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                                                           As filed with the
                                                           Delaware Secretary
                                                                of State
                                                             March 7, 2000


                    CERTIFICATE OF THE DESIGNATIONS, POWERS,
                             PREFERENCES AND RIGHTS
                                     OF THE
                      SERIES A CONVERTIBLE PREFERRED STOCK
                           (par value $.001 per share)

                                       of

                              THINKING TOOLS, INC.
                             a Delaware Corporation

                                   ----------

                         Pursuant to Section 151 of the
                General Corporation Law of the State of Delaware

                                   ----------

         The undersigned DOES HEREBY CERTIFY that the following resolution was
duly adopted by the Board of Directors (the "Board of Directors") of Thinking
Tools, Inc., a Delaware corporation (the "Corporation"), at a meeting held on
February 29, 2000 and March 7, 2000.

         RESOLVED, that one series of a class of authorized preferred stock,
$.001 par value, of the Corporation is hereby created and that the designations,
powers, preferences and relative, participating, optional or other special
rights of the shares of such series, and qualifications, limitations or
restrictions thereof, are hereby fixed as follows (this instrument hereinafter
referred to as the "Designation"):

         1. Number of Shares and Designations. 1,148,800 shares of the preferred
stock, $.001 par value, of the Corporation are hereby constituted as a series of
preferred stock of the Corporation designated as Series A Convertible Preferred
Stock (the "Series A Preferred Stock").

         2. Dividend Provisions. In the event that the Conversion Date (as
defined in Section 6(b)) does not occur by March 7, 2001, the holders of the
Series A Preferred Stock shall be entitled to receive cumulative dividends on
each share of Preferred Stock, payable in cash, or at the option of the Company,
in kind, at the rate of 8% per share per annum (computed on the basis of a 360
day year of twelve 30 day months) of the Dividend Base Amount (as defined
below), payable semi-annually in arrears. If the Corporation elects to pay in
kind, such dividends shall be paid in additional duly authorized, fully paid and
non assessable share of Series A Preferred Stock. Such dividends shall only
accrue and accumulate after March 7, 2001 whether or not they have been declared
and whether or not there are profits, surplus or other funds of the Corporation
legally available for payment of dividends. The "Dividend Base Amount" shall be
$5.00 (subject to appropriate adjustment to reflect any stock split,
combination, reclassification or reorganization of the Series A Preferred
Stock). In



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addition to the foregoing, subject to the rights of any other series of
Preferred Stock that may from time to time come into existence, the holders of
shares of Series A Preferred Stock shall be entitled to receive dividends, out
of any assets legally available therefor, ratably with any declaration or
payment of any dividend with holders of the Corporation's common stock, $.001
par value per share ("Common Stock"), or other junior securities of this
Corporation, when, as and if declared by the Board of Directors, based on the
number of shares of Common Stock into which each share of Series A Convertible
Preferred Stock is then convertible.

         3. Rank. The Series A Preferred Stock shall rank: (i) junior to any
other class or series of capital stock of the Corporation hereafter created
specifically ranking by its terms senior to the Series A Preferred Stock (the
"Senior Securities"); (ii) prior to all of the Corporation's Common Stock; (iii)
prior to any class or series of capital stock of the Corporation hereafter
created not specifically ranking by its terms senior to or on parity with the
Series A Preferred Stock ("Junior Securities"); and (iv) on parity with any
class or series of capital stock of the Corporation hereafter created
specifically ranking by its terms on parity with the Series A Preferred Stock
(the "Parity Securities"), in each case as to the distribution of assets upon
liquidation, dissolution or winding up of the Corporation.

         4. Liquidation Preference.

            (a) Upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary ("Liquidation"), the holders of
record of the shares of the Series A Preferred Stock shall be entitled to
receive, immediately after any distributions to Senior Securities required by
the Corporation's Certificate of Incorporation and any certificate(s) of
designation, powers, preferences and rights, and before and in preference to any
distribution or payment of assets of the Corporation or the proceeds thereof may
be made or set apart for the holders of Junior Securities or Common Stock, an
amount in cash equal to $.001 per share (subject to adjustment in the event of
stock splits, combinations or similar events). If, upon such Liquidation, the
assets of the Corporation available for distribution to the holders of Series A
Preferred Stock and any Parity Securities shall be insufficient to permit
payment in full to the holders of the Series A Preferred Stock and Parity
Securities, then the entire assets and funds of the Corporation legally
available for distribution to such holders and the holders of the Parity
Securities then outstanding shall be distributed ratably among the holders of
the Series A Preferred Stock and Parity Securities based upon the proportion the
total amount distributable on each share upon liquidation bears to the aggregate
amount available for distribution on all shares of the Series A Preferred Stock
and of such Parity Securities, if any.

            (b) Upon the completion of the distributions required by Section
4(a), if assets remain in the Corporation, they shall be distributed to holders
of Junior Securities in accordance with the Corporation's Certificate of
Incorporation and any certificate(s) of designation, powers, preferences and
rights.

            (c) Upon the completion of the distributions required by Section
4(a) and 4(b), if assets remain in the Corporation, they shall be distributed to
the holders of the Series A Preferred Stock and Common Stock on a pro rata basis
(based on the number of shares of Common Stock into which each share of Series A
Preferred Stock is convertible).


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            (d) For purposes of this Section 4, a merger or consolidation
or a sale of all or substantially all of the assets of the Corporation shall be
considered a Liquidation except in the event that in such a transaction, the
holders of capital stock of the Corporation receive securities of the surviving
corporation equal to at least fifty percent of the total outstanding shares of
capital stock of the surviving corporation immediately after such transaction
and the holders of the Series A Preferred Stock receive securities of the
surviving corporation having substantially similar rights as the Series A
Preferred Stock. Notwithstanding Section 7 hereof, such provision may be waived
in writing by a majority of the holders of the then outstanding Series A
Preferred Stock.

         5. Redemption.  The Series A Preferred Stock is not redeemable.

         6. Conversion.

            (a) From and after the Conversion Date (as defined in Section 6(b)),
each share of Series A Preferred Stock shall automatically, without any further
action of the holders thereof or the Corporation being required, be converted
(the "Conversion") into and be deemed and treated for all purposes to represent
ownership of ten (10) fully paid and nonassessable shares of Common Stock. The
Corporation hereby irrevocably agrees to take any action that may be required to
be taken by law in order to cause the Conversion to occur on the Conversion
Date.

            (b) For the purposes hereof, "Conversion Date" means the close of
business on the date that the Corporation files with the Secretary of State of
the State of Delaware an amendment to the Corporation's Certificate of
Incorporation increasing the authorized number of shares of Common Stock to at
least thirty-five million (35,000,000) shares.

            (c) After the Conversion Date, each certificate representing Series
A Preferred Stock (i) shall automatically represent the number of shares of
Common Stock into which such Series A Preferred Stock has been converted
pursuant to the provisions of Section 6(a) and (ii) at the option of the holder
thereof, may be surrendered for exchange for a certificate or certificates for
that number of shares of Common Stock into which such Series A Preferred Stock
has been converted pursuant to the provisions of Section 6(a). Each certificate
for Series A Preferred Stock so surrendered shall be accompanied by written
notice to the Corporation stating the name or names (with addresses) in which
the certificate or certificates for Common Stock issuable pursuant to such
exchange shall be issued and shall, unless the Common Stock issuable on exchange
are to be issued in the same name as the registration of such certificate, be
duly endorsed by, or be accompanied by stock powers, duly endorsed for transfer
in form satisfactory to the Corporation duly executed by the holder. The
Corporation shall pay any and all transfer taxes that may be payable in respect
of the issuance or delivery of Common Stock on exchange of Series A Preferred
Stock pursuant to this Section 6. The Corporation shall not, however, be
required to pay any tax that may be payable in respect of any transfer involved
in the issue and delivery of Common Stock in a name other than that in which the
shares of Series A Preferred Stock so exchanged were registered.


                                       -3-

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            (d) As soon as practicable after the receipt of certificates for
Series A Preferred Stock surrendered for exchange accompanied by the notice
required by Section 6(c) hereof (and stock powers duly endorsed for transfer as
provided in such Section 6(c)), the Corporation shall issue and shall deliver at
the transfer agent, or at the principal executive offices of the Corporation if
no transfer agent exists, to the holder of such Series A Preferred Stock, or to
such other person or persons as may be named in the required notice, a
certificate or certificates for the full number of whole shares of Common Stock
to which the holder is entitled. If the shares of Common Stock issuable on
exchange are not to be issued in the same name as the registration of the
certificate for Series A Preferred Stock surrendered for exchange, the person or
persons in whose name or names any certificate or certificates for Common Stock
shall be issuable upon such exchange shall not be deemed to have become the
holder or holders of record of the Common Stock represented thereby until the
date on which the transfer agent, or if no such transfer agent exists, the
Corporation, shall have received such certificates for Series A Preferred Stock
and the aforesaid notice.

            (e) In case of any reorganization, reclassification or change of the
Common Stock (including any such reorganization, reclassification or change in
connection with a consolidation or merger in which the Corporation is the
continuing entity), or any consolidation of the Corporation with, or merger of
the Corporation with or into, any other entity (other than a consolidation or
merger in which the Corporation is the continuing entity), or of any sale of the
properties and assets of the Corporation as, or substantially as, an entirety to
any other person or entity, prior to the Conversion Date, each share of Series A
Preferred Stock then outstanding shall thereafter be convertible into the kind
and amount of stock or other securities or property receivable upon such
reorganization, reclassification, change, consolidation, merger or sale by a
holder of the number of shares of Common Stock into which such shares of Series
A Preferred Stock would have been converted had the Conversion Date occurred.
The provisions of this Section 6(e) shall similarly apply to successive
reorganizations, reclassifications, changes, consolidations, mergers or sales
immediately prior to such reorganization, reclassification, change,
consolidation, merger or sale.

            (f) No fractional Common Stock or scrip representing fractional
Common Stock shall be issued upon the conversion of Series A Preferred Stock. If
any such conversion would otherwise require the issuance of a fractional share
of Common Stock, then the Corporation shall pay in lieu of issuing any
fractional share an amount in cash equal to the same fraction of the Market
Value (as defined below) of one share of Common Stock on the day of Conversion.
For the purposes of any computation under this Section 6(f), the "Market Value"
per share of Common Stock on any date shall be deemed to be the average of the
daily closing prices for the 10 consecutive business days prior to the day in
question. The closing price for each day shall be the last sales price regular
way or in case no sale takes place on such day, the average of the closing high
bid and low asked prices regular way, in either case (a) as officially quoted by
the NASD over the counter bulletin board, Nasdaq SmallCap Market or the Nasdaq
National Market or such other market on which the Common Stock is then listed
for trading, or (b) if, in the reasonable judgment of the Board of Directors of




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the Corporation, the NASD over-the-counter bulletin board, the Nasdaq SmallCap
Market or the Nasdaq National Market is no longer the principal United States
market for the Common Stock, then as quoted on the principal United States
market for the Common Stock, as determined by the Board of Directors of the
Corporation, or (c) if, in the reasonable judgment of the Board of Directors of
the Corporation, there exists no principal United States market for the Common
Stock, then as reasonably determined by the Board of Directors of the
Corporation.

            (g) No shares of Series A Preferred Stock which have been converted
to Common Stock shall be reissued by the Corporation; provided, however, that
any such share, upon being converted and canceled, shall be restored to the
status of an authorized but unissued share of preferred stock without
designation as to series, rights or preferences and may thereafter be issued as
a share of preferred stock not designated as Series A Preferred Stock.

         7. Restrictions on Certain Actions Affecting Series A Preferred Stock.
Except for the designation of the Series B Preferred Stock as approved by the
Board on March 7, 2000, so long as any Series A Preferred Stock is outstanding,
the Corporation will not amend, alter or repeal any of the provisions of its
Certificate of Incorporation so as to authorize the issuance of any new series
of Preferred Stock ranking senior to the Series A Preferred Stock or to
adversely affect the rights, powers or preferences of the Series A Preferred
Stock without the consent of the holders of at least a majority of the total
number of shares of outstanding shares of Series A Preferred Stock whose powers,
preferences or special rights would be altered in a substantially similar
manner, voting together as a single class, given in person or by proxy.

         8. Voting Rights.

            (a) Except as otherwise provided herein, or as required by the
Delaware General Corporation Law, the holders of shares of Series A Preferred
Stock shall have the right to vote, together with the holders of all the
outstanding shares of capital stock of the Corporation as a single class, and
not as a separate class, on all matters on which holders of Common Stock shall
have the right to vote. The holders of shares of Series A Preferred Stock shall
have the right to cast such number of votes per share that equals the number of
whole shares of Common Stock into which each such share of Series A Preferred
Stock is then convertible, calculated to the nearest whole share.

            (b) Whenever holders of Series A Preferred Stock are required or
permitted to take any action by vote, such action may be taken without a meeting
on written consent, setting forth the action so taken and signed by the holders
of the outstanding capital stock of the Corporation having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all such shares entitled to vote thereon were present and
voted. Each share of the Series A Preferred Stock shall entitle the holder
thereof to one vote on all matters to be voted on by the holders of the Series A
Preferred Stock, as set forth in this Section 8(b).




                                       -5-

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         IN WITNESS WHEREOF, Thinking Tools, Inc. has caused this Designation to
be executed this 7th day of March, 2000.

                                         THINKING TOOLS, INC.


                                         By: /s/ Moshe Zarmi
                                             --------------------------------
                                             Name: Moshe Zarmi
                                             Title: Chief Executive Officer


Attest:


By: /s/ James D. Houston
    --------------------------
     Name:  James D. Houston
     Title:  Secretary



                                       -6-