EXHIBIT 10.3(1)

                          FIRST AMENDMENT AND WAIVER TO

              THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

     First Amendment and waiver, dated as of December 21, 2001, to Third Amended
and Restated  Revolving Credit Agreement (the "First  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  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 Borrower and the Banks have agreed to modify and waive certain
terms and conditions of the Credit  Agreement as specifically  set forth in this
First 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 "Revolving  Credit Loan Maturity  Date"  contained in
Section  1.1 of the Credit  Agreement  is hereby  amended by  deleting  the date
"December 31, 2004" which appears in such  definition and  substituting in place
thereof the words "April 30, 2002,  unless  extended in accordance with ss.2.11,
and then such date as set forth in such extension notice."

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

          Bottled Water  Business.  Those assets of the Borrower,  Ionics (U.K.)
     Limited ("IUK") and Aqua Cool,  S.A.  constituting  the Borrower's  bottled
     water business in the U.S.,  U.K. and France and as more fully set forth in
     the Purchase Agreements.

          Extension Date. April 30, 2002.

          Nestle Disposition.  The sale by the Borrower,  IUK and Ionics France,
     S.A.  ("IF") on the Nestle  Disposition  Closing Date of the Bottled  Water
     Business to certain Affiliates of Nestle, S.A. for a cash purchase price of
     not less than  $200,000,000 less up to $40,000,000 (the "Like Kind Exchange
     Amount")   which  Like  Kind  Exchange   Amount  will  be  placed  with  an
     accommodation  party on the  Nestle  Disposition  Closing  Date  solely  in
     connection with a possible consummation of a purchase of "like kind" assets
     (as described in the Code) by the Borrower (the "Like Kind Exchange").  The
     $200,000,000 cash purchase price less the Like Kind Exchange Amount will be
     paid to the  Borrower,  IUK and IF on the Nestle  Disposition  Closing Date
     pursuant to the terms of the Purchase Agreements.


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          Nestle Disposition  Closing Date. The date on which all the conditions
     to closing set forth in the Purchase  Agreements have been  satisfied,  the
     purchase  price of not less than  $200,000,000  less the Like Kind Exchange
     Amount  has  been  received  by the  Borrower,  IUK and IF and  the  Nestle
     Disposition has been consummated.

          Purchase Agreements.  Collectively, (a) the Master Agreement, dated as
     of November  30,  2001,  between  the  Borrower  and the  Perrier  Group of
     America, Inc., (b) the United States Asset Purchase Agreement,  dated as of
     November  30,  2001,  between  the  Borrower  and Great  Springs  Waters of
     America,  Inc.,  (c) the  offer  letter,  dated  November  30,  2001,  from
     Springbar  Water  Coolers  Limited for the purchase of IUK's  Bottled Water
     Business,  and (d) the Share Purchase  Agreement,  dated November 30, 2001,
     between  Societe  Francaise des Eaux  Regionales and IF for the purchase of
     all of the capital stock of Aqua Cool, S.A.

     ss.2.  Amendments  to Section 2 of the Credit  Agreement.  Section 2 of the
Credit  Agreement is hereby amended by inserting  immediately  after the text in
ss.2.10 the following new ss.2.11:


          2.11.  Extension of Revolving  Credit Loan  Maturity  Date.  The Total
     Commitment  shall  terminate  and all  Revolving  Credit Loans shall become
     finally  due and  payable  on the  Revolving  Credit  Loan  Maturity  Date,
     provided,  however,  that such Total  Commitment and Revolving  Credit Loan
     Maturity  Date may be extended for such time as the Borrower may request in
     writing (but in no event later than December 31, 2004), as provided in this
     ss.2.11 and at each Bank's sole discretion, upon the written request of the
     Borrower.  A written request, if any, for the extension of the then current
     Revolving Credit Loan Maturity Date along with updated  projections for the
     term of the requested extension shall be given by the Borrower to the Agent
     and the Banks not less than  twenty (20) days prior to the  Extension  Date
     and shall provide the Banks with a request for a specific  extension  time.
     Except as  expressly  provided in this  ss.2.11,  no  extension of the then
     current  Revolving Credit Loan Maturity Date pursuant to this ss.2.11 shall
     be effective  unless all of the Banks shall have approved such extension by
     written  notice to the Agent.  If on or prior to ten (10) days prior to the
     Extension  Date,  all of the Banks  consent  to such  extension  by written
     notice to the Agent, the Revolving Credit Loan Maturity Date  automatically
     shall be extended to that date which has been  requested by the Borrower in
     its written request to the Banks.

         ss.3. Amendments to Section 3 of the Credit Agreement. Section 3 of the
Credit Agreement is hereby amended by deleting the text of ss.3.2.2 in its
entirety and restating it as follows:

          3.2.2. Proceeds.  Concurrently with the receipt by the Borrower or any
     of its  Subsidiaries  of (a) Net Cash Sale Proceeds from Asset Sales (other
     than (i) the sale of inventory or the  disposition of obsolete  assets,  in
     each case in the ordinary course of business consistent with past practices
     and (ii) the Net Cash Sale Proceeds from the Nestle Disposition) or (b) Net
     Cash  Proceeds  from any Equity  Issuances,  the Borrower  shall pay to the
     Agent for the  respective  accounts of the Banks an amount equal to (i) one
     hundred  percent  (100%) of such Net Cash Sale Proceeds from any Asset Sale
     by the Borrower or any of its domestic  Subsidiaries  in excess of $500,000
     in the  aggregate in any fiscal year and from any Asset Sale by any foreign


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<PAGE>

     Subsidiary  of the Borrower in excess of $5,000,000 in the aggregate in any
     fiscal year, and (ii) seventy-five percent (75%) of such Net Cash Proceeds,
     in each case, to be applied against the outstanding amount of the Revolving
     Credit Loans.  In addition,  no later than two (2) Business Days  following
     the Nestle  Disposition  Closing Date,  the Borrower shall pay to the Agent
     for the  respective  accounts of the Banks an amount  which is necessary to
     reduce the sum of the outstanding  Revolving  Credit Loans plus the Maximum
     Drawing  Amount and all Unpaid  Reimbursement  Obligations  to an aggregate
     amount of not more than $40,000,000,  such amount to be applied against the
     outstanding  amount of the  Revolving  Credit  Loans  (and,  to the  extent
     necessary,  to cash  collateralize  any issued and  outstanding  Letters of
     Credit).

     ss.4.  Amendments  to Section 8 of the Credit  Agreement.  Section 8 of the
Credit  Agreement is hereby amended by inserting the word  "domestic" in ss.8.13
immediately before each reference to the word "Subsidiary" in such ss.8.13.  For
purposes of clarification,  the word "domestic" was  inadvertently  omitted from
ss.8.13 on the Closing Date.  Therefore,  upon execution of this First Amendment
the  foregoing  amendment to such ss.8.13  shall be deemed to be effective as of
the Closing Date.

     ss.5.  Amendments  to Section 9 of the Credit  Agreement.  Section 9 of the
Credit Agreement is hereby amended as follows:

     (a)   Section   9.3  of  the  Credit   Agreement   is  hereby   amended  by
deletingss.9.3(c) in its entirety and restating it as follows:

               (c)  Investments in (i) securities  commonly known as "commercial
          paper" issued by a corporation  organized and existing  under the laws
          of the  United  States of  America  or any state  thereof  or any OECD
          country (including,  without limitation,  corporate bonds,  Eurodollar
          issues of United States  corporations and Dollar denominated issues of
          corporations  organized under the laws of an OECD country) that at the
          time of  purchase  have been rated and the  ratings  for which are not
          less than "P 1" if rated by Moody's Investors  Service,  Inc., and not
          less than "A 1" if rated by Standard and Poor's  Rating Group (or, for
          securities  of issuers  with a long-term  credit  rating,  ratings for
          which are not less than "A-" if rated by  Standard  and Poor's  Rating
          Group and not less  than A3 if rated by  Moody's  Investors  Services,
          Inc.; and (ii)  asset-backed  securities which at the time of purchase
          have been rated and the  ratings  for which are not less than "AAA" if
          rated by Standard and Poor's Rating Group or "Aaa" if rated by Moody's
          Investors Service, Inc.

     (b) Section  9.5.1(d) of the Credit  Agreement is hereby  amended by adding
the following new text to such ss.9.5.1(d)  immediately before the word "and" at
the end of such ss.9.5.1(d):

          including, in the event that the Like Kind Exchange (as defined in the
          definition  of  Nestle  Disposition)  satisfies  all of the  terms and
          conditions set forth in the definition of "Permitted Acquisition", the
          Like Kind Exchange

     (c)  Section   9.5.2  of  the  Credit   Agreement  is  hereby   amended  by
deletingss.9.5.2. in its entirety and restating it as follows:

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          9.5.2.  Disposition  of Assets.  The  Borrower  will not, and will not
     permit any of its  Subsidiaries to, become a party to or agree to or effect
     any  disposition  of assets,  other than (a) the sale of inventory  and the
     disposition  of obsolete  assets,  in each case in the  ordinary  course of
     business  consistent with past practices,  (b) the disposition of the stock
     of or other equity  interests in foreign  Subsidiaries  of the Borrower the
     aggregate fair market value of which shall not exceed $1,000,000 per single
     transaction or $5,000,000 in any fiscal year, (c) the disposition of assets
     as contemplated by Schedule 9.5.2, (d) the Nestle Disposition, provided (i)
     no Event of Default  has  occurred  and is  continuing  or would exist as a
     result  thereof,  (ii) the gross proceeds  received by the Borrower and its
     Subsidiaries  is not less than  $200,000,000  minus the Like Kind  Exchange
     Amount; (iii) such disposition has been consummated by not later than April
     30, 2002;  (iv) the Borrower has  demonstrated  to the  satisfaction of the
     Agent,  no less than three (3) Business Days prior to the  consummation  of
     the  Nestle  Disposition  Closing  Date,  based on a pro  forma  Compliance
     Certificate,  compliance  on an actual (to the  extent  any such  financial
     covenant  is tested at all  times) and pro forma  basis  with ss.10  hereof
     immediately prior to giving effect to the Nestle Disposition for the fiscal
     quarter  ended  December  31,  2001 (or,  to the extent any such  financial
     covenant is tested at all times, as of the date of such Nestle  Disposition
     without giving effect  thereto);  and (v) the Borrower has certified to the
     Agent that the Borrower and its  Subsidiaries  are and, after giving effect
     to  the  Nestle  Disposition  will  be,  solvent,  on  a  consolidated  and
     consolidating  basis;  and (e)  the  disposition  of  other  assets  of the
     Borrower  and  its  Subsidiaries  (including  assets  which  are no  longer
     necessary to the business of the Borrower or any of its  Subsidiaries)  the
     aggregate  fair market  value of which shall not exceed  $1,000,000  in any
     fiscal year.

     ss.6.  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.7. Limited Waiver.  Upon the execution of this Amendment by all parties,
the Banks  hereby  waive  compliance  with those  provisions  of ss.9.5.2 of the
Credit  Agreement  solely to permit the  Borrower,  IUK and IF to enter into the
Purchase Agreements.

     ss.8. Conditions to Effectiveness. Except as otherwise set forth in ss.ss.4
and 7, this First Amendment shall not become  effective until the Agent receives
(a) a counterpart of this First Amendment, executed by the Borrower, each of the
Guarantors,  the Agent,  and the Majority  Banks,  (b) receipt by the Agent of a
copy of the  Purchase  Agreements  and (c)  evidence  satisfactory  in form  and
substance to the Agent of consummation of the Nestle Disposition,  including but
not limited to,  confirmation  of payment of the cash purchase price of not less
than  $200,000,000  to the  Borrower,  IUK and IF minus the Like  Kind  Exchange
Amount.

     ss.9.  Representations and Warranties.  The Borrower hereby repeats, on and
as of the date hereof,  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 First  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 First 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.

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<PAGE>

     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 First  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.7,  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 First  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.

     ss.13.  Governing  Law.  THIS FIRST  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 THIS PAGE INTENTIONALLY LEFT BLANK.]






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

                              IONICS, INCORPORATED

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


                              FLEET NATIONAL BANK


                              By: /s/Luanne T. Smith
                                  ------------------
                              Title: Senior Vice President


                              BANK OF AMERICA, N.A.


                              By: /s/Jennifer Gerdis
                                  ------------------
                              Title: Vice President


                              JPMORGAN CHASE BANK
                              f/k/a The Chase Manhattan Bank

                              By: /s/A. Neil Sweeny
                                  -----------------
                              Title: Vice President


                              MELLON BANK, N.A.

                              By: /s/Nancy E. Gale
                                  ----------------
                              Title: Vice President


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<PAGE>

                            RATIFICATION OF GUARANTY

     Each of the undersigned  Guarantors hereby acknowledges and consents to the
foregoing  First Amendment as of December 21, 2001, 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/ Edward J. Cichon
                                   --------------------
                               Name: Edward J. Cichon
                               Title:   President


                               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/Arthur L. Goldstein
                                   ----------------------
                               Name: Arthur L. Goldstein
                               Title:   President


                               IONICS LIFE SCIENCES, INC.


                               By: /s/Theodore G. Papastavros
                                   --------------------------
                               Name: Theodore G. Papastavros
                               Title:   Treasurer


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<PAGE>

                               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



                                       7
<PAGE>



                                   SCHEDULE 1
                   Bank Commitments and Commitment Percentages


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

Domestic and LIBOR        Revolving    Credit  Revolving Credit
Lending Office            Commitment           Commitment Percentage
---------------------------------------------- ----------------------
Fleet National Bank       $25,000,000.01       50.00000%
100 Federal Street
Boston, MA 02110
Attn:  John C. Dunne
Senior Vice President
---------------------------------------------- ----------------------
Bank of America, N.A.     $8,333,333.33        16.66667%
231 South LaSalle
Ill 1231-06-46
Chicago, IL 60697
Attn: Helen Perry
---------------------------------------------- ----------------------
JPMorgan Chase Bank       $8,333,333.33        16.66667%
999 Broad Street
Bridgeport, CT 06604
Attn: Neil Sweeny
Vice President
---------------------------------------------- ----------------------
Mellon Bank, N.A.         $8,333,333.33        16.66667%
One Boston Place
AIM 024 0061
Sixth Floor
Boston. MA 02108
Attn: Eliot Klein
Vice President
---------------------------------------------- ----------------------
TOTAL                     $50,000,000          100.00000%
---------------------------------------------- ----------------------