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I am working for a service company. As per client requirement we need to slightly modify eclipse mosquito source code. It is dual licensed with EPL and EDL. (https://github.com/eclipse/mosquitto/blob/master/LICENSE.txt).

In the License FAQ it says user can select the license(https://www.eclipse.org/legal/eplfaq.php#DUALLIC) .

As EDL is more permissive and BSD like (https://www.eclipse.org/org/documents/edl-v10.php), we choose EDL license. Now can we use modified mosquito without opensourcing our modifications? Is there any other implications which will impact it's commercial use.

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As you point out, the EDLv1 is BSD-like (in fact, it's a copy of 3-clause BSD with names changed in clause 3 and the disclaimer), so your rights and obligations are pretty simply stated in clauses one and two.

IANAL/IANYL, but it seems to me that you may use modified mosquito within your organisation, and you may sell it without, and in neither case will you have any obligation to release the modified source. You will need to reproduce the text of the licence somewhere in the content you transfer to customers along with the binary, and you must refrain from claiming that Eclipse or any contributors endorse your binary (to be safest, it's best not to claim that anyone endorses it, except you), but that's the full extent of the impact of EDLv1 on commercial activities with this code.

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