MASTER LEASE AGREEMENT

Exhibit 10.27

Lessee Legal Name: DUCKWALL-ALCO STORES, INC.
Address: 401 Cottage Street
City, State, Zip: Abilene, KS 67410-2832
State and Type of Organization: Kansas Corporation

        This MASTER LEASE AGREEMENT ( “Lease Agreement” ), made as of the above date, is entered into by and between GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (together with its successors and assigns, “Lessor”), having a place of business at 44 Old Ridgebury Road, Danbury, CT 06810, and the Lessee named above (“Lessee” ), having its principal place of business at the address set forth above.

     1.         LEASE AGREEMENT: Pursuant to the terms of this Lease Agreement, Lessor hereby leases to Lessee and Lessee hereby leases from Lessor all of the equipment, related replacements, parts, additions, software, accessories, alterations and repairs incorporated therein or affixed thereto, together with any items included on the related Lease Schedule (the “Schedule” ) including, but not limited to, training, maintenance, services, license agreements, etc. (the “Equipment” ) listed in the Schedule(s) related hereto which are or may from time to time be executed by Lessor and Lessee. This Lease Agreement is a master lease and each Schedule is subject to the terms of this Lease Agreement. Each Schedule shall be treated as a separate lease (the “Lease” ) with respect to the Equipment covered by such Schedule. In the event of any conflict between the language of this Lease Agreement and any Schedule entered into pursuant hereto, the language of the Schedule shall prevail with respect to that Schedule and the Equipment covered thereby. Capitalized terms used and not defined herein shall mean and refer to the corresponding items on the applicable Schedule. Lessor may also finance the fees (the “Fees” ) for any of the following, if specified on a Schedule: (i) software licenses (the “Software” ) granted by the “Supplier” (as defined by UCC Section 2A-1-103(x)) pursuant to a separate licensing agreement between such Supplier and Lessee; and (ii) services relating to the transportation, delivery, installation, maintenance or operation of the Equipment (the “Services” ) provided by the Supplier of the Equipment pursuant to a separate agreement between such Supplier and Lessee. The parties agree that this Lease Agreement and each Lease is and shall be a “Finance Lease” as defined by Section 2A-103(g) of the Uniform Commercial Code ( “UCC” ). Lessee acknowledges (a) that Lessee has reviewed and approved any written “Supply Contract” (as defined by UCC Section 2A-103(y)) covering the Equipment purchased from the Supplier and thereafter leased to Lessee or (b) that Lessor has informed or advised Lessee, in writing, either previously or by this Lease Agreement of the following: (i) the identity of the Supplier; (ii) that the Lessee may have rights under the Supply Contract; and (iii) that the Lessee may contact the Supplier for a description of any such rights Lessee may have under the Supply Contract.

     2.         TERM: This Lease Agreement shall commence as of the above date, provided Lessor accepts this Lease Agreement in writing and shall continue as long as any Schedule is in effect. The term of a Schedule (the “Term”) shall commence upon the Acceptance Date (as defined in Section 4) of the Equipment and/or Software described in the applicable Schedule, and shall continue for the number of months or other period set forth in such Schedule, beginning with the first month (or other applicable period) commencing after the Acceptance Date, unless such term has been extended or otherwise modified in writing executed by Lessor and Lessee. Lessee’s execution of a Schedule shall evidence its binding commitment to lease the Equipment described therein upon the terms and conditions of this Lease Agreement and such Schedule.

     3.         PAYMENTS: Lessee shall pay Lessor the monthly (or other) rent and other amounts specified in the applicable Schedule (the “Payments” ). Unless otherwise expressly provided in a Schedule, Payments shall be payable in advance on the first day of each month during the Term, beginning with the first month commencing after Acceptance Date. In addition to the Payments, any Advance Payment(s) specified on the Schedule and interim rent shall be due and payable on the first Payment date. Except as may otherwise be indicated in a Schedule or other rider or addendum hereto or thereto, Interim rent shall be in an amount equal to 1/30th of the applicable Rental Payment for each day from and including the Acceptance Date to and excluding the first Payment date. If a Schedule includes any Software or Services, the Payments specified include amounts to cover payment of the related Fees, as so expressly provided in a Schedule. Payments shall be payable at the mailing address of Lessor, as designated by Lessor from time to time.

     4.         ORDER AND ACCEPTANCE OF EQUIPMENT AND SOFTWARE: Lessee has selected or will select all of the Equipment, Software and Services and the Supplier(s) and therefore acknowledges that Lessor has not selected, manufactured,

supplied or provided any Equipment, Software or Services. In reliance upon Lessee’s execution of and compliance with this Lease Agreement and assignment of Lessee’s purchase rights for the Equipment to Lessor, Lessor shall take assignment of Lessee’s purchase documents and/or Supply Contract(s) from its Supplier(s) (or in the alternative, Lessor shall issue its purchase order to the Supplier(s)), for the Equipment, Software and/or Services described in the applicable Schedule. As soon as practicable after the date on which the Equipment and Software have been delivered and determined by Supplier(s) to be ready for use at Lessee’s location, Lessee will execute a Certificate of Acceptance (and as applicable, staged Certificate(s) of Acceptance), provided by Lessor (the date or date(s), as applicable, of each such Certificate of Acceptance being an “Acceptance Date” ). If prior to the Last Acceptance Date set forth in the Schedule (i) no Event of Default has occurred, (ii) Lessor receives such executed Certificate of Acceptance, all other documents and information required under this Lease Agreement, and any additional credit enhancement Lessor requires in connection with the related Schedule, and (iii) Lessor receives appropriate invoices and related documents from Supplier(s), Lessor shall pay the Supplier(s) for the Equipment and any Fees. (Any reference herein to a Certificate of Acceptance, shall also be deemed to refer to and include each and every staged Certificate of Acceptance, as applicable, as the context so requires.)

     5.         DELIVERY AND INSTALLATION: Lessee shall arrange with the Supplier(s) for delivery and installation of Equipment and Software under each Schedule. All Equipment and Software shall be shipped directly from Supplier(s) to Lessee. Lessor shall have no liability for any delay or failure by the Supplier(s) to deliver any Equipment, to license any Software or to perform any Services, or with respect to the selection, installation, testing, performance, quality, maintenance or support of the Equipment, Software or Services. Lessee, at its expense, will pay all transportation, packing, taxes, duties, insurance, installation, testing, maintenance and other charges in connection with the delivery, installation and use of the Equipment and Software, unless the related Service is included in the related Schedule.

     6.         DISCLAIMER: (a) LESSOR, NOT BEING THE SUPPLIER OR THE AGENT OF ANY SUPPLIER, MAKES NO WARRANTY, REPRESENTATION OR COVENANT, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATEVER, INCLUDING, BUT NOT LIMITED TO THE MERCHANTABILITY OF THE EQUIPMENT, SOFTWARE OR SERVICES OR THEIR FITNESS FOR ANY PARTICULAR PURPOSE, THE DESIGN, QUALITY, CAPACITY OR CONDITION OF THE EQUIPMENT, SOFTWARE OR SERVICES, COMPLIANCE OF THE EQUIPMENT, SOFTWARE OR SERVICES WITH THE REQUIREMENT OF ANY LAW, RULE, SPECIFICATION OR CONTRACT, PATENT OR COPYRIGHT INFRINGEMENT, TITLE, OR LATENT DEFECTS. LESSOR SHALL HAVE NO LIABILITY WHATSOEVER FOR THE BREACH OF ANY REPRESENTATION OR WARRANTY MADE BY THE SUPPLIER(S). LESSOR MAKES NO REPRESENTATION AS TO THE TREATMENT BY LESSEE OF THIS LEASE AGREEMENT FOR FINANCIAL STATEMENT OR TAX PURPOSES. LESSEE LEASES THE EQUIPMENT “AS IS”. Lessee agrees, regardless of cause. not to assert any claim whatsoever against Lessor for any indirect, consequential, incidental or special damages or loss, of any kind, including, without limitation, any loss of business, lost profits or interruption of service.

    (b) Lessee shall look solely to the Supplier(s) for any and all claims related to the Equipment, Software or Services. LESSEE UNDERSTANDS AND AGREES THAT NEITHER SUPPLIER(S) NOR ANY SALESPERSON OR OTHER AGENT OF SUPPLIER(S) IS AN AGENT OF Lessor, NOR ARE ANY OF THEM AUTHORIZED TO WAIVE OR ALTER THIS LEASE AGREEMENT. No representation by Supplier(s) shall in any way affect Lessee’s duty to pay the Payments and perform its obligations under this Lease Agreement. Lessor agrees, so long as there shall not have occurred or be continuing any Event of Default as defined in section 25, that Lessor will permit Lessee, as Lessee’s sole and exclusive remedy hereunder, to enforce in Lessee’s own name and at Lessee’s sole expense, any Supplier’s or Manufacturer’s warranty or agreement in respect of the Equipment to the extent that such warranty or agreement is assignable.

     7.         NO OFFSET: THIS LEASE AGREEMENT IS A NET LEASE. LESSEE’S OBLIGATIONS TO PAY ALL AMOUNTS UNDER THIS AGREEMENT SHALL BE ABSOLUTE AND UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY SET-OFF, COUNTERCLAIM, ABATEMENT, REDUCTION, RECOUPMENT, INTERRUPTION OR DEFENSE FOR ANY REASON WHATSOEVER, INCLUDING DEFECTS OR FAILURE IN, LOSS OF USE OR POSSESSION OF, OR DISCONTINUANCE OF THE EQUIPMENT, SOFTWARE OR SERVICES. THIS LEASE AGREEMENT CANNOT BE PREPAID OR TERMINATED BY LESSEE UNLESS AGREED IN WRITING BY LESSOR.

     8.         TITLE TO AND LOCATION OF EQUIPMENT: (a) Unless otherwise expressly provided in a Schedule, title to each item of Equipment shall remain with Lessor or its assigns at all times and Lessee shall have no right, title or interest therein except as expressly set forth in this Lease Agreement. Lessee, at its expense, will keep the Equipment free and clear of all claims, liens, and encumbrances, other than those which result from acts of Lessor or its assigns. All items of Equipment shall at all times remain personal property notwithstanding that any such Equipment may be affixed to realty.

    (b) The Equipment shall be delivered to the location specified in the related Schedule and shall not be relocated, displaced or moved without Lessor’s prior written consent. Lessee shall in no event permit any Equipment to be removed outside the United States.

     9.         SOFTWARE: Lessor and Lessee acknowledge that the Software leased hereunder may be owned by a Supplier and that neither Lessor nor Lessee may have any ownership rights therein. Lessee shall, where required by the Supplier, enter into a license or other such agreement for the use of the software. Any software license agreement shall be separate and distinct from this Lease Agreement and any Schedule and Lessor and any Assignee shall have no obligations thereunder, but shall have the right under this Lease Agreement to require Lessee to terminate its use of the Software in an Event of Default. All Software leased hereunder shall be subject to all provisions of this Lease Agreement. Upon termination of this Lease Agreement or any Schedule, Lessee hereby assigns to Lessor, to the extent assignable, any and all licenses and rights to the Software.

     10.         TAX BENEFITS: (a) Lessee acknowledges that Lessor intends to claim all available tax benefits of ownership with respect to the Equipment (the “Tax Benefits” ), unless otherwise expressly provided in a Schedule. All references to Lessor in this Section include the consolidated taxpayer group of which Lessor is a member. Tax Benefits shall include interest deductions, investment tax credit and depreciation deductions using the “applicable depreciation method” set forth in Section 168(b)(1) of the Internal Revenue Code, as amended (the “Code” ) over the “applicable recovery period” set forth in Section 168(b)(1) of the Code. Lessee represents and warrants to Lessor that at no time during the Term will Lessee take or omit to take, nor will it permit any sublessee or assignee to take or omit to take, any action (whether or not such sublessee or assignee, or act or omission is otherwise permitted by the terms of this Lease Agreement), which may result in the disqualification of any of the Equipment for, or recapture of, all or any portion of the Tax Benefits.

    (b)        If as a result of a breach of any representation, warranty or covenant of Lessee in this Lease Agreement, any Schedule or any other Document, or any act, omission or misrepresentation by Lessee, (i) tax counsel of Lessor shall determine that Lessor is not entitled to claim on its Federal income tax return all or my portion of the Tax Benefits, or (ii) any such Tax Benefit is disallowed or recaptured (a “Loss” ), than Lessee shall pay to Lessor, on demand, as an indemnity and as additional rent, an amount which will, after deduction therefrom of all taxes required to be paid by Lessor with respect to such amount, enable Lessor to receive the same after-tax rate of return that Lessor would have realized had such Loss not occurred, plus all interest and penalties assessed on such Loss.

     11.         USE OF EQUIPMENT; INSPECTION: During the Term, Lessee may possess and use the Equipment in accordance with this Lease Agreement and Lessor shall not disturb Lessee’s quiet enjoyment of such Equipment unless an Event of Default has occurred and is continuing. During the Term, Lessee shall comply with the terms of this Lease Agreement, applicable law, insurance policies, installation requirements (including environmental specifications) and warranties of Supplier(s) concerning the Equipment. Lessee shall obtain all permits and licenses, if any, necessary for the Equipment. Lessor shall have the right, upon reasonable prior notice to Lessee and during regular business hours, to inspect the Equipment.

     12.         FURTHER ASSURANCES: Lessee shall provide to Lessor at Lessor’s request, such documents and assurances as Lessor deems necessary for the confirmation or perfection of this Lease Agreement, including corporate or other resolutions, opinions of counsel and financing statements. Lessee authorizes Lessor to prepare and file financing statements, with respect to the Equipment and this Lease Agreement. Any such filings shall not be deemed evidence of any intent to create a security interest under the UCC, unless otherwise expressly provided in a Schedule. Lessee will within 120 days of the close of each fiscal year of Lessee, deliver to Lessor, Lessee’s balance sheet and profit and loss statement, certified by a recognized firm of certified public accountants. Upon request, Lessee will also deliver to Lessor quarterly, within 60 days of the close of each fiscal quarter of Lessee, Lessee’s quarterly financial report certified by Lessee’s chief financial officer. Lessee will provide Lessor with any further financial information or reports, upon request. Lessee agrees to promptly notify Lessor in writing of any change in Lessee’s name, its state of organization or in the location of its principal place of business.

     13.         DAMAGE, DESTRUCTION OR LOSS:

    (a) From the date the Supplier(s) ships the Equipment to Lessee and until the Equipment is redelivered to Lessor, Lessee shall bear the entire risk of loss, damage, or destruction with respect to the Equipment resulting from any cause whatsoever.

    (b) If any Equipment becomes damaged beyond repair, lost, stolen, destroyed or permanently rendered unfit, or in the event of any condemnation or taking by any governmental authority (any such occurrence being hereinafter referred to as an “Event of Loss” ), then Lessee shall promptly notify Lessor, and Lessor shall, at its sole option and in its sole discretion, do either of the following:

    (i) At Lessee’s expense, permit Lessee, provided there exists no other Event of Default at such time, to promptly replace the affected Equipment with like or better replacement equipment of identical make, model, configuration, capacity and condition, in good repair, free and clear of all liens, in which case any such replacement equipment shall become the property of Lessor and for all purposes of this Lease Agreement shall be deemed to be the Equipment which at replaced (in which event, Lessee shall certify to Lessor that such replaced Equipment shall no longer be in use and shall never again be placed in use); or

    (ii) Terminate the Schedule with respect to the affected Equipment and directed Lessee to pay to Lessor on the next payment date, all past due rents and all obligations due under the Lease with respect to the affected Equipment, including taxes, indemnities and attorney’s fees, plus an amount equal to the sum of (A) the present value of the remaining rental payments discounted by five percent

(5%), plus (B) the fair market value in continued use of the Equipment as of the date of such Event of Loss (which fair market value the parties hereby agree shall not be less than 25% of the “Capitalized Lessor’s Cost” (as indicated in the applicable Schedule) for the Equipment) (such amount shall be the “Stipulated Loss Value” ).

     14.         INSURANCE: Lessee, at its own expense, shall insure the Equipment against all risks in an amount at least equal to the full replacement cost thereof, with carriers acceptable to Lessor, under a policy containing a loss payable endorsement and breach of warranty endorsement in favor of Lessor and its successors and assigns, irrespective of any breach of warranty or other act or omission of Lessee. Lessee shall further, at its expense, maintain in effect a policy of comprehensive public liability and property damage insurance in form and amount and with carriers satisfactory to Lessor, which names Lessor and its successors and assigns as additiona1 insureds. The policies shall provide that they may not be canceled or altered without at least 30 days prior written notice to Lessor or its assigns. Lessee shall deliver to Lessor copies or other evidence satisfactory to Lessor of each insurance policy upon Lessee’s execution of each Schedule and each renewal thereof. Lessor shall have the right, on behalf of itself and Lessee, and Lessee hereby appoints Lessor as Lessee’s attorney-in-fact, to make proofs of loss or claims for, make adj