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                                                                   Exhibit 10.31

                                  AMENDMENT 002
                                       TO
             LICENSED WORKS AGREEMENT STATEMENT OF WORK #4902S90047

International Business Machines Corporation ("Buyer" or "IBM") and Selectica,
Inc. ("Supplier" or "Selectica") agree to amend Statement of Work #4902S90047
(the "SOW") to Licensed Works Agreement #4902S90046, (the "LWA") (collectively,
the "Agreement") as described herein.

This Amendment 02 is effective as of the date of the last party to sign
("Effective Date") and is entered into by Buyer and Supplier for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged. If there is a conflict among the terms of the LWA, SOW and this
Amendment 02 the terms of Amendment 02 shall prevail.

The parties agree as follows:

DEFINITIONS

NATIONAL LANGUAGE SUPPORT (NLS) shall mean that the Licensed Works have the
ability to enter, store, process, retrieve, distribute, display and print
character data in the foreign language of choice. NLS includes
Internationalization characteristics.

INTERNATIONALIZATION shall mean that a Licensed Work has the ability to
implement national functions and the facility to be translated to other
languages. Enablement includes three (3) categories which correspond to
characteristics of various languages: (a) single byte character set (SBCS),
left-to-right languages (U.S. English, German, Greek, etc.); (b) single byte
bi-directional languages (Hebrew, Arabic); and (c) double byte character set
(DBCS) or multi-byte character set (MBCS) languages (Japanese, Korean,
simplified and traditional Chinese). The Licensed Works shall avoid hardcoding
language dependent codepages and character sets.

SERVER TOOLS shall mean Selectica's server-side development and maintenance
tools, including Enterprise Data Translator, KBS Repository, Application Data
Manager, and Management Center (System Management Console).

(1)   UPDATED DOCUMENTATION. The February 3, 2003 version of the document
referenced in Schedule D of the SOW and titled "Selectica Application
Configuration Guidelines" is part of the Documentation for the Licensed Works.

(2)   DEVELOPMENT SERVER ON AIX/DB2.

      a)    Porting of Server Tools. Selectica will deliver to IBM a ported
      version of the Server Tools software that runs on AIX versions 4.3.3 and
      5.1 and DB2 version 7.2 in accordance with acceptance criteria that will
      be defined as part of the Work Authorization ("WA") exercise described in
      paragraph 2)b) below. Selectica will deliver this software to IBM no later
      than March 31, 2003 by making it available for FTP download. Recognizing
      that IBM's implementation efforts will be seriously impacted by delays,
      IBM reserves the right to deduct 20% of the next quarterly Maintenance Fee
      payment(s) for each month (or portion thereof) after March 2003 in which
      the Server Tools are not delivered to IBM in accordance with IBM's
      acceptance criteria. IBM may also withhold payment of Maintenance Fees
      until the Server Tools are delivered in accordance with IBM's acceptance
      criteria.

      b)    Interim Development Environment. Until Selectica has acceptably
      completed the activity described in paragraph (2)a) above, Selectica
      agrees to provide IBM with network access to a development
      hardware/software environment physically located at a Selectica facility
      (the "Interim Environment") at no cost to IBM. Selectica will, on the
      Effective Date, deliver to IBM a draft WA subject to IBM's approval that
      details Selectica's responsibilities for: i) the setup of the Interim
      Environment; ii) maintenance support of the Interim Environment to ensure
      adequate availability to IBM (weekdays, 7 AM CST to 7 PM CST); and iii)
      planning and execution of the migration from the Interim Environment to
      IBM owned AIX server- side development server (the "IBM Environment"). The
      WA will include acceptance criteria to confirm successful migration of the
      IBM work products created in the Interim Environment to the IBM
      Environment, as well as the operation of the ported Server Tools.
      Selectica will complete the responsibilities described above as detailed
      in the WA at no charge to IBM. IBM agrees that no IBM Confidential
      information will be used on this server.

(3)   NLS/ DBCS ENABLEMENT.

      Selectica will deliver to IBM a version of the Licensed Works that meets
      the Internationalization requirements described in the Exhibit to this
      Amendment entitled "Internationalization Requirements" (the
      "Internationalized Licensed Works"). Selectica will deliver this software
      to IBM no later than March 31, 2003 by making it available for FTP
      download. Selectica will demonstrate to IBM's satisfaction that the
      Internationalized Licensed Works meet the


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      requirements specified in Exhibit 1. Recognizing that IBM's implementation
      efforts will be seriously impacted by delays, IBM reserves the right to
      deduct 50% of the next quarterly Maintenance Fee payment(s) for each month
      (or portion thereof) after March 2003 in which the Internationalized
      Licensed Works are not delivered to IBM in accordance with the
      Internationalization requirements. IBM may also withhold payment of
      Maintenance Fees until the Internationalized Licensed Works are delivered
      in accordance with IBM's acceptance criteria.

(4)   MEMORY REQUIREMENTS FOR CLIENT APPLICATION. Furthermore, Selectica
recognizes the importance to IBM of application performance within the confines
of reasonable memory requirements for the client solution. Selectica understands
that IBM expects Selectica to conduct detailed performance analysis and testing
and to communicate test results to IBM. Selectica agrees to use commercially
reasonable efforts to maintain an environment that is focused on performance and
recognizes that IBM users will be required to have the Licensed Works co-exist
with other applications like Lotus Notes and Siebel.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
caused this Amendment 02 to be executed by their respective duly authorized
representatives. Any signed copy of this Amendment 02 made by reliable means
(e.g. photocopy or facsimile) is considered an original.

ACCEPTED AND AGREED TO:



By:  /s/ John R. Sweetman                 2/28/2003
-------------------------------------------------------------
IBM Signature                               Date


John R. Sweetman
-------------------------------------------------------------
Printed Name


Relationship Manager, IBM Software Procurement
-------------------------------------------------------------
Title and Organization


IBM Address:
-------------------------------------------------------------
IBM Corporation
3039 Cornwallis Road
Research Triangle Park, NC 27709
USA


ACCEPTED AND AGREED TO:



By:  /s/ Sanjay Mittal                    2/28/2003
-------------------------------------------------------------
Selectica Signature                         Date


Sanjay Mittal
-------------------------------------------------------------
Printed Name


President & CEO
-------------------------------------------------------------
Title and Organization


Selectica Address:
-------------------------------------------------------------
Selectica, Inc.
3 W. Plumeria Drive
San Jose, CA  95134


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EXHIBIT 1:  INTERNATIONALIZATION REQUIREMENTS

Selectica will deliver Internationalized Licensed Works as follows:

-     The Internationalized Licensed Works will enable multiple language support
      (including DBCS languages) on a single server for concurrent user sessions
      where the languages are associated with different code pages. E.g. and for
      example, the ability to execute multiple user sessions with concurrent
      session # 1 being displayed in French, concurrent session #2 displayed in
      Kanji, concurrent session #3 displayed in English, and concurrent session
      #4 displayed in Hangul.

-     The Internationalized Licensed Works will be able to use different code
      pages on the same server on the same time and will no longer limit
      responses returned to the application page and will no longer be limited
      to the default java process character set.

-    The Internationalized Licensed Works will allow end users to switch the
     language being used for the UI and data elements during a configuration
     session. When the user changes the language, the selections made during the
     configuration session up to that point should be retained.

-     The Internationalized Licensed Works will allow model generated text (such
      as constraint failure message) to be displayed in the user's native
      language during runtime.

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