Exhibit 10.1

                 SECOND AMENDMENT AND WAVIER TO CREDIT AGREEMENT


                            Dated as of July 9, 2004

     This SECOND AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this  "Agreement") is
among IONICS,  INCORPORATED,  a Massachusetts corporation (the "Borrower"),  UBS
AG, STAMFORD BRANCH, in its capacity as administrative agent for the Lenders (in
such  capacity,  the  "Administrative  Agent") and as  collateral  agent for the
Secured  Parties  (in such  capacity,  the  "Collateral  Agent") and the Lenders
signatory hereto, and is made pursuant to that certain Credit Agreement dated as
February  13,  2004,  as  amended  by that  certain  First  Amendment  to Credit
Agreement dated as of March 15, 2004 (as further amended, modified,  restated or
supplemented  from  time  to  time,  the  "Credit  Agreement"),   among  IONICS,
INCORPORATED,  a  Massachusetts  corporation,  the  Subsidiary  Guarantors,  the
Lenders, the Administrative  Agent, the Collateral Agent, UBS SECURITIES LLC, as
lead  arranger  (in  such  capacity,  the  "Arranger"),   sole  bookmanager  and
documentation  agent  (in  such  capacity,  the  "Documentation  Agent"),  FLEET
SECURITIES,  INC.  and BANK OF AMERICA,  N.A.,  as  syndication  agents (in such
capacity,  the "Syndication  Agents"),  WACHOVIA BANK, N.A. and GENERAL ELECTRIC
CAPITAL  CORPORATION,   as  co-documentation   agents  (in  such  capacity,  the
"Co-Documentation  Agents"),  UBS LOAN FINANCE LLC, as swingline lender (in such
capacity,  "Swingline  Lender"),  and HSBC BANK USA,  as  issuing  bank (in such
capacity, the "Issuing Bank").

     Terms  used but not  otherwise  defined  in this  Agreement  shall have the
meaning ascribed to such terms in the Credit Agreement.

                             PRELIMINARY STATEMENTS:

     1. The Borrower has requested that the Required Lenders agree to (i) delete
in its entirety existing Schedule 6.04(b) to the Credit Agreement (the "Existing
Schedule")  and  replace  it with  replacement  Schedule  6.04(b)  to the Credit
Agreement,  attached hereto as Exhibit A (the "Replacement Schedule"), (ii) make
such other  amendments to Section  6.04(c)(ii) as set forth herein,  (iii) waive
for all periods from February 13, 2004 through the Amendment  Effective Date (as
defined below) the provisions of Section 6.04(b) of the Credit  Agreement to the
extent such provisions  limit permitted  Investments  outstanding on the Closing
Date to those Investments identified on the Existing Schedule; provided all such
Investments  outstanding  on  the  Closing  Date  shall  be  identified  on  the
Replacement Schedule, (iv) waive the provisions of Section 2.08(a) of the Credit
Agreement  with respect to the first  Interest  Period  following  the Amendment
Effective  Date for the  $167,900,025  Borrowing  to the extent such  provisions
require that such  Borrowing  have Interest  Periods  ending on the  numerically
corresponding  day in the calendar  month that is one, two,  three or six months
after the date of conversion  of such  Borrowing  from a Borrowing  based on the
Alternate Base Rate to a Borrowing  based on the Adjusted  LIBOR Rate;  provided
that such first  Interest  Period  shall end on  September  30,  2004;  provided
further that such first Interest  Period shall be available to all Lenders,  and
(v) waive any  Default  or Event of  Default  that may have  arisen by reason of
there  being cash and Cash  Equivalents  in any account not subject to a Control
Agreement  in an  aggregate  amount in excess of $5 million in  violation of the
requirements set forth in Section 6.04(c)(ii)  (provided that such amounts shall
not have been in excess of $80 million)  for all periods from  February 13, 2004
through the Amendment Effective Date.

     2.  Subject  to the terms and  conditions  set forth  below,  the  Required
Lenders,  the  Administrative  Agent, and the Collateral Agent are willing to so
amend the Credit Agreement.

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

     1. Amendments to Credit Agreement.

          a. Upon the  terms and  subject  to the  conditions  set forth in this
     Agreement and in reliance on the representations and warranties of the Loan
     Parties set forth in this Agreement, the Credit Agreement is hereby amended
     such that the  Existing  Schedule  shall be  deleted  in its  entirety  and
     replaced with the Replacement Schedule.

          b. Upon the  terms and  subject  to the  conditions  set forth in this
     Agreement and in reliance on the representations and warranties of the Loan
     Parties  set forth in this  Agreement,  Section  6.04(c)(ii)  of the Credit
     Agreement is hereby amended and restated in its entirety as follows:

          "(ii) invest in, acquire and hold cash and Cash Equivalents  (provided
     that any such amounts  constituting cash and Cash Equivalents that are held
     in any account that is not then subject to a Control  Agreement in favor of
     the  Collateral  Agent for the benefit of the Secured  Parties  (other than
     cash and Cash  Equivalents  (a)  generated  from the  operations of Foreign
     Subsidiaries  that are not required to pledge their assets  pursuant to the
     last sentence of Section 5.11(b) (any such Foreign Subsidiary, an "Excluded
     Foreign  Subsidiary") or (b) generated from the disposition of assets of an
     Excluded Foreign  Subsidiary or the repayment of an intercompany loan owing
     to an Excluded  Foreign  Subsidiary,  in each case,  in a  transaction  not
     prohibited by the terms of this  Agreement and, in each case, to the extent
     held by an  Excluded  Foreign  Subsidiary  in an account  of such  Excluded
     Foreign  Subsidiary)  shall not exceed $5 million in the  aggregate  at any
     time outstanding),"

          2. Waivers.

          a.  Required  Lenders  hereby waive for all periods from  February 13,
     2004 through the Amendment Effective Date the provisions of Section 6.04(b)
     of the Credit  Agreement  to the extent  such  provisions  limit  permitted
     Investments outstanding on the Closing Date to those Investments identified
     on the Existing Schedule;  provided all such Investments outstanding on the
     Closing Date shall be identified on the Replacement Schedule.

          b. Required  Lenders hereby waive the provisions of Section 2.08(a) of
     the Credit  Agreement with respect to the first  Interest  Period after the
     Amendment Effective Date for the $167,900,025  Borrowing to the extent such
     provisions  require that such Borrowing have Interest Periods ending on the
     numerically corresponding day in the calendar month that is one, two, three
     or six  months  after  the  date of  conversion  of such  Borrowing  from a
     Borrowing  based on the  Alternate  Base Rate to a  Borrowing  based on the
     Adjusted LIBOR Rate;  provided that such first Interest Period shall end on
     September 30, 2004;  provided further that such first Interest Period shall
     be available to all Lenders.

          c. Required  Lenders hereby waive any Default or Event of Default that
     may have arisen by reason of there being cash and Cash  Equivalents  in any
     account not subject to a Control Agreement in an aggregate amount in excess
     of $5  million  in  violation  of the  requirements  set  forth in  Section
     6.04(c)(ii)  (provided  that such amounts  shall not have been in excess of
     $80 million) for all periods from  February 13, 2004 through the  Amendment
     Effective Date.

          The waivers set forth in this Section 2 shall be effective  only as to
     the  matters  set forth  specifically  herein  and shall  not  entitle  the
     Borrower to any other waiver or agreement with respect to any other matter.

          3. Conditions to Effectiveness. The effectiveness of this Agreement is
     conditioned  upon  the  satisfaction  of each of the  following  conditions
     precedent on or before July __, 2004;  provided  that once such  conditions
     precedent  have  been  satisfied  this  Agreement  shall  be  deemed  to be
     effective as of June 30, 2004 (such date, the "Amendment Effective Date"):

               a. the Administrative  Agent shall have received  counterparts of
          this Agreement signed by the Borrower, the Subsidiary Guarantors,  the
          Required Lenders, the Administrative Agent and the Collateral Agent;

               b. each of the  representations and warranties in Section 4 below
          shall be true and correct in all material respects as of the Amendment
          Effective Date and as of the date hereof;

               c. after giving effect to the  amendments  set forth in Section 1
          hereof and the  waivers  set forth in Section 2 hereof,  no Default or
          Event of  Default  shall have  occurred  and be  continuing  under the
          Credit Agreement or any other Loan Document;

               d. the  Administrative  Agent  shall  have  received  payment  in
          immediately   available   funds  of  all  expenses   incurred  by  the
          Administrative Agent (including,  without limitation,  legal fees) for
          which  invoices  have  been  presented,  on or  before  the  Amendment
          Effective Date; and

               e. the  Administrative  Agent  shall have  received  satisfactory
          evidence  that  the  execution,   delivery  and  performance  of  this
          Agreement have been duly approved by all necessary corporate action of
          each Loan Party.

          4. Representations and Warranties.  The Borrower and each of the other
     Loan Parties  represents  and  warrants to the  Administrative  Agent,  the
     Collateral Agent and each Lender as of the date hereof as follows:

               a.  Authority.  Each  of  the  Loan  Parties  has  the  requisite
          corporate  power and  authority to execute and deliver this  Agreement
          and  to  perform  its  obligations  hereunder  and  under  the  Credit
          Agreement  (as  modified   hereby).   The   execution,   delivery  and
          performance  by the  Borrower  and  each  other  Loan  Party  of  this
          Agreement,   the  Credit   Agreement  (as  modified  hereby)  and  the
          transactions  contemplated  hereby and thereby have been duly approved
          by all  necessary  corporate  action  of  such  person  and  no  other
          corporate proceedings on the part of each such person are necessary to
          consummate such transactions (except as expressly  contemplated hereby
          and thereby).

               b. Due  Execution;  Enforceability.  This Agreement has been duly
          executed and  delivered  by the  Borrower and the other Loan  Parties.
          Each of this Agreement and, after giving effect to this Agreement, the
          Credit Agreement and the other Loan Documents is the legal,  valid and
          binding obligation of each Loan Party hereto and thereto,  enforceable
          against such Loan Party in accordance  with its terms,  and is in full
          force and effect.  Neither the  execution,  delivery or performance of
          this Agreement or of the Credit  Agreement (as modified  hereby),  nor
          the performance of the  transactions  contemplated  hereby or thereby,
          will  adversely  affect the  validity,  perfection  or priority of the
          Collateral  Agent's Lien, for the benefit of the Secured  Parties,  on
          any of the Collateral.

               c.  Representations  and Warranties.  After giving effect to this
          Agreement,  the representations and warranties contained in the Credit
          Agreement  and  the  other  Loan   Documents   (other  than  any  such
          representations  and warranties that, by their terms, are specifically
          made as of a date other than the date  hereof) are true and correct on
          and as of the date hereof as though made on and as of the date hereof.

               d. No  Conflicts.  Neither  the  execution  and  delivery of this
          Agreement,  nor  the  consummation  of the  transactions  contemplated
          hereby,   nor  performance  of  and  compliance  with  the  terms  and
          provisions  hereof by the Borrower or any Loan Party will, at the time
          of such performance, (a) violate or conflict with any provision of its
          articles  or   certificate  of   incorporation   or  bylaws  or  other
          organizational  or governing  documents  of such Person,  (b) violate,
          contravene or materially  conflict with any  Requirement of Law or any
          other law, regulation (including, without limitation,  Regulation U or
          Regulation X), order,  writ,  judgment,  injunction,  decree or permit
          applicable to it, except for any violation,  contravention or conflict
          which could not  reasonably  be  expected  to have a Material  Adverse
          Effect,   (c)  violate,   contravene  or  conflict  with   contractual
          provisions of, or cause an event of default under, any indenture, loan
          agreement,  mortgage,  deed of trust,  contract or other  agreement or
          instrument to which it is a party or by which it may be bound,  or (d)
          result in or  require  the  creation  of any Lien  (other  than  those
          contemplated in or created in connection with the Loan Documents) upon
          or with respect to its properties.

               e. No Default. After giving effect to the amendments set forth in
          Section 1 hereof and the  waivers  set forth in  Section 2 hereof,  no
          Default or Event of Default has occurred and is  continuing  under the
          Credit Agreement or any other Loan Document.

          5. Reference to and Effect on Credit Agreement.

               a. Upon and  after  the  effectiveness  of this  Agreement,  each
          reference in the Credit  Agreement to "this  Agreement",  "hereunder",
          "hereof" or words of like import  referring  to the Credit  Agreement,
          and  each  reference  in the  other  Loan  Documents  to  "the  Credit
          Agreement",  "thereunder", "thereof" or words of like import referring
          to the Credit  Agreement,  shall mean and be a reference to the Credit
          Agreement as modified hereby.

               b. Except as specifically  modified above,  the Credit  Agreement
          and the other  Loan  Documents  are and shall  continue  to be in full
          force  and  effect  and  are  hereby  in  all  respects  ratified  and
          confirmed.  Without  limiting the  generality  of the  foregoing,  the
          Security Documents and all of the Collateral  described therein do and
          shall continue to secure the payment of all  Obligations  under and as
          defined therein, in each case as modified hereby.

               c. The execution,  delivery and  effectiveness  of this Agreement
          shall not, except as expressly provided herein, operate as a waiver of
          any right,  power or remedy of any Secured Party under any of the Loan
          Documents,  nor,  except as expressly  provided  herein,  constitute a
          waiver or amendment of any provision of any of the Loan Documents.

          6.  Counterparts.  This  Agreement  may be  executed  in any number of
     counterparts and by different parties hereto in separate counterparts, each
     of which when so executed and  delivered  shall be deemed to be an original
     and  all of  which  taken  together  shall  constitute  one  and  the  same
     agreement.  Delivery of an executed counterpart of a signature page to this
     Agreement  by  facsimile  shall be  effective  as  delivery  of a  manually
     executed counterpart of this Agreement.

          7. Severability. Any provision of this Agreement that is prohibited or
     unenforceable  in any  jurisdiction  shall,  as to  such  jurisdiction,  be
     ineffective to the extent of such prohibition or  unenforceability  without
     invalidating the remaining  provisions  hereof, and any such prohibition or
     unenforceability  in  any  jurisdiction  shall  not  invalidate  or  render
     unenforceable such provision in any other jurisdiction.

          8. Governing  Law. This Agreement  shall be governed by, and construed
     in accordance with, the laws of the State of New York.

                            [Signature Pages Follow]

<PAGE>
                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.


                     IONICS, INCORPORATED



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

                     SUBSIDIARY GUARANTORS:

                     AQUA DESIGN, INC.
                     FIDELITY PUREWATER, INC.
                     FIDELITY WATER SYSTEMS, INC.
                     IONICS KOREA, INC.
                     IONICS LIFE SCIENCES, INC.
                     IONICS SECURITIES CORPORATION
                     IONICS ULTRAPURE WATER CORPORATION
                     RESOURCES CONSERVATION CO. INTERNATIONAL
                     SEPARATION TECHNOLOGY, INC.
                     SIEVERS INSTRUMENTS, INC.
                     ECOLOCHEM, INC.
                     ECOLOCHEM HOLDINGS, INC.
                     ECOLOCHEM JV HOLDINGS, INC.


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


                     ECOLOCHEM SERVICES - MEXICO, LLC
                     MOSON HOLDINGS, LLC

                     By: Ionics, Incorporated as Managing Member


                     By: /s/Stephen Korn
                         -----------------------------------------------
                         Name: Stephen Korn
                         Title: Vice President and General Counsel



<PAGE>


                     UBS AG, STAMFORD BRANCH, as Administrative Agent
                       and Collateral Agent



                     By: /s/Wilfred V. Saint
                         ----------------------------------------------
                         Name: Wilfred V. Saint
                         Title: Director, Banking Products Services, US


                     By: /s/Salloz Sikka
                         ----------------------------------------------
                         Name: Salloz Sikka
                         Title: Associate Director, Banking Products
                                Services, US


                     LENDERS:



                     UBS LOAN FINANCE LLC, as a Lender



                     By: /s/Wilfred V. Saint
                         ----------------------------------------------
                         Name: Wilfred V. Saint
                         Title: Director, Banking Products Services, US


                     By: /s/Salloz Sikka
                         ----------------------------------------------
                         Name: Salloz Sikka
                         Title: Associate Director, Banking Products
                                Services, US



                     Northwoods Capital III, Limited
                     By: Angelo, Gordon & Co., L.P.,
                         as Collateral Manager



                     By: /s/John W. Fraser
                         ----------------------------------------------
                         Name: John W. Fraser
                         Title: Managing Director


                     Northwoods Capital II, Limited
                     By: Angelo, Gordon & Co., L.P.,
                         as Collateral Manager



                     By: /s/John W. Fraser
                         ----------------------------------------------
                         Name: John W. Fraser
                         Title: Managing Director


                     Northwoods Capital IV, Limited
                     By: Angelo, Gordon & Co., L.P.,
                         as Collateral Manager



                     By: /s/John W. Fraser
                         ----------------------------------------------
                         Name: John W. Fraser
                         Title: Managing Director
<PAGE>
                     Bank of America, N.A., as a Lender



                     By: /s/John F. Lynch
                         ----------------------------------------------
                         Name: John F. Lynch
                         Title: Senior Vice President


                     Fleet National Bank, as a Lender



                     By: /s/John F. Lynch
                         ----------------------------------------------
                         Name: John F. Lynch
                         Title: Senior Vice President


                     Olympic Cloi Ltd., as a Lender



                     By: /s/John M. Casparian
                         ----------------------------------------------
                         Name: John M. Casparian
                         Title: Chief Operating Officer
                                Centre Pacific LLP (Manager)


                     Apex (IDM) CDO I, Ltd.
                     ELC (Cayman) Ltd. 1999-II
                     ELC (Cayman) Ltd. 1999-III
                     ELC (Cayman) Ltd. 2000-I
                     Tryon CLO Ltd. 2000-I
                     By: Babson Capital Management LLC as Collateral
                         Manager, as a Lender



                     By: /s/John W. Stelwagon
                         ----------------------------------------------
                         Name: John W. Stelwagon
                         Title: Managing Director


                     Babson CDO Ltd. 2003-I
                     By: Babson Capital Management LLC as Collateral
                         Manager, as a Lender



                     By: /s/John W. Stelwagon
                         ----------------------------------------------
                         Name: John W. Stelwagon
                         Title: Managing Director

<PAGE>
                     Maplewood (Cayman) Limited
                     By: Babson Capital Management LLC under delegated
                         authority from Massachusetts Mutual LIfe Insurance
                         Company as Investment Manager, as a Lender



                     By: /s/John W. Stelwagon
                         ----------------------------------------------
                         Name: John W. Stelwagon
                         Title: Managing Director


                     Massachusetts Mutual Life Insurance Company
                     By: Babson Capital Management LLC as Collateral
                         Advisor, as a Lender



                     By: /s/John W. Stelwagon
                         ----------------------------------------------
                         Name: John W. Stelwagon
                         Title: Managing Director


                     Seaboard CLO 2000 Ltd.
                     By: Babson Capital Management LLC as Collateral
                         Manager, as a Lender



                     By: /s/John W. Stelwagon
                         ----------------------------------------------
                         Name: John W. Stelwagon
                         Title: Managing Director


                     Suffield CLO, Limited
                     By: Babson Capital Management LLC as Collateral
                         Manager, as a Lender



                     By: /s/John W. Stelwagon
                         ----------------------------------------------
                         Name: John W. Stelwagon
                         Title: Managing Director


                     Simsbury CLO, Limited
                     By: Babson Capital Management LLC under delegated
                         authority from Massachusetts Mutual LIfe Insurance
                         Company as Collateral Manager, as a Lender



                     By: /s/John W. Stelwagon
                         ----------------------------------------------
                         Name: John W. Stelwagon
                         Title: Managing Director


                     Somers CDO, Limited
                     By: Babson Capital Management LLC under delegated
                         authority from Massachusetts Mutual Life Insurance
                         Company as Collateral Manager, as a Lender



                     By: /s/John W. Stelwagon
                         ----------------------------------------------
                         Name: John W. Stelwagon
                         Title: Managing Director


                     Bill & Melinda Gates Foundatioin
                     By: Babson Capital Management LLC as Investment
                         Advisor, as a Lender



                     By: /s/John W. Stelwagon
                         ----------------------------------------------
                         Name: John W. Stelwagon
                         Title: Managing Director
<PAGE>
                     Senior Debt Portfolio
                     By: Boston Management and Research as Investment
                         Advisor, as a Lender



                     By: /s/Michael B. Botthof
                         ----------------------------------------------
                         Name: Michael B. Botthof
                         Title: Vice President


                     Eaton Vance Senior Income Trust
                     By: Eaton Vance Management as Investment
                         Advisor, as a Lender



                     By: /s/Michael B. Botthof
                         ----------------------------------------------
                         Name: Michael B. Botthof
                         Title: Vice President


                     Eaton Vance Institutional Senior Loan Fund
                     By: Eaton Vance Management as Investment
                         Advisor, as a Lender



                     By: /s/Michael B. Botthof
                         ----------------------------------------------
                         Name: Michael B. Botthof
                         Title: Vice President


                     Costantinus Eaton Vance CDO V. Ltd.
                     By: Eaton Vance Management as Investment
                         Advisor, as a Lender



                     By: /s/Michael B. Botthof
                         ----------------------------------------------
                         Name: Michael B. Botthof
                         Title: Vice President


<PAGE>
                     Eaton Vance CDO VI Ltd.
                     By: Eaton Vance Management as Investment
                         Advisor, as a Lender



                     By: /s/Michael B. Botthof
                         ----------------------------------------------
                         Name: Michael B. Botthof
                         Title: Vice President


                     Grayson & Co.
                     By: Boston Management and Research as Investment
                         Advisor, as a Lender



                     By: /s/Michael B. Botthof
                         ----------------------------------------------
                         Name: Michael B. Botthof
                         Title: Vice President


                     Eaton Vance
                     VT Floating-Rate Income Fund
                     By: Eaton Vance Management as Investment
                         Advisor, as a Lender



                     By: /s/Michael B. Botthof
                         ----------------------------------------------
                         Name: Michael B. Botthof
                         Title: Vice President


                     Eaton Vance
                     Limited Duration Income Fund
                     By: Eaton Vance Management as Investment
                         Advisor, as a Lender



                     By: /s/Michael B. Botthof
                         ----------------------------------------------
                         Name: Michael B. Botthof
                         Title: Vice President


                     Tolli & Co.
                     By: Eaton Vance Management as Investment
                         Advisor, as a Lender



                     By: /s/Michael B. Botthof
                         ----------------------------------------------
                         Name: Michael B. Botthof
                         Title: Vice President
<PAGE>
                     Fidelity Advisor Series II:
                     By: Fidelity Advisor Floating RAte High Income
                         Fund, as a Lender



                     By: /s/John H. Costello
                         ----------------------------------------------
                         Name: John H. Costello
                         Title: Assistant Treasurer


                     Ballyrock CLO II Limited
                     By: Ballyrock Investment Advisors LLC, as Collateral
                         Manager, as a Lender



                     By: /s/Lisa Rymut
                         ----------------------------------------------
                         Name: Lisa Rymut
                         Title: Assistant Treasurer


                     Ballyrock CLO I Limited
                     By: Ballyrock Investment Advisors LLC, as Collateral
                         Manager, as a Lender



                     By: /s/Lisa Rymut
                         ----------------------------------------------
                         Name: Lisa Rymut
                         Title: Assistant Treasurer


                     Flagship CLO 2000-1
                     By: Flagship Capital Management, Inc., as a Lender



                     By: /s/Colleen Cunniffe
                         ----------------------------------------------
                         Name: Colleen Cunniffe
                         Title: Director


                     Flagship CLO II
                     By: Flagship Capital Management, Inc., as a Lender



                     By: /s/Colleen Cunniffe
                         ----------------------------------------------
                         Name: Colleen Cunniffe
                         Title: Director


                     General Electric Capital Corporation, as a Lender



                     By: /s/Eric Herr
                         ----------------------------------------------
                         Name: Eric Herr
                         Title: Duly Authorized Signatory


                     HSBC Bank USA, National Association, as a Lender



                     By: /s/Patricia Tostanoski
                         ----------------------------------------------
                         Name: Patricia Tostanoski
                         Title: Vice President


                     LightPoint CLO-I, Ltd., as a Lender



                     By: /s/Timothy S. Van Kirk
                         ----------------------------------------------
                         Name: Timothy S. Van Kirk
                         Title: Managing Director
<PAGE>
                     Longhorn CDO (Cayman) Ltd.
                     By: Merrill Lynch Investment Manager, L.P.,
                         as Investment Advisor, as a Lender



                     By: /s/Anthony Heyman
                         ----------------------------------------------
                         Name: Anthony Heyman
                         Title: Authorized Signatory


                     Longhorn CDO II, Ltd.
                     By: Merrill Lynch Investment Manager, L.P.,
                         as Investment Advisor, as a Lender



                     By: /s/Anthony Heyman
                         ----------------------------------------------
                         Name: Anthony Heyman
                         Title: Authorized Signatory


                     Longhorn CDO III, Ltd.
                     By: Merrill Lynch Investment Manager, L.P.,
                         as Investment Advisor, as a Lender



                     By: /s/Anthony Heyman
                         ----------------------------------------------
                         Name: Anthony Heyman
                         Title: Authorized Signatory
<PAGE>
                     Oppenheimer Senior Floating Rate Fund, as a Lender



                     By: /s/Lisa Chaffee
                         ----------------------------------------------
                         Name: Lisa Chaffee
                         Title: Manager

                     Harbourview CLO IV, Ltd., as a Lender



                     By: /s/Lisa Chaffee
                         ----------------------------------------------
                         Name: Lisa Chaffee
                         Title: Manager


                     Harbourview CLO V, Ltd., as a Lender



                     By: /s/Lisa Chaffee
                         ----------------------------------------------
                         Name: Lisa Chaffee
                         Title: Manager


                     Foxe Basin CLO 2003, Ltd.
                     By: Royal Bank of Canada as Collateral Manager,
                         as a Lender



                     By: /s/Melissa Marano
                         ----------------------------------------------
                         Name: Melissa Marano
                         Title: Authorized Signatory


                     Sovereign Bank, as a Lender



                     By: /s/Daniel M. Grondin
                         ----------------------------------------------
                         Name: Daniel M. Grondin
                         Title: Senior Vice President


                     Wachovia Bank, N.A., as a Lender



                     By: /s/Dean Gorton
                         ----------------------------------------------
                         Name: Dean Gorton
                         Title: Vice President
                         Re: Second Amendment and Waiver to Credit Agreement


                     WhiteHorse I, Ltd., as a Lender
                     By: WhiteHorse Capital Partners, L.P., as Collateral
                         Manager



                     By: /s/Ethan M. Underwood
                         ----------------------------------------------
                         Name: Ethan M. Underwood, CFA
                         Title: Portfolio Manager


                     Metlife Bank National Association, as a Lender



                     By: /s/James R. Dinsler
                         ----------------------------------------------
                         Name: James R. Dinsler
                         Title: Director


                     Metropolitan Life Insurance Company, as a Lender


                     By: /s/James R. Dinsler
                         ----------------------------------------------
                         Name: James R. Dinsler
                         Title: Director

<PAGE>


                                    EXHIBIT A
              Replacement Schedule 6.04(b) to the Credit Agreement
                                 [See attached]



<PAGE>

<TABLE>
<CAPTION>
                                                              Schedule 6.04(b)

                                                            Existing Investments

                                                            Ionics, Incorporated

                                                        Advances and Trade Payables


-----------------------------------------------------------------------------------------------------------------------------
             OWED TO                                             OWED BY                                         AMOUNT (USD)
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                                                          <C>
ELITE CHEMICALS PTY LTD                              IONICS ACAPULCO S.A. DE C.V.                                     52,285
-----------------------------------------------------------------------------------------------------------------------------
GLOBAL WATER SERVICES, S.A.                          IONICS (UK) LTD                                                 580,187
-----------------------------------------------------------------------------------------------------------------------------
GLOBAL WATER SERVICES, S.A.                          IONICS ITALBA S.P.A.                                             37,716
-----------------------------------------------------------------------------------------------------------------------------
IONICS (UK) LTD                                      GLOBAL WATER SERVICES, S.A.                                     344,456
-----------------------------------------------------------------------------------------------------------------------------
IONICS (UK) LTD                                      IONICS FRANCE S.A.                                            1,677,271
-----------------------------------------------------------------------------------------------------------------------------
IONICS (UK) LTD                                      IONICS IBERICA S.A.                                             383,277
-----------------------------------------------------------------------------------------------------------------------------
IONICS (UK) LTD                                      FAVOURABLE TRADING LIMITED                                    2,678,385
-----------------------------------------------------------------------------------------------------------------------------
IONICS (UK) LTD                                      IONICS ITALBA S.P.A.                                            205,702
-----------------------------------------------------------------------------------------------------------------------------
IONICS (UK) LTD                                      IONICS VENTURES LTD                                              46,180
-----------------------------------------------------------------------------------------------------------------------------
IONICS (UK) LTD                                      IONICS, INCORPORATED                                          1,134,524
-----------------------------------------------------------------------------------------------------------------------------
IONICS (UK) LTD                                      SEPARATIONS TECHNOLOGY UK                                     1,407,336
-----------------------------------------------------------------------------------------------------------------------------
IONICS ASIA PACIFIC PTE. LTD                         IONICS, INCORPORATED                                             99,658
-----------------------------------------------------------------------------------------------------------------------------
IONICS ASIA PACIFIC PTE. LTD                         SIEVERS INSTRUMENTS, INC.                                        75,465
-----------------------------------------------------------------------------------------------------------------------------
IONICS CARIBBEAN INVESTORS LTD                       IONICS CONSTRUCTORS TRINIDAD LTD                                608,647
-----------------------------------------------------------------------------------------------------------------------------
IONICS CONSTRUCTORS TRINIDAD LTD                     IONICS VENTURES LTD                                             180,833
-----------------------------------------------------------------------------------------------------------------------------
FIDELITY PUREWATER, INC.                             FAVOURABLE TRADING LIMITED                                    1,705,184
-----------------------------------------------------------------------------------------------------------------------------
FIDELITY PUREWATER, INC.                             IONICS, INCORPORATED                                         41,601,837
-----------------------------------------------------------------------------------------------------------------------------
IONICS FRANCE S.A.                                   IONICS ITALBA S.P.A.                                            259,969
-----------------------------------------------------------------------------------------------------------------------------
IONICS FRANCE S.A.                                   IONICS, INCORPORATED                                             31,737
-----------------------------------------------------------------------------------------------------------------------------
IONICS IBERICA, S.A.                                 IONICS ITALBA S.P.A.                                              5,832
-----------------------------------------------------------------------------------------------------------------------------
IONICS IBERICA, S.A.                                 IONICS, INCORPORATED                                          1,122,850
-----------------------------------------------------------------------------------------------------------------------------
FAVOURABLE TRADING LIMITED                           IONICS (UK) LTD                                                 359,162
-----------------------------------------------------------------------------------------------------------------------------
FAVOURABLE TRADING LIMITED                           IONICS, INCORPORATED                                             22,936
-----------------------------------------------------------------------------------------------------------------------------
IONICS ITALBA S.P.A.                                 IONICS (UK) LTD                                                     947
-----------------------------------------------------------------------------------------------------------------------------
IONICS ITALBA S.P.A.                                 IONICS FRANCE S.A.                                            1,225,087
-----------------------------------------------------------------------------------------------------------------------------
IONICS ITALBA S.P.A.                                 IONICS, INCORPORATED                                            104,643
-----------------------------------------------------------------------------------------------------------------------------
IONICS LIFE SCIENCES, INC.                           IONICS ULTRAPURE WATER CORP.                                        348
-----------------------------------------------------------------------------------------------------------------------------
IONICS TAIWAN, INC                                   IONICS ASIA PACIFIC PTY. LET.                                    11,200
-----------------------------------------------------------------------------------------------------------------------------
IONICS TAIWAN, INC                                   IONICS, INCORPORATED                                             36,154
-----------------------------------------------------------------------------------------------------------------------------
IONICS TAIWAN, INC                                   KUNSHAN IONICS                                                  174,058
-----------------------------------------------------------------------------------------------------------------------------
IONICS ULTRAPURE WATER CORP.                         IONICS LIFE SCIENCES, INC.                                       49,116
-----------------------------------------------------------------------------------------------------------------------------
IONICS ULTRAPURE WATER CORP.                         IONICS WATERTEC PTY. LTD                                        431,396
-----------------------------------------------------------------------------------------------------------------------------
IONICS ULTRAPURE WATER CORP.                         IONICS, INCORPORATED                                          2,594,922
-----------------------------------------------------------------------------------------------------------------------------
IONICS WATERTEC PTY. LTD                             IONICS, INCORPORATED                                              2,193
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 AQUA DESIGN, INC.                                            14,889,738
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS ACAPULCO S.A. DE C.V.                                  1,665,171
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS (UK) LTD                                               1,291,238
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS ASIA PACIFIC PTY. LTD                                  3,363,191
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS CARIBBEAN INVESTORS LTD                                    4,100
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS CONSTRUCTORS TRINIDAD LTD                             11,002,734
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 FIDELITY PUREWATER, INC.                                     17,701,270
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS IBERICA, S.A.                                          1,759,408
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 FAVOURABLE TRADING LIMITED                                    1,814,013
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS ITALBA S.P.A.                                          8,524,401
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS LIFE SCIENCES, INC.                                    6,337,685
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS TAIWAN, INC                                            1,545,809
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS ULTRAPURE WATER CORP.                                 35,791,147
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS WATER RESOURCES                                          695,068
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS WATERTEC PTY. LTD                                      2,552,568
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 KUNSHAN IONICS LIMITED                                          782,315
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 SIEVERS INSTRUMENTS, INC.                                         1,100
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 SEPARATIONS TECHNOLOGY INC                                    7,881,192
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 TORAY MEMBRANE AMERICA, INC.                                  5,430,000
-----------------------------------------------------------------------------------------------------------------------------
KUNSHAN IONICS LIMITED                               IONICS TAIWAN, INC                                               98,994
-----------------------------------------------------------------------------------------------------------------------------
SEPARATIONS TECHNOLOGY UK                            SEPARATIONS TECHNOLOGY INC                                      964,041
-----------------------------------------------------------------------------------------------------------------------------
SIEVERS INSTRUMENTS, INC.                            IONICS (UK) LTD                                               2,520,135
-----------------------------------------------------------------------------------------------------------------------------
SIEVERS INSTRUMENTS, INC.                            IONICS ASIA PACIFIC PTY. LTD                                    278,084
-----------------------------------------------------------------------------------------------------------------------------
SIEVERS INSTRUMENTS, INC.                            IONICS FRANCE S.A.                                              164,379
-----------------------------------------------------------------------------------------------------------------------------
SIEVERS INSTRUMENTS, INC.                            IONICS ITALBA S.P.A.                                             20,524
-----------------------------------------------------------------------------------------------------------------------------
SIEVERS INSTRUMENTS, INC.                            IONICS LIFE SCIENCES, INC.                                       21,085
-----------------------------------------------------------------------------------------------------------------------------
SIEVERS INSTRUMENTS, INC.                            IONICS TAIWAN, INC                                                  930
-----------------------------------------------------------------------------------------------------------------------------
SIEVERS INSTRUMENTS, INC.                            IONICS WATERTEC PTY. LTD                                          4,850
-----------------------------------------------------------------------------------------------------------------------------
SIEVERS INSTRUMENTS, INC.                            IONICS, INCORPORATED                                         20,854,981
-----------------------------------------------------------------------------------------------------------------------------
IONICS, IBERICA, S.A.                                IONICS, INCORPORATED                                          5,040,000
-----------------------------------------------------------------------------------------------------------------------------
IONICS FRANCE S.A.                                   IONICS, INCORPORATED                                          9,072,000
-----------------------------------------------------------------------------------------------------------------------------
IONICS, IBERICA, S.A.                                IONICS FRANCE S.A.                                            4,992,496
-----------------------------------------------------------------------------------------------------------------------------
IONICS, IBERICA, S.A.                                IONICS ITALBA S.P.A.                                          3,155,769
-----------------------------------------------------------------------------------------------------------------------------
IONICS, IBERICA, S.A.                                IONICS ITALBA S.P.A                                           3,786,922
-----------------------------------------------------------------------------------------------------------------------------
IONICS (U.K.) LIMITED                                IONICS FRANCE S.A.                                            5,921,244
-----------------------------------------------------------------------------------------------------------------------------
IONICS VENTURES LIMITED                              IONICS (BERMUDA) LTD                                          5,000,000
-----------------------------------------------------------------------------------------------------------------------------
IONICS VENTURES LIMITED                              IONICS ITALBA S.P.A                                           2,000,000
-----------------------------------------------------------------------------------------------------------------------------
IONICS VENTURES LIMITED                              IONICS CARIBBEAN INVESTORS LTD                               11,110,000
-----------------------------------------------------------------------------------------------------------------------------
IONICS VENTURES LIMITED                              IONICS TAIWAN, INC.                                           1,030,746
-----------------------------------------------------------------------------------------------------------------------------
IONICS VENTURES LIMITED                              IONICS WATER RESOURCES LTD                                    1,290,353
-----------------------------------------------------------------------------------------------------------------------------
IONICS VENTURES LIMITED                              IONICS, INCORPORATED                                         52,300,000
-----------------------------------------------------------------------------------------------------------------------------
IONICS (U.K.) LIMITED                                IONICS VENTURES LIMITED                                       2,250,000
-----------------------------------------------------------------------------------------------------------------------------
IONICS (U.K.) LIMITED                                IONICS, INCORPORATED                                          9,000,000
-----------------------------------------------------------------------------------------------------------------------------
AQUA DESIGN, INC.                                    AQUA DESIGN ANTIGUA LTD                                         136,325
-----------------------------------------------------------------------------------------------------------------------------
AQUA DESIGN, INC.                                    AQUA DESIGN ANGUILLA LTD                                        230,633
-----------------------------------------------------------------------------------------------------------------------------
AQUA DESIGN, INC.                                    AQUA DESIGN BAHAMAS LTD                                         297,343
-----------------------------------------------------------------------------------------------------------------------------
AQUA DESIGN, INC.                                    AQUA DESIGN CURACAO NV                                          573,057
-----------------------------------------------------------------------------------------------------------------------------
AQUA DESIGN, INC.                                    AQUA DESIGN VI, INC.                                            356,109
-----------------------------------------------------------------------------------------------------------------------------
AQUA DESIGN, INC.                                    AQUA DESIGN B.V.I. LTD                                           74,078
-----------------------------------------------------------------------------------------------------------------------------
AQUA DESIGN, INC.                                    AQUA DESIGN NETHERLAND ANTILLES N.V.                             15,296
-----------------------------------------------------------------------------------------------------------------------------
AQUA DESIGN, INC.                                    IONICS AQUA DESIGN BONAIRE N.V.                                 111,401
-----------------------------------------------------------------------------------------------------------------------------
AQUA DESIGN, INC.                                    IONICS FRESHWATER LTD                                            10,037
-----------------------------------------------------------------------------------------------------------------------------
AQUA DESIGN, INC.                                    BIMINI BAY WATER LTD                                            119,943
-----------------------------------------------------------------------------------------------------------------------------
SIEVERS INSTRUMENTS, INC.                            IONICS AGAR ENVIRONMENTAL LTD                                   212,460
-----------------------------------------------------------------------------------------------------------------------------
IONICS CARIBBEAN INVESTORS LTD                       HAFEEZ KARAMATH ENGINEERING SERVICES LIMITED                 11,748,786
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

                                                  Investments in Project Subsidiaries

-----------------------------------------------------------------------------------------------------------------------------
                      INVESTOR                                           INVESTMENT                         AMOUNT (USD)
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                                                          <C>
IONICS IBERICA, S.A.                                 GRUPO EMPRESARIAL DE MEJORMIENTO AMBIETAL, S. DE              4,970,000
                                                     R.L. DE C.V.
-----------------------------------------------------------------------------------------------------------------------------
IONICS CARIBBEAN INVESTORS LTD                       DESALINATION COMPANY OF TRINIDAD AND TOBAGO                   5,471,740
-----------------------------------------------------------------------------------------------------------------------------
IONICS VENTURES LIMITED                              DESALINATION COMPANY OF TRINIDAD AND TOBAGO                  10,177,932
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 UTILITIES DEVELOPMENT COMPANY, W.L.L.                        15,200,000
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 MAAGAN DESALINATION LTD                                       1,300,000
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 CARMEL DESALINATION LTD*                                     13,300,000
                                                                                                                 (PROJECTED)
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 HAMMA WATER DESALINATION S.P.A.*                             45,600,000
                                                                                                                 (PROJECTED)
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS FRESHWATER LTD                                         1,100,000
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 WATLINGTON WATERWORKS LIMITED - BERMUDA                       2,735,670
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 JALAL IONICS                                                    534,755
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 AQUA COOL SAUDI ARABIA                                        1,490,044
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 AQUA COOL KUWAIT                                                456,800
-----------------------------------------------------------------------------------------------------------------------------
IONICS (BERMUDA) LTD                                 AQUA DESIGN LTD                                                  32,973
-----------------------------------------------------------------------------------------------------------------------------
IONICS IBERICA, S.A.                                 UTE EL REVENTON                                                 103,924
-----------------------------------------------------------------------------------------------------------------------------
IONICS IBERICA, S.A.                                 UTE TAMAIMO                                                       3,518
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 YUASA-IONICS CO LTD                                             721,480
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

* Financial close has not yet been reached.
<TABLE>
<CAPTION>

                                                    Investments in Foreign Subsidiaries

-----------------------------------------------------------------------------------------------------------------------------
                      INVESTOR                                           INVESTMENT                         AMOUNT (USD)
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                                                          <C>
IONICS, INCORPORATED                                 IONICS WATERTEC PTY LTD                                       1,896,012
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS ITALBA S.P.A.                                          1,321,251
-----------------------------------------------------------------------------------------------------------------------------
IONICS ITALBA S.P.A.                                 AGRINORD S.R.L.                                               2,093,765
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS VENTURES LIMITED                                      11,838,312
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS (UK) LTD                                               6,039,996
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS ACAPULCO, S.A. DE C.V.                                 1,665,320
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS AGAR ENVIRONMENTAL                                        76,892
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS ASIA PACIFIC PTE LTD                                   2,853,912
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS IBERICA, S.A.                                         15,448,647
-----------------------------------------------------------------------------------------------------------------------------
IONICS IBERICA, S.A.                                 PLANTAS DESALADORAS DE MASPALOMAS S.L. SOCIEDAD              11,010,370
                                                     UNIPERSONAL
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS (BERMUDA) LTD                                            552,000
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS TAIWAN, INC.                                           1,321,050
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS NEDERLAND B.V.                                            15,508
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS FRANCE S.A.                                              905,683
-----------------------------------------------------------------------------------------------------------------------------
IONICS FRANCE S.A.                                   IONICS WATER SERVICES                                            46,705
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS CONSTRUCTORS TRINIDAD LIMITED                                340
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS CARIBBEAN INVESTORS LTD                               10,661,628
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 HAMMA WATER DESALINATION S.P.A.                                 175,000
-----------------------------------------------------------------------------------------------------------------------------
IONICS, INCORPORATED                                 IONICS FRESHWATER LTD                                           625,000
-----------------------------------------------------------------------------------------------------------------------------
IONICS (BERMUDA) LTD                                 AQUA DESIGN B.V.I. LIMITED                                    1,728,125
-----------------------------------------------------------------------------------------------------------------------------
IONICS (BERMUDA) LTD                                 AQUA DESIGN ANGUILLA LIMITED                                  2,271,169
-----------------------------------------------------------------------------------------------------------------------------
IONICS (BERMUDA) LTD                                 AQUA DESIGN LIMITED CAYMAN                                      395,000
-----------------------------------------------------------------------------------------------------------------------------
AQUA DESIGN B.V.I. LIMITED                           KUNSHAN IONICS LIMITED                                          510,000
-----------------------------------------------------------------------------------------------------------------------------



                                              Ecolochem, Inc. and its Affiliated Entities

Pursuant to the Partnership Agreement dated September 18, 2001 between Nalco PWS, Inc. and Ecolochem JV Holdings, Inc., Ecolochem,
Inc. is obligated to provide capital contributions to the Joint Venture in the amount of $450,000.
</TABLE>