EXHIBIT 10.131

             SECURITY AGREEMENT DATED AUGUST 8, 1996 BETWEEN NUOASIS
               INTERNATIONAL INC. AND THE HARTCOURT COMPANIES INC.

                               SECURITY AGREEMENT



         THIS SECURITY AGREEMENT  ("Agreement") is executed as of this 8th day
of August,  1996,  by The  Hartcourt  Companies,  Inc.,  a  Utah  corporation
(hereinafter referred to as the "Debtor"),  with its principal place of business
located at 19104 South Norwalk Blvd.,  Artesia,  California  90703,  in favor of
NuOasis  International  Inc.,  a  corporation  organised  under  the laws of the
Commonwealth of the Bahamas, its successors and assigns (hereinafter referred to
as the "Secured Party").

          WHEREAS,  the  following  recitals of fact are a material part of this
Agreement; and,

         WHEREAS,  Secured  Party is  granting  credit to Debtor  pursuant  to a
Convertible  Secured  Promissory  Note (the "Note")  dated of even date which is
required to be secured by the property described in Exhibit "A" to the Note (all
of which documents and instruments  evidencing  and/or securing  indebtedness of
Debtor to Secured  Party are  collectively  referred to herein,  along with this
Agreement,  as the  "Security  Documents").  Secured Party is unwilling to grant
credit to Debtor unless  Debtor  grants to Secured  Party the security  interest
granted herein according to the terms and conditions hereof.

1.       In  consideration of the granting of credit to Debtor by Secured Party,
         Debtor hereby grants to Secured Party a security interest  (hereinafter
         referred to as the "Security  Interest")  in the property  described on
         Exhibit "A" attached  hereto and made a part hereof,  whether now owned
         or hereafter acquired,  including all proceeds and products thereof and
         additions  and  accessions  thereto  (hereinafter  referred  to as  the
         "Collateral").  This  Agreement  and the rights  hereby  granted  shall
         secure  the  following  (hereinafter  collectively  referred  to as the
         "Obligations"):

          A.   Principal  and  Interest.  The  principal  amount  of  Borrower's
               indebtedness to Secured Party with interest  thereon as specified
               in  the  Security  Documents  and  any  renewals,  extensions  or
               modifications thereof; and

          B.   Expenses.  The  expense  of  all  legal  proceedings,   including
               attorneys' fees, brought by the Secured Party to enforce the Note
               or this  Agreement  and all  other  costs  and  expenses  paid or
               incurred by the Secured Party in respect of or in connection with
               the Collateral; and

          C.   Performance.  The observance and performance by the Debtor of all
               of the terms,  provisions,  covenants and obligations on its part
               to be observed or  performed  under the Note and this  Agreement;
               and

          D.   Other. Any and all  indebtedness,  obligations and liabilities of
               any kind and  nature of the Debtor to  Secured  Party,  direct or
               indirect,  absolute  or  contingent,  due or to become  due,  now
               existing or hereafter arising.

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2.   DEBTOR'S WARRANTIES, COVENANTS AND AGREEMENTS

     Debtor hereby warrants, covenants and agrees that:

     A.   Purpose. The Collateral covered by this Agreement is used or purchased
          for  use  primarily  for  business  purposes.   Although  proceeds  of
          Collateral are covered by this Agreement,  this shall not be construed
          to mean that  Secured  Party  consents to any sale of the  Collateral,
          except in ordinary course of business.

     B.   Transfer of Collateral Prohibited.  Debtor will not, without obtaining
          the prior  written  consent of Secured  Party,  transfer or permit any
          transfer  of the  Collateral  or any part  thereof to be made,  or any
          interest  therein to be created by way of a sale  (except as permitted
          above), or by way of a grant of a security interest, or by way of levy
          or other judicial process.

     C.   Access and  Inspection.  Debtor will, at all reasonable  times,  allow
          Secured Party or its  representatives  free and complete access to all
          of the Debtor's records for such inspection and examination as Secured
          Party deems necessary. Debtor shall also upon request of Secured Party
          from time to time submit up-to-date  schedules of the items comprising
          the Collateral in such detail as Secured Party shall require.

     D.   Third Party  Claims.  Debtor at its cost and expense  will protect and
          defend this  Agreement,  all of the rights of Secured Party  hereunder
          and the  Collateral  against  the  claims  and  demands  of all  other
          parties.  Debtor  will  promptly  notify  Secured  Party of any  levy,
          distraint or other  seizure by legal  process or otherwise of any part
          of  the  Collateral,   and  of  any  threatened  or  filed  claims  or
          proceedings that might in any way affect or impair any of the terms of
          the Agreement.

     E.   Insurance.  Debtor at its expense  will  obtain and  maintain in force
          insurance policies including fire and flood insurance, covering losses
          or damage to the Collateral.  The insurance policies to be obtained by
          Debtor  shall be in form and  amounts  acceptable  to  Secured  Party.
          Secured Party is hereby  irrevocably  appointed  Debtor's  attorney in
          fact to endorse  any check or draft that may be payable to the Debtor,
          alone or jointly  with other  payees,  so that the  Secured  Party may
          collect the proceeds  payable for any loss under such  insurance.  The
          proceeds of such  insurance,  less any costs and expenses  incurred or
          paid by the Secured Party in the collection thereof,  shall be applied
          in Secured  Party's  sole  discretion  either  toward the costs of the
          repair or replacement of the items damaged or destroyed, or on account
          of any sums secured hereby, whether or not then due or payable.

     F.   Notices.  Debtor will give Secured Party  immediate  written notice of
          any change in location of Debtor's place of business.

3.   EVENTS OF DEFAULT

     The  occurrence  of any of the  following  events shall  constitute  and is
     hereby defined to be an "Event of Default":

     A.   Breach of  Security  Agreement  Any  failure  or neglect to observe or
          perform  any  of  the  terms,  provisions,   promises,  agreements  or
          covenants of this  Agreement  and the  continuance  of such failure or
          neglect after notice thereof to the Debtor; or

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     B.   Failure  to Pay.  Any  failure  of the  Debtor  to pay any  amount  of
          principal and/or interest,  or any other sum due under the Note within
          ten (10) days  following  the date such amount became due and payable;
          or

     C.   False Statements. Any warranty,  representation or statement contained
          in this  Agreement or otherwise made or furnished to the Secured Party
          by or on behalf  of the  Debtor  shall be or shall  prove to have been
          false when made or furnished; or

     D.   Destruction  or Demise of  Collateral.  Any loss,  theft,  substantial
          damage,  destruction of, or the attachment of an encumbrance to any of
          the Collateral, or the voluntary or involuntary transfer of any of the
          Collateral (and said Collateral is not immediately replaced,  restored
          or returned) or the transfer of possession  thereof to anyone,  or the
          sale,  creation  of  a  security  interest,  lien,  attachment,  levy,
          garnishment,  distraint,  or other  process  of, in or upon any of the
          Collateral,  and if such  attachment or other  similar  process is not
          bonded or released within thirty (30) days after levy.

     E    Breach of  Conversion  Rights.  If the Debtor  shall fail to honor the
          Secured Party's conversion rights under the Note following thirty (30)
          days prior notice to Debtor and following  Secured Party's  compliance
          with all the  procedures of Debtor for  conversion  and the failure of
          Debtor to either  tender the shares  issuable  upon  conversion  or to
          notify  Secured Party of  additional  third party  requirements  (i.e.
          transfer agent) within said thirty (30) day period.

4.   SECURED PARTY'S REMEDIES

     Upon the occurrence of any Event of Default hereunder,  Secured Party shall
     have the following rights and remedies:

     A.   Acceleration and Possession. Secured Party may, at its option, declare
          all or any part of the  Obligations  immediately  due and  payable and
          Debtor shall on demand by Secured Party deliver the  Collateral to the
          Secured Party. Secured Party may, without further notice or demand and
          without legal  process,  take  possession of the  Collateral  wherever
          found and, for this purpose,  may enter upon any property  occupied by
          or in the control of Debtor.

     B.   All  Remedies  Available.  Secured  Party may pursue any legal  remedy
          available to collect all sums secured  hereby and to enforce its title
          in and right to possession of the  Collateral,  and to enforce any and
          all other rights or remedies available to it, and no such action shall
          operate as a waiver of any other right or remedy of the Secured  Party
          under the terms hereof or under applicable law.

     C.   Waiver of Defenses.  Debtor waives any  requirements  of  presentment,
          protest,  notices  of  protest,  notices  of  dishonor,  and all other
          formalities.  Debtor  waives all  rights  and/or  privileges  it might
          otherwise have to require  Secured Party to proceed against or exhaust
          the Collateral encumbered hereby or the Note or to proceed against any
          guarantor of the  Obligations or to pursue any other remedy  available
          to Secured Party in any particular  manner or order under the legal or
          equitable  doctrine or principle of marshaling  and/or  suretyship and
          further  agrees that Secured  Party may proceed  against any or all of
          the Collateral encumbered hereby in the event of default in such order
          and manner as Secured Party in its sole discretion may determine.  Any
          Debtor that has signed  this  Agreement  as a surety or  accommodation
          party,  or that has subjected its property to this Agreement to secure
          the  indebtedness of another hereby  expressly  waives the benefits of
          the  provisions  of any laws which could delay,  defeat or render more
          costly the Secured Party's realization upon the Collateral, waives any
          defense arising by reason of any disability or other defense of Debtor
          or by  reason  of the  cessation  from  any  cause  whatsoever  of the
          liability  of  Debtor,  and  waives the  benefit  of any  statutes  of
          limitation affecting the enforcement hereof.

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     D.   Sale of  Collateral.  Secured  Party  may  sell all or any part of the
          Collateral  at public or private  sale either  with or without  having
          such  Collateral  at the place of sale,  and with  notice to Debtor as
          provided herein. The proceeds of such sale, after deducting  therefrom
          all  expenses  of Secured  Party in  taking,  storing,  repairing  and
          selling the  Collateral  (including  attorneys'  fees and court costs)
          shall be applied to the payment of any part or all of the  Obligations
          and any other  indebtedness  or liability of Debtor to Secured  Party,
          and any surplus thereafter  remaining shall be paid to any person that
          may be legally entitled thereto.  In the event of a deficiency between
          such net proceeds from the sale of Collateral  and the total amount of
          Obligations owing by Debtor,  Debtor will promptly upon demand pay the
          amount of such deficiency to Secured Party.

     E.   Secured Party as  Purchaser.  At any sale,  public or private,  of the
          Collateral or any part thereof,  made in the enforcement of the rights
          and remedies of Secured Party,  Secured Party may purchase any part or
          parts of the Collateral or all thereof offered at such sale.

     F.   Notice of Sale.  Secured Party shall give Debtor  reasonable notice of
          any sale or other  disposition  of the Collateral or any part thereof.
          Debtor  agrees  that  notice  shall  be  conclusively   deemed  to  be
          reasonable  and  effective if such notice is mailed by  registered  or
          certified mail postage prepaid,  to Debtor at Debtor's principal place
          of  business  at least  ten  (10)  days  prior  to such  sale or other
          dispositions.

     G.   Applicable  Law Remedies.  Secured Party shall have all the rights and
          remedies afforded a Secured Party under applicable law.

5.   MISCELLANEOUS PROVISIONS

     A.   Waivers and  Cumulative  Remedies.  No Event of Default  hereunder  by
          Debtor shall be deemed to have been waived by Secured  Party except by
          a writing to that effect  signed by Secured Party and no waiver of any
          such Event of Default  shall operate as a waiver of any other Event of
          Default on a future occasion,  or as a waiver of that Event of Default
          after  written  notice  thereof and demand by Secured Party for strict
          performance of this Agreement.  All rights, remedies and privileges of
          Secured Party hereunder shall be cumulative and not  alternative,  and
          shall, whether or not specifically so expressed,  inure to the benefit
          of the Secured Party, its successors and assigns,  and all obligations
          of the Debtor shall bind its successors and legal representatives.

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     B.   Debtor's  Possession  of  Collateral.  Until an Event of Default,  the
          Debtor may retain  possession of the  Collateral and may use it in any
          lawful  manner  not  inconsistent  with  this  Agreement  or with  the
          provisions of any policies of insurance thereon.

     C.   Waiver of Jury Trial.  Secured  Party and Debtor hereby agree to trial
          by court and irrevocably  waive jury trial in any action or proceeding
          (including but not limited to any  counterclaim)  arising out of or in
          any way related to or connected  with this  Agreement,  the Note,  the
          relationship  created thereby,  or the origination,  administration or
          enforcement  of the  indebtedness  evidenced  and/or  secured  by this
          Agreement.

     D.   Severability.  Whenever  possible,  each  provision of this  Agreement
          shall be interpreted in such manner as to be effective and valid under
          applicable  law,  but if any  provision  of this  Agreement  shall  be
          prohibited by or invalid under applicable law, such provision shall be
          ineffective to the extent of such  prohibition or invalidity,  without
          invalidating   the  remainder  of  such  provision  or  the  remaining
          provisions of this Agreement.

     E.   Written  Amendment  Required.  No  modification,  rescission,  waiver,
          release or amendment of any provision of this Agreement  shall be made
          except by a written agreement subscribed by Debtor and Secured Party.

     F.   Full Force and Effect.  This Agreement  shall remain in full force and
          effect until all of the  indebtedness  and any  extensions or renewals
          thereof shall be paid in full.

     G.   Successors and Assigns.  Secured Party and Debtor as used herein shall
          include the heirs,  executors  or  administrators,  or  successors  or
          assigns of those parties. The provisions of this Agreement shall apply
          to the parties  according to the context  hereof and without regard to
          the number or gender of words and expressions used herein.

     H.   Financing Statements. A carbon,  photographic or other reproduced copy
          of this Agreement and/or any financing statement relating hereto shall
          be sufficient for filing and/or  recording as a financing  statements.
          Notwithstanding the foregoing, Debtor shall provide, shall execute and
          shall cooperate with Secured Party in the execution and filing of such
          financing  statements,  documents and instruments as Secured Party may
          reasonably  request in order to perfect the security  interest granted
          to Secured  Party  hereunder or otherwise to carry out the purposes of
          this Agreement.

     I.   Governing Law. This Security  Agreement and the transaction  evidenced
          hereby shall be construed under the laws of the United States,  as the
          same may from time to time be in effect.

         IN WITNESS  WHEREOF,  this Agreement has been executed and delivered on
behalf of and in the name of Debtor on the date indicated above.

                                             The Hartcourt Companies, Inc.
                                             a Utah corporation



                                             By:-------------------------------
                                                Name:
                                                Title:

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                                  SCHEDULE "3"

                                     to the
                           Purchase and Sale Agreement
                                 Dated August 8, 1996

                                 CAPITALIZATION

DESCRIPTION OF SECURITIES

The authorized  capital stock of the Company  consists of 110,001,000  shares of
capital stock,  composed of 100,000,000 shares of common stock, par value $0.001
per share ("Common Stock"),  1,000 shares of Preferred Stock, par value $.01 per
share ("Original  Preferred  Stock"),  and 10,000,000 shares of Preferred Stock,
par value $.01 per share ("Class A Preferred Stock").

COMMON STOCK

         Voting  Rights.  Subject  to the voting  rights of holders of  Original
Preferred  Stock  described  below,  each  holder of  shares of Common  Stock is
entitled  to one  vote for  each  share of  Common  Stock  for the  election  of
directors and on each other matter  submitted to a vote of the  stockholders  of
the Company.  Until December 31, 2010,  holders of Common Stock, are entitled to
elect  two-fifths  (2/5) of the  authorized  number of  members  of the Board of
Directors.  The  holders of Common  Stock  have  exclusive  voting  power on all
matters at any time no Preferred Stock with superior voting rights is issued and
outstanding.

         Liquidation Rights. Upon liquidation,  dissolution or winding up of the
Company,  holders of shares of Common  Stock are  entitled  to share  ratably in
distributions  of any assets after  payment in full or provision for all amounts
due creditors and provision for any liquidation preference of any other class or
series of stock of the Company then outstanding.

         Dividends. Dividends may be declared by the Board of Directors and paid
from time to time to the holders of Common Stock in cash,  stock,  or otherwise,
as may be determine by the Board of Directors, out of the net profits or surplus
of the Company.

ORIGINAL PREFERRED STOCK

         Voting Rights. The holders of Original Preferred Stock are not entitled
to vote on any matters except those affecting the Original  Preferred Stock, the
election of directors (to the extent described below) and as otherwise  required
by law. Until December 31, 2010, holders of Original Preferred Stock,  voting as
a single  class,  are  entitled to elect  three-fifths  (3/5) of the  authorized
number of members of the Board of Directors.

         Liquidation  Rights.  In the event of any  liquidation,  dissolution or
winding up of the Company,  holders of Original  Preferred Stock are entitled to
be paid the full par value of the Original Preferred Stock, $.01 per share.

         Conversion  Rights.  The holders of shares of Original  Preferred Stock
are entitled to convert each share of Original Preferred Stock into 1,000 shares
of fully paid non-assessable Common Stock.

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          Dividends.The  holders of shares of Original  Preferred  Stock are not
entitled to receive any dividends. Class A Preferred Stock

         General.  The  10,000,000  shares of  authorized  and unissued  Class A
Preferred  Stock may be issued  pursuant  to  action by the  Company's  Board of
Directors and without  further  action by the Company's  stockholders  with such
designations,   powers,   preferences  and  other  rights  and   qualifications,
limitations  and  restrictions  thereof as the Board of Directors may designate,
including but not limited to: (i) the distinctive designation of each series and
the number of shares that will constitute such series; (ii) the dividend rate on
the shares of such series,  any  restriction,  limitation or condition  upon the
payment of such dividends,  whether  dividends shall be cumulative and the dates
on which  dividends  are payable;  (iii) the prices at which,  and the terms and
conditions on which,  the shares of such series may be redeemed,  if such shares
are redeemable;  (iv) any preferential amount payable upon shares of such series
may be converted into other securities, if such shares are convertible;  and (v)
the voting rights,  including the right to vote as a class on designated matters
such as, but not limited to, the merger,  consolidation or sale of substantially
all of the Company's  assets,  or the approval of designated action by a greater
than two thirds  (2/3)  affirmative  vote,  and if so, the terms and  conditions
thereof and any limitations thereon.

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