Exhibit 10.32

CROSS-COLLATERAL AND
CROSS-DEFAULT AGREEMENT

General Electric Capital Corporation
311 North Bayshore Drive Safety Harbor, FL 34695

Gentlemen:

You
(and/or your affiliates, successors or assigns, you) have entered into or purchased one
or more conditional sale contracts, lease agreements, chattel mortgages, security
agreements, notes and other choses in action (herein designated Accounts) arising from
the bona fide sale or lease to us, by various vendors or lessors, of equipment and
inventory (herein designated Collateral) and/or you have made direct loans to or
otherwise extended credit to us evidenced by Accounts creating security interests in
Collateral. This agreement does not include real estate pledged as collateral to GE
Commercial Finance Business Property Corporation.

In
order to induce you to extend our time of payment on one or more Accounts and/or to make
additional loans to us and/or to purchase additional Accounts and/or to lease us
additional equipment, and in consideration of you so doing, and for other good and
valuable consideration, the receipt of which we hereby acknowledge, we agree as follows:

All
presently existing and hereafter acquired Collateral in which you have or shall have a
security interest shall secure the payment and performance of all of our liabilities and
obligations to you of every kind and character, whether joint or several, direct or
indirect, absolute or contingent, due or to become due, and whether under presently
existing or hereafter created Accounts or agreements, or otherwise.

We
further agree that your security interest in the property covered by any Account now held
or hereafter acquired by you shall not be terminated in whole or in part until and unless
all indebtedness of every kind, due or to become due, owed by us to you is fully paid and
satisfied and the terms of every Account have been fully performed by us.  It is further
agreed that you are to retain your security interest in all property covered by all
Accounts held or acquired by you, as security for payment and performance under each such
Account, notwithstanding the fact that one or more of such Accounts may become fully paid.

This
instrument is intended to create cross-default and cross-security between and among all
the within described Accounts now owned or hereafter acquired by you.

A
default under any Account or agreement shall be deemed to be a default under all other
Accounts and agreements.  A default shall result if we fail to pay any sum when due on
any Account or agreement, or if we breach any of the other terms and conditions thereof,
or if we become insolvent, cease to do business as a going concern, make an assignment
for the benefit of creditors, or if a petition for a receiver or in bankruptcy is filed
by or against us, or if any of our property is seized, attached or levied upon.  Upon our
default any or all Accounts and agreements shall, at your option, become immediately due
and payable without notice or demand to us or any other party obligated thereon, and you
shall have and may exercise any and all rights and remedies of a secured party under the
Uniform Commercial Code as enacted in the applicable jurisdiction and as otherwise
granted to you under any Account or other agreement.  We hereby waive, to the maximum
extent permitted by law, notices of default, notices of repossession and sale or other
disposition of collateral, and all other notices, and in the event any such notice cannot
be waived, we agree that if such notice is mailed to us postage prepaid at the address
shown below at least five (5) days prior to the exercise by you of any of your rights or
remedies, such notice shall be deemed to be reasonable and shall fully satisfy any
requirement for giving notice.

All
rights granted to you hereunder shall be cumulative and not alternative, shall be in
addition to and shall in no manner impair or affect your rights and remedies under any
existing Account, agreement, statute or rule of law.

This
agreement may not be varied or altered nor its provisions waived except by your duly
executed written agreement. This agreement shall inure to the benefit of your successors
and assigns and shall be binding upon our heirs, administrators, executors, legal
representatives, successors and assigns.

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IN
WITNESS WHEREOF, this agreement is executed this 1st day of December, 2005

| | DUCKWALL-ALCO
      STORES, INC.
| | --------------------------------
| | By:                             
| | Title:                          
| | Address:                        

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