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

         Alan Phan and Frederic  Cohn certify  that they are the  president  and
secretary,  respectively,  of the Hartcourt Companies,  Inc., a Utah corporation
(hereinafter   called  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 September , 1997:

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

                            SERIES C PREFERRED STOCK

Section 1.                  Designation and Amount.

                  There is hereby created a series of preferred stock, par value
                  $1,000.00  per share,  which shall be  designated as "Series C
                  Preferred  Stock"  (the  "Series C  Preferred  Stock") and the
                  number of shares  constituting  the Series C  Preferred  Stock
                  shall be 1,500.  Such  number of shares  may be  increased  or
                  decreased by resolution  of the Board of Directors;  provided,
                  that no decrease shall reduce the number of shares of Series C
                  Preferred  Stock to a number  less  than the  number of shares
                  then  outstanding plus the number shares reserved for issuance
                  upon the exercise of outstanding  options,  rights or warrants
                  or upon the conversion of any outstanding securities issued by
                  the Company convertible into Series C Preferred Stock.

Section 2.                 Rank.

                  The Series C Preferred  Stock shall rank;  (i) prior to all of
                  the  Company's  Common  Stock,  par  value  $0.001  per  share
                  ("Common Stock"); (ii) prior to any class or series of capital
                  stock of the Company hereafter created specifically ranking by
                  its terms  junior to any Series C Preferred  Stock of whatever
                  subdivision  (collectively,  with the  Common  Stock,  "Junior
                  Securities");  (iii) on  parity  with any  class or  series of
                  capital stock of the Company  hereafter  created  specifically
                  ranking  by its terms on parity  with the  Series C  Preferred
                  Stock ("Parity  Securities") in each case as to  distributions
                  of assets upon  liquidation,  dissolution or winding up of the
                  Company,   whether   voluntary   or   involuntary   (all  such
                  distributions being referred to collectively as

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                  "Distributions"),  and (iv) junior to the  Original  Preferred
                  Stock and any other  class or series of  capital  stock of the
                  Company  which  is  specifically  ranked  senior  to  Series C
                  Preferred Stock ("Senior Securities").

Section 3.                 Dividends.

                  The Series C Preferred  Stock will bear no dividends,  and the
                  holders of the Series C Preferred  Stock shall not be entitled
                  to receive dividends on the Series C Preferred Stock.

Section 4.                 Liquidation Preference.

                  There shall be no liquidation preference.

Section 5.                 Redemption by Company.

         a.       Company's Right to Redeem at its Election.  At any time,
                  the Company shall have the right, in its sole discretion,
                  to redeem, from time to time, any or all of the Series C
                  Preferred Stock at a redemption price of $1,000.00 per
                  share.  If the Company elects to redeem some, but not all
                  of the Series C Preferred Stock, the Company shall redeem
                  a pro-rata amount from each holder of Series C Preferred
                  Stock unless requested in writing by any holder not to
                  redeem such holder's shares.

                  i.       Mechanics of Redemption at Company's Election.  The
                           Company shall effect each such redemption by giving
                           at least 10 days prior written notice ("Notice of
                           Redemption At Company's Election") to the holders
                           of Series C Preferred Stock selected for
                           redemption, at the address and facsimile number of
                           such holder appearing in the Company's register for
                           the Series C Preferred Stock, which Notice of
                           Redemption At Company's Election shall be deemed to
                           have been delivered three (3) business days after
                           the Company's mailing (by overnight courier, or by
                           facsimile with a valid confirmation of
                           transmission) of such Notice of Redemption At
                           Company's Election.  Such Notice of Redemption At
                           Company's Election shall indicate the number of
                           shares of holder's Series C Preferred Stock that
                           have been selected for redemption, the date which
                           such redemption is to become effective (the "Date
                           of Redemption At Company's Election") and the
                           applicable aggregate redemption price to such
                           holder.

                  ii.      Payment of Redemption Price.  Each holder
                           submitting stock being redeemed under this Section
                           5 shall send their certificates representing the
                           stock so redeemed to the Company, and the Company
                           shall pay the redemption price to that holder

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                           within  ten  (10)  business  days of the date of such
                           receipt of the certificates. The Company shall not be
                           obligated to deliver the redemption  price unless the
                           certificates  representing  the  Series  C  Preferred
                           Stock so redeemed are delivered to the Company, or in
                           the event one ore more  certificates  have been lost,
                           stolen,   mutilated  or  destroyed,  the  holder  has
                           complied with Section 5(c) below.

         b.       Lost or Stolen Certificates.  Within three (3) business
                  days after receipt by the Company of evidence of the
                  loss, theft, destruction or mutilation of a certificate
                  or certificates representing the Series C Preferred
                  Stock, and (in the case of loss, theft or destruction) of
                  indemnity or security reasonably satisfactory to the
                  Company, and upon surrender and cancellation of the
                  certificate representing Series C Preferred Stock, if
                  mutilated, the Company shall execute and deliver new
                  Series C Preferred Stock certificates of like tenor and
                  date.  Company shall not be required to deliver new
                  Series C Preferred Stock if the request for replacement
                  is made contemporaneously with the redemption of a
                  holder's Series C Preferred Stock.

Section 6.                 Holder's Right to Advance Notice of Company's
Election to Redeem.

                  Holder's Right to Redeem.  Holders of Series C Preferred Stock
                  shall  have the  right to  redeem,  in the  aggregate,  0.1667
                  shares of Series C Preferred  Stock for each share of Series C
                  Preferred  Stock owned by such holder on or after the last day
                  of each  calendar  quarter,  at a  redemption  price  equal to
                  $1,000.00 per whole share redeemed. In the event a holder does
                  not redeem the full  amount of shares  such holder is entitled
                  to redeem after each calendar  quarter,  such redemption right
                  shall be cumulative, such that the holder shall have the right
                  to redeem,  in the  aggregate,  a number of shares of Series C
                  Preferred  Stock  equal to .1667  shares of Series C Preferred
                  Stock for each share of Series C Preferred Stock owned by such
                  holder plus the number of shares  such holder was  entitled to
                  redeem  previously  which  were  not  redeemed  either  at the
                  holder's or the Company's election.

Section 7.                 Status of Redeemed Stock.

                  Upon redemption of the Series C Preferred Stock (in whole
                  or in part) the Series C Preferred Stock so redeemed
                  shall no longer be deemed to be outstanding and all
                  rights with respect thereto, except only the right of the
                  holder of Series C Preferred Stock to receive cash
                  payment of the applicable redemption price upon such
                  redemption, shall terminate, and the shares of Series C
                  Preferred Stock so redeemed shall be canceled.  The

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                  redeemed  shares so  canceled  shall  return to the  status of
                  authorized  but  unissued  Preferred  Stock  of no  designated
                  series.

Section 8.                 Protective Provisions.

                  So long as shares of Series C Preferred Stock are outstanding,
                  the   Company  may  not  waive  or  amend  any  term  of  this
                  Certificate  of  Designation   without  first   obtaining  the
                  approval (by vote or written consent) of the holders of 75% of
                  the then outstanding Series C Preferred Stock.

Section 9.                 Voting Rights.

                  The holders of Series C  Preferred  Stock shall have no voting
                  rights  except as otherwise  provided by Section 8 above,  and
                  except  to  the  extent   required  under  the  Utah  Business
                  Corporation Act. Holders of the Series C Preferred Stock shall
                  be entitled to notice of all stockholders  meetings or written
                  consents with respect to which they would be entitled to vote,
                  which  notice  would be  provided  pursuant  to the  Company's
                  by-laws and applicable statutes.

Section 10.                Preference Rights.

                  Nothing  contained  herein  shall be  construed to prevent the
                  Board of  Directors  of the Company  from  issuing one or more
                  series of Preferred  Stock with  dividend  and/or  liquidation
                  preferences  senior  to,  on a parity  with,  or junior to the
                  preferences of the Series C Preferred Stock.

Section 11.                Governing Law.

                  This  Certificate  of  Designation  will  be  governed  by and
                  construed  in  accordance  with the laws of the State of Utah,
                  U.S.A. without giving effect to the principles of conflicts of
                  laws,  except for matters  arising under the Securities Act of
                  1933,  as amended,  the  Securities  Exchange Act of 1934,  as
                  amended,  or other applicable federal law, which matters shall
                  be governed by and construed in accordance with such laws.

Section 12.                Business Day Definition.

                  For purposes  hereof,  the term  "business day" shall mean any
                  day on which  banks are  generally  open for  business  in the
                  State  of  California,  USA and  excluding  any  Saturday  and
                  Sunday.

Section 13.                Notices.


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                  Any notice or other communication  required or permitted to be
                  given hereunder shall be given as provided herein or delivered
                  against  receipt if to (i) the Company at 19104 Norwalk Blvd.,
                  Artesia, California, 90701, ATTN: Alan V. Phan, CEO, Telephone
                  No. (562)  403-1126,  Telecopy No. (562) 403-1130 and (ii) the
                  holder of this  Certificate of Designation,  to such holder at
                  its last  address  as shown on the  Series C  Preferred  Stock
                  Register  (or to such other  address  as the party  shall have
                  furnished  in writing as its new  address to be entered on the
                  Series C Preferred  Stock Register (which address must include
                  a telecopy  number) in accordance  with the provisions of this
                  Section 13). Any notice or other  communication may be made by
                  facsimile  and  delivery  shall be  deemed  given,  except  as
                  otherwise required herein, at the time of transmission of said
                  facsimile,  with a valid confirming  transmission  report. Any
                  notice  given on a day  that is not a  business  day  shall be
                  effective upon the next business day.

Section 14.                Waiver of any Breach to be in Writing.

                  Any waiver by the Company or the holder  hereof of a breach of
                  any  provision of the  Certificate  of  Designation  shall not
                  operate as, or be construed to be a waiver of any other breach
                  of such  provision or of any breach of any other  provision of
                  the Certificate of Designation.  The failure of the Company or
                  the holder hereof to insist upon strict  adherence to any term
                  of the  Certificate  of  Designation  on one or more occasions
                  shall not be  considered a waiver or deprive that party of the
                  right  thereafter to insist upon strict adherence to that term
                  or any  other  term of the  Certificate  of  Designation.  Any
                  waiver must be in writing.

Section 15.                Unenforceable Provisions.

                  If  any  provision  of  this  Certificate  of  Designation  is
                  invalid,  illegal  or  unenforceable,   the  balance  of  this
                  Certificate of Designation shall remain in effect,  and if any
                  provision is  inapplicable to any person or  circumstance,  it
                  shall nevertheless  remain applicable to all other persons and
                  circumstances.


         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 secretary this day of September, 1997.

                                                 THE HARTCOURT COMPANIES, INC.


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                                                     Alan V. Phan, President

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                                     ATTEST:



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                                                     Frederic Cohn, Secretary

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