ARTICLES OF AMENDMENT
                                     OF THE
                            ARTICLES OF INCORPORATION
                                       OF
                          THE HARTCOURT COMPANIES, INC.
                      DESIGNATING SERIES D PREFERRED STOCK

         Alan  Phan and Jehu  Hand  certify  that  they  are the  President  and
Assistant  Secretary,  respectively,  of The Hartcourt  Companies,  Inc., a Utah
corporation  (hereinafter  referred to as the  "Corporation"  or the "Company");
that,  pursuant  to the  Articles  of  Incorporation,  as  amended,  and Section
16-10a-602 of the Utah Business  Corporation  Act, the Board of Directors of the
Corporation  acting without  shareholder  approval,  which is not required under
such Section  16-10a-602  adopted the  following  amendment to Article IV of the
Articles of Incorporation on October 28, 1997:

         The  following  is  hereby  appended  to the end of  Article  IV of the
Articles of Incorporation.

         1. Creation of Series D Convertible  Preferred  Stock.  There is hereby
created a series of preferred  stock  consisting of 10,000 shares and designated
as  the  Series  D  Convertible  Preferred  Stock,  having  the  voting  powers,
preferences, relative, participating,  optional and other special rights and the
qualifications, limitations and restrictions thereof that are set forth below.

         2. Dividend  Provisions.  The holders of shares of Series D Convertible
Preferred Stocks shall be entitled to receive, when and as declared by the Board
of Directors out of any funds at the time legally available therefor,  dividends
at a par with holders of the common stock,  $.01 par value,  of the  Corporation
("Common  Stock")  as if the  Series  D  Convertible  Preferred  Stock  has been
converted  into Common  Stock on the record  date for the  payment of  dividend.
Dividends  shall be waived  with  respect to any shares of Series D  Convertible
Preferred Stock which are converted  prior to any dividend  payment record date.
Each issued share of Series D Convertible Preferred Stock shall rank on a parity
with each  other  issued  share of Series D  Convertible  Preferred  Stock  with
respect to dividends.

         3.       Redemption Provisions.  The Series D Convertible
Preferred Stock shall have no redemption rights.

         4. Liquidation Provisions. In the event of any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, the Series D
Convertible  Preferred  Stock shall be  entitled  to receive an amount  equal to
$1,000.00 per share.  Only after the full  preferential  liquidation  amount has
been  paid to,  or  determined  and set  apart  for,  the  Series D  Convertible
Preferred Stock and all other series of Preferred Stock  heretofore or hereafter
authorized and issued, if any, the remaining assets of the Corporation available
for distribution to shareholders shall be distributed  ratably to the holders of
the Common Stock. In the

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event  the  assets  of  the  Corporation   available  for  distribution  to  its
shareholders are insufficient to pay the full  preferential  liquidation  amount
per share  required  to be paid to the  holders of the  Corporation's  Preferred
Stock, the entire amount of assets of the Corporation available for distribution
to shareholders shall be paid up to their respective full liquidation amounts to
the holders of all classes of Preferred  Stock,  all of which  amounts  shall be
distributed  among holders of each such series of Preferred  Stock  according to
their respective terms, and the holders of Common Stock shall receive nothing. A
reorganization  or any other  consolidation or merger of the Corporation with or
into any other corporation, or any other sale of all or substantially all of the
assets of the Corporation, shall not be deemed to be a liquidation,  dissolution
or winding up of the  Corporation  within the meaning of this Section 4, and the
Series D  Convertible  Preferred  Stock shall be entitled  only to (i) the right
provided  in any  agreement  or  plan  governing  the  reorganization  or  other
consolidation,  merger or sale of assets transaction,  (ii) the rights contained
in the Utah  General  Corporation  Law and (iii) the rights  contained  in other
Sections hereof.

         5.       Conversion Provisions.  The holders of shares of Series
D Convertible Preferred Stock shall have conversion rights as
follows (the "Conversion Rights"):

                  (a)      Right to Convert.

                           (1) Each  share of  Series  D  Convertible  Preferred
                  Stock shall be  convertible,  at the option of its holder,  at
                  any time,  into a number  of  shares  of  common  stock of the
                  Company at the conversion rate (the "Conversion Rate") defined
                  below.

                           The  Conversion  Rate,  subject  to  the  adjustments
                  described  below,  shall  be equal to  $1,000  divided  by the
                  Market  Price.  For purposes of this Section  5(a)(1),  Market
                  Price shall be the  closing  bid price of the Common  Stock on
                  the Conversion  Date, as reported by the  Electronic  Bulletin
                  Board  sponsored by the  National  Association  of  Securities
                  Dealers  or the  closing  bid  price on the  NASDAQ  Small Cap
                  Market,  if the  Common  Stock  is  then  trading  on  NASDAQ,
                  averaged  over the  twenty  (20)  trading  days  ending on and
                  including  the  second  trading  day  prior  to  the  date  of
                  conversion.  Notwithstanding the foregoing,  in no event shall
                  the Conversion Rate be less than $1.00 nor more than $2.25, as
                  adjusted for any stock split or recapitalization.

                           The holder shall notify the Corporation, by facsimile
                  notice to the Corporation at (562) 403-1130, copy by overnight
                  courier at 19104 S.  Norwalk  Boulevard,  Artesia,  California
                  90701,  of the  holder's  intent to  convert  (the  "Notice of
                  Conversion")  in the form set forth in Section 5(a)(2) hereof,
                  executed  by the  holder of the  shares of Series D  Preferred
                  Stock evidencing such

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                  holder's   intention  to  convert  such  shares  of  Series  D
                  Convertible  Preferred Stock or a specified  portion (as above
                  provided)  thereof,  and  accompanied,   if  required  by  the
                  Company,   by  proper   assignment   thereof  in  blank.  Such
                  conversion   shall  be   effectuated   by   surrendering   the
                  certificates  representing  the shares of Series D Convertible
                  Preferred  Stock to be converted.  The date on which notice of
                  conversion  shall  be given  shall  be the  date on which  the
                  holder has  delivered  to the  Company,  by  facsimile or hand
                  delivery,  of the Notice of  Conversion  duly  executed to the
                  Company; provided, however, that the Conversion Date specified
                  in such Notice of Conversion is no less than thirty days after
                  the date on which the  Notice  of  Conversion  is  given.  The
                  Company  shall  cause  its  transfer  agent  to  complete  the
                  issuance  of Common  Stock  within ten (10)  business  days of
                  receipt  of such  Notice  of  Conversion,  provided  that  the
                  Company has received the Series D Convertible  Preferred Stock
                  certificates  which are the  subject of the  conversion  on or
                  prior to such tenth business day.

                           (2) No less than 10 (or multiple  thereof)  shares of
                  Series D Convertible  Preferred  Stock may be converted at any
                  one time. No fractional shares of Common Stock shall be issued
                  upon conversion of the Series D Convertible  Preferred  Stock,
                  in lieu of fractional  shares,  the number of shares  issuable
                  will be rounded to the nearest whole share. The form of Notice
                  of Conversion shall read substantially as follows:

                           The   undersigned   holder   (   the   "Holder")   is
                  surrendering  to  The  Hartcourt   Companies,   Inc.,  a  Utah
                  corporation   (the  "Company"),   one  or  more   certificates
                  representing shares of Series D Convertible Preferred Stock of
                  the Company (the  "Preferred  Stock") in  connection  with the
                  conversion  of all or a portion  of the  Preferred  Stock into
                  shares of Common  Stock,  $.01 par  value  per  share,  of the
                  Company (the "Common Stock") as set forth below.

                           1. The Holder  understands  that the Preferred  Stock
                  was  issued by the  Company  pursuant  to the  exemption  from
                  registration  under the United States  Securities Act of 1933,
                  as amended (the  "Securities  Act"),  provided by Section 4(2)
                  thereof.

                           2. The Holder represents and warrants that all offers
                  and sales of the Common  Stock  issued to the Holder upon such
                  conversion of the  Preferred  Stock shall be made (a) pursuant
                  to an effective  registration  statement  under the Securities
                  Act, (b) in compliance  with Rule 144, or (c) pursuant to some
                  other exemption from registration.

                  Number of Shares of Preferred Stock being converted:


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                  Conversion Date:


                  Delivery Instructions for certificates of Common Stock and for
                  new   certificates   representing   any  remaining  shares  of
                  Preferred Stock:





                                                              NAME OF HOLDER:



                                                        (Signature of Holder)

                  (b)      Adjustments to Conversion Rate.

                           (1) Reclassification,  Exchange and Substitution.  If
                  the Common Stock of the Corporation  issuable on conversion of
                  the Series D Convertible Preferred Stock shall be changed into
                  the same or a different number of shares of any other class or
                  classes  of  stock,   whether   by   capital   reorganization,
                  reclassification,  reverse  stock split or forward stock split
                  or stock  dividend or otherwise  (other than a subdivision  or
                  combination of shares provided for above),  the holders of the
                  Series  D  Convertible   Preferred   Stock  shall,   upon  its
                  conversion,  be  entitled  to  receive,  in lieu of the Common
                  Stock which the holders would have become  entitled to receive
                  but for such change, a number of shares of such other class or
                  classes of stock  that  would have been  subject to receipt by
                  the holders if they had  exercised  their rights of conversion
                  of the Series D Convertible Preferred Stock immediately before
                  that change.

                           (2) Reorganizations,  Mergers, Consolidations or Sale
                  of  Assets.   If  at  any  time  there   shall  be  a  capital
                  reorganization  of the Common Stock (other than a subdivision,
                  combination,  reclassification  or exchange of shares provided
                  for elsewhere in this Section (b) or merger of the Corporation
                  into  another  corporation,  or the sale of the  Corporation's
                  properties and assets as, or substantially  as, an entirety to
                  any other  person),  then,  as a part of such  reorganization,
                  merger  or sale,  lawful  provision  shall be made so that the
                  holders  of the Series D  Convertible  Preferred  Stock  shall
                  thereafter  be  entitled  to receive  upon  conversion  of the
                  Series D Convertible  Preferred Stock, the number of shares of
                  stock or other securities or property of the  Corporation,  or
                  of the successor  corporation  resulting from such merger,  to
                  which holders of the Common Stock  deliverable upon conversion
                  of the Series D  Convertible  Preferred  Stock would have been
                  entitled on such capital reorgan-

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                  ization,  merger  or  sale  as if  the  Series  D  Convertible
                  Preferred  Stock had been  converted  immediately  before that
                  capital  reorganization,  merger  or sale to the end  that the
                  provisions of this paragraph (b)(2)  (including  adjustment of
                  the  Conversion  Rate  then in  effect  and  number  of shares
                  purchasable  upon  conversion  of  the  Series  D  Convertible
                  Preferred  Stock)  shall be  applicable  after  that  event as
                  nearly equivalently as may be practicable.

                  (c) No Impairment.  The Corporation  will not, by amendment of
         its   Articles  of   Incorporation   or  through  any   reorganization,
         recapitalization, transfer of assets, merger, dissolution, or any other
         voluntary action,  avoid or seek to avoid the observance or performance
         of any of the  terms  to be  observed  or  performed  hereunder  by the
         Corporation, but will at all times in good faith assist in the carrying
         out of all the  provisions  of this  Section 5 and in the taking of all
         such action as may be necessary or  appropriate in order to protect the
         Conversion Rights of the holders of the Series D Convertible  Preferred
         Stock against impairment.

                  (d) Certificate as to Adjustments. Upon the occurrence of each
         adjustment or  readjustment  of the  Conversion  Rate for any shares of
         Series D Convertible  Preferred  Stock,  the Corporation at its expense
         shall promptly  compute such  adjustment or  readjustment in accordance
         with the terms  hereof and prepare and furnish to each holder of Series
         D Convertible  Preferred Stock effected  thereby a certificate  setting
         forth such adjustment or  readjustment  and showing in detail the facts
         upon which such adjustment or  readjustment  is based.  The Corporation
         shall,  upon the written  request at any time of any holder of Series D
         Convertible  Preferred Stock,  furnish or cause to be furnished to such
         holder  a like  certificate  setting  forth  (i) such  adjustments  and
         readjustments,  (ii) the  Conversion  Rate in effect  at the time,  and
         (iii) the number of shares of Common  Stock and the amount,  if any, of
         other  property which at the time would be received upon the conversion
         of such holder's shares of Series D Convertible Preferred Stock.

                  (e) Notices of Record Date. In the event of the  establishment
         by  the  Corporation  of a  record  of the  holders  of  any  class  of
         securities for the purpose of determining  the holders  thereof who are
         entitled to receive any dividend  (other than a cash dividend) or other
         distribution,  the  Corporation  shall mail to each  holder of Series D
         Convertible Preferred Stock at least twenty (20) days prior to the date
         specified  therein,  a notice  specifying  the  date on which  any such
         record is to be taken for the purpose of such dividend or  distribution
         and the amount and character of such dividend or distribution.

                  (f)      Reservation of Stock Issuable Upon Conversion.  The
         Corporation shall at all times reserve and keep available out

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         of its  authorized  but unissued  shares of Common Stock solely for the
         purpose  of  effecting  the  conversion  of the  shares of the Series D
         Convertible  Preferred  Stock such number of its shares of Common Stock
         as shall from time to time be  sufficient  to effect the  conversion of
         all then  outstanding  shares  of the  Series D  Convertible  Preferred
         Stock;  and if at any time the number of authorized but unissued shares
         of Common Stock shall not be sufficient to effect the conversion of all
         then  outstanding  shares of the Series D Convertible  Preferred Stock,
         the Corporation  will take such corporate action as may, in the opinion
         of its counsel,  be necessary to increase its  authorized  but unissued
         shares of Common Stock to such number of shares as shall be  sufficient
         for such purpose.

                  (g) Notices.  Any notices  required by the  provisions of this
         Section 5 to be given to the holders of shares of Series D  Convertible
         Preferred Stock shall be deemed given if deposited in the United States
         mail,  postage  prepaid,  and addressed to each holder of record at its
         address appearing on the books of the Corporation.

         6. Voting Provisions. The Series D Convertible Preferred Stock shall be
entitled  to vote as a class with  holders of Common  Stock with such  number of
votes per share as the holder would be entitled to, and at the Conversion  Rate,
as if the Series D  Preferred  Stock were  converted  on the record date for the
vote of holders of Common Stock.

         IN WITNESS WHEREOF,  the Company has caused these Articles of Amendment
to the  Articles  of  Incorporation  to be duly  executed by its  President  and
attested to by its Assistant Secretary this 28th day of October, 1997.

                                                  THE HARTCOURT COMPANIES, INC.



                                                     Alan Phan, President



                                               Jehu Hand, Assistant Secretary

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