Document:

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                                                                  Exhibit 10.3

                            FIRST EXTENSION AGREEMENT

         This FIRST EXTENSION AGREEMENT (this "Agreement") is entered into as of
March 28, 2003, and effective as of March 1, 2003, by and among Angelica
Corporation, a Missouri corporation ("Borrower"), LaSalle Bank National
Association ("LaSalle"), as Administrative Agent ("Administrative Agent"), and
LaSalle and the other lenders on the signature page hereto (the "Lenders").

                                    RECITALS:
                                    ---------

A.       Borrower, Administrative Agent and Lenders are party to that certain
         Loan Agreement dated as of May 30, 2002, (the "Original Loan
         Agreement").

B.       Borrower, Administrative Agent and Lenders are party to that certain
         First Amendment to Loan Agreement dated January 24, 2003, amending the
         Original Loan Agreement (the "First Amendment to Loan Agreement").

C.       The Original Loan Agreement, as amended by the First Amendment to Loan
         Agreement, provides, in Section 6.1.3, that Borrower, Administrative
         Agent and Lenders may agree, in the form of a written extension
         agreement, to extend the Revolving Loan Maturity Date by one (1) year.

D.       Having been notified of Borrower's wish to so extend the Revolving Loan
         Maturity Date, and being willing to agree to such extension,
         Administrative Agent and Lenders do hereby affirmatively agree with
         Borrower and between them to do so in accordance with the provisions
         set forth herein.

                                    AGREEMENT
                                    ---------

         Therefore, in consideration of the mutual agreements herein and other
sufficient consideration, the receipt of which is hereby acknowledged, Borrower,
Administrative Agent and Lenders hereby agree as follows:

1. DEFINITIONS. All references to the "Agreement" or the "Loan Agreement" in the
Original Loan Agreement, the First Amendment to Loan Agreement or in this
Agreement, shall be deemed to be references to the Original Loan Agreement as it
may be amended, restated, extended, renewed, replaced, or otherwise modified
from time to time. Capitalized terms used and not otherwise defined herein have
the meanings given them in the Original Loan Agreement.

2. EFFECTIVENESS OF AGREEMENT. This Agreement shall be effective as of the date
first written above, but only if this Agreement has been executed by Borrower,
Administrative Agent and the Lenders.

3. AGREEMENT. Borrower, Administrative Agent and Lenders hereby agree that the
Revolving Loan Maturity Date shall be, and hereby is, extended by one (1) year
from May 30, 2005 to May 30, 2006.

4. REPRESENTATION AND WARRANTIES OF BORROWER. Borrower hereby represents and
warrants to Administrative Agent and the Lenders that (i) Borrower's execution,
delivery and performance of this Agreement has been duly authorized by all
requisite action of borrower, (ii) no consents are necessary from any third
parties for Borrower's execution, delivery or performance of this Agreement,
(iii) this

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Agreement, the Loan Agreement, the First Amendment to Loan Agreement and
each of the other Loan Documents, constitute the legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance with
their terms, except to the extent that the enforceability thereof against
Borrower may be limited by bankruptcy, insolvency or other laws affecting
the enforceability of creditors rights generally or by equity principles of
general application, (iv) all of the representations and warranties
contained in Section 10 of the Loan Agreement are true and correct with the
same force and effect as if made on and as of the date of this Agreement,
(v) after giving effect to this Agreement, there is no Existing Default, and
(vi) since the Effective Date, there has been no change or modification to
the Charter Documents of Borrower or any other Covered Person.

5. REAFFIRMATION. Borrower hereby represents, warrants, acknowledges and
confirms that (i) the Loan Agreement, the First Amendment to Loan Agreement and
the other Loan Documents remain in full force and effect, (ii) Borrower has no
defenses to its obligations under the Loan Agreement, the First Amendment to
Loan Agreement and the other Loan Documents, and (iii) Borrower has no claim
against Administrative Agent or any Lender arising from or in connection with
the Loan Agreement, the First Amendment to Loan Agreement or the other Loan
Documents and any such claim is hereby irrevocably waived and released and
discharged forever.

6. GOVERNING LAW. This Agreement has been deemed to be executed and delivered in
Chicago, Illinois, and shall be governed by and construed under the laws of the
State of Illinois without giving effect to choice or conflicts of law principles
thereunder.

7. SECTION TITLES. The section titles in this Agreement are for convenience of
reference only and shall not be construed so as to modify any provisions of this
Agreement.

8. COUNTERPARTS; FACSIMILE TRANSMISSIONS. This Agreement may be executed in one
or more counterparts and on separate counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument. Signatures to this Agreement may be given by facsimile or other
electronic transmission, and such signatures shall be fully binding on the party
sending the same.

9. INCORPORATION BY REFERENCE. Administrative Agent, Lenders and Borrowers
hereby agree that all of the terms of the Loan Documents and of the First
Amendment to Loan Agreement are incorporated in and made a part of this
Agreement by this reference.

10. FEES AND EXPENSES. Borrower shall promptly pay to Administrative Agent all
fees, expenses and other amounts owing to Administrative Agent under the Loan
Agreement, the First Amendment to Loan Agreement and the other Loan Documents,
including, without limitation, all fees, costs and expenses incurred by
Administrative Agent in connection with the preparation, negotiation, execution,
and delivery of this Agreement.

11. NOTICE - ORAL COMMITMENTS NOT ENFORCEABLE. Nothing contained in the
following notice shall be deemed to limit or modify the terms of the Loan
Documents:

         ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
         FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND
         OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER) AND
         US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS
         WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS
         THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US,
         EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.

                                     2

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Borrower acknowledges that there are no other agreements between Administrative
Agent, Lenders, and Borrower, oral or written, concerning the subject matter of
the Loan Documents, and that all prior agreements concerning the same subject
matter, including any proposal or commitment letter, are merged into the Loan
Documents and thereby extinguished.

12. STATUTORY NOTICE-INSURANCE. The following notice is given pursuant to
Section 10 of the Collateral Protection Act set forth in Chapter 815 Section
180/1 of the Illinois Compiled Statutes (1996); nothing contained in such notice
shall be deemed to limit or modify the terms of the Loan Documents:

         UNLESS YOU PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR
         AGREEMENT WITH US, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT
         OUR INTERESTS IN YOUR COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT,
         PROTECT YOUR INTERESTS. THE COVERAGE THAT WE PURCHASE MAY NOT PAY ANY
         CLAIM THAT YOU MAKE OR ANY CLAIM THAT IS MADE AGAINST YOU IN CONNECTION
         WITH THE COLLATERAL. YOU MAY LATER CANCEL ANY INSURANCE PURCHASED BY
         US, BUT ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE OBTAINED INSURANCE
         AS REQUIRED BY OUR AGREEMENT. IF WE PURCHASE INSURANCE FOR THE
         COLLATERAL, YOU WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE,
         INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGES WE MAY
         IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE
         EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE
         COSTS OF THE INSURANCE MAY BE ADDED TO YOUR TOTAL OUTSTANDING BALANCE
         OR OBLIGATION. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF
         INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR OWN.

                {REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
                     SIGNATURE PAGE IMMEDIATELY FOLLOWS}

                                     3

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     IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first above written.

ANGELICA CORPORATION, A MISSOURI CORPORATION, AS BORROWER

By:   /s/ Steven L. Frey
      -----------------------------
Name:  Steven L. Frey
      -----------------------------
Title: Vice President
      -----------------------------

LASALLE BANK NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT AND A LENDER

By:   /s/ Margaret C. Dierkes
      -----------------------------
Name:  Margaret C. Dierkes
      -----------------------------
Title: Assistant Vice President
      -----------------------------

UMB BANK, NATIONAL ASSOCIATION, A LENDER

By:   /s/ Robert D. Vieth
      -----------------------------
Name:  Robert D. Vieth
      -----------------------------
Title: Executive Vice President
      -----------------------------

WELLS FARGO BANK, N.A., A LENDER

By:   /s/ Eric Gudmestad
      -----------------------------
Name:  Eric Gudmestad
      -----------------------------
Title: Vice President
      -----------------------------

                                     4<PAGE>

                                                                  Exhibit 10.18

                              ANGELICA CORPORATION
                              EMPLOYMENT AGREEMENT
                              --------------------

            This agreement ("Agreement") has been entered into as of this 1st
day of January, 2003, (the "Effective Date"), by and between Angelica
Corporation, a Missouri corporation ("Angelica"), and Theodore M. Armstrong,
an individual ("Armstrong").

            WHEREAS, Angelica currently employs Armstrong as Senior Vice
President - Finance and Administration and Chief Financial Officer; and

            WHEREAS, Angelica and Armstrong wish to more specifically define in
this Agreement the terms and conditions of Armstrong's continued employment with
Angelica, as well as the terms and conditions of the consulting arrangement to
become effective upon the termination of Armstrong's employment, all as provided
for hereunder.

            NOW THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:

SECTION 1:  TERM OF AGREEMENT. The term of this Agreement (the "Term"), shall be
for the period commencing on the Effective Date and ending on July 31, 2004,
subject to any earlier termination by either party in accordance with this
Agreement.

SECTION 2:  TERMS AND CONDITIONS OF EMPLOYMENT.

            2.1 EMPLOYMENT PERIOD. Armstrong will be employed by Angelica
during the period (the "Employment Period"), commencing on the Effective Date
and ending on such date as the parties may mutually agree (the "Employment
Termination Date"); provided, however, that if the parties fail to otherwise
mutually agree upon an earlier Employment Termination Date, the Employment
Termination Date shall be February 28, 2004.

            2.2 EMPLOYMENT. Armstrong shall remain in the employ of Angelica
throughout the Employment Period in accordance with the terms and provisions of
this Agreement. This Agreement shall remain in full force and effect throughout
the Employment Period notwithstanding changes in Armstrong's compensation,
location of employment, duties or authority, or any changes in the identity of
the corporation to which Armstrong's compensation is charged, provided that said
corporation is a subsidiary or affiliate of Angelica.

            2.3 POSITIONS AND DUTIES. Angelica hereby employs Armstrong during
the Employment Period and Armstrong hereby accepts such employment during such
period, as Senior Vice President - Finance and Administration and Chief
Financial Officer, subject to the following and subject to such other reasonable
directions of the Chief Executive Officer of Angelica and Angelica's Board of
Directors.

            (a) Armstrong shall have such authority and shall perform such
                duties as are specified in the bylaws of Angelica for the
                office and position to which he has been appointed hereunder
                and shall so serve, subject to the control exercised by the
                Chief Executive Officer of Angelica and Angelica's Board of
                Directors from time to time.

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            (b) Armstrong agrees to devote such of his time, attention and
                energy to the business of Angelica as may be required to
                perform the duties and responsibilities assigned to him to
                the best of his ability and with reasonable diligence. Such
                duties and responsibilities shall include, but not be
                limited to: (i) training and preparing other officers and
                employees of Angelica to assume the performance of
                Armstrong's duties and responsibilities; (ii) determining
                which other officers and employees are best qualified to
                assume those duties and responsibilities; and (iii)
                effectively completing the transfer and transition of those
                duties and responsibilities to such other officers and
                employees prior to the end of the Employment Period.

            (c) At such time during the Employment Period as the Chief
                Executive Officer of Angelica or Angelica's Board of
                Directors may determine, in his (or its) sole discretion,
                Armstrong shall relinquish, resign and no longer hold his
                office and position as Chief Financial Officer. Although
                such determination shall remain at the sole discretion of
                the Chief Executive Officer of Angelica or Angelica's Board
                of Directors, the parties agree that it shall not be earlier
                than June 30, 2003. Following such determination, Armstrong
                will continue to hold his office and position as Senior Vice
                President, or such other office and/or position, with such
                other duties and responsibilities as the Chief Executive
                Officer of Angelica or Angelica's Board of Directors may
                otherwise, in his (or its) sole discretion, assign to him.

            2.4 COMPENSATION.  Armstong's initial base salary during the
Employment Period will be $208,000 per annum, (the "Annual Base Salary"),
payable in accordance with Angelica's current payroll practices. The Annual
Base Salary will be subject to such increases, if any, as the Chief Executive
Officer of Angelica or Angelica's Board of Directors may, from time to time,
determine, in his (or its) sole discretion, are appropriate. It is specifically
understood and agreed that Angelica's Chief Executive Officer will submit the
recommendation to Angelica's Board of Directors, at its next regularly
scheduled meeting, that the Annual Base Salary be increased to $220,000 per
annum, effective February 1, 2003. In addition to the Annual Base Salary,
Armstrong will have the opportunity during the Employment Period to earn
incentive compensation ("Incentive Compensation") under the incentive
compensation plan that is generally available to other similarly situated
executives of Angelica. Incentive Compensation during the Employment Period
shall range from 0 to 80% of the Annual Base Salary.

            2.5 PARTICIPATION IN BENEFIT PLANS AND PROGRAMS. During the
Employment Period Armstrong is eligible to participate in the following plans
and programs to the extent such plans and programs may, from time to time, be or
remain in effect:

            (a) PARTICIPATION IN PERFORMANCE PLANS. During the Employment
                Period Armstrong is eligible to receive stock-based awards
                or grants under Angelica's 1994 Performance Plan, 1999
                Performance Plan or any other similar plan or program that
                may, from time to time during such period, be in effect and
                generally available to other similarly situated executives
                of Angelica, including stock options, restricted stock and
                performance awards, all in the discretion of Angelica's
                Board of Directors and/or its Compensation and Organization
                Committee.

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            (b) PARTICIPATION IN STOCK BONUS AND INCENTIVE PLAN. During the
                Employment Period Armstrong is eligible to participate in
                Angelica's Stock Bonus and Incentive Plan, based on current
                eligibility requirements and subject to the terms and
                conditions of such plan.

            (c) PARTICIPATION IN RETIREMENT SAVINGS PLAN. During the Employment
                Period Armstrong is eligible to participate in Angelica's
                Retirement Savings Plan (the "401(k) Plan"), based upon
                current eligibility requirements and subject to the terms
                and conditions of such plan.

            (d) PARTICIPATION IN PENSION PLAN. During the Employment Period
                Armstrong is eligible to participate in Angelica's "defined
                benefit" Pension Plan, based on current eligibility
                requirements and subject to the terms and conditions of such
                plan.

            (e) PARTICIPATION IN SUPPLEMENTAL PLAN. During the Employment
                Period Armstrong is eligible to participate in Angelica's
                Supplemental Plan, based upon current eligibility
                requirements and subject to the terms and conditions of such
                plan.

            (f) PARTICIPATION IN DEFERRED COMPENSATION OPTION PLAN. During
                the Employment Period Armstrong is eligible to participate
                in Angelica's Deferred Compensation Option Plan, based upon
                current eligibility requirements and subject to the terms
                and conditions of such plan.

            2.6 TERMINATION. Subject to any earlier termination by either party
in accordance with this paragraph 2.6, Armstrong's employment by Angelica shall
terminate as of the Employment Termination Date (as defined hereinabove);
provided, however, that notwithstanding anything to the contrary contained in
this Agreement, either party may elect to terminate the Employment Period (and
Armstrong's employment with Angelica), at any time prior to the Employment
Termination Date as follows:

            (a) TERMINATION BY ARMSTRONG. Armstrong may elect to
                terminate the Employment Period (and his employment with
                Angelica), at any time prior to the Employment Termination
                Date, by giving Angelica not less than thirty (30) days
                prior written notice of such termination. In the event of
                such termination by Armstrong, Angelica shall have no
                further obligations or liabilities to Armstrong under this
                Agreement, other than any accrued salary owed to Armstrong
                under this Agreement and any payments or benefits to which
                Armstrong is entitled under any of the plans or programs in
                which Armstrong participated as an employee.

            (b) TERMINATION BY ANGELICA WITH GOOD CAUSE. Angelica may,
                with Good Cause, (as that term is hereinafter defined),
                elect to terminate the Employment Period (and Armstrong's
                employment with Angelica), at any time prior to the
                Employment Termination Date, by giving Armstrong written
                notice of such termination. Any such termination may, in
                Angelica's sole discretion, be effective immediately or upon
                such other date as Angelica may determine. For purposes of
                this Agreement and, in particular, when used in connection
                with Angelica's termination of the Employment Period (and
                Armstrong's employment with Angelica by Angelica), "Good
                Cause" shall mean: (i) Armstrong's willful and continued
                failure to substantially perform his duties with Angelica
                (other than as a result of incapacity due to physical or
                mental condition), after a written demand for

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                substantial performance is delivered to Armstrong by
                Angelica, which specifically identifies the manner in which
                Armstrong has not substantially performed his duties; (ii)
                Armstrong's commission of an act constituting a criminal
                offense involving moral turpitude, dishonesty or breach of
                trust; or (iii) Armstrong's material breach of any provision
                of this Agreement. In the event of such termination by
                Angelica with Good Cause, Angelica shall have no further
                obligations or liabilities to Armstrong under this
                Agreement, other than any accrued salary owed to Armstrong
                under this Agreement and any payments or benefits to which
                Armstrong is entitled under any of the plans or programs in
                which Armstrong participated as an employee.

            (c) TERMINATION BY ANGELICA WITHOUT GOOD CAUSE. Angelica may
                elect to terminate the Employment Period (and Armstrong's
                employment with Angelica), at any time prior to the
                Employment Termination Date, by giving Armstrong written
                notice of such termination. Any such termination may, in
                Angelica's sole discretion, be effective immediately or upon
                such other date as Angelica may determine. In the event of
                such termination by Angelica without Good Cause, then, upon
                the negotiation and execution of a mutually acceptable
                settlement agreement and release by Angelica and Armstrong,
                and in addition to any accrued salary owed to Armstrong
                under this Agreement, and any payments or benefits to which
                Armstrong is entitled under any of the plans or programs in
                which Armstrong participated as an employee, Angelica shall
                pay Armstrong: (i) payments equal to his then current base
                salary for the period commencing on the effective date of
                such termination and ending on February 28, 2004; and (ii)
                payments equal to the Consulting Fees (as hereinafter
                defined) during the period commencing on March 1, 2004 and
                ending July 31, 2004. Also in the event of such termination,
                and in addition to such payments, Angelica will provide to
                Armstrong, during the period commencing on the effective
                date of such termination and ending on July 31, 2004,
                Ancillary Services of the type, nature and scope defined in
                paragraph 3.4 below. In the event of such termination by
                Angelica without Good Cause, Angelica shall have no further
                obligations or liabilities to Armstrong under this
                Agreement, except as expressly provided in this paragraph
                2.6 (c).

            (d) DEATH OR DISABILITY. The Employment Period (and
                Armstrong's employment with Angelica) shall terminate
                immediately upon Armstrong's death or upon his becoming
                disabled (as determined in accordance with Angelica's then
                current long term disability plan), and unable, in
                Angelica's reasonable judgment, to substantially perform the
                duties and responsibilities of his employment under this
                Agreement. In such event, Angelica shall have no further
                obligations or liabilities to Armstrong under this
                Agreement, other than any accrued salary owed to Armstrong
                under this Agreement, and any payments or benefits to which
                Armstrong is entitled under any of the plans or programs in
                which Armstrong participated as an employee.

            Any early termination by either party prior to the Employment
Termination Date pursuant to paragraph 2.6 (a), (b) or (c), or any termination
pursuant to paragraph 2.6 (d), shall also be deemed to have terminated this
Agreement and all further obligations and liabilities of either party except as
otherwise expressly provided herein.

            2.7 DETERMINATION OF BENEFITS UPON TERMINATION. Upon termination of
the Employment Period (and Armstrong's employment with Angelica), the payments
and other benefits to which Armstrong

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may be entitled under the plans and programs identified in paragraph 2.5 above,
will be determined in accordance with the following:

            (a) NORMAL TERMINATION OR TERMINATION BY ANGELICA WITHOUT
                GOOD CAUSE. Upon termination of the Employment Period (and
                Armstrong's employment with Angelica), for any reason other
                than: (i) by Armstrong pursuant to paragraph 2.6 (a); or
                (ii) by Angelica with Good Cause pursuant to paragraph 2.6
                (b), the retirement benefits to which Armstrong is otherwise
                entitled under such plans and programs will be determined in
                a manner such that Armstrong will be deemed to have
                completed that number of years of service he would have
                completed had he continued to be employed by Angelica until
                age 65 and, further, he will be deemed to have attained age
                65, all as of the effective date of any such termination.
                Additionally, as of the effective date of any such
                termination, any stock based awards or grants held by
                Armstrong, including stock options and any matching shares
                under the Angelica Stock Bonus and Incentive Plan, that, by
                the terms of the plan under which they were granted, have
                not yet vested, shall thereupon and immediately vest.

                     (i) CASH EQUIVALENT PAYMENTS. It is expressly understood
                         and agreed with respect to paragraph 2.7 (a) above
                         that:

                         (A) If the manner described therein for determining
                             the retirement benefits to which Armstrong is
                             entitled under any such plan or program requires
                             the prior approval or consent of Angelica's Board
                             of Directors, and/or of any of its committees,
                             such approval and consent will be requested.
                             If such approval or consent is not granted or if
                             that manner for determining such retirement
                             benefits is prohibited by the terms of any such
                             plan or program, or by applicable law, then, in
                             any such case, Angelica will pay Armstrong cash
                             payment(s) equal to any additional dollar value
                             that the retirement benefits would have had for
                             Armstrong had such retirement benefits been
                             determined in the manner so described above; and

                         (B) If any plan or program under which Armstrong holds
                             any stock based awards or grants, including stock
                             options, requires the prior approval or consent
                             of Angelica's Board of Directors and/or any of its
                             committees, in order to accelerate their vesting,
                             such approval or consent will be requested. If
                             such approval or consent is not granted, or if
                             such acceleration of vesting is prohibited by the
                             terms of such plan, or by applicable law, then,
                             in any such case, Angelica will pay Armstrong cash
                             payment(s) equal to any additional dollar value
                             that the stock based awards or grants would have
                             had for Armstrong had vesting been so accelerated.

            (b) TERMINATION BY ARMSTRONG OR TERMINATION BY ANGELICA WITH GOOD
                CAUSE. Upon termination of the Employment Period (and
                Armstrong's employment with Angelica), either: (i) by
                Armstrong pursuant to paragraph 2.6 (a); or (ii) by Angelica
                with Good Cause pursuant to paragraph 2.6 (b), the
                retirement benefits to which Armstrong is otherwise entitled
                under such plans and programs will be determined in a manner
                such

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                that Armstrong will be deemed to have completed only that
                number of years of service that he has, in fact, completed
                as an employee of Angelica as of the effective date of such
                termination and, further, he shall be deemed to have
                attained only that age that he has, in fact, attained as of
                that date. Additionally, as of the effective date of any
                such termination, any stock based awards or grants,
                including stock options, that, by the terms of the plan
                under which they were granted, have not yet vested, will
                otherwise be treated in accordance with the terms of such
                plan.

            2.8 CONTINUATION OF HEALTHCARE BENEFITS. Upon termination of the
Employment Period (and Armstrong's employment with Angelica), for any reason
other than: (i) by Armstrong pursuant to paragraph 2.6 (a); or by Angelica
with Good Cause pursuant to paragraph 2.6 (b), then, for a period of ten
years thereafter, without cost to Armstrong, Angelica will continue and keep
in force, at its sole cost, and for the benefit of Armstrong and his spouse,
such healthcare benefits as are at least equivalent to those healthcare
benefits as Angelica provides, from time to time during said ten year period,
to its executive management personnel; provided, however, that if Armstrong
thereafter becomes employed by another employer and is thereby eligible to
participate in a healthcare plan maintained or offered by that other employer
then, in that event, the healthcare benefits made available to Armstrong and
his spouse by Angelica will be secondary to such benefits provided by the
plan maintained or offered by such other employer. Upon termination of the
Employment Period (and Armstrong's employment with Angelica), either: (i) by
Armstrong pursuant to paragraph 2.6 (a); or (ii) by Angelica with Good Cause
pursuant to paragraph 2.6 (b), then Angelica will have no obligation
hereunder to continue any such healthcare benefits except as may otherwise be
required by law.

SECTION 3:  TERMS AND CONDITIONS OF CONSULTING ENGAGEMENT.

            3.1 CONSULTING PERIOD. Subject to any earlier termination of this
Agreement by either party pursuant to paragraph 2.6, Armstrong will be engaged
by Angelica as a consultant, on an independent contractor basis, during the
period (the "Consulting Period"), commencing on the Employment Termination Date
and ending on July 31, 2004 (the "Consulting Termination Date").

            3.2 CONSULTING. Armstrong will be engaged by Angelica as a
consultant throughout the Consulting Period in accordance with the terms and
provisions of this Agreement. During the Consulting Period Armstrong will make
himself available to perform such consulting projects as may, from time to time,
be assigned to him by the Chief Executive Officer of Angelica and Angelica's
Board of Directors. Such consulting projects shall be appropriate as to
Armstrong's skills, experience and training but will otherwise be determined in
the sole discretion of the Chief Executive Officer and Angelica's Board of
Directors. Armstrong agrees to devote such of his time, attention and energy as
may reasonably be required to complete the consulting projects assigned to him
to the best of his ability and with reasonable diligence.

            3.3 CONSULTING FEES AND EXPENSES. In consideration for such
consulting services, Angelica will pay Armstrong, during the Consulting Period,
consulting fees of $10,000 per month (the "Consulting Fees"). Additionally,
Angelica will reimburse Armstrong, in accordance with Angelica's then current
expense reimbursement policies, reasonable out-of-pocket expenses incurred by
Armstrong in connection with his performance of consulting services for Angelica
hereunder. Consistent with Armstrong's status as an independent contractor, all
Consulting Fees and other amounts paid to him pursuant to this Section 3 of this
Agreement, will be paid without deduction for federal or state income taxes,
social security or similar deductions and withholdings, and Armstrong shall be
responsible therefor.

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            3.4 ANCILLARY SUPPORT SERVICES. In addition to the Consulting Fees
and out-of-pocket expense reimbursements provided for in paragraph 3.3 above,
Angelica will, at its cost, make available and provide to Armstrong for his use
in connection with performing consulting services hereunder, office space and
clerical assistance, telephone service and other general office services
("Ancillary Services"). Such Ancillary Services will be of such type, nature and
scope as are reasonably necessary and appropriate, and will be provided to
Armstrong only during such times as he is performing consulting services at
Angelica's principal offices in St. Louis, Missouri, or during such other times
as Angelica determines are necessary in order to allow Armstrong to complete the
consulting projects that have been assigned to him.

            3.5 TERMINATION. Subject to any earlier termination by either party
in accordance with this paragraph 3.5, Armstrong's consulting engagement with
Angelica shall terminate as of the Consulting Termination Date; provided,
however, that notwithstanding anything to the contrary contained in this
Agreement, either party may elect to terminate the Consulting Period (and
Armstrong's consulting engagement with Angelica), at any time prior to the
Consulting Termination Date as follows:

            (a) TERMINATION BY ARMSTRONG. Armstrong may elect to terminate
                the Consulting Period (and his consulting engagement with
                Angelica), at any time prior to the Consulting Termination
                Date, by giving Angelica not less than thirty (30) days prior
                written notice of such termination. In the event of such
                termination by Armstrong, Angelica shall have no further
                obligations or liabilities to Armstrong under this Agreement,
                other than any accrued consulting fees owed to Armstrong
                under this Agreement and any payments or benefits to which
                Armstrong is entitled under paragraph 2.7 of this Agreement.

            (b) TERMINATION BY ANGELICA WITH GOOD CAUSE. Angelica may, with
                Good Cause, (as that term is defined in paragraph 2.6 (b)
                above and applied to the consulting services performed by
                Armstrong hereunder), elect to terminate the Consulting
                Period (and Armstrong's consulting engagement with
                Angelica), at any time prior to the Consulting Termination
                Date, by giving Armstrong written notice of such
                termination. Any such termination may, in Angelica's sole
                discretion, be effective immediately or upon such other date
                as Angelica may determine. In the event of such termination
                by Angelica with Good Cause, Angelica shall have no further
                obligations or liabilities to Armstrong under this
                Agreement, other than any accrued consulting fees owed to
                Armstrong under this Agreement and any payments or benefits
                to which Armstrong is entitled under paragraph 2.7 of this
                Agreement. For purposes of this paragraph 3.5 (b), and, in
                particular, when used in connection with Angelica's
                termination of the Consulting Period (and Armstrong's
                consulting engagement with Angelica), Good Cause shall be
                applied as to the consulting services assigned to and
                performed by Armstrong hereunder.

            (c) TERMINATION BY ANGELICA WITHOUT GOOD CAUSE. Angelica may,
                without Good Cause, elect to terminate the Consulting Period
                (and Armstrong's consulting engagement with Angelica), at
                any time prior to the Consulting Termination Date, by giving
                Armstrong written notice of such termination. Any such
                termination may, in Angelica's sole discretion, be effective
                immediately or upon such other date as Angelica may
                determine. In the event of such termination by Angelica
                without Good Cause, then, upon the negotiation and execution
                of a mutually acceptable settlement agreement and release by

                                     - 7 -

<PAGE>
<PAGE>

                Angelica and Armstrong, and in addition to any accrued
                Consulting Fees owed to Armstrong under this Agreement, and
                any payments or benefits to which Armstrong is entitled
                under paragraph 2.7 of this Agreement, Angelica shall pay
                Armstrong payments equal to the Consulting Fees during the
                period commencing on the effective date of such termination
                and ending on July 31, 2004. Also in the event of such
                termination, and in addition to such payments, Angelica will
                continue to provide to Armstrong, during the period
                commencing on the effective date of such termination and
                ending on July 31, 2004, Ancillary Services of the type,
                nature and scope defined in paragraph 3.4 above. In the
                event of such termination by Angelica without Good Cause,
                Angelica shall have no further obligations or liabilities to
                Armstrong under this Agreement, except as expressly provided
                in this paragraph 3.5 (c).

            (d) DEATH OR DISABILITY. The Consulting Period (and Armstrong's
                consulting engagement with Angelica) shall terminate
                immediately upon Armstrong's death or upon his becoming
                disabled (as determined in accordance with Angelica's then
                current long term disability plan), and unable, in
                Angelica's reasonable judgment, to substantially perform the
                consulting services under this Agreement. In such event,
                Angelica shall have no further obligations or liabilities to
                Armstrong under this Agreement, other than any accrued
                Consulting Fees owed to Armstrong under this Agreement, and
                any payments or benefits to which Armstrong is entitled
                under paragraph 2.7 of this Agreement.

            Any early termination by either party prior to the Consulting
Termination Date pursuant to paragraph 3.5 (a), (b) or (c), or any termination
pursuant to paragraph 3.5 (d), shall also be deemed to have terminated this
Agreement and all further obligations and liabilities of either party except as
otherwise expressly provided herein.

SECTION 4:  RESTRICTIVE COVENANTS.

            4.1 NON-COMPETE AGREEMENT. Armstrong agrees that during the
period beginning on the Effective Date and ending one year after the Employment
Termination Date, the Consulting Termination Date or any earlier termination of
this Agreement, whichever is later (said period being referred to as the
"Restrictive Covenant Period"), and regardless of whether such termination is by
the action of Armstrong or Angelica, or by mutual agreement, Armstrong shall
not, either for himself or on behalf of any person, firm or corporation (whether
for profit or otherwise) engage in any form of competition with Angelica or with
any of its business segments, directly or indirectly, through any commercial
venture, as a partner, officer, director, stockholder, advisor, employee,
consultant, agent, salesman, venturer or otherwise, anywhere that Angelica or
any of its business segments are conducting business. This requirement, however,
will not limit Armstrong's right to invest in the capital stock or other equity
securities of any corporation, the stock or securities of which are publicly
owned or are regularly traded on any public securities exchange, so long as such
investment does not exceed five percent (5%) of the total capital stock or other
equity securities of such corporation than outstanding.

            4.2 CONFIDENTIAL INFORMATION. Armstrong acknowledges that he may
have in the past, or may in the future, during his employment or during his
consulting engagement with Angelica, develop or be exposed to confidential
information concerning Angelica's inventions, processes, methods and
confidential

                                     - 8 -

<PAGE>
<PAGE>

affairs, property of a proprietary nature and trade secrets of Angelica or its
licensors or customers. Armstrong agrees that the maintenance of the proprietary
character of such information and property to the fullest extent feasible is
important and that for so long as any such confidential information and trade
secrets may remain confidential, secret or otherwise wholly or partially
protectable, either during or after the Employment Period and Consulting Period,
he shall not use or divulge such confidential information or property except as
permitted or required by the duties of his employment or consulting engagement
with Angelica. Armstrong shall not remove any confidential information of a
proprietary nature from Angelica's premises except as required by the duties of
his employment or consulting engagement with Angelica. Armstrong shall return to
Angelica upon the Employment Termination Date, the Consulting Termination Date
or such earlier termination of this Agreement, whichever is later, all models,
drawings, photographs, writings, records, papers or other properties produced by
Armstrong or coming into his possession by or through his employment or
consulting engagement with Angelica.

            4.3 NON-DIVERSION. Armstrong agrees that during the Restrictive
Covenant Period, he shall not directly or indirectly or by aid to others, do
anything which could be expected to divert from Angelica any trade or business
with any customer of Angelica or of any of its business segments.

            4.4 NON-SOLICITATION. Armstrong agrees that during the Restrictive
Covenant Period, he shall not solicit or encourage any employee of Angelica, of
any of its business segments or of its successors or assigns to terminate his or
her employment with Angelica or with any such successor or assign.

            4.5 NON-DISPARAGEMENT. Armstrong agrees that during and after
the Employment Period and the Consulting Period, he shall not make any
statement or publish any communication which does or which could be expected
to defame, disparage or reflect adversely upon Angelica or upon any of
Angelica's employees, officers, directors, customers or suppliers.

            4.6 COOPERATION. Armstrong agrees that during and after the
Employment Period and the Consulting Period, he will cooperate with Angelica and
its representatives in connection with the investigation, litigation or other
handling of any matter that may have occurred during his employment or
consulting engagement with Angelica. Angelica will reimburse Armstrong for all
reasonable expenses he may incur under this paragraph.

            4.7 REASONABLENESS OF RESTRICTIONS. Armstrong agrees that the
periods and areas of restrictions set forth in this Section 4, are reasonably
required for the protection of Angelica and its business, as well as the
continued protection of Angelica's employees. If any one or more of the
covenants, agreements or provisions contained herein shall be held to be
contrary to the policy of a specific law, though not expressly prohibited, or
against public policy, or shall for any other reason whatsoever be held invalid,
then such particular covenant, agreement or provision shall be null and void and
shall be deemed separable from the remaining covenants, agreements and
provisions, and shall in no way affect the validity of any of the other
covenants, agreements and provisions hereof. The parties hereto agree that in
the event that either the length of time or the geographic area set forth herein
is deemed too restrictive in any court proceeding, the court may reduce such
restrictions to those which it deems reasonable under the circumstances.

            4.8 EQUITABLE RELIEF. Any action by Employee contrary to the
restrictive covenants contained in this Section 4 may as a matter of course be
restrained by equitable or injunctive process issued out of any court of
competent jurisdiction, in addition to any other remedies provided in law. In
the event of the breach of Armstrong's covenants as set forth in this Section 4
and Angelica's obtaining of injunctive relief, the period of restrictions set
forth herein shall commence from the date of the issuance of the order which
enjoins such activity.

                                     - 9 -

<PAGE>
<PAGE>

SECTION 5: MISCELLANEOUS.

            5.1 NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered, or when mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses as set forth below; provided that all notices to Angelica
shall be directed to the attention of the Chief Executive Officer of Angelica,
or to such other address as one party may have furnished to the other in writing
in accordance herewith, except that notice of change of address shall be
effective only upon receipt.

                Notice to Armstrong
                -------------------
                Theodore M. Armstrong
                43 Countryside Lane
                Frontenac, MO  63131

                Notice to Angelica
                ------------------
                Angelica Corporation
                424 South Woods Mill Road
                Chesterfield, MO 63017-3406
                Attn: Chief Executive Officer

            5.2 WAIVER. Armstrong's or Angelica's failure to insist upon
strict compliance with any provision of this Agreement or their failure to
assert any right either may have hereunder shall not be deemed to be a waiver of
such provision or right or any other provision or right of this Agreement and
shall not operate or be construed as a waiver of any subsequent breach of the
same provision.

            5.3 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri, without
reference to its conflict of law principles.

            5.4 SUCCESSORS. This Agreement shall be binding upon and inure to
the benefit of any successor of Angelica and any such successor shall be deemed
to be substituted for Angelica under the terms of this Agreement. Angelica shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of Angelica to assume expressly and agree to perform the provisions of
this Agreement as if no such succession had taken place. As used in this
Agreement, "Angelica" shall mean Angelica as hereinbefore defined or any
successor to Angelica's business and/or assets which assumes and agrees to
perform this Agreement.

            5.5 ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and
supersedes any prior written or oral agreements, understandings, discussions or
negotiations with respect thereto including, but not limited to: (i) the
Participation Agreement in the Angelica Corporation Management Retention and
Incentive Plan, dated May 11, 1990, between Angelica and Armstrong; and (ii) the
Employment Agreement, dated January 1, 2000, between Angelica and Armstrong.

                                     - 10 -

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<PAGE>

               IN WITNESS WHEREOF, Armstrong and Angelica, pursuant to the
authorization from its Board of Directors, have caused this Agreement to be
executed in its name on its behalf, all as of the day and year first above
written.

                          /s/ T. M. Armstrong
                          -------------------
                          Theodore M. Armstrong

                          ANGELICA CORPORATION

                          By: /s/ Don W. Hubble
                              -----------------
                          Name: Don W. Hubble
                                -------------
                          Title: Chairman, President & Chief Executive Officer
                                 ---------------------------------------------

                                     - 11 -

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