Exhibit 10.26 



AGENCY AGREEMENT 



        THIS
AGENCY AGREEMENT, dated November 9, 2005 (“Agreement”), between
General Electric Capital Corporation, a Delaware corporation (together with its
successors and assigns, if any, “Lessor”), and Duckwall-Alco Stores,
Inc., a Kansas corporation (the “Company”). Capitalized terms not
defined herein shall have the meanings assigned to them in the Lease (as that term is
defined below). 



RECITALS: 



        WHEREAS,
Lessor and the Company have entered into a Master Lease Agreement dated November 9, 2005
wherein Lessor, as the lessor, has agreed to lease certain items of equipment to the
Company (the Master Lease Agreement and all Schedules entered into from time to time
thereunder are hereinafter collectively referred to as the “Lease”; and
all equipment leased thereunder are hereinafter collectively referred to as the
“Equipment”); capitalized terms used herein but not otherwise defined
shall have the meanings as provided in the Lease; and 



        WHEREAS,
Lessor desires to appoint the Company its agent to order, receive and, in the name and on
behalf of Lessor, the Equipment; 



        NOW,
THEREFORE, in consideration of the above premises and the mutual promises contained
herein, as well as other good and valuable considerations, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows: 



ARTICLE I 
GENERAL UNDERTAKING 



Section 1.01 Appointment.
Lessor hereby appoints the Company, and the Company hereby agrees to accept such
appointment, as the agent of Lessor, without any fee for acting as such agent, pursuant to
the terms and conditions of this Agreement, for the purpose of ordering and, subject to
the conditions set forth in Section’s 2.01 and 2.05 hereof, accepting Equipment on
Lessor’s behalf for leasing to the Company under the Lease from the respective
supplier thereof (each a “Supplier” and collectively, the
“Suppliers”). It is specifically agreed that all of the power and
authority vested to the Company herein shall be subject to any modifications as may from
time to time be made by Lessor. 



Section 1.02 Powers. Except as
may be otherwise expressly provided in this Agreement, the Company is hereby granted the
authority to act, and hereby agrees to act, on behalf of Lessor and in the name of Lessor,
to the extent necessary to carry out its duties under this Agreement. 



Section 1.03 Master Lease.
This Agreement is entered into in connection with and subject to the terms of the Lease
and in the event of a conflict between the terms of this Agreement and the Lease, the
Lease shall control. The Company and Lessor may from time to time hereafter enter into
Equipment Schedules to the Lease, and it is the intent of the parties that this Agreement
facilitate the leasing of Equipment under the Lease. EXCEPT AS PROVIDED IN ANY OTHER
AGREEMENT, NOTHING IN THIS AGREEMENT SHALL BE OR SHALL BE DEEMED TO BE, A COMMITMENT ON
THE PART OF EITHER THE COMPANY OR LESSOR TO EXECUTE OR OTHERWISE ENTER INTO ANY EQUIPMENT
SCHEDULES AFTER THE DATE OF THIS AGREEMENT. 



ARTICLE II 
DUTIES OF AGENT 



Section 2.01 Equipment Orders.
Upon the written acknowledgment by the Company and Lessor of each jointly approved
purchase agreement, purchase order or invoice (“Purchase Order”), the
Company, pursuant to the agency granted to it by Lessor in Article I hereof, may order,
receive, accept the Equipment to be leased in accordance with the Economic Terms (as
hereafter defined and described). 















Upon and as of the date of acceptance
of the Equipment by the Company and satisfaction of the conditions precedent provided for
in the Lease: (a) Lessor shall be unconditionally obligated to purchase such Equipment
pursuant to the terms of the applicable Purchase Order and to lease such Equipment to the
Company pursuant to the terms and conditions of the Lease and the applicable completed
Schedule; and (b) the Company shall be unconditionally obligated to lease such Equipment
from Lessor pursuant to the terms and conditions of the Lease and the applicable completed
Schedule. The leasing of Equipment pursuant to this Agreement shall be in accordance with
the Economic Terms set forth in Section 2.05 hereof, and upon delivery of the Equipment
from any Supplier shall be deemed to be leased pursuant to this Agreement and the Lease
and be subject to all of the provisions of the Lease, including without limitation, the
insurance and indemnity provisions of the Lease. Notwithstanding any provision to the
contrary herein, the Company’s ability to act as Lessor’s agent hereunder, and
to unconditionally obligate Lessor to purchase Equipment pursuant to such agency, shall be
limited by the following: (i) the Company must disclose to all Suppliers that it is
ordering the Equipment as agent for Lessor; (ii) all of the Equipment ordered and/or
accepted hereunder must meet at least one of the general description categories contained
in Section 2:05; (iii) the aggregate Purchase Price for all Equipment purchased in
connection with any Schedule must be less than, or equal to, the Maximum Aggregate
Capitalized Lessor’s Cost specified in Section 2:05; (iv) the Equipment must be
delivered to, and accepted by, the Company on or before the Last Delivery Date specified
in Section 2:05; (v) the Purchase Price of each unit of Equipment must not be more than
the then current Fair Market Value of such Equipment; (vi) each unit of Equipment must
qualify for all the Tax Benefits described in the applicable Schedule in the hands of
Lessor upon the Company’s acceptance thereof from the Supplier and (vii) with respect
to any documentation, technical or confidential business information and/or software
relating to the Equipment (collectively, “Software”), the Purchase Order will
grant Lessor a license to use the Software and will allow Lessor to grant a sublicense to
the Company to use such Software pursuant to the Lease and will allow Lessor to grant a
sublicense to a third party after a termination or the expiration of the Lease in the
event the Company does not elect to exercise any purchase option that may be provided for
in the Lease; and (viii) all conditions precedent set forth in the Lease, including the
delivery and execution of the Schedule and the Certificate of Acceptance, must be
completed by no later than the Last Basic Term Commencement Date specified in Section
2.05. 



The Company additionally agrees that
all Purchase Orders executed by the Company as Lessor’s agent hereunder shall: (A)
condition Lessor’s obligation to pay for and purchase the Equipment on the
Company’s acceptance of such Equipment; (B) not permit passage of title or risk of
loss for the Equipment earlier than such acceptance by the Company; (C) not permit the
Supplier or any other person or entity to retain any security in, or lien on, any of the
Equipment; and (D) otherwise be on terms and conditions acceptable to Lessor in its sole
discretion. 



Section 2.02 Receipt of and
Payment for Equipment. With respect to any Equipment ordered by the Company as agent
for Lessor, the Company agrees to perform all obligations of the purchaser in the time and
manner required by the applicable Purchase Order. 



Section 2.03 Payment of Purchase
Price.  On or before the Lease Commencement Date for any Schedule, the Company shall
present to Lessor documentation (“Purchase Documentation”), in form and
substance satisfactory to Lessor in its sole discretion, which (i) describes all units of
Equipment ordered, received and accepted by the Company as agent for Lessor in connection
with such Schedule, and (ii) if Company has paid any Supplier for any of the Equipment,
includes evidence of the Purchase Price paid to Supplier for each such unit of Equipment
and of passage of title thereto to Lessor. Upon the latter of (A) Lessor’s receipt of
the Purchase Documentation or (B) the satisfaction of all conditions precedent on or after
the applicable Lease Commencement Date, Lessor shall pay the Supplier or reimburse the
Company, as the case may be, for the aggregate Purchase Price for all Equipment purchased
hereunder in connection with such schedule. 



Section 2.04 Books and
Records. The Company shall maintain full and accurate books and records of all
Equipment orders, receipts and All such books and records shall be maintained in a form
acceptable to Lessor in its sole discretion. Such books and records shall be open for
inspection and examination by Lessor and its respective representatives and/or accountants
during the Company’s normal business hours. 



Section 2.05 Economic Terms.
The Company and the Lessor hereby agree that Schedules entered into pursuant to this
Agency Agreement shall conform with the following “Economic Terms”: 


	
      

    
	1. Maximum Aggregate Capitalized Lessor’s
      Cost:	 	$14,500,000.00	 
	
      

    
	2. Basic Term Lease Rate Factor:	 	To be mutually agreed upon by Company and Lessor	 
	
      

    
	3. Basic Term (No. of Months):	 	To be mutually agreed upon by Company and Lessor	 
	
      

    
	4. Equipment Type:	 	To be mutually agreed upon by Company and Lessor	 
	
      

    
	5. Agency Agreement Expiration Date and Last Delivery
      Date:	 	October 31, 2006	 
	
      

    
















ARTICLE III
TERMINATION 



Section 3.01 Termination. 



     (a)    
          So long as no default exists and is continuing hereunder or under the Lease,
          either party may terminate this Agreement at any time upon ____________
          (______30________) days written notice to the other party; provided
          however that such termination shall not act as a termination of any Equipment
          leased hereunder. 



     (b)    
          In the event the Company is in default hereunder or under the Lease, Lessor may
          elect to terminate this Agreement immediately, which shall be effective upon the
          receipt of written notice thereof by the Company. 



     (c)    
          Any termination under this Section 3.01 shall automatically result in the
          immediate revocation of all authority vested in the Company under this Agreement
          to order, accept or pay for any Equipment on behalf of Lessor. 



        IN
WITNESS WHEREOF, the parties hereto have caused their duly authorized representatives
to execute and deliver this Agreement on the date first above written. 



	General Electric Capital Corporation
      	Duckwall-Alco Stores, Inc.
      

      
	By:	 /s/ Susan Lyndon
      

    	By: 	/s/ Richard A. Mansfield
      

    
	Title:	 Manager Portfolio Admin	Title: 	V.P./CFO














AGENCY AGREEMENT
INSTRUCTIONS  



BEFORE EQUIPMENT IS
ORDERED: 



	 	• 	  	When
issuing a Purchase Order or Sales Agreement for Equipment in connection with the Agency
Agreement, incorporate the following in the Purchase Order or Sales Agreement:  






	  	
Duckwall-Alco
Stores, Inc. is ordering the following equipment as Agent for:  






	  	
General
Electric Capital Corporation 
311 North Bayshore Drive 
Safety Harbor, FL 34695 
Attn:
Teresa Schafer 






		•		All
invoices should indicate that General Electric Capital Corporation is the “Sold to” party
at the above address, and that Duckwall-Alco Stores, Inc. is the “Ship to” party
for delivery. 




		•		The
invoices should be mailed directly to General Electric Capital Corporation. Also, all
invoices should reference the appropriate Purchase Order/Sales Agreement Number. 




        General
Electric Capital Corporation will also require a complete set of Lease documentation prior
to funding. These documents may include a Schedule and a Certificate of Acceptance. The
full terms and conditions of the lease contract are set forth in the Master Lease
Agreement and Equipment Schedule.