Document:

Exhibit 10.6

                                  June 4, 2002

Mr. Eldon R. Mette
President and Chief Executive Officer
Palmyra Savings
123 West Lafayette Street
Palmyra, Missouri 63461

Dear Eldon:

         The purpose of this letter is to set forth our mutual understanding
regarding the termination of your existing employment agreement with Palmyra
Savings ("Palmyra") and PFSB Bancorp, Inc. ("PFSB"), and your ongoing
relationship with First Federal Bank ("First Federal") following the
consummation of the merger of PFSB and First Federal Bancshares, Inc. ("FFBI").
Your execution of this letter will constitute your binding agreement to enter
into the Non-Competition and Consulting Agreement described below effective on
the date of the merger.

         At the closing of the merger, your employment as President and Chief
Executive Officer of Palmyra will terminate. Therefore, we hereby offer to enter
into a non-competition agreement with you at the closing of the merger for a
term of 12 months covering the geographic areas where First Federal and Palmyra
currently do business and relating to your involvement with a competing
financial institution or similar business. In consideration of your acceptance
of these restrictions, we will make a payment to you of $1,500 during each month
of the agreement. In addition, we would like to retain your services as a
consultant on an ongoing basis for a period of 12 months following the
completion of the merger. You would be required to render up to 15 hours of
consulting services per month for which we will make a payment to you of $4,335
during each month of the agreement. The foregoing is reflected in the "form of"
Non-Competition and Consulting Agreement attached to this letter.

         We look forward to working with you toward the completion of the merger
and to our ongoing relationship. If the foregoing arrangements are acceptable to
you, please indicate your acceptance in the place indicated below.

                                        Sincerely,

                                        /s/ James J. Stebor

                                        James J. Stebor

Accepted and Agreed:

/s/ Eldon R. Mette

Eldon R. Mette

<PAGE>

                                     FORM OF
                    NON-COMPETITION AND CONSULTING AGREEMENT

         This Non-Competition and Consulting Agreement ("Agreement") is entered
into this ___ day of _______________, 2002 ("Effective Date") by and between
First Federal Bank (the "Bank") and Eldon R. Mette ("Consultant").

                                    RECITALS

         A.       First Federal Bancshares, Inc. ("FFBI") and PFSB Bancorp, Inc.
("PFSB"), parent of Palmyra Savings ("Palmyra"), have signed an Agreement and
Plan of Merger, pursuant to which PFSB will merge with and into FFBI, with FFBI
surviving the merger.

         B.       The Bank recognizes the specialized knowledge and expertise of
the Consultant related to the operations of Palmyra.

         C.       To ensure the continued availability of the Consultant, the
Bank desires to enter into a non-competition agreement and consulting
relationship with Consultant upon the terms and conditions set forth herein.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the covenants and terms set forth
in this Agreement and of the mutual benefits accruing to the Bank and Consultant
from the relationship to be established between the parties by the terms of this
Agreement, the Bank and Consultant hereby agree as follows:

1.       Consulting Relationship
         -----------------------

         The Bank hereby retains Consultant, and Consultant hereby agrees to be
retained by the Bank, as an independent contractor, and not as an employee.

2.       Consulting Services
         -------------------

         Consultant agrees that during the term of this Agreement:

         A.       Consultant will consult on matters related to the operations
                  of Palmyra, or such other subsidiary of FFBI as shall continue
                  the historic business of Palmyra.

         B.       Consultant shall exercise a reasonable degree of skill,
                  prudence and care in performing the services referred to in
                  Paragraph A above.

         C.       During the Term of this Agreement, Consultant shall provide
                  services under this Agreement on a schedule mutually agreed
                  upon with senior management of the Bank; PROVIDED, HOWEVER,
                  that Consultant shall not be required to render more than 15
                  hours of service per month, it being understood and agreed
                  that time spent for service as a director of the Bank
                  (including time spent traveling to and

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<PAGE>

                  attending meetings of the Bank's Board of Directors) shall not
                  count towards Consultant's performance obligations. It is
                  expressly acknowledged that Consultant may perform services as
                  an employee or independent contractor of another company,
                  subject to the restrictions in Section 6 hereof, and if
                  Consultant performs such services for another company, the
                  Bank shall use its best efforts to schedule his consulting
                  services so as not to interfere with such activities.
                  Consultant shall not be obligated to render any services under
                  this Agreement during such period when he is unable to do so
                  due to illness, disability or injury, subject to the terms of
                  Section 5(b) hereof.

         D.       Consultant shall not enter into agreements or make commitments
                  on behalf of the Bank without prior written consent or
                  approval of the Bank or its chief executive officer.

3.       Compensation
         ------------

         A.       The Bank agrees to pay Consultant for his consulting services
                  performed under this Agreement at a rate of $ 4,335 per month
                  for a period of 12 months, commencing as of the date of this
                  agreement.

         B.       For his commitments and agreements as described in Section 6
                  herein, the Bank agrees to pay consultant $1,500 per month for
                  a period of 12 months, commencing as of the date of this
                  agreement.

         C.       The Bank hereby agrees to reimburse the Consultant for all
                  reasonable expenses incurred by the Consultant on behalf of
                  and with the consent of the Bank, provided that the Consultant
                  shall furnish appropriate documentation of such expenses and
                  receives prior approval of such expenses.

         D.       The Bank agrees to provide Consultant with reasonable office
                  facilities for the performance of his consulting services.

4.       Other Conditions
         ----------------

         Consultant shall have no authority over any employee or officer of the
Bank, nor shall the Bank be required in any manner to implement any plans or
suggestions Consultant may provide.

5.       Term and Termination; Effect of Termination
         -------------------------------------------

         The term of this Agreement shall begin on the date first written above
and shall continue for a period of 12 calendar months thereafter ("Term") unless
terminated in accordance with A, B or C as set forth below.

         A.       Termination for Cause. The Bank may terminate this Agreement
                  at any time for "Cause." Termination for Cause means
                  termination because of the Consultant's personal dishonesty,
                  willful misconduct, breach of fiduciary duty involving
                  personal profit, intentional failure to perform stated duties,
                  or willful violation of any law, rule or regulation related to
                  the business or operations of the Bank or its

                                        3
<PAGE>

                  subsidiaries. Any determination regarding Consultant's
                  termination for Cause shall be made by a majority of the
                  disinterested members of the Bank's Board of Directors (after
                  reasonable notice to Consultant and the opportunity to be
                  heard with counsel on the reasons therefor.)

         B.       Death or Disability. In the event of Consultant's death or
                  permanent disability (as determined by a physician selected by
                  the Bank), Consultant's obligations under the Agreement shall
                  terminate.

         C.       Termination Without Cause. In the event of a termination of
                  Consultant by the Bank during the Term, other than a
                  Termination for Cause, Consultant's obligation's under the
                  Agreement shall terminate.

         D.       Effect of Termination. In the event of Consultant's
                  Termination for Cause, no further payments or benefits shall
                  be payable or provided to Consultant under this Agreement. In
                  the event of (i) a termination by the Bank other than a
                  Termination for Cause or (ii) termination by reason of
                  Consultant's disability, Consultant (or his guardian) shall be
                  entitled to receive the payments and benefits Consultant would
                  have received under Section 3 had he continued to provide
                  services through the expiration of the Term. In the event of a
                  termination by reason of Consultant's death, Consultant's
                  estate shall be entitled to receive the payments Consultant
                  would have received under Section 3 had he continued to
                  provide services through the expiration of the Term.

6.       Non-Competition and Confidential Business
         -----------------------------------------

         A.       Consultant, during the Term of the Agreement, will not compete
                  with the Bank or an affiliate of the Bank in any city, town or
                  county in which the Bank or an affiliate has an office or has
                  filed an application for regulatory approval to establish an
                  office.

         B.       During the Term of this Agreement, the Consultant hereby
                  agrees that he shall not, without the Bank's prior written
                  consent, engage in providing professional services or enter
                  into employment as an employee, director, consultant,
                  representative, or similar relationship with any entity whose
                  business materially competes with the depository, lending or
                  other business activities of the Bank or its affiliates in any
                  city, town or county in which the Bank or an affiliate has an
                  office or has filed an application for regulatory approval to
                  establish an office.

         C.       During the Term of this Agreement, the Consultant hereby
                  agrees that he shall not, on his own behalf or on behalf of
                  others, employ, solicit, or induce, or attempt to employ,
                  solicit or induce, any employee of the Bank for employment
                  with any financial services enterprise, including, but not
                  limited to, a savings and loan association, bank, credit union
                  or mortgage banking firm, nor will Consultant directly or
                  indirectly, on his behalf or for others, seek to influence any
                  Bank employee to leave the Bank's employ.

                                        4
<PAGE>

         D.       During the Term of this Agreement, Consultant agrees that he
                  will not, without the express written consent of the Bank,
                  directly or indirectly communicate or divulge his knowledge of
                  the past, present or considered business activities,
                  proprietary data or other confidential information, of the
                  Bank or its affiliates, nor will he use such information for
                  his own benefit or for the benefit of any other person, firm,
                  association, or corporation, except that Consultant may
                  disclose such matters to the extent that disclosure is (a)
                  requested by the Bank in the course of the consulting
                  relationship or (b) required by a court or other governmental
                  agency of competent jurisdiction. The foregoing restriction
                  shall not apply to information that is or becomes generally
                  available to the public other than as a result of a disclosure
                  by Consultant.

7.       Independent Contractor
         ----------------------

         The parties hereto agree and acknowledge that the relationship between
the Bank and Consultant shall be that of an independent contractor and not that
of employer-employee, master-servant or principal-agent. Nothing in this
Agreement, or its implementation, shall be construed to the contrary.

8.       Effect on Prior Agreements and Existing Benefit Plans
         -----------------------------------------------------

         This Agreement shall represent the complete Agreement between the Bank
and Consultant concerning the subject matter hereof and supersedes all prior
agreements or understandings, written or oral. No attempted modification or
waiver of any of the provisions hereof shall be binding on either party unless
made in writing and signed by both Consultant and the Bank.

9.       Notices
         -------

         Any notice required or permitted to be given hereunder shall be in
writing and shall be effective three (3) business days after it is properly sent
by registered or certified mail, if to the Bank to the President at the
principal administrative offices of the Bank, or if to Consultant to the address
set forth beneath his signature to this Agreement, or to such other address as
either party may from time to time designate by notice.

10.      Assignability
         -------------

         This Agreement may not be assigned by either party without the prior
written consent of the other party, except that no consent is necessary for the
Bank to assign this Agreement to a corporation succeeding to substantially all
of the assets or business of the Bank, whether by merger, consolidation,
acquisition or otherwise. This Agreement shall be binding upon Consultant, his
heirs and permitted assigns and the Bank, its successors and permitted assigns.

11.      Severability
         ------------
         Each of the sections contained in this Agreement shall be enforceable
independently of every other section in this Agreement, and the invalidity or
nonenforceability of any section shall not invalidate or render nonenforceable
any other section contained herein. If any section or

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<PAGE>

provision within a section is found invalid or unenforceable, it is the intent
of the parties that a court of competent jurisdiction shall reform the section
or provisions to produce its nearest enforceable economic equivalent.

12.      Arbitration
         -----------

         Unless otherwise mutually agreed to by the Consultant and the Bank in
writing, any controversy or claim arising out of or relating to this Agreement
or the breach thereof shall be settled by binding arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association, with
such arbitration hearing to be held at the offices of the American Arbitration
Association ("AAA") nearest to Palmyra, Missouri and judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. Either the Consultant or the Bank may file a request for such
arbitration with the AAA.

13.      Applicable Law
         --------------

         It is the intention of the parties hereto that all questions and
interpretations with respect to the construction and performance of this
Agreement and the rights and liabilities of the parties hereto shall be
determined in accordance with the laws of the State of Missouri, with respect to
any matter or thing arising out of this Agreement or pursuant thereto.

                                        6
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and the first above written.

                                        FIRST FEDERAL BANK

                                        By:
                                           -------------------------------------

                                        CONSULTANT

                                        ----------------------------------------
                                        Eldon R. Mette

                                        ----------------------------------------

                                        ----------------------------------------
                                                       Address

                                        7<PAGE>

                                                                  Exhibit 10.104

                      SECOND AMENDMENT TO MULTIFAMILY NOTE

     THIS SECOND AMENDMENT TO MULTIFAMILY NOTE (this "Amendment") is made as of
this 19th day of February, 2002 and effective as between the parties hereto as
of January 1, 2002, between RETIREMENT INNS III, LLC, a Delaware limited
liability company (the "Borrower"), and RED MORTGAGE CAPITAL, INC., an Ohio
corporation, formerly known as Provident Mortgage Capital, Inc.,
successor-in-interest to Banc One Capital Funding Corporation (the "Lender").

                                    RECITALS

     WHEREAS, the Lender has previously made a loan to the Borrower in the
original principal sum of Eight Million Two Hundred Nine Thousand Nine Hundred
Dollars ($8,209,900) (the "Loan") pursuant to the terms of that certain
Multifamily Note dated as of June 27, 1999, by the Borrower to the order of the
Lender (the "Original Note"), as amended pursuant to the terms of that certain
First Amendment to Multifamily Note dated as of December 28, 2000 between
Borrower and Lender (the "First Amendment to Note" and together with the
Original Note, the "Existing Note") and is secured, in part, by a first mortgage
lien on the real property (the "Mortgaged Property") described on Exhibit A to
that certain Multifamily Deed of Trust, Assignment of Rents, Security Agreement
and Fixture Filing dated as of June 27, 1999 by the Borrower and for the benefit
of the Lender (the "Original Deed of Trust"), recorded among the Official
Records of Ventura County, California (the "Land Records") on June 28, 1999 as
Instrument No. 99-122405, as amended by that certain Amendment to Multifamily
Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated
as of August 31, 1999 between the Borrower and the Lender (the "First Amendment
to Deed of Trust"), recorded among the Land Records on September 10, 1999 as
Instrument No. 99-173435, as affected by that certain Confirmatory Assignment of
Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture
Filing dated as of December 12, 2000, effective as of October 2, 2000, by Banc
One Capital Funding Corporation, an Ohio corporation to Provident Mortgage
Capital, Inc., now known as Red Mortgage Capital, Inc. (the "Confirmatory
Assignment", and together with the Original Deed of Trust and the First
Amendment to Deed of Trust, the "Existing Deed of Trust"), recorded among the
Land Records on January 31, 2001 as Instrument No. 2001-0018605-00; and

     WHEREAS, pursuant to the terms of that certain Confirmatory Agreement dated
as of December 28, 2000 by and among the Borrower, ARV Assisted Living, Inc., a
Delaware corporation (the "Guarantor"), and the Lender (the "Confirmatory
Agreement"), and the First Amendment to Note, the Maturity Date (as such term is
defined in the Original Note) of the Loan was extended to January 1, 2002; and

     WHEREAS, the Borrower has requested and the Lender has agreed pursuant to
the terms and conditions of that certain Master Modification Agreement dated as
of the date hereof by and among Borrower, Guarantor, and Lender (the
"Modification Agreement") to (i) increase the principal sum of the Loan to
$11,980,000 (the "Increase"), (ii) extend the Maturity Date (as such term is
defined in the Existing Note) of the Loan to July 1, 2003 (the "Extension"), and
(iii) change the interest rate of the Loan to 8.50% (the "Rate Change"); and

     WHEREAS, Borrower and Lender have agreed to enter into this Amendment in
accordance with the terms and conditions of the Modification Agreement.

     NOW, THEREFORE, for and in consideration of the premises, the mutual entry
of the Modification Agreement by the parties thereto, the Extension, the
Increase, the Rate Change, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged by each party hereto, the
parties hereby agree as follows:

     Section 1. Recitals. The Recitals are hereby incorporated into this
Amendment as a substantive part hereof.

     Section 2. Modification to the Existing Note.

<PAGE>

                (a) The first paragraph of the Existing Note is hereby deleted
in its entirety and the following is inserted in lieu thereof:

     "FOR VALUE RECEIVED, the undersigned ("Borrower") promises to pay to the
     order of RED MORTGAGE CAPITAL, INC., an Ohio corporation, or any successor
     holder of this Multifamily Note, the principal sum of ELEVEN MILLION NINE
     HUNDRED EIGHTY THOUSAND and 00/100 DOLLARS (US $11,980,000.00), with
     interest on the unpaid principal balance at the annual rate of Eight and
     50/100ths percent (8.50%)."

                (b) Section 3(b) of the Existing Note is hereby deleted in its
entirety and the following is inserted in lieu thereof:

     "Consecutive monthly installments of principal and interest, each in the
     amount of Ninety-Six Thousand Three Hundred Eighty-Seven and 22/100 Dollars
     (US $96,387.22), shall be payable on the first day of each month beginning
     on March 1, 2002 until the Maturity Date or the Extended Maturity Date (as
     defined in Section 20 herein), if applicable, until the entire unpaid
     principal balance evidenced by this Note is fully paid. Any accrued
     interest remaining past due for 30 days or more shall be added to and
     become part of the unpaid principal balance and shall bear interest at the
     rate or rates specified in this Note, and any reference below to "accrued
     interest" shall refer to accrued interest which has not become part of the
     unpaid principal balance. Subject to Section 20 herein, any remaining
     principal and interest shall be due and payable on July 1, 2003 or on any
     earlier date on which the unpaid principal balance of this Note becomes due
     and payable, by acceleration or otherwise (the "Maturity Date"). The unpaid
     principal balance shall continue to bear interest after the Maturity Date
     or the Extended Maturity Date, if applicable, at the Default Rate set forth
     in this Note until and including the date on which it is paid in full."

     Section 3. Ratification. Except as may be amended or modified hereby, the
terms of the Existing Note are hereby ratified, affirmed and confirmed and shall
otherwise remain in full force and effect.

     Section 4. Amendments. This Amendment may be amended or supplemented by and
only by an instrument executed and delivered by each party hereto.

     Section 5. Waiver. The Lender shall not be deemed to have waived the
exercise of any right which it holds under the Original Loan Documents (as such
term is defined in the Modification Agreement) unless such waiver is made
expressly and in writing (and no delay or omission by the Lender in exercising
any such right shall be deemed a waiver of its future exercise). No such waiver
made as to any instance involving the exercise of any such right shall be deemed
a waiver as to any other such instance, or any other such right. Without
limiting the operation and effect of the foregoing provisions hereof, no act
done or omitted by the Lender pursuant to the powers and rights granted to it
hereunder shall be deemed a waiver by the Lender of any of its rights and
remedies under any of the provisions of the Original Loan Documents executed in
connection with the Loan, and this Assignment is made and accepted without
prejudice to any of such rights and remedies.

     Section 6. Governing Law. This Agreement shall be given effect and
construed by application of the law of the State of California.

     Section 7. Headings. The headings of the sections, subsections, paragraphs
and subparagraphs hereof are provided herein for and only for convenience of
reference, and shall not be considered in construing their contents.

                                       2

<PAGE>

     Section 8. References. As used herein, all references made (i) in the
neuter, masculine or feminine gender shall be deemed to have been made in all
such genders and (ii) in the singular or plural number shall be deemed to have
been made, respectively, in the plural or singular number as well.

     Section 9. Severability. No determination by any court, governmental body
or otherwise that any provision of this Amendment or any amendment hereof is
invalid or unenforceable in any instance shall affect the validity or
enforceability of (i) any other such provision or (ii) such provision in any
circumstance not controlled by such determination. Each such provision shall be
valid and enforceable to the fullest extent allowed by, and shall be construed
wherever possible as being consistent with, applicable law.

     Section 10. Binding Effect. This Amendment shall be binding upon and inure
to the benefit of the Borrower and the Lender and their respective successors
and assigns, except that the Borrower shall not have the right to assign its
rights hereunder or any interest in the Original Loan Documents without the
prior written consent of the Lender.

     Section 11. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one and the same instrument.

     Section 12. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER EACH (i)
AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF
THIS AMENDMENT, THE NOTE, ANY OTHER ORIGINAL LOAN DOCUMENT, OR THE RELATIONSHIP
BETWEEN THE PARTIES, AS LENDER AND BORROWER, THAT IS TRIABLE OF RIGHT BY A JURY
AND (ii) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE
EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO
TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH
THE BENEFIT OF COMPETENT LEGAL COUNSEL.

     IN WITNESS WHEREOF, each of the parties hereto have executed and delivered
this Amendment under their respective seals as of the day and year first written
above.

WITNESS:                                  BORROWER:

                                          RETIREMENT INNS III, LLC,
----------------------------          a Delaware limited liability company

                                          By:  /s/ ABDO H. KHOURY
                                             -----------------------------------
                                          Name:    Abdo H. Khoury
                                          Title:   Manager

WITNESS:                                  LENDER:

                                          RED MORTGAGE CAPITAL, INC.,
----------------------------          an Ohio corporation, formerly known
                                          as Provident Mortgage Capital, Inc.,
                                          successor-in-interest to Banc One
                                          Capital Funding Corporation

                                          By:
                                             -----------------------------------
                                          Name:
                                          Title:

                                       3

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