EXH10-31

                                A G R E E M E N T


                                     between

                                 FiberCore, Inc.
                         174 Charlton Road, P.O. Box 206
                              Sturbridge, MA 01566

                                      and


                               FiberCore Jena GmbH
                            Gschwitzer Stra(beta)e 20
                                07745 Jena-Burgau


FiberCore Inc.  participates,  with effect from July 1, 1994, in accordance with
the provisions  below,  in the business of FiberCore  Jena GmbH,  with a capital
contribution  of DM 5775200  ("Capital  contribution")  in exchange  for special
profit participation rights.



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                                        1



The capital contribution is payable to FiberCore Jena GmbH through 5/30/95.




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                                        2



1.   FiberCore  Inc.  will  receive  an  annual  profit  share,   prior  to  the
     determination  of  retained  earnings  available  to  the  shareholders  of
     FiberCore Jena GmbH. The profit share will comprise

     a.   a basic  profit  share  amounting  to 7% of the nominal  amount of the
          capital contribution, and

     b.   a bonus  profit  share in the same  percentage  amount as the dividend
          resolved and distributed.

     If  retained  earnings  are  insufficient  to cover  payment  of the  basic
     distribution  amount,  this will be  correspondingly  reduced.  There is no
     claim for later payment of the amount of the reduction.

2.   FiberCore Inc. is entitled to the profit share from July 1, 1997.

3.   The distribution of the profit share on the capital  contribution is due on
     the first bank  working day after the  general  meeting of  FiberCore  Jena
     GmbH's  shareholders  in which  the  annual  financial  statements  for the
     financial   year  just  ended  are  approved   and  a  resolution   on  the
     appropriation of the profit is passed,  unless the resolution approving the
     financial statements stipulates a different due date.




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                                        3



1.   FiberCore  Inc.  participates  in full in a current  loss (net loss for the
     year) of FiberCore GmbH in that its right of repayment is reduced. The loss
     is  allocated in the  proportions  of the capital  contribution  to nominal
     share capital.

2.   If  thereafter  net  profits  are  earned in later  years  covered  by this
     agreement,  the rights of repayment  will be increased out of these profits
     until they equal the nominal amount of the capital contribution, before any
     other appropriations of the net profits for the years are resolved.




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                                        4



1.   FiberCore  Inc. does not receive any  shareholders'  rights from its profit
     participation rights, in particular,  no rights to attend,  participate in,
     and vote at, meetings of FiberCore Jena GmbH shareholders.

2.   FiberCore Jena GmbH is entitled,  and, if FiberCore Inc. demands,  obliged,
     to  prepare  documents  on  the  special  profit  participation  rights  in
     accordance with this agreement. The parties to this agreement will agree on
     the form and contents of these documents if these are not obvious from this
     agreement.




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                                        5



1.       This agreement is concluded for an indefinite  period.  Either party to
         the  agreement  can give  notice of  termination  of at least two years
         effective at the end of a financial year of FiberCore Jena GmbH, but at
         the earliest with effect from 2001.

2.       If  notice  of   termination   is  given,   FiberCore   Inc.'s  capital
         contribution  will be repaid to that company,  if appropriate  less its
         shares of losses.  The amount to be repaid is payable at December 31 of
         that  year in which  the  shareholders  resolved  the  approval  of the
         financial  statements  for  the  financial  year  at the  end of  which
         termination  became  effective.  It bears  interest at 7% p.a. from the
         effective termination date until repayment date.




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                                        6



FiberCore Inc. hereby agrees to subordinate its repayment  rights to liabilities
to all other  creditors of FiberCore Jena GmbH. If FiberCore Jena GmbH should be
liquidated, the capital contribution can only be repaid after the liabilities to
all other  creditors  have been settled in full.  FiberCore Inc. has no right to
participate in proceeds of liquidation.




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                                        7



The  participation  in  losses  (ss.  3) and the  subordination  of the right of
repayment (ss. 6) can not be retroactively restricted, nor can the period of the
agreement  and the  notice of  termination  (ss.  6} be  reduced  retroactively.
FiberCore  Jena  GmbH  will be  entitled  to  receive  a refund  of a  premature
repayment  of  the  capital   contribution,   without  account  being  taken  of
contradicting provisions.




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                                        8



FiberCore Inc. can dispose of its claims and rights - by assignment or otherwise
- only after obtaining FiberCore Jena GmbH's prior approval.




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                                        9



1.   Only the laws of the Federal  Republic  of Germany  apply in respect of the
     rights  and  obligations   arising  from  this  agreement.   The  place  of
     performance is Jena.

2.   The place of jurisdiction for all disputes arising from, or connected with,
     this agreement is Jena.


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                                       10

If one of the provisions of this agreement  should be, or should become,  partly
or wholly  invalid,.  the validity of the  agreement as a whole is not otherwise
affected.  A rule which  fulfills  the economic  intention  of the  agreement as
nearly as  possible,  in a legally  acceptable  manner,  is held to be agreed to
replace the invalid provisions.




Jena, (date)




___/s/____________________
Mohd A. Aslami, President


___/s/____________________