Exhibit 10.13

                              CONSULTING AGREEMENT

This  Consulting  Agreement  (the  "Agreement")  is entered into on December 30,
1996,  by and between  Hartcourt  Companies,  Inc., a Utah  corporation  and its
subsidiaries  or  affiliates  (the  "Company"),  and  American  Equities  LLC, a
California limited liability company ("Consultant").

WHEREAS,  the  Company's  desires to  acquire,  manage and  develop a large real
estate portfolio for its real estate division (the "Business"),  including,  but
not limited to, office, retail, industrial and multi-family properties,  and raw
land;

WHEREAS,  the Company  recognizes  that the  Consultant  can  contribute  to the
acquisition, management and development of a real estate portfolio;

WHEREAS,  the Company believes it to be important both to the future  prosperity
of the Business and to the Company's general interest to retain Consultant as an
exclusive consultant to the Company and have Consultant available to the Company
for consulting services in the manner and subject to the terms,  covenants,  and
conditions set forth herein;

WHEREAS,  the Company and  Consultant  have  entered into that  agreement  dated
December 20, 1996 which contains a summary of the  provisions  herein (the "Term
Sheet") and hereby desire to more fully document the agreement  contained in the
Term Sheet in accordance with the provisions therein; and

WHEREAS, in order to accomplish the foregoing, the Company and Consultant desire
to enter into this  Agreement,  effective on January 1, 1997, to provide certain
assurances as set forth herein.

NOW THEREFORE, in view of the foregoing and in consideration of the premises and
mutual representations,  warranties, covenants and promises contained herein and
other good and valuable consideration,  the receipt and sufficiency of which are
hereby  acknowledged,  the parties hereto,  intending to be legally bound hereby
agree as follows:

1.       RETENTION. The  Company   hereby   retains  the Consultant  during  the
         Consulting  Period  (as defined in  Section  2  below),  and Consultant
         hereby  agrees to  be so retained  by the Company,  all  subject to the
         terms and provisions of this Agreement.

2.       CONSULTING  PERIOD.  The  Consulting  Period shall  commence on January
         1, 1997 and terminate no earlier than December 31, 2001. After December
         31, 2001,  either  party may  terminate this agreement upon at least 30
         days written notice.

3.       DUTIES OF  CONSULTANT.  During the  Consulting  Period,  the Consultant
         shall use  reasonable  and best  efforts to perform  those  actions and
         responsibilities  necessary to analyze,  purchase,  sell, refinance and
         manage real property (the "Services"), throughout the world. Consultant
         shall render such services  diligently  and to the best of its ability.
         Consultant  shall  report to Dr.  Alan V. Phan,  President.  Consultant


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         shall present  various  opportunities  to the Company,  and the Company
         shall be under no obligation to accept such opportunities.  The Company
         shall not retain or hire any other person to perform  services  similar
         or related to the  Services,  including but not limited to, real estate
         brokers,  mortgage  brokers or property  managers.  The  Company  shall
         provide  all  necessary   financing   required  in  order  to  purchase
         properties  approved by the Company,  including cash or freely tradable
         or restricted  securities.  Such securities may include freely tradable
         Common Stock,  restricted Common Stock, preferred stock in the Company,
         debt, convertible debt or any other security.

4.       OTHER ACTIVITIES OF CONSULTANT.  The Company  recognizes the Consultant
         shall perform  only  those services  that  are reasonably  required  to
         accomplish  the  goals  and  objectives  set forth  herein,  and   that
         Consultant  shall  provide  services  to other  businesses and entities
         other  than  the Company.  Consultant  shall  be  free  to  directly or
         indirectly  own,  manage,  operate,  join,  purchase,  organize or take
         preparatory steps for  the organization  of,  build,  control,  finance
         acquire, lease or invest or participate  in the ownership,  management,
         operation,  control  or   financing  of, or be connected as an officer,
         director,      employee,     partner,    principal,   manager,   agent,
         representative,  associate, consultant,  investor, advisor or otherwise
         with (collectively,  be "Affiliated" with), any business or enterprise,
         or permit its name or any part thereof to be  used in  connection  with
         any business or enterprise  engaged in any business,  including but not
         limited to, any business that is the same as, substantially  similar to
         
         or  otherwise   competitive  with,  adverse,  to  affiliated  with,  or
         otherwise related to the Company. Consultant may be Affiliated with any
         entity  which  may  provide  services  to the  Company.  In  the  event
         Consultant  is Affiliated  with any entity which  proposes to sell real
         property to, or purchase real property  from,  the Company,  Consultant
         shall disclose the nature of such  relationship to the Company prior to
         the Company  making any decision,  and shall obtain the approval of the
         Company,  which  approval  shall be  conclusively  deemed  granted upon
         written notice from Dr. Alan V. Phan or his or the Company's designated
         representative. The Company hereby waives any conflict of interest that
         may arise from a relationship  between  Consultant and any entity which
         Consultant  is  Affiliated  with.  This  Agreement  may be  assigned by
         Consultant to an entity designated by Consultant, whether Affiliated or
         not Affiliated with Consultant, and wherever located.

         Consultant   shall  present  any  real  estate   project  which  it  is
         considering  acquiring  for its own account  first to the Company,  and
         Consultant  hereby grants to the Company an exclusive  right to acquire
         any  such  real  estate   project  prior  to  Consultant   making  such
         acquisition  for its own account.  In the event that the Company elects
         not to go forward with said  acquisition of real  property,  Consultant
         may, in and for its own account, acquire said property.

5.       COMPENSATION.     In  consideration  for Consultant  entering into this
         Agreement, the Company shall compensate Consultant as follows:

         a.       MONTHLY FEES AND BENEFITS:
                  I.         Retainer.  The Company shall pay  to  Consultant  a
                             non-refundable monthly retainer of $5,000.

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                  ii.        Expenses.  The Company shall pay all  such expenses
                             reasonably  incurred  during the Consulting  Period
                             by the Consultant for business  purposes related to
                             or in  furtherance  of the goals and  objectives of
                             the Company and/or  the provision  of the  Services
                             (collectively,   "Company  Purposes"),   including,
                             without limitation, expenses incurred  with respect
                             to  the  Consultant's  travel  (including  business
                             class travel for flights  of less than three  hours
                             and first  class travel  for flights of three hours
                             or  more),  meals  and   entertainment  and   other
                             customary  and  reasonable   expenses  for  Company
                             Purposes.   The  Company  shall  pay  such expenses
                             directly,  or, upon submission  of bills,  receipts
                             and/or   vouchers  by  the  Consultant,  by  direct
                             reimbursement  to the Consultant.
                  iii.       Automobile  Allowance.  The  Company  shall  pay to
                             Consultant  an  automobile  allowance  of $750  per
                             month,  and  shall pay for  fuel,  maintenance  and
                             automobile insurance. The Company acknowledges that
                             Consultant may have a master  automobile  insurance
                             policy covering more than one automobile, and that,
                             for  purposes of this  paragraph,  Consultant  will
                             reasonably  determine  the portion of the insurance
                             premium to be allocated to the  automobile  used by
                             Consultant for Company Purposes.
   
                   iv.       Benefit Plans.  Two employees of Consultant,  which
                             shall  be  designated  by   Consultant,   shall  be
                             entitled to  participated  in and receive  benefits
                             under any retirement plan,  health and dental plan,
                             disability plan and life insurance plan or employee
                             benefit  plan or  arrangement  currently  or in the
                             future  made   available  by  the  Company  to  its
                             employees and/or consultants  ("Benefit Plans") and
                             to which Consultant is eligible, in accordance with
                             the terms, conditions and overall administration of
                             such  Benefit  Plans;  provided,  however,  that if
                             under the terms of any  Benefit  Plan,  the Company
                             shall provide the Consultant with benefits that are
                             substantially  similar to the  benefits  that would
                             have been provided  under such Benefit Plan. At the
                             Company's option, and with at least 30 days notice,
                             in lieu of providing the benefits  under any or all
                             of the Benefit Plans,  the Company may elect to pay
                             to the  Consultant  a monthly  amount  equal to the
                             Company's   cost  of  providing  such  benefits  to
                             Consultant.  Nothing in this Agreement  shall limit
                             the Company's ability to adopt,  terminate or amend
                             any  such   benefits  at  any  time   provided  the
                             Consultant  is provided  with  benefits that are at
                             least   substantially   similar  to  the   benefits
                             provided   prior   to   such   adoption,  amendment
    


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                             or   termination.   Any  Benefit   Plans  that  are
                             determined  according to annual  compensation shall
                             be calculated assuming an annual salary of $250,000
                             for each of Consultant's two designated employees.
    

            b.     Advance.   The  Company  shall  pay  to  the  Consultant  the
                   following  advance  and  Warrants  (as  defined  below).  The
                   Warrants and any unearned portion of the advance described in
                   this section shall not be refundable  and shall be considered
                   earned by Consultant in the event the Agreement is terminated
                   by the Company, with or without cause.

                   i.        The   Company   shall   transfer  or  cause  to  be
                             transferred   1,000,000  shares  of  the  Company's
                             common  stock  (the  "Common  Stock") as an advance
                             against   future   fees  to  be  earned   from  the
                             acquisition, sale or refinance of real property, or
                             any  other  fees due and  payable  hereunder.  Such
                             Common  Stock  shall  not be freely  tradable.  The
                             Company  shall be  obligated  to prepare and file a
                             registration     statement    (the    "Registration
                             Statement")  and  amendments   thereto,   with  the
                             Securities    and    Exchange    Commission    (the
                             "Commission")  for the  registration  of the Common
                             Stock under the Securities and Exchange Act of 1933
                             (the  "Act)") and shall be  obligated to cause such
                             registration statement,  and amendments thereto, to
                             be declared effective by the Commission on or prior
                             to May 1, 1997.  The Company  shall be obligated to
                             the  Consultant  to  continually  maintain,  at the
                             Company's    own   expense,    the   currency   and
                             effectiveness of such registration statement of the
                             Company,  including  the  filing  of  any  and  all
                             applications and other  notifications,  filings and
                             post   effective    amendments   and    supplements
                             (collectively,     the    "Current     Registration
                             Statement"),  as may be necessary,  so as to permit
                             the resale of the Common Stock until the earlier of
                             the time that all shares of Common  Stock have been
                             sold pursuant to the Current Registration Statement
                             or two years from the date of the  effectiveness of
                             the Registration  Statement. In lieu of filing such
                             Registration  Statement,  the Company may  exchange
                             the Common  Stock for common  stock of the Company,
                             which is freely tradable pursuant to a registration
                             statement  filed on Form  S-8.  
              As fees are earned  pursuant to paragraph 5(d) below,  the advance
          will be  considered  earned at the rate  equal to the Bid Price on the
          date  prior to the date of this  Agreement.  For  example,  if the Bid
          Price on the date prior to the execution of this  Agreement was $3.00,
          then the advance will have been earned after the Consultant  will have
          become  entitled to  $3,000,000  of fees  pursuant to  paragraph  5(d)
          below.


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        c.      WARRANTS.  The Company shall issue  warrants to purchase  Common
                Stock (the "Warrants"),  which shall vest immediately, and which
                may be exercised by  Consultant  at any time through the payment
                of cash or a  promissory  note  bearing  interest at six percent
                (6%) per annum,  at Consultant's  option.  The exercise price of
                the  Warrants  shall be based on the  closing  bid  price of the
                Common  Stock as quoted on the NASDAQ  Bulletin  Board,  or such
                other  U.S.  stock  market as it shall be quoted  on, on the day
                prior to the  date of this  Agreement  (the  "Bid  Price").  The
                Company  shall,  at its sole  expense,  cause the  Common  Stock
                underlying the Warrants to be registered with the Securities and
                Exchange  Commission upon demand, or upon the first registration
                of any of the Common Stock of the Company after the date of this
                Agreement. In the event the Company issues or sells Common Stock
                or any other equity  securities of the Company after the date of
                this  agreement  to any party  other  than  Consultant  for cash
                consideration or non-cash  consideration  which has a fair value
                below  the  closing  bid  price  as of the  date  prior  to such
                issuance  or sale,  the terms of the  Warrants  herein  shall be
                adjusted so as to protect Consultant against any dilution of its
                interest in the Common Stock  underlying  the  Warrants.  Within
                five  business  days of the  execution  of this  Agreement,  the
                Company shall issue the following  Warrants to Consultant and/or
                its assignee:
                I.         400,000 Warrants at 20% of the Bid Price
                ii.        400,000 Warrants at 40% of the Bid Price
                iii.       400,000 Warrants at the Bid Price
                iv.        400,000 Warrants at 120% of the Bid Price
                v.         400,000 Warrants at 140% of the Bid Price

        d.      ACQUISITION AND  DISPOSITION  FEES. The Company shall pay to the
                Consultant  the following  fees for the  acquisition  or sale of
                real property in each year during the Consulting  Period,  which
                fees may be paid in cash or Common  Stock at the closing of each
                transaction:
                I.   Six percent (6%) of the first 100,000,000 of gross purchase
                     or sale price in each year; 
                ii.  Five  percent (5%) of  the  second  $100,000,000  of  gross
                     purchase or sale price in each year;
                iii. Four  percent (4%)  of  the  third  $100,000,000  of  gross
                     purchase or sale price in each year;
                iv.  Three  percent (3%)  of  the  fourth  $1,000,000  of  gross
                     purchase or sale price in each year;
                v.   Two percent (2%) of the fifth  $1,000,000 of gross purchase
                     or sale price in each year;
                vi.  1%of the aggregate  gross purchase and sales prices in each
                     year during the Consulting Period in excess of $600,000,000
                     on any one year.

        e.      PROPERTY MANAGEMENT, ASSET MANAGEMENT AND REFINANCING FEES.  The
                Company shall  pay to Consultant the following fees for services
                to be provided:




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                i.   Management  Fee:  Six  percent  (6%) of  all  gross  income
                     or  receipts  from all  properties  owned or  controlled by
                     the  Company  ("Company  Properties"),  including, but  not
                     limited to, rental fees, storage fees, application fees and
                     any other operating income.
                ii.  Asset  Management  Fee: One  percent (1%) per  annum of the
                     gross  value of  all  real  property  assets  owned  by the
                     Company,  including,  but   not  limited  to,  all  Company
                     Properties.
                iii. Refinancing  Fee: One  percent (1%) of the gross  amount of
                     all  refinancings  that  take  place  on  any  of  the real
                     property  assets  owned or controlled by the Company.
                iv.  All  fees  under  this  section  shall  be  payable monthly
                     commencing January 1, 1997.  In the event the Company shall
                     defer  payment of  such fees,  for a  maximum of six months
                     from  January 1, 1997,  the  deferred   fees  shall  accrue
                     interest  at 1%  per month.
        f.      THIRD PARTY COMMISSIONS.  Consultant and/or its Affiliates shall
                be entitled to share in any fees or commissions payable by third
                parties on any transaction  contemplated herein,  including, but
                not limited to,  real estate or mortgage  brokerage  commissions
                payable by third party  sellers or  purchasers  arising from any
                acquisition   or  sale  of  real  property  by  the  Company  (a
                "Commission").   The  Company  hereby  waives  any  conflict  of
                interest  that  may  arise  due  to  any   transaction   wherein
                Consultant  receives  such  a  Commission,  including,  but  not
                limited to, any conflict of interest which may arise as a result
                of the  dual  representation  by  Consultant  of the  seller  or
                purchaser of real  property on the one hand,  and the Company on
                the other. The Company acknowledges that, from time to time, the
                Consultant may present to the Company as a possible  acquisition
                real  property  owned or controlled  by  Consultant.  Consultant
                shall fully  disclose to the Company the nature of  Consultant's
                interest in such real  property  prior to the  Company  entering
                into any agreement to purchase said real  property.  In cases in
                which  Consultant  owns  or  controls  all or any  part  of real
                property  which has been  presented to the Company as a possible
                acquisition, the Company is encouraged, and shall have the right
                to retain an  unaffiliated  consultant  to assist the Company in
                evaluating that property only.

6.       OFFICE  AND  STAFF.  The  Company  shall  provide   Consultant  with  a
         reasonable  office  and  staff,  along  with the  necessary  costs  and
         expenses to carry out the  objectives  of the Company.  Such office and
         staff  shall be  commensurate  with the  offices  and staff  reasonably
         required  by other  companies  with  similar  real  estate  assets  and
         operations.  It is  acknowledged  that  until  such time as  additional
         office  space and  personnel  are  needed to  service  the real  estate
         operations  of, and  properties  acquired by, the Company,  the Company
         will provide an executive  suite to  Consultant in the West Los Angeles
         area at an  approximate  cost  of  $2,000  per  month,  plus  operating
         expenses including, but not limited to, telephone (including cellular),
         utility,  facsimile and copy machine charges as well as required office
         staff.
 

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7.       TERMINATION.  Subject  to the cure  provisions  contained  herein,  the
         Company may terminate  the  Consulting  Period upon written  notice for
         Cause at any time. Cause shall mean that during the Consulting  Period,
         the  Consultant  engaged  in  gross  and  willful  misconduct  that  is
         materially  and  significantly  injurious  to the Company,  and,  after
         written  notice of such  conduct,  Consultant  has failed to cease such
         conduct within not less than 30 days. Any termination  pursuant to this
         section   shall  be   communicated   by  written   Notice  of  Intended
         Termination.  For  purposes  of this  Agreement,  a "Notice of Intended
         Termination" shall mean a notice which shall clearly state the specific
         termination provision in this Agreement relied upon and shall set forth
         in reasonable and specific detail the facts and  circumstances  claimed
         to provide a basis for termination of the Consulting  Period. No Notice
         of  Intended  Termination  shall be valid  unless  it is  signed by the
         entire board of directors of the Company (the "Board").
     
         a.    Not less than 15 days after  receipt  of the  Notice of  Intended
               Termination,  Consultant  shall have the  opportunity  to a full,
               complete and fair  hearing in the  presence of the entire  Board.
               The  Board  shall  present  to  Consultant  its  reasons  for the
               termination, including the specific actions, inactions, omissions
               or  other   facts   relied  upon  by  the  Board  in  making  its
               determination  that  Consultant  has engaged in gross and willful
               misconduct  and that the Company has the right to terminate  this
               Agreement for Cause. Consultant shall have the right to rebut any
               evidence or allegations of wrongdoing and shall have the right to
               be represented by counsel of Consultant's choice at such hearing.
               After  such  hearing,   should  the  Board  determine  that  this
               Agreement shall be terminated for Cause, it shall issue a written
               Final Notice of Termination to Consultant,  signed by all members
               of the  Board,  setting  forth  in  detail  the  specific  facts,
               conclusions  and findings of the Board in determining  that Cause
               exists for the termination of this Agreement. The Final Notice of
               Termination  shall contain an effective  termination  date, which
               effective termination date shall be no less than thirty (30) days
               from the date of the Final Notice of Termination.

         b.    For a term of one (1) year,  in the event the Company  terminates
               this  Agreement,  then the Company  shall pay to  Consultant,  as
               liquidated damages, 87,500 shares of freely tradable Common Stock
               for each month or fraction  thereof  commencing  with  January 1,
               1997  through the  effective  date of such  termination,  up to a
               maximum of 1,000,000 shares.  All compensation paid to Consultant
               pursuant to Section 5 hereof shall be deemed  earned,  including,
               but not limited to, the Warrants;  provided,  however, that after
               Company has delivered the liquidated  damages as described above,
               Consultant  shall return to Company the  unearned  portion of the
               1,000,000 shares advanced to Consultant pursuant to Section 5(a).








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8.       NOTICE. Any notice required,  permitted or desired to be given pursuant
         to any of the provisions of this Agreement shall be deemed to have been
         sufficiently given or served for all purposes if delivered in person or
         sent by certified  mail,  return  receipt  requested,  postage and fees
         prepaid,  or by  national  overnight  delivery  prepaid  service to the
         parties  at their  addresses  set forth  above.  Copies of  notices  to
         Consultant shall be sent to the attention of Reid Breitman, Esq. at the
         address below.  Notice to Consultant shall be sent to Consultant at the
         address  below.  Any party hereto may at any time and from time to time
         hereafter change the address to which notice shall be sent hereunder by
         notice to the other party given under this  paragraph.  The date of the
         giving of any  notice  sent by mail shall be the day two days after the
         posting of the mail,  except that notice of an address  change shall be
         deemed  given  when  received.  The  addresses  of the  parties  are as
         follows:

         TO CONSULTANT:                  With a Copy to:
         AMERICAN EQUITIES, LLC          Reid Breitman, Esq.
         1860 N. Fuller Avenue, #401     Kaye, Scholer, Fierman,
         Los Angeles, California 90046   Hays & Handler LLP
         Telephone: (213) 850-1478       1999 Avenue of the Stars, 17th Floor
                                         Los Angeles, California 90067
                                         Telephone: (310) 788-1077


         TO THE COMPANY:
         Dr. Alan V. Phan, President
         Hartcourt Companies, Inc.
         19104 S. Norwalk Blvd.
         Artesia, California 90701
         Telephone: (310) 403-1126
         Facsimile: (310) 403-1130

9.       WAIVER.  No course of dealing nor any delay on the part of either party
         in  exercising  any rights  hereunder  will  operate as a waiver of any
         rights  of such  party.  No  waiver  of any  default  or breach of this
         Agreement or  application  of any term,  covenant or  provision  hereof
         shall be deemed a continuing  waiver or a waiver of any other breach or
         default or the waiver of any other application of any term, covenant or
         provision.

10.      DEFINITION  OF  "REASONABLE  AND  BEST  EFFORTS".  Reasonable  and best
         efforts   shall  not  include  the  payment  of  any   non-reimbursable
         out-of-pocket  costs or other payments by Consultant.  Consultant shall
         not guarantee, make any representation concerning (which representation
         would  survive  the  closing  of any  escrow or other  transaction)  or
         warrant (1) the condition,  performance, value, or profitability of any
         real property purchased,  sold by, or otherwise considered for purchase
         by the Company; (2) the validity,  marketability or insurability of any
         title to any real property purchased,  sold by, or otherwise considered
         for purchase by the Company; (3) the validity,  enforceability or value
         of any leases of or  pertaining to all or any part of any real property
         purchased,  sold  by,  or  otherwise  considered  for  purchase  by the
         Company; (4) the market value of any real property purchased,  sold by,


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         or otherwise considered for purchase by the Company; (5) the ability to
         finance,  refinance or otherwise mortgage or encumber any real property
         purchased,  sold  by,  or  otherwise  considered  for  purchase  by the
         Company;  or (6) that Consultant will find or present any real property
         which the Company will consider,  approve or ultimately  purchase or be
         able to purchase.


11.      SUCCESSORS;  BINDING  AGREEMENTS.  Prior  to the  effectiveness  of any
         succession   (whether   direct  or  indirect,   by   purchase,   merger
         consolidation or otherwise) to all or substantially all of the business
         and/or assets of the Company, the Company will require the successor to
         expressly  assume  and agree to perform  it if no such  succession  had
         occurred.  As used in this Agreement,  "Company" shall mean the Company
         as defined above and any successor to its business  and/or assets which
         executes and delivers the Agreement  provided for in this Section 10 or
         which  otherwise  becomes bound by all the terms and provisions of this
         agreement by operation of law.

12.      SURVIVAL OF TERMS.  Notwithstanding  the  termination of this Agreement
         for  whatever  reason,  the  provisions   hereof  shall   survive  such
         termination,  unless the context requires otherwise.

13.      COUNTERPARTS.   This   Agreement  may  be  executed   in  two  or  more
         counterparts, each of which shall be deemed to be an  original, but all
         of which  together  shall constitute one and  the same instrument.  Any
         signature by  facsimile  shall  be valid and  binding as if an original
         signature were delivered.

14.      CAPTIONS.  The caption  headings in this Agreement are for  convenience
         of reference only and are not intended  and shall not  be construed  as
         having any  substantive effect.

15.      GOVERNING  LAW.  This  Agreement  shall be  governed,  interpreted  and
         construed  in  accordance  with  the laws of the  state  of  California
         applicable  to  agreements  entered into and to be  performed  entirely
         therein.  Any suit, action or proceeding with respect to this Agreement
         shall be  brought  exclusively  in the  state  courts  of the  State of
         California  or in the  federal  courts of the United  States  which are
         located in Los Angeles,  California. The parties hereto hereby agree to
         submit to the  jurisdiction  and venue of such courts for the  purposes
         hereof.  Each party  agrees that,  to the extent  permitted by law, the
         losing party in a suit,  action or proceeding  in  connection  herewith
         shall pay the prevailing party its reasonable  attorneys' fees incurred
         in connection therewith.

16.      ENTIRE  AGREEMENT/MODIFICATIONS.  This Agreement constitutes the entire
         agreement  between the parties and supersedes all prior  understandings
         and  agreements,   whether  oral  or  written  regarding   Consultant's
         retention  by the  Company,  including,  but not  limited  to, the Term
         Sheet.  This  Agreement  shall not be  altered  or  modified  except in
         writing, duly executed by the parties hereto.




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17.      WARRANTY. The Company and Consultant each hereby warrant and agree that
         each is free to enter into this  Agreement,  that the  parties  signing
         below are duly authorized and directed to execute this  agreement,  and
         that this  Agreement is a valid,  binding and  enforceable  against the
         parties hereto.

18.      SEVERABILITY.  If any term, covenant or provision, or any part thereof,
         is found by any court of competent jurisdiction to be invalid,  illegal
         or  unenforceable  in any  respect,  the  same  shall  not  affect  the
         remainder  of such  term,  covenant  or  provision,  any  other  terms,
         covenants or provisions  or any  subsequent  application  of such term,
         covenant or provision  which shall be given the maximum effect possible
         without regard to the invalid,  illegal or unenforceable term, covenant
         or  provision,  the parties  hereto intend that there shall be added as
         part of this  Agreement  a term,  covenant or  provision  as similar in
         terms to such  invalid,  illegal or  unenforceable  term,  covenant  of
         provision,  or part thereof, as may be possible and be valid, legal and
         enforceable.

IN WITNESS  HEREOF,  the parties  hereto have duly executed and  delivered  this
Agreement as of the day and year first written above.


AMERICAN EQUITIES LLC   HARTCOURT COMPANIES, INC.


By: /s/ Reid Breitman             By: /s/ Alan V. Phan
-----------------------           ---------------------------
Reid Breitman, President          Dr. Alan V. Phan, President



























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                        ADDENDUM TO CONSULTING AGREEMENT


This Addendum to  Consulting  Agreement is entered into on December 30, 1996, by
and between Hartcourt  Companies,  Inc., a Utah corporation and its subsidiaries
or affiliates (the "Company"),  and American Equities LLC, a California  limited
liability company ("Consultant").

The  parties  hereby  acknowledge  that  the  "Bid  Price,"  as  defined  in the
Consulting Agreement, is One Dollar and Fifty Cents ($1.50).

IN WITNESS  HEREOF,  the parties  hereto have duly executed and  delivered  this
Addendum as of the day and year first above written.


AMERICAN EQUITIES LLC                              HARTCOURT COMPANIES, INC.




By: /s/ Reid Breitman                              By: /s/ Alan V. Phan
---------------------------                        ---------------------------
Reid Breitman, President                           Dr. Alan V. Phan, President



                                       





























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December 20, 1996


Dr. Alan Phan
Hartcourt Investments, Inc.
19104 S. Norwalk Blvd.
Artesia, California 90701

Re:American Equities LLC Consulting Agreement

Dear Dr. Phan:

This letter shall clarify  certain  issues raised by you in connection  with the
consulting agreement (the "Consulting  Agreement") between American Equities LLC
("American Equities") and Hartcourt Investments, Inc. ("Hartcourt") and shall be
incorporated as part of such Consulting  Agreement reached on December 20, 1996.
Hartcourt and American Equities agree to the following:

         1.       EXCLUSIVITY.  All real estate  purchases shall be for Harcourt
                  only. Not to go forward with said  property, Consultant agrees
                  not to purchase said  property.

         2.       MINIMUM PERFORMANCE OBJECTIVE. Consultant shall have increased
                  the assets  and/or  market  capitalization  of  Harcourt  by a
                  minimum of  $50,000,000  by December  31,  1997.  In the event
                  Consultant shall not meet this minimum performance  objective,
                  Consultant  shall return that portion of the 1,000,000  shares
                  of Common  Stock  advanced to  Consultant,  valued at $.50 per
                  share,  which has not been  earned  pursuant  to the terms set
                  forth in the Consultant  Agreement,  or shall pay to Hartcourt
                  the sum equal to the number of shares  unearned  multiplied by
                  $0.50. For purposes of the minimum performance objective,  the
                  assets  of  Hartcourt  shall be  defined  as all  assets  that
                  Hartcourt acquires of any kind,  including real estate,  other
                  operating companies, all other tangible and intangible assets,
                  and any increase in the market  capitalization  of  Hartcourt.
                  The market capitalization as of December 17, 1996 is agreed to
                  be $18,569,432.  Therefore,  if the market  capitalization  of
                  Hartcourt  exceeds  $68,569,432  at any time,  or if the total
                  assets of Hartcourt exceeds  approximately  $82,000,000 at any
                  time,  or, if in the  aggregate,  the total assets plus market
                  capitalization  of Hartcourt shall exceed  $100,500,000 at any
                  time,  this  minimum  performance  objective  will  have  been
                  satisfied.  To the extent any assets are sold or removed  from
                  Hartcourt's  balance sheet,  this calculation will be adjusted
                  to the extent of the  dollar  value of such sale or removal so
                  as to reduce the minimum performance objective.

         3.       Expense Cap. Hartcourt shall sell to Consultant 300,000 shares
                  of restricted Common Stock at $0.50 per share. Hartcourt shall
                  advance to  Consultant  $50,000 to be used for the opening and
                  operating of an office. The initial budget to open said office
                  shall not exceed  $10,000.  The parties  agree that  Hartcourt
                  shall  pay the  monthly  operating  expenses  of  this  office


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                  pursuant to the Consulting Agreement.  Hartcourt shall advance
                  twelve thousand dollars ($12,000) per month towards the agreed
                  upon budget. Consultant shall advance any portion in excess of
                  $12,000 per month which shall be reimbursed by Hartcourt  upon
                  approval of such  expenses.  Any travel  expenses,  except for
                  local  travel,  must be approved in advance by  Hartcourt  and
                  will be reimbursed by Hartcourt. Hartcourt agrees to set aside
                  an additional  $100,000 in a segregated account to pay for the
                  operating expenses of the consultant.

         IN WITNESS WHEREOF, the  parties  hereby agree  to this modification of
         the Consulting  Agreement.  All other terms  remain the same and are in
         full force and effect.


AMERICAN EQUITIES LLC                            HARTCOURT INVESTMENTS, INC.




By: /s/ Reid Breitman                            By: /s/ Alan V. Phan
----------------------                           ---------------------------
Reid Breitman, President                         Dr. Alan V. Phan, President

































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