10.3      Distribution Agreement between The Hartcourt Companies, Inc. and Enova
          Holdings, Inc.

                             DISTRIBUTION AGREEMENT



         THIS  DISTRIBUTION  AGREEMENT,  dated March 24, 1999, is by and between
The  Hartcourt  Companies  Inc.,  a Utah  corporation  ("Hartcourt")  and  Enova
Holdings Inc., a Nevada corporation ("Enova"). Capitalized terms used herein and
not otherwise  defined shall have the  respective  meanings  assigned to them in
paragraph 1 hereof.

         WHEREAS,  the Board of Directors of Hartcourt has determined that it is
in the best interests of Hartcourt and its shareholders to separate  Hartcourt's
existing subsidiaries into an independent business;

         WHEREAS,  the Board of  Directors  of  Hartcourt  has  determined  that
Hartcourt will distribute to its  shareholders all of the capital stock of Enova
held directly or indirectly  by Hartcourt,  subject to the terms and  conditions
set forth herein;

         WHEREAS,  the Enova  Distribution  is intended to qualify as a tax-free
spin-off under Section 355 of the Code;

         WHEREAS,   it  is  appropriate  and  desirable  to  set  forth  certain
agreements that will govern certain matters  relating to the Enova  Distribution
and the relationship of Hartcourt and Enova following the Enova Distribution;

         NOW,  THEREFORE,  the parties,  intending to be legally bound, agree as
follows:

1.       Definitions

         For the purpose of this  Agreement the  following  terms shall have the
following meanings:

          1.1  "Agent" means the distribution agent to be appointed by Hartcourt
               to  distribute  the  shares  of  Enova  stock  held by  Hartcourt
               pursuant to the Enova Distribution.

          1.2  "Agreement" means this Distribution  Agreement,  including all of
               the Schedules hereto.

          1.3  "Code" means the Internal Revenue Code of 1986, as amended.

          1.4  "Commission" means the Securities and Exchange Commission.

          1.5  "Consents"  means any  consents,  waivers or approvals  from,  or
               notification requirements to, any third parties.

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          1.6  "Exchange  Act" means the  Securities  Exchange  Act of 1934,  as
               amended,  together  with the  rules and  regulations  promulgated
               thereunder.

          1.7  "Enova" means Enova Holdings Inc., a Nevada corporation.

          1.8  "Enova Common Stock" means the Common Stock,  par value $.001 per
               share, of Enova.

          1.9  "Enova Class A Warrant" means the Class A Warrant that grants the
               holder the right to acquire one share of Enova  Common Stock at a
               purchase price of $4.00 per share.

          1.10 "Enova Preferred Stock" means the Preferred Stock,  Series D, par
               value $.001 per share, of Enova.

          1.11 "Enova Stock" means  collectively  the Enova Common Stock and the
               Enova Preferred Stock.

          1.12 "Enova Distribution" means the distribution by Hartcourt on a pro
               rata  basis  to  holders  of  Hartcourt   Stock  of  all  of  the
               outstanding shares of Enova Stock owned by Hartcourt on the Enova
               Distribution Date as set forth in paragraph 2 of this Agreement.

          1.13 "Enova  Distribution Date" means the date determined  pursuant to
               paragraph 2.3 of this  Agreement on which the Enova  Distribution
               occurs.

          1.14 "Enova Form 10-SB" means the Registration Statement on Form 10-SB
               to be filed by Enova with the  Commission in connection  with the
               Enova Distribution.

          1.15 "Enova  Information  Statement"  means the Information  Statement
               constituting a part of the Enova Form 10, which will be mailed to
               Hartcourt shareholders in connection with the Enova Distribution.

          1.16 "Enova  Record Date" means the time at which the transfer  agents
               for the Hartcourt Stock close the transfer  records for Hartcourt
               Stock  on the date to be  determined  by the  Hartcourt  Board of
               Directors  as the record  date for  determining  shareholders  of
               Hartcourt  entitled to receive the special  dividend of shares of
               Enova Stock in the Enova Distribution.

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          1.17 "Enova Ancillary  Agreement" means any written  agreement between
               Hartcourt and Enova executed in  furtherance of the  transactions
               contemplated herein.

          1.18 "Hartcourt"   means  The   Hartcourt   Companies   Inc.,  a  Utah
               corporation.

          1.19 "Hartcourt  Common Stock" means the Common Stock,  $.01 par value
               per share, of Hartcourt.

          1.20 "Securities  Act" means the  Securities  Act of 1933, as amended,
               together with the rules and regulations promulgated thereunder.

2.0      The Distribution

          2.1  The Distribution. Subject to paragraph 2.3 hereof, on or prior to
               the Enova Distribution Date,  Hartcourt will deliver to the Agent
               for the  benefit of holders of record of  Hartcourt  Stock on the
               Enova Record Date,  stock  certificates  representing  all of the
               outstanding  shares of Enova  Stock  then  beneficially  owned by
               Hartcourt,  and shall cause the transfer  agent for the shares of
               Hartcourt  Stock to instruct the Agent on the Enova  Distribution
               Date to distribute the appropriate number of such shares of Enova
               Stock to each  such  holder  of  Hartcourt  Stock  or  designated
               transferee or transferees of such holder

               Subject to paragraph  2.4, each holder of Hartcourt  Stock on the
               Enova  Record Date (or such  holder's  designated  transferee  or
               transferees)   will  be   entitled   to   receive  in  the  Enova
               Distribution  a number  of  shares  of Enova  Stock  equal to the
               number of shares of  Hartcourt  Stock held by such  holder on the
               Enova Record date divided by four (4).

               Each of Enova and Hartcourt,  as the case may be, will provide to
               the Agent all share certificates and any information  required in
               order  to   complete   the  Enova   Distribution   on  the  terms
               contemplated hereby.

          2.2. Actions  Prior to The  Enova  Distribution.  Hartcourt  and Enova
               shall prepare and mail, prior to the Enova  Distribution Date, to
               the holders of  Hartcourt  Common  Stock,  the Enova  Information
               Statement,   which   shall  set  forth   appropriate   disclosure
               concerning  Enova, the Enova  Distribution and such other matters
               as Hartcourt and Enova may determine.  Within a reasonable period
               of time following the Enova Distribution Date Hartcourt and Enova
               shall  prepare,  and Enova  shall file with the  Commission,  the
               Enova Form 10-SB, which shall include or incorporate by reference
               the Enova Information  Statement.  Enova shall use its reasonable

<PAGE>

               best  efforts  to cause  the  Enova  Form  10-SB  to be  declared
               effective under the Exchange Act as soon as practicable following
               the filing thereof. In this regard:

                           (a) Hartcourt and Enova shall take all such action as
                           may be necessary or appropriate  under the securities
                           or  blue  sky  laws of the  United  States  (and  any
                           comparable  laws under any foreign  jurisdiction)  in
                           connection with the Enova Distribution.

                           (b) Enova shall  prepare and file,  and shall use its
                           reasonable   best  efforts  to  have   approved,   an
                           application for the listing of the Enova Common stock
                           to be  distributed  in the  Enova  Distribution  on a
                           mutually  agreeable  stock  exchange or on the Nasdaq
                           Electronic Bulletin Board system.

          2.3. Conditions to The Enova  Distribution.  The Hartcourt Board shall
               have the sole  discretion  to determine the Enova Record Date and
               the Enova  Distribution  Date, and all appropriate  procedures in
               connection with the Enova  Distribution,  provided that the Enova
               Distribution  shall not  occur  prior to such time as each of the
               following conditions shall have been satisfied or shall have been
               waived by the Hartcourt Board in its sole discretion:

                           (a) A private letter ruling from the Internal Revenue
                           Service or written opinion from qualified tax counsel
                           shall  have  been  obtained,  and shall  continue  in
                           effect,  to the effect that, among other things,  the
                           Enova   Distribution   will  qualify  as  a  tax-free
                           distribution  for federal  income tax purposes  under
                           Section  355 of the Code,  and such ruling or opinion
                           shall  be  in  form  and  substance  satisfactory  to
                           Hartcourt in its sole discretion;

                           (b) Any material Governmental  approvals and consents
                           necessary to consummate the Enova  Distribution shall
                           have been obtained and he in full force and effect;

                           (c) No  order,  injunction  or  decree  issued by any
                           court or agency of  competent  jurisdiction  or other
                           legal   restraint  or   prohibition   preventing  the
                           consummation  of the Enova  Distribution  shall be in
                           effect  and no other  event  shall have  occurred  or
                           failed to occur that prevents the consummation of the
                           Enova Distribution;

<PAGE>

                           (d) The Hartcourt Board shall have formally  approved
                           the  Distribution;  provided that the satisfaction of
                           such  conditions  shall not create any  obligation on
                           the part of  Hartcourt,  Enova or any other person to
                           effect or to seek to effect the Enova Distribution or
                           in any way limit  Hartcourt's right to terminate this
                           Agreement as set forth in paragraph  7.1 or alter the
                           consequences  of  any  such  termination  from  those
                           specified in paragraph 7.2.

          2.4. Fractional Shares. No certificates representing fractional shares
               of Enova Common Stock will be distributed to holders of Hartcourt
               Common  Stock in the Enova  Distribution.  Holders  that  receive
               certificates  in the Enova  Distribution  and holders  that would
               otherwise receive less than one whole share of Enova Common Stock
               in the Enova Distribution will receive one whole share in lieu of
               such fractional shares as contemplated hereby.

3.   Certain Agreements Relating to The Enova Distribution

          3.1. Enova Ancillary Agreements. Effective as of the date hereof, each
               of Hartcourt and Enova are executing and  delivering  each of the
               Enova Ancillary Agreements.

          3.2. The Enova Board. Enova and Hartcourt shall take all actions which
               may be required to elect or  otherwise  appoint as  directors  of
               Enova, on or prior to the Enova Distribution Date, the persons so
               named shall also be  directors  in the Enova Form 10-SB and shall
               constitute   the  Board  of  Directors  of  Enova  on  the  Enova
               Distribution Date.

          3.3. Enova   Charter,   Bylaws  And  Warrants.   Prior  to  the  Enova
               Distribution   Date,  (a)  Hartcourt   shall  cause  Articles  of
               Amendment and  Restatement  of Enova,  substantially  in the form
               filed with the Enova Form 10-SB,  to be filed for record with the
               Nevada  Secretary  of  State  and to be in  effect  on the  Enova
               Distribution  Date, and (b) the Board of Directors of Enova shall
               amend  the  Bylaws  of  Enova  so  that  the  Enova   Bylaws  are
               substantially in the form filed with the Enova Form 10-SB.  Prior
               to the Enova Record  Date,  the Board of Directors of Enova shall
               declare a dividend  of the Class A Warrants so that each share of
               Enova  Common  Stock   issued  and   outstanding   on  the  Enova
               Distribution  Date  shall  initially  have  one  Class A  Warrant
               attached thereto.

<PAGE>

4.       Mutual Releases; Indemnification

          4.1. Release of Pre-Closing Claims.

               (a)  Release by Enova.  It is the intent of each of Hartcourt and
                    Enova by virtue of the  provisions of this  paragraph 4.1 to
                    provide for a full and complete release and discharge of all
                    Liabilities  existing  or  arising  from all acts and events
                    occurring or failing to occur or alleged to have occurred or
                    to have  failed  to occur  and all  conditions  existing  or
                    alleged to have existed on or before the Enova  Distribution
                    Date,   between  or  among  Enova,  on  the  one  hand,  and
                    Hartcourt,  on the other  hand  (including  any  contractual
                    agreements  or  arrangements  existing  or  alleged to exist
                    between  or among any such  members  on or before  the Enova
                    Distribution Date as follows:  Enova does hereby, for itself
                    and successors and assigns,  and all Persons who at any time
                    prior to the Enova Distribution Date have been shareholders,
                    directors,  officers,  agents or employees of Enova (in each
                    case,  in their  respective  capacities  as  such),  remise,
                    release  and forever  discharge  Hartcourt,  its  respective
                    Affiliates,  successors and assigns,  and all Persons who at
                    any time  prior to the  Enova  Distribution  Date  have been
                    shareholders,  directors,  officers,  agents or employees of
                    Hartcourt (in each case, in their  respective  capacities as
                    such),    and    their    respective    heirs,    executors,
                    administrators,  successors  and  assigns,  from any and all
                    Liabilities   whatsoever,   whether  at  law  or  in  equity
                    (including any right of contribution), whether arising under
                    any contract or agreement, by operation of law or otherwise,
                    existing  or arising  from any acts or events  occurring  or
                    failing  to occur or  alleged  to have  occurred  or to have
                    failed to occur or any  conditions  existing  or  alleged to
                    have  existed  on or  before  the Enova  Distribution  Date,
                    including in connection  with the actions or decisions taken
                    or  omitted  to  be  taken  in  connection  with  the  Enova
                    Distribution

               (b)  Release by Hartcourt. Effective as of the Enova Distribution
                    Date,  Hartcourt does hereby,  for itself and its successors
                    and  assigns,  and all  Persons who at any time prior to the
                    Enova Distribution Date have been  shareholders,  directors,
                    officers, agents or employees of Hartcourt (in each case, in
                    their respective  capacities as such),  remiss,  release and
                    forever discharge Enova, its successors and assigns, and all
                    Persons who at any time prior to the Enova Distribution Date
                    have  been  shareholders,  directors,  officers,  agents  or
                    employees  of Enova  (in  each  case,  in  their  respective
                    capacities as such~, and their respective heirs,  executors,
                    administrators,  successors  and  assigns,  from any and all
                    Liabilities   whatsoever,   whether  at  law  or  in  equity
                    (including any right of contribution), whether arising under
                    any contract or agreement, by operation of law or otherwise,

<PAGE>

                    existing  or arising  from any acts or events  occurring  or
                    failing  to occur or  alleged  to have  occurred  or to have
                    failed to occur or any  conditions  existing  or  alleged to
                    have existed on or before the Enova Distribution Date.

          4.2. Indemnification by Enova. Enova shall indemnify,  defend and hold
               harmless  Hartcourt,  and  each of its  directors,  officers  and
               employees,  and  each of the  heirs,  executors,  successors  and
               assigns of any of the  foregoing  ~collectively,  the  "Hartcourt
               Indemnities"),  from and against any and all  Liabilities  of the
               Hartcourt  Indemnities  relating to,  arising out of or resulting
               from any of the following  items (without  duplication),  in each
               case whether arising before,  on or after the Enova  Distribution
               Date:

               (a)  The failure of Enova or any other Person to pay,  perform or
                    otherwise  promptly  discharge any Liabilities of any member
                    of Enova in accordance with their respective terms,  whether
                    prior to or after  the Enova  Distribution  Date or the date
                    hereof  (including  any  Liabilities  assumed or retained by
                    Enova);

          4.3. Indemnification by Hartcourt.  Hartcourt shall indemnify,  defend
               and hold  harmless  Enova,  each of its  directors,  officers and
               employees,  and  each of the  heirs,  executors,  successors  and
               assigns  of  any  of  the  foregoing  (collectively,  the  "Enova
               Indemnities"),  from and against any and all  Liabilities  of the
               Enova  Indemnities  relating to, arising out of or resulting from
               any of the following  items (without  duplication),  in each case
               whether arising before, on or after the Enova Distribution Date:

               (a)  The failure of Hartcourt or any other Person to pay, perform
                    or otherwise promptly discharge any Liabilities of Hartcourt
                    whether prior to or after the Enova Distribution Date or the
                    date hereof  (including any Liabilities  assumed or retained
                    by Hartcourt);

          4.4. Survival of  Indemnities.  The rights and  obligations of each of
               Hartcourt and Enova and their respective  Indemnities  under this
               paragraph 4 shall survive the sale or other transfer by any party
               of  any  Assets  or  businesses  or the  assignment  by it of any
               Liabilities.

<PAGE>

5.   Interim Operations And Certain Other Matters

          5.1. Certain Tax Matters. Unless otherwise agreed to in writing in any
               Ancillary   Agreement,   Hartcourt   and  Enova   shall  each  be
               responsible for any taxes  incurred,  accrued or owed through the
               Enova Distribution  Date.  Following the Enova Distribution Date,
               Hartcourt and Enova, as separate  entities,  shall be responsible
               for their respective tax obligations.

          5.2. Agreement For Exchange of  Information;  Archives.  Hartcourt and
               Enova each agrees that (a) Enova shall  maintain in effect at its
               own cost and expense  adequate systems and controls to the extent
               necessary  to  enable   Hartcourt   to  satisfy  its   respective
               reporting, accounting, audit and other obligations, and (b) Enova
               shall provide, or cause to be provided, to Hartcourt in such form
               as  Hartcourt  shall  request,  at no  charge to  Hartcourt,  all
               financial and other data and information as Hartcourt  determines
               necessary or advisable  in order to prepare  Hartcourt  financial
               statements   and  reports  or  filings   with  any   Governmental
               Authority.

          5.3. Insurance Matters. All rights of Enova under Enova Policies as of
               the Enova  Distribution Date shall survive the Enova Distribution
               Date in accordance with their respective terms as of such date.

               Enova  does  hereby  agree  that  Hartcourt  shall  not  have any
               Liability  whatsoever as a result of the  insurance  policies and
               practices of  Hartcourt  and its  Affiliates  as in effect at any
               time prior to the Enova Distribution Date,  including as a result
               of the level or scope of any such insurance, the creditworthiness
               of any insurance carrier, the terms and conditions of any policy,
               the adequacy or timeliness of any notice to any insurance carrier
               with respect to any claim or potential claim or otherwise.  In no
               event shall Hartcourt have liability or obligation  whatsoever to
               Enova in the  event  that any  Enova  Insurance  Policy  or other
               contract or policy of insurance  shall be terminated or otherwise
               cease to be in effect for any  reason,  shall be  unavailable  or
               inadequate  to  cover  any  Liability  of  Enova  for any  reason
               whatsoever or shall not be renewed or extended beyond the current
               expiration date.

6.   Further Assurances And Additional Covenants

          6.1. Further  Assurances.  In  addition  to the  actions  specifically
               provided  for  elsewhere in this  Agreement,  each of the parties
               hereto shall use its  reasonable  best efforts,  prior to, on and
               after the Enova Distribution Date, to take, or cause to be taken,
               all  actions,  and  to do,  or  cause  to be  done,  all  things,
               reasonably necessary,  proper or advisable under applicable laws,
               regulations  and  agreements to consummate and make effective the
               transactions   contemplated  by  this  Agreement  and  the  Enova
               Ancillary Agreements.

<PAGE>

               Without limiting the foregoing,  prior to, on and after the Enova
               Distribution  Date,  each party hereto shall  cooperate  with the
               other parties, and without any further consideration,  but at the
               expense of the requesting  party, to execute and deliver,  or use
               its  reasonable   best  efforts  to  cause  to  be  executed  and
               delivered, all instruments,  including instruments of conveyance,
               assignment  and transfer,  and to make all filings  with,  and to
               obtain  all  consents,   approvals  or  authorizations   of,  any
               Governmental  Authority  or any other  Person  under any  permit,
               license, agreement,  indenture or other instrument (including any
               Consents or Governmental  Approvals),  and to take all such other
               actions as such party may  reasonably be requested to take by any
               other party hereto from time to time,  consistent  with the terms
               of this Agreement and the Enova Ancillary Agreements, in order to
               effectuate  the provisions and purposes of this Agreement and the
               Enova   Ancillary   Agreements   and   the   other   transactions
               contemplated hereby and thereby.  Without limiting the foregoing,
               each party will, at the reasonable  request,  cost and expense of
               any other  party,  take such other  actions as may be  reasonably
               necessary to vest in such other party good and marketable  title,
               free and clear of any Security Interest,  if and to the extent it
               is practicable to do so.

               Hartcourt and Enova,  at the request of the other,  shall use its
               reasonable  best  efforts to obtain,  or to cause to be obtained,
               any  consent,  substitution,  approval or  amendment  required to
               novate   (including  with  respect  to  any  federal   government
               contract) or assign all  obligations  under  agreements,  leases,
               licenses  and other  obligations  or  Liabilities  of any  nature
               whatsoever  that  constitute  Liabilities of Enova or Liabilities
               that relate to Enova,  or to obtain in writing the  unconditional
               release of all parties to such arrangements, so that, in any such
               case,  Enova  will be solely  responsible  for such  Liabilities;
               provided,  however,  that  neither  Hartcourt  nor Enova shall be
               obligated  to pay any  consideration  therefor to any third party
               from whom such consents, approvals, substitutions, amendments and
               releases are requested.

               If  Hartcourt  or Enova is  unable to  obtain,  or to cause to be
               obtained,   any  such  required   consent,   approval,   release,
               substitution  or amendment,  Hartcourt shall continue to be bound
               by such agreements,  leases,  licenses and other obligations and,
               unless not permitted by law or the terms thereof, Enova shall, as
               agent or subcontractor for Hartcourt,  pay, perform and discharge
               fully  all the  obligations  or other  Liabilities  of  Hartcourt
               thereunder from and after the date hereof.  Enova shall indemnify
               each  Hartcourt  Indemnities,  and  hold  each of  them  harmless
               against any Liabilities arising in connection therewith.

<PAGE>

               The parties hereto agree to take any reasonable actions necessary
               in order for the Enova  Distribution  to  qualify  as a  tax-free
               distribution pursuant to Section 355 of the code.

          6.2. Qualification   as   Tax-free   Distribution.   After  the  Enova
               Distribution  date,  Hartcourt or Enova shall not take any action
               which  could   reasonably   be  expected  to  prevent  the  Enova
               Distribution  from qualifying as a tax-free  distribution  within
               the meaning of Section  355 of the Code or any other  transaction
               contemplated  by this Agreement or any Ancillary  Agreement which
               is  intended by the  parties to be  tax-free  from  failing so to
               qualify.

               After  the  Enova  Distribution  Date,  Enova  shall not take any
               action or enter into any  transaction  which could  reasonably be
               expected to materially  adversely impact the reasonably  expected
               tax  consequences  to  Hartcourt  which are known to Enova of any
               transaction contemplated by this Agreement.

7.   Termination

          7.1. Termination.  This  Agreement may be terminated at any time prior
               to the Enova Distribution Date by Hartcourt.

          7.2. Effect of  Termination.  In the event of any  termination of this
               Agreement, no party to this Agreement (or any of its directors or
               officers)  shall have any Liability or further  obligation to any
               other party.

8.   Miscellaneous

          8.1. Counterparts;  Entire Agreement;  Corporate Power. This Agreement
               and each Enova Ancillary Agreement may be executed in one or more
               counterparts,  all of which shall be considered  one and the same
               agreement,   and  shall  become   effective   when  one  or  more
               counterparts  have  been  signed  by  each  of  the  parties  and
               delivered to the other party.

               This Agreement  contains the entire agreement between the parties
               with respect to the subject matter hereof, supersede all previous
               agreements, negotiations,  discussions, writings, understandings,
               commitments and conversations with respect to such subject matter
               and there are no agreements or understandings between the parties
               other than those set forth or referred to herein or therein.

               Hartcourt  represents on behalf of itself and Enova represents on
               behalf of itself as follows:

<PAGE>

               (a)  each  has  the  requisite   corporate  or  other  power  and
                    authority  and has  taken  all  corporate  or  other  action
                    necessary  in order to execute,  deliver and perform each of
                    this Agreement and each other Enova Ancillary  Agreements to
                    which  it is a  party  and to  consummate  the  transactions
                    contemplated hereby and thereby; and

               (b)  this Agreement and each Enova  Ancillary  Agreement to which
                    it is a party has been duly executed and delivered by it and
                    constitutes a valid and binding  agreement of it enforceable
                    in accordance with the terms thereof.

               Notwithstanding  any  provision  of this  Agreement  or any Enova
               Ancillary  Agreement,  Hartcourt shall not be required to take or
               omit to take any act that would violate its  fiduciary  duties to
               any minority stockholders, if any.

          8.2. Governing  Law. This  Agreement and,  unless  expressly  provided
               therein, each Enova Ancillary Agreement, shall be governed by and
               construed  and  interpreted  in  accordance  with the laws of the
               State of California.

          8.3. Assign  Ability.  Except  as set  forth  in any  Enova  Ancillary
               Agreement,  this  Agreement  and each Enova  Ancillary  Agreement
               5hail be binding  upon and inure to the  benefit  of the  parties
               hereto and thereto, respectively, and their respective successors
               and assigns;  provided,  however, that no party hereto or thereto
               may assign  its  respective  rights or  delegate  its  respective
               obligations under this Agreement or any Enova Ancillary Agreement
               without the express  prior  written  consent of the other parties
               hereto or thereto.

          8.4. Third Party Beneficiaries.  Except for the indemnification rights
               under  this  Agreement  of any  Hartcourt  Indemnities  or  Enova
               Indemnities  in their  respective  capacities  as  such,  (a) the
               provisions of this Agreement and each Enova  Ancillary  Agreement
               are solely for the benefit of the parties and are not intended to
               confer upon any Person  except the parties any rights at remedies
               hereunder, and (b) there are no third party beneficiaries of this
               Agreement  or any Enova  Ancillary  Agreement  and  neither  this
               Agreement  nor any Enova  Ancillary  Agreement  shall provide any
               third person with any remedy,  claim,  liability,  reimbursement,
               claim of  action  or  other  right in  excess  of those  existing
               without  reference  to  this  Agreement  or any  Enova  Ancillary
               Agreement.

          8.5. Notices. All notices or other communications under this Agreement
               or any Enova Ancillary Agreement shall be in writing and shall be
               deemed  to be duly  given  when (a)  delivered  in  person or (b)

<PAGE>

               deposited  in the United  States  mail or private  express  mail,
               postage prepaid, addressed as follows:

                  If to Hartcourt, to:      The Hartcourt Companies Inc.
                                            c/o Dr. Alan Phan
                                            2049 Century Park East
                                            Los Angeles, California 90067
                                            Telephone:        (310) 788-2634
                                            Facsimile:        (310) 553-1338

                  If to Enova, to:          Enova Holdings Inc.
                                            4695 MacArthur Court, Suite 530
                                            Newport Beach, CA 92660
                                            Telephone:        (949) 833-2094
                                            Facsimile:        (949) 833-7854

          8.6. Severability.  If any  provision  of this  Agreement or any Enova
               Ancillary  Agreement or the application  thereof to any Person or
               circumstance  is determined by a court of competent  jurisdiction
               to be invalid,  void or unenforceable,  the remaining  provisions
               hereof  or  thereof,  or the  application  of such  provision  to
               Persons or circumstances or in jurisdictions  other than those as
               to which it has been held invalid or unenforceable,  shall remain
               in  full  force  and  effect  and  shall  in no way be  affected,
               impaired or invalidated thereby, so long as the economic or legal
               substance of the transactions  contemplated hereby or thereby, as
               the case may be, is not  affected  in any  manner  adverse to any
               party.  Upon such  determination,  the parties shall negotiate in
               good  faith  in an  effort  to agree  upon  such a  suitable  and
               equitable provision to effect the original intent of the parties.

          8.7. Force  Majeure.  No party  shall be  deemed  in  default  of this
               Agreement or any Enova Ancillary Agreement to the extent that any
               delay or failure in the performance of its obligations under this
               Agreement or any Enova Ancillary Agreement results from any cause
               beyond  its   reasonable   control   and  without  its  fault  or
               negligence,  such  as acts of God,  acts  of  civil  or  military
               authority,   embargoes,  epidemics,  war,  riots,  insurrections,
               fires, explosions,  earthquakes, floods, unusually severe weather
               conditions, labor problems or unavailability of parts, or, in the
               case of  computer  systems,  any  failure  in  electrical  or air
               conditioning  equipment.  In the event of any such excused delay,
               the time for performance  shall be extended for a period equal to
               the time lost by reason of the delay.

<PAGE>

          8.8. Publicity.  Prior to the Enova  Distribution  Date, each of Enova
               and Hartcourt  shall consult with each other prior to issuing any
               press releases or otherwise making public statements with respect
               to the  Enova  Distribution  or any  of  the  other  transactions
               contemplated  hereby  and prior to making  any  filings  with any
               Governmental Authority with respect thereto.

          8.9. Expenses.  Except as expressly set forth in this  Agreement or in
               any  Enova  Ancillary   Agreement,   whether  or  not  the  Enova
               Distribution  is  consummated,  all third party  fees,  costs and
               expenses paid or incurred prior to the Enova Distribution Date in
               connection with the Enova Distribution will be paid by Hartcourt;
               provided however that Enova shall consult with Hartcourt prior to
               incurring any such third party obligations.

          8.10.Headings.  The paragraph and paragraph headings contained in this
               Agreement and in the Enova Ancillary Agreements are for reference
               purposes  only and shall not  affect  in any way the  meaning  or
               interpretation   of  this   Agreement  or  any  Enova   Ancillary
               Agreement.

          8.11.Survival  of  Covenants.  Except  as  expressly  set forth in any
               Enova Ancillary  Agreement,  the covenants,  representations  and
               warranties  contained in this Agreement and each Enova  Ancillary
               Agreement,  and  liability  for  the  breach  of any  obligations
               contained herein,  shall survive the Enova Distribution and shall
               remain in full force and effect following the consummation of the
               Enova Distribution.

          8.12.Waivers  of  Default.  Waiver by any party of any  default by the
               other  party of any  provision  of this  Agreement  or any  Enova
               Ancillary  Agreement  shall not be deemed a waiver by the waiving
               party of any subsequent or other default,  nor shall it prejudice
               the rights of the other party.

          8.13.Amendments.   No  provisions  of  this  Agreement  or  any  Enova
               Ancillary Agreement shall be deemed waived, amended, supplemented
               or  modified  by  any  party,  unless  such  waiver,   amendment,
               supplement  or  modification  is in  writing  and  signed  by the
               authorized  representative of the party against whom it is sought
               to enforce such waiver, amendment, supplement or modification.

<PAGE>

          IN  WITNESS  WHEREOF,   the  parties  have  caused  this  Distribution
Agreement to be executed by their duly authorized representatives.

                                        "Hartcourt"
                                        The Hartcourt Companies Inc.

                                        By:  /s/  Alan Phan
                                             ---------------------------------
                                        Name:     Dr. Alan Phan
                                        Title:    President

                                        "Enova"
                                        Enova Holdings Inc.

                                        By:  /s/  JL Lawver
                                             ---------------------------------
                                        Name:     JL Lawver
                                        Title:    President