Exhibit 10.3


                         SECOND AMENDMENT AND WAIVER TO
              THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

     Second  Amendment and Waiver,  dated as of March 28, 2002, to Third Amended
and Restated Revolving Credit Agreement ("this Amendment"), by and among IONICS,
INCORPORATED, a Massachusetts corporation (the "Borrower"),  FLEET NATIONAL BANK
and the other lending  institutions listed on Schedule 1 to the Credit Agreement
(as hereinafter defined) (the "Banks"), amending certain provisions of the Third
Amended and Restated  Revolving Credit Agreement,  dated as of June 29, 2001 (as
amended by the First Amendment and Waiver, dated as of December 21, 2001, and as
further amended and in effect from time to time, the "Credit  Agreement") by and
among the Borrower, the Banks and FLEET NATIONAL BANK as agent for the Banks (in
such  capacity,  the  "Agent").  Terms not  otherwise  defined  herein which are
defined in the Credit  Agreement shall have the same respective  meanings herein
as therein.

     WHEREAS,  the Banks have entered into a letter agreement with the Borrower,
dated as of March 27, 2002, pursuant to which each of the Banks other than Fleet
agreed, upon the request of the Borrower, to terminate its respective Commitment
(the "Commitment Termination Agreement");

     WHEREAS, all conditions set forth in the Commitment  Termination  Agreement
having been satisfied by the Borrower and the Banks as of the date hereof,  none
of Bank of  America,  N.A.,  JPMorgan  Chase Bank and Mellon  Bank,  N.A.  shall
constitute Banks;

     WHEREAS, the Borrower and the Banks have agreed to modify and waive certain
terms and conditions of the Credit  Agreement as specifically  set forth in this
Amendment;

     NOW, THEREFORE,  in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration,  the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

          ss.1. Amendments to Section 1 of the Credit Agreement.  Section 1.1 of
     the Credit Agreement is hereby amended as follows:

          (a) The definition of "Applicable  Margin" contained in Section 1.1 of
     the Credit  Agreement is hereby amended by deleting such  definition in its
     entirety and restating it as follows:

          Applicable  Margin:  The  Applicable  Margin  for (i) Prime Rate Loans
          shall be zero, (ii) LIBOR Rate Loans shall be 1.25%,  (iii) the Letter
          of Credit Fee shall be 1.25% and (iv) the Commitment Fee Rate shall be
          0.25%.

          (b) The definition of "Commitment  Fee Rate"  contained in Section 1.1
     of the Credit  Agreement is hereby  amended by deleting the text "set forth
     in the chart" and "under the heading `Commitment Fee Rate'".

          (c) The  definition of "Permitted  Acquisitions"  contained in Section
     1.1 of the Credit Agreement is hereby amended by deleting each reference to
     the amount  "$5,000,000"  contained in such definition and substituting the
     amount "$25,000,000" therefor.

                                       1
<PAGE>

          (d) The definition of "Revolving  Credit Loan Maturity Date" contained
     in Section 1.1 of the Credit  Agreement is hereby  amended by deleting such
     definition it in its entirety and restating it as follows:

          Revolving  Credit Loan Maturity Date:  March 26, 2003, as the same may
          be extended in the sole discretion of the Banks pursuant to ss.2.11 or
          such earlier date on which the  Revolving  Credit Loans may become due
          and payable pursuant to the terms hereof.

          (e)  Section  1.1  of the  Credit  Agreement  is  further  amended  by
     inserting the following new  definitions  in the  appropriate  alphabetical
     order:

          Cash   Equivalents.   As  to  the   Borrower   and  its   Consolidated
          Subsidiaries,  (a) securities  issued or directly and fully guaranteed
          or insured by the United  States of America  and having a maturity  of
          not more than twelve (12)  months  from the date of  acquisition;  (b)
          certificates  of deposit,  time deposits and eurodollar  time deposits
          with  maturities  of  twelve  (12)  months  or less  from  the date of
          acquisition, bankers' acceptances with maturities not exceeding twelve
          (12) months and overnight  bank  deposits,  in each case, (i) with any
          Banks or (ii) with any domestic  commercial  bank organized  under the
          laws of the United  States of America  or any state  thereof,  in each
          case having a rating of not less than A or its  equivalent by Standard
          & Poor's Ratings Group or any successor and having capital and surplus
          in excess of $1,000,000,000; (c) repurchase obligations with a term of
          not more than seven (7) days for  underlying  securities  of the types
          described in clauses (a) and (b) above;  and (d) any commercial  paper
          or  finance  company  paper  issued by (i) any  Lender or any  holding
          company  controlling  any Bank or (ii) any other  Person that is rated
          not less than "P-1" or "A-1" or their equivalents by Moody's Investors
          Services, Inc. or Standard & Poor's Ratings Group or their successors.

          Consolidated  Tangible  Net Worth.  The excess of  Consolidated  Total
          Assets over Consolidated Total Liabilities, and less the sum of:

                    (a) the total book value of assets of the  Borrower  and its
               Subsidiaries properly classified as intangible assets under GAAP,
               including such items as good will, the purchase price of acquired
               assets in excess of the fair market  value  thereof,  trademarks,
               trade names, service marks, brand names, copyrights,  patents and
               licenses, and rights with respect to the foregoing; plus

                    (b) Investments by the Borrower and its  Subsidiaries in any
               of their  Affiliates  and other joint  ventures or  partnerships;
               plus

                    (c) all amounts  representing any write-up in the book value
               of any assets of the Borrower or its Subsidiaries  resulting from
               a  revaluation  thereof  subsequent  to the  Balance  Sheet Date,
               excluding adjustments to translate foreign assets and liabilities
               for changes in foreign  exchange  rates made in  accordance  with
               Financial Accounting Standards Board Statement No. 52; plus

                    (d) to the extent otherwise includable in the computation of
               Consolidated Tangible Net Worth, any subscriptions receivable.

                                       2
<PAGE>

                    (f) Section 1.1 of the Credit  Agreement is further  amended
               by deleting the  definitions  of "EBITDA",  "Leverage  Ratio" and
               "Total Funded Indebtedness" in their entirety.

         ss.2.  Amendments to Section 2 of the Credit Agreement.

          (a)  Section  2.6.1 of the  Credit  Agreement  is  hereby  amended  by
     deleting the first  sentence of such ss.2.6.1 in its entirety and restating
     it as follows:

          The  Borrower  shall give to the Agent  written  notice in the form of
          Exhibit B hereto (or telephonic  notice  confirmed in a writing in the
          form of  Exhibit B hereto) of each  Revolving  Credit  Loan  requested
          hereunder (a "Loan Request") by no later than 11:00 a.m. (Boston time)
          (a)(i)  and no less than one (1)  Business  Day prior to the  proposed
          Drawdown  Date of any  Prime  Rate  Loan or  (ii) if the  Banks  shall
          consist of only one (1) Bank at such time,  on the day of the proposed
          Drawdown  Date of any Prime  Rate Loan and (b) and no less than  three
          (3) LIBOR  Business  Days prior to the proposed  Drawdown  Date of any
          LIBOR Rate Loan.

          (b) Section 2.11 of the Credit Agreement is hereby amended by deleting
     suchss.2.11 in its entirety and restating it as follows:

          2.11.  Extension of Revolving  Credit Loan Maturity Date. The Borrower
          may,  provided that no Default or Event of Default has occurred and is
          continuing,  by  written  notice to the Agent and the Banks  given not
          more than 120 days nor less than 90 days prior to the then  applicable
          Revolving Credit Loan Maturity Date (the  "Applicable  Maturity Date")
          request  that the  Applicable  Maturity  Date be  extended to the date
          which is 364 days  after the then  Applicable  Maturity  Date.  If the
          Banks in their sole  discretion  consent to the  extension on the then
          Applicable  Maturity  Date,  the  Revolving  Credit Loan Maturity Date
          shall be extended for 364 days, and the definition of Revolving Credit
          Maturity  Date  shall be  deemed to  reflect  such  extension  for all
          purposes hereof.

          (c) Section 2 of the Credit  Agreement is further  amended,  if and so
     long as the Banks shall  consist of only one (1) Bank,  by making the Swing
     Line  described  in ss.2.6.2  of the Credit  Agreement  and any  provisions
     related thereto inactive.

         ss.3.  Amendments to Section 9 of the Credit Agreement.

          (a)  Section  9.3(i) of the  Credit  Agreement  is hereby  amended  by
     deleting  the  reference  to the  amount  "$30,000,000"  contained  in such
     ss.9.3(i) and substituting the amount "$50,000,000" therefor.

          (b)  Section  9.3(j) of the  Credit  Agreement  is hereby  amended  by
     deleting  the  reference  to the  amount  "$10,000,000"  contained  in such
     ss.9.3(j) and substituting the amount "$30,000,000" therefor.

         ss.4.  Amendments to Section 10 of the Credit Agreement.

          (a) Section 10.1 of the Credit Agreement is hereby amended by deleting
     suchss.10.1 in its entirety and restating it as follows:

                                       3
<PAGE>

          10.1 Profitable Operations.  The Borrower will not permit Consolidated
          Net Income for any fiscal year to be less than $1.00.

          (b) Section 10.2 of the Credit Agreement is hereby amended by deleting
     suchss.10.2 in its entirety and restating it as follows:

          10.2 Minimum  Liquidity.  The Borrower will not permit the sum of cash
          and Cash  Equivalents  maintained  on its books at any time to be less
          than $60,000,000.

          (c) Section 10.4 of the Credit Agreement is hereby amended by deleting
     the reference to the amount  "$40,000,000"  in the table  contained in such
     ss.10.4 and substituting the amount "$50,000,000" therefor.

          (d) Section 10.5 of the Credit Agreement is hereby amended by deleting
     the table and the text  following  such table set forth in such ss.10.5 and
     substituting the following therefor:

   ---------------------------------- -----------------------------
            Fiscal Quarters                      Ratio
   ---------------------------------- -----------------------------
                   Q2 2002                        2.00:1.00
   ---------------------------------- -----------------------------
       Q3 2002 and each fiscal quarter            3.00:1.00
              thereafter
   ---------------------------------- -----------------------------

          Solely for the  purposes of this  ss.10.5 (a)  Reference  Period shall
          mean (i) for Q2 2002, the period  commencing on 01/01/02 and ending on
          06/30/02,  (ii) for Q3 2002,  the period  commencing  on 01/01/02  and
          ending  on  09/30/02,  and (b) for Q4 2002  and  each  fiscal  quarter
          thereafter,  Reference  Period  shall  have the  meaning  set forth in
          ss.1.1 for such term. In addition,  this covenant  shall not be tested
          as of 03/31/02.

          (e) Section 10 is further  amended by adding the following  newss.10.6
     immediately followingss.10.5:

          10.6 Ratio of Total  Liabilities  to Tangible Net Worth.  The Borrower
          will  not  permit  the  ratio of  Consolidated  Total  Liabilities  to
          Consolidated Tangible Net Worth to exceed 0.95:1.00 at any time.

     ss.5.  Amendment to Schedule I to the Credit  Agreement.  Schedule I to the
Credit  Agreement is hereby amended by deleting such Schedule I and substituting
Schedule I attached hereto therefor.

     ss.6.  Limited  Waiver.  The  Borrower has informed the Agent and the Banks
that the  Borrower  has  failed  to  comply  with  the  covenants  set  forth in
ss.ss.10.2  and 10.5 of the Credit  Agreement  for the  Reference  Period  ended
12/31/01, and has requested that the Banks waive such non-compliance.  As of the
Effective  Date,  the Banks  hereby  waive  compliance  with the  provisions  of
ss.ss.10.2  and 10.5 of the Credit  Agreement  solely for the  Reference  Period
ended 12/31/01,  and accordingly the Banks deem such non-compliance to have been
subsequently cured. Nothing contained in this waiver shall be construed to imply
a  willingness  on the part of the Banks to grant any  similar  or other  future
waivers of any of the terms and conditions of the Credit  Agreement or the other
Loan Documents.

     ss.7. Conditions to Effectiveness.  This Amendment shall be effective as of
March 28,  2002 (the  "Effective  Date"),  subject  to the  satisfaction  of the
following conditions:

                                       4
<PAGE>

     (a) The Borrower, the Banks and the Agent shall have executed and delivered
to the Agent this Amendment.

     (b) The  Agent  shall  have  received  an  amendment  fee in the  amount of
$25,000.

     (c) All  proceedings in connection  with the  transactions  contemplated by
this  Amendment  and  all  documents   incident   thereto  shall  be  reasonably
satisfactory  in  substance  and form to the Banks and the Agent,  and the Agent
shall have received all information and such counterpart  originals or certified
or other copies of such documents as the Agent may reasonably request.

     (d) The Borrower shall have paid all fees and expenses  required to be paid
on or prior to the date hereof.

     ss.8. Condition Subsequent.  The Borrower shall have delivered to the Agent
no later than May 8, 2002,  resolutions of the Board of Directors of each of the
Borrower and its domestic  Subsidiaries  (other than the Inactive  Subsidiaries)
evidencing  its  authorization  of such entity's  execution and delivery of this
Amendment  and the  obligations  contemplated  therein  along with an  officer's
certificate with respect thereto.  The Borrower hereby agrees with the Agent and
the Banks that failure to provide the aforementioned  resolutions on or prior to
the date specified  herein shall constitute an Event of Default under the Credit
Agreement.

     ss.9.  Representations and Warranties.  The Borrower hereby repeats, on and
as of the Effective Date, each of the  representations and warranties made by it
in ss.7 of the Credit Agreement  (except to the extent of changes resulting from
transactions  contemplated or permitted by this Amendment,  the Credit Agreement
and the other Loan  Documents  and changes  occurring in the ordinary  course of
business that singly or in the aggregate are not materially adverse,  and to the
extent that such  representations  and warranties relate expressly to an earlier
date), provided, that all references therein to the Credit Agreement shall refer
to such Credit  Agreement as amended  hereby.  In addition,  the Borrower hereby
represents  and warrants that the execution and delivery by the Borrower and its
Subsidiaries  of this  Amendment  and the  performance  by the  Borrower and its
Subsidiaries of all of its agreements and obligations under the Credit Agreement
as amended  hereby are within the  corporate  or other  authority of each of the
Borrower and its  Subsidiaries  and have been duly  authorized  by all necessary
corporate or other action on the part of the Borrower and its Subsidiaries.

     ss.10.  Ratification,  Etc. Except as expressly amended hereby,  the Credit
Agreement  and  all  documents,  instruments  and  agreements  related  thereto,
including,  but not limited to the other Loan Documents, are hereby ratified and
confirmed  in all  respects  and shall  continue in full force and  effect.  The
Credit  Agreement  and this  Amendment  shall be read and  construed as a single
agreement.  All references in the Credit  Agreement or any related  agreement or
instrument to the Credit Agreement shall hereafter refer to the Credit Agreement
as amended hereby.

     ss.11. No Waiver.  Except as set forth in ss.6,  nothing  contained  herein
shall constitute a waiver of, impair or otherwise  affect any  Obligations,  any
other  obligation  of the  Borrower  or any  rights  of the  Agent or the  Banks
consequent thereon.

     ss.12. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.

                                       5
<PAGE>

     ss.13. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE  WITH,  THE  LAWS  OF  THE  COMMONWEALTH  OF  MASSACHUSETTS  (WITHOUT
REFERENCE TO CONFLICT OF LAWS).



                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]



                                       6
<PAGE>




         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
a document under seal as of the date first above written.



              IONICS, INCORPORATED


              By:  /s/Daniel M. Kuzmak
                   -------------------------------------------------
              Title: Vice President and Chief Financial Officer

              FLEET NATIONAL BANK



              By: /s/John C. Dunne
                  ----------------------------------------------------
                   John C. Dunne, Senior Vice President



                                       7
<PAGE>




                            RATIFICATION OF GUARANTY

     Each of the undersigned  Guarantors hereby acknowledges and consents to the
foregoing  Amendment as of March 28, 2002, and agrees that the Guaranty to which
such  Guarantor  is a party  remains in full force and  effect,  and each of the
Guarantors confirms and ratifies all of its obligations thereunder.

                        AQUA DESIGN, INC.



                        By: /s/Daniel M. Kuzmak
                            --------------------------------------------------
                               Name: Daniel M. Kuzmak
                               Title: Treasurer


                        FIDELITY PUREWATER, INC.



                        By: /s/Anthony Di Paola
                            ---------------------------------------------------
                                Name: Anthony Di Paola
                                Title: Treasurer


                        FIDELITY WATER SYSTEMS, INC.



                        By: /s/Anthony Di Paola
                            --------------------------------------------------
                                Name: Anthony Di Paola
                                Title: Treasurer


                        IONICS KOREA, INC.



                        By: /s/Stephen Korn
                            --------------------------------------------------
                               Name: Stephen Korn
                               Title: Secretary



                                       8
<PAGE>




                        IONICS LIFE SCIENCES, INC.



                        By: /s/Stephen Korn
                             -------------------------------------------------
                               Name: Stephen Korn
                               Title: Secretary


                        IONICS ULTRAPURE WATER CORPORATION



                        By: /s/Stephen Korn
                             -------------------------------------------------
                               Name: Stephen Korn
                               Title: Secretary


                        RESOURCES CONSERVATION CO. INTERNATIONAL



                        By: /s/Stephen Korn
                           --------------------------------------------------
                               Name: Stephen Korn
                               Title: Secretary


                        SEPARATION TECHNOLOGY INC.



                        By: /s/Ark W. Pang
                           -------------------------------------------------
                                Name: Ark W. Pang
                                Title: President


                        SIEVERS INSTRUMENTS, INC.



                        By: /s/Stephen Korn
                           ---------------------------------------------------
                               Name: Stephen Korn
                               Title: Secretary


                                       9
<PAGE>

                                   SCHEDULE 1
                   Bank Commitments and Commitment Percentages


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

Domestic and LIBOR               Revolving    Credit  Revolving Credit
Lending Office                   Commitment           Commitment Percentage
-------------------------------- -------------------- ----------------------
Fleet National Bank              $30,000,000          100.00000%
100 Federal Street
Boston, MA 02110
Attn:  John C. Dunne
Senior Vice President
-------------------------------- -------------------- ----------------------
TOTAL                            $30,000,000          100.00000%
-------------------------------- -------------------- ----------------------