of
Control (whether based solely on the consummation of such a transaction or based
on the consummation of such a transaction and the subsequent termination of
Executive’s employment with the Company), in each case to the extent such claims
are related to the Merger.

3. All other terms of the Employment Agreement shall remain in full force and
effect.

4. This Agreement shall take effect as of, and only in the event of, the
occurrence of the Effective Time. If the Closing does not occur, this Agreement
shall be null and void, and even if executed by the Parties, shall not be
binding.

5. This Agreement shall be governed by and construed under the laws of the State
of Texas, without regard to conflict of laws principles.

6. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. This Agreement may be executed and delivered by facsimile
or electronic signature (.pdf) and upon such delivery the facsimile or
electronic signature will be deemed to have the same effect as if the original
signature had been delivered to the other Party.

[Signature Page to Follow]

 

2.

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.

 

PARENT: DRAW ANOTHER CIRCLE, LLC By:  

/s/ Joel Weinshanker

  Name:   Joel Weinshanker   Title:   President EXECUTIVE:

/s/ Philip McConnell

Philip McConnell HASTINGS ENTERTAINMENT, INC. By:  

/s/ Dan Crow

  Name:   Dan Crow   Title:   Vice President

Signature Page to

Waiver and Amendment to the Employment Agreement