FOURTH MODIFICATION TO LOAN AND SECURITY AGREEMENT
This Fourth Modification to Loan and Security Agreement (this “Modification”) is entered into by and
between ENERGY RECOVERY, INC. (“Borrower”) and COMERICA BANK (“Bank”) as of
December 23, 2008, at San Jose, California.
This Modification is entered into upon the basis of the following facts and understandings of the parties, which
facts and understandings are acknowledged by the parties to be true and accurate:
Bank and Borrower previously entered into a Loan and Security Agreement (Accounts and Inventory) dated
March 27, 2008, which was subsequently modified by First Modification to Loan and Security Agreement dated
as of March 27, 2008, Second Modification to Loan and Security Agreement dated as of May 29, 2008, and
Third Modification to Loan and Security Agreement dated as of September 18, 2008. The Loan and Security
Agreement and each modification shall collectively be referred to herein as the “Agreement”.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as set forth below.
1. Incorporation by Reference. The Recitals and the documents referred to therein are incorporated herein by
this reference. Except as otherwise noted, the terms not defined herein shall have the meaning set forth in the
2. Modification to the Agreement. Subject to the satisfaction of the conditions precedent as set forth in
Section 3 hereof, the Agreement is hereby modified as set forth below.
(a) Section 3.1 of the Agreement is amended to read in its entirety as follows:
“3.1 This Agreement shall remain in full force and effect until March 31, 2009, unless earlier terminated
by notice by Borrower. Notice of such termination by Borrower shall be effectuated by mailing of a
registered or certified letter not less than thirty (30) days prior to the effective date of such term