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Severance Agreement and Release

SEVERANCE AGREEMENT AND RELEASE

This Severance Agreement and Release (Agreement) is entered into as of the 19th day of March, 2005 (the Effective Date). The parties to this Agreement are Hastings Entertainment, Inc. (Hastings or the Company) and Robert Berman (Berman).

1. Berman has been employed by Hastings as Vice President of Store Operations. Berman has voluntarily resigned his employment with Hastings effective March 19, 2005, in order to pursue other business opportunities.

2. Hastings and Berman do not anticipate that there will be any dispute between them or legal claims arising out of Bermans separation from the Company, but nevertheless desire to settle fully and finally any and all differences, causes of action, claims, or disputes that might otherwise arise out of Bermans employment with the Company.

IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED HEREIN, IT IS AGREED AS FOLLOWS:

1. Temporary Continuation of Pay. Hastings will continue to pay Berman his regular salary through March 31, 2005. These payments will be issued through the Companys payroll less all applicable taxes and withholding. Berman will receive his vested employee benefits (including the bonus payable for the period ending January 31, 2005 and three (3) weeks of vacation pay).

2. Severance Benefits. Following his final date of employment, Hastings agrees to pay Berman a sum equal to twelve (12) months of his current base salary plus bonus computed at his bonus percentage for such period based upon an assumed achievement of 100%, equal to $240,000.00, payable in one lump sum less all applicable taxes and withholding. This payment will be made on or before April 15, 2005.

3. COBRA Payments. The Company will pay Bermans (including his spouse) COBRA costs for a period of fifteen (15) months. Hastings will pay all costs directly through its third party administrator.

4. Options. Any unvested Options granted pursuant to Option Grant Nos 500, 551, 605, 606, 671, and 672 will be vested as of April 1, 2005, and all Options under such grants must be exercised on or before June 30, 2005. Any option shares under such grants not exercised by such date will expire. All other Options Grants remain in force as written.


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5. Return of Property. Berman agrees to return to the Company any property owned by the Company in a timely manner.

6. Agreement Confidentiality. Berman represents and agrees that the existence, terms and conditions of this Agreement shall be kept strictly and completely confidential subject only to the following exceptions:

	A.		Berman may tell, on condition of confidentiality, his immediate family, appropriate governmental agencies, such as the Internal Revenue Service, Bankruptcy trustee, his investment adviser, attorneys, and accountant; and any other person he is required to tell by law or must do so to effectuate this Agreement.

	B.		Berman may disclose relevant information regarding the terms and conditions of this Agreement in response to a validly executed and served subpoena or other court order. However, in so responding, Berman will advise the court and all interested parties of the existence and substance of this confidentiality agreement and will take all reasonable steps necessary to limit his disclosure of confidential information governed by this Agreement.

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