Document:

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                                                                    Exhibit 10.9

                             GENOMICA CORPORATION

                           SERIES B PREFERRED STOCK

                              PURCHASE AGREEMENT

                               February 12, 1999

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                               Table of Contents

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                                                                            Page
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Section 1.  AGREEMENT TO SELL AND PURCHASE................................     1

  1.1  Authorization of Shares............................................     1
  1.2  Sale and Purchase..................................................     1

Section 2.  CLOSING, DELIVERY AND PAYMENT.................................     2

  2.1  Closing............................................................     2
  2.2  Delivery...........................................................     2

Section 3.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................     2

  3.1  Organization, Good Standing and Qualification......................     2
  3.2  Subsidiaries.......................................................     2
  3.3  Capitalization; Voting Rights......................................     2
  3.4  Authorization; Binding Obligations.................................     3
  3.5  Financial Statements...............................................     3
  3.6  Liabilities........................................................     3
  3.7  Agreements; Action.................................................     4
  3.8  Obligations to Related Parties.....................................     4
  3.9  Absence of Changes.................................................     5
  3.10 Title to Properties and Assets; Liens, Etc.........................     6
  3.11 Patents and Trademarks.............................................     6
  3.12 Compliance with Other Instruments..................................     6
  3.13 Litigation.........................................................     7
  3.14 Tax Returns and Payments...........................................     7
  3.15 Employees..........................................................     7
  3.16 Proprietary Information and Inventions Agreements..................     8
  3.17 Obligations of Management..........................................     8
  3.18 Registration Rights................................................     8
  3.19 Compliance with Laws; Permits......................................     8
  3.20 Offering Valid.....................................................     8
  3.21 Full Disclosure....................................................     9

Section 4.  REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS..............     9

  4.1  Requisite Power and Authority......................................     9
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                                      i.
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                               Table of Contents
                                  (continued)

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  4.2  Investment Representations.........................................     9
  4.3  Transfer Restrictions..............................................    10

Section 5.  CONDITIONS TO CLOSING.........................................    10

  5.1  Conditions to Purchasers' Obligations at the Closing...............    10
  5.2  Conditions to Obligations of the Company...........................    11

Section 6.  MISCELLANEOUS.................................................    12

  6.1  Governing Law......................................................    12
  6.2  Survival...........................................................    12
  6.3  Successors and Assigns.............................................    12
  6.4  Entire Agreement...................................................    12
  6.5  Severability.......................................................    13
  6.6  Amendment and Waiver...............................................    13
  6.7  Delays or Omissions................................................    13
  6.8  Notices............................................................    13
  6.9  Titles and Subtitles...............................................    13
  6.10 Counterparts.......................................................    13
  6.11 Broker's Fees......................................................    14
  6.12 Expenses...........................................................    14
  6.13 Attorneys' Fees....................................................    14
  6.14 Exculpation Among Purchasers.......................................    14
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                                      ii.
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                               Index of Exhibits

Schedule of Purchasers                       Exhibit A

Restated Certificate of Incorporation        Exhibit B

Investors' Rights Agreement                  Exhibit C

Form of Legal Opinion                        Exhibit D
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                             GENOMICA CORPORATION

                  SERIES B PREFERRED STOCK PURCHASE AGREEMENT

     This Series B Preferred Stock Purchase Agreement (the "Agreement") is
entered into as of this 12/th/ day of February, 1999, by and among Genomica
Corporation, a Delaware corporation (the "Company"), and each of those persons
and entities, severally and not jointly, whose names are set forth on the
Schedule of Purchasers attached hereto as Exhibit A (which persons and entities
are hereinafter collectively referred to as "Purchasers" and each individually
as a "Purchaser").

                                   RECITALS

     Whereas, the Company has authorized the sale and issuance of an aggregate
of twenty five million (25,000,000) shares of its Series B Preferred Stock (the
"Shares");

     Whereas, Purchasers desire to purchase the Shares on the terms and
conditions set forth herein; and

     Whereas, the Company desires to issue and sell the Shares to Purchasers on
the terms and conditions set forth herein.

     Now, Therefore, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:

SECTION 1.  AGREEMENT TO SELL AND PURCHASE

     1.1    Authorization of Shares. On or prior to the Closing (as defined in
Section 2 below), the Company shall have authorized (i) the sale and issuance to
Purchasers of the Shares and (ii) the issuance of such shares of Common Stock to
be issued upon conversion of the Shares (the "Conversion Shares"). The Shares
and the Conversion Shares shall have the rights, preferences, privileges and
restrictions set forth in the Restated Certificate of Incorporation of the
Company, in the form attached hereto as Exhibit B (the "Certificate").

     1.2    Sale and Purchase. Subject to the terms and conditions hereof, at
the Closing (as hereinafter defined), the Company hereby agrees to issue and
sell to each Purchaser, severally and not jointly, and each Purchaser agrees to
purchase from the Company, severally and not jointly, the number of Shares set
forth opposite such Purchaser's name on Exhibit A at a purchase price of $0.72
per share.

SECTION 2.  CLOSING, DELIVERY AND PAYMENT

     2.1    Closing.  The closing of the sale and purchase of the Shares under
this Agreement (the "Closing") shall take place on the date hereof, at the
offices of Cooley Godward llp, 2595 Canyon Boulevard, Suite 250, Boulder,
Colorado 80302, or at such other time or place as the Company and Purchasers may
mutually agree (such date is hereinafter referred to as a "Closing Date").

                                       1.
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     2.2    Delivery.  At the Closing, subject to the terms and conditions
hereof, the Company will deliver to the Purchasers certificates representing the
number of Shares to be purchased at the Closing by each Purchaser, against
payment of the purchase price therefor, by check or wire transfer made payable
to the order of the Company or cancellation of indebtedness.

SECTION 3.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except as set forth on the Schedule of Exceptions delivered to the
Purchasers, the Company hereby represents and warrants to each Purchaser as
follows:

     3.1    Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement and the Investors' Rights Agreement, in the form attached hereto
as Exhibit C (the "Investors' Rights Agreement"), to issue and sell the Shares
and the Conversion Shares and to carry out the provisions of this Agreement, the
Investors' Rights Agreement and the Certificate and to carry on its business as
presently conducted and as presently proposed to be conducted. The Company is
duly qualified and is authorized to do business and is in good standing as a
foreign corporation in all jurisdictions in which the nature of its activities
and of its properties (both owned and leased) make such qualifications
necessary, except for those jurisdictions in which failure to do so would not
have a material adverse effect on the Company or its business. The Company has
made available to the Purchasers true, correct and complete copies of the
Company's Certificate of Incorporation and Bylaws, each as amended to date.

     3.2    Subsidiaries.  The Company owns no equity securities of any other
corporation, limited partnership or similar entity.  The Company is not a
participant in any joint venture, partnership or similar arrangement.

     3.3    Capitalization; Voting Rights.  The authorized capital stock of the
Company, immediately prior to the Closing, will consist of (a) thirty-four
million (34,000,000) shares of Common Stock, of which three million one hundred
thirty-five thousand two hundred ninety-six (3,135,296) shares are issued and
outstanding, and (b) twenty-six million seven hundred eighty-five thousand four
hundred (26,785,400) shares of Preferred Stock, of which twelve million six
hundred eighty-eight thousand one hundred seventy-eight (12,688,178) shares are
designated Series A Preferred Stock, of which twelve million five hundred
thirty-three thousand six hundred seventy-six (12,533,676) are issued and
outstanding, and of which fourteen million ninety-seven thousand two hundred
twenty-two (14,097,222) shares are designated Series B Preferred Stock, none of
which are issued and outstanding.  All issued and outstanding shares of the
Company's Common Stock and Preferred Stock (i) have been duly authorized and
validly issued, (ii) are fully paid and nonassessable and (iii) were issued in
compliance with all applicable state and federal laws concerning the issuance of
securities.  The rights, preferences, privileges and restrictions of the Shares
are as stated in the Certificate.  The Conversion Shares have been duly and
validly reserved for issuance.  Except as may be granted pursuant to this
Agreement, there are no outstanding options, warrants, rights (including
conversion or preemptive rights and rights of first refusal), proxy or
stockholder agreements, or agreements of any kind for the purchase or
acquisition from the Company of any of its securities.  The Shares and the
Conversion Shares

                                       2.
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have been duly authorized and, when issued in compliance with the provisions of
this Agreement and the Certificate, will be validly issued (including, without
limitation, issued in compliance with applicable state and federal securities
laws), fully paid and nonassessable and will be free of any liens or
encumbrances; provided, however, that the Shares and the Conversion Shares may
be subject to restrictions on transfer under state and/or federal securities
laws as set forth herein or as otherwise required by such laws at the time
transfer is proposed.

     3.4    Authorization; Binding Obligations. All corporate action on the part
of the Company, its officers, directors and stockholders necessary for the
authorization of this Agreement and the Investors' Rights Agreement, the
performance of all obligations of the Company hereunder and thereunder at the
Closing and the authorization, sale, issuance and delivery of the Shares
pursuant hereto and the Conversion Shares pursuant to the Certificate has been
taken or will be taken prior to the Closing. The Agreement and the Investors'
Rights Agreement, when executed and delivered, will be valid and binding
obligations of the Company enforceable in accordance with their terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors' rights;
(ii) general principles of equity that restrict the availability of equitable
remedies; and (iii) to the extent that the enforceability of the indemnification
provisions in Section 3.11 of the Investors' Rights Agreement may be limited by
applicable laws. The sale of the Shares and the subsequent conversion of the
Shares into Conversion Shares are not and will not be subject to any preemptive
rights or rights of first refusal that have not been properly waived or complied
with.

     3.5    Financial Statements. The Company has delivered to each Purchaser
(i) its audited balance sheet as at December 31, 1997 and audited statement of
income and cash flows for the twelve months ending December 31, 1997 and (ii)
its unaudited balance sheet as at October 31, 1998 (the "Statement Date") and
unaudited statement of income and cash flows for the ten month period ending on
the Statement Date (collectively, the "Financial Statements"). The Financial
Statements, together with the notes thereto, are complete and correct in all
material respects, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated, except as disclosed therein, and present fairly the financial
condition and position of the Company as of December 31, 1997 and the Statement
Date; provided, however, that the unaudited financial statements are subject to
normal recurring year-end audit adjustments (which are not expected to be
material), and do not contain all footnotes required under generally accepted
accounting principles.

     3.6    Liabilities.  The Company has no material liabilities and, to the
best of its knowledge, has no material contingent liabilities not otherwise
disclosed in the Financial Statements, except current liabilities incurred in
the ordinary course of business subsequent to the Statement Date which have not
been, either in any individual case or in the aggregate, materially adverse.

     3.7    Agreements; Action.

            (a)  Except for agreements explicitly contemplated hereby and
agreements between the Company and its employees with respect to the sale of the
Company's Common

                                       3.
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Stock, there are no agreements, understandings or proposed transactions between
the Company and any of its officers, directors, affiliates or any affiliate
thereof.

            (b)  There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Company is a party or to its knowledge by which it is bound which may
involve (i) obligations (contingent or otherwise) of, or payments to, the
Company in excess of $25,000, or (ii) the license of any patent, copyright,
trade secret or other proprietary right to or from the Company (other than
licenses arising from the purchase of "off the shelf" or other standard
products), or (iii) provisions restricting or affecting the development,
manufacture or distribution of the Company's products or services, or (iv)
indemnification by the Company with respect to infringements of proprietary
rights.

            (c) The Company has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred any indebtedness for money borrowed or any
other liabilities (other than with respect to dividend obligations,
distributions, indebtedness and other obligations incurred in the ordinary
course of business or as disclosed in the Financial Statements) individually in
excess of $25,000 or, in the case of indebtedness and/or liabilities
individually less than $25,000, in excess of $75,000 in the aggregate, (iii)
made any loans or advances to any person, other than ordinary advances for
travel expenses or (iv) sold, exchanged or otherwise disposed of any of its
assets or rights, other than the sale of its inventory in the ordinary course of
business.

            (d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.

     3.8    Obligations to Related Parties.  There are no obligations of the
Company to officers, directors, stockholders, or employees of the Company other
than (a) for payment of salary for services rendered, (b) reimbursement for
reasonable expenses incurred on behalf of the Company and (c) for other standard
employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board
of Directors of the Company).  No such officer, director or stockholder, or any
member of their immediate families is, directly or indirectly, interested in any
material contract with the Company (other than such contracts as relate to any
such person's ownership of capital stock or other securities of the Company).
The Company is not a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation.

     3.9   Absence of Changes. Except as set forth in Schedule 3.9, since the
Statement Date, there has not been to the Company's knowledge:

           (a)  Any change in the assets, liabilities, financial condition or
operations of the Company from that reflected in the Financial Statements, other
than changes in the ordinary course of business, none of which individually or
in the aggregate has had or is expected to have a material adverse effect on
such assets, liabilities, financial condition or operations of the Company;

                                       4.
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           (b)  Any resignation or termination of any key officers of the
Company; and the Company, to the best of its knowledge, does not know of the
impending resignation or termination of employment of any such officer;

           (c)  Any material change, except in the ordinary course of business,
in the contingent obligations of the Company by way of guaranty, endorsement,
indemnity, warranty or otherwise;

           (d)  Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, business or
prospects or financial condition of the Company;

           (e)  Any waiver by the Company of a valuable right or of a material
debt owed to it;

           (f)  Any direct or indirect loans made by the Company to any
stockholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business;

           (g)  Any material change in any compensation arrangement or agreement
with any employee, officer, director or stockholder;

           (h)  Any declaration or payment of any dividend or other distribution
of the assets of the Company or any direct or indirect redemptions of shares of
the Company's stock;

           (i)  Any labor organization activity;

           (j)  Any debt, obligation or liability incurred, assumed or
guaranteed by the Company, except those for immaterial amounts and for current
liabilities incurred in the ordinary course of business;

           (k)  Any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets or any sale, transfer lease
or pledge of a material asset, except in the ordinary course of business;

           (l)  Any change in any material agreement to which the Company is a
party or by which it is bound which materially and adversely affects the
business, assets, liabilities, financial condition, operations or prospects of
the Company; or

           (m)  Any other event or condition of any character that, either
individually or cumulatively, has materially and adversely affected the
business, assets, liabilities, financial condition, operations or prospects of
the Company. For purposes of this subsection (m), a material and adverse effect
shall only be deemed to occur if its monetary impact exceeds, or with the
passage of time, will exceed $75,000.

     3.10  Title to Properties and Assets; Liens, Etc.  The Company has good and
marketable title to its properties and assets, and good title to its leasehold
estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance
or charge, other than (i) those resulting

                                       5.
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from taxes which have not yet become delinquent, (ii) minor liens and
encumbrances which do not materially detract from the value of the property
subject thereto or materially impair the operations of the Company and (iii)
those that have otherwise arisen in the ordinary course of business. All
facilities, machinery, equipment, fixtures, vehicles and other properties owned,
leased or used by the Company are in good operating condition and repair and are
reasonably fit and usable for the purposes for which they are being used. The
Company is in compliance with all material terms of each lease to which it is a
party or is otherwise bound.

     3.11  Patents and Trademarks. To its knowledge, the Company owns or
possesses sufficient legal rights to all patents, trademarks, service marks,
trade names, copyrights, trade secrets, information and other proprietary rights
and processes necessary for its business as now conducted and as proposed to be
conducted, without any known infringement of the rights of others. There are no
outstanding options, licenses or agreements of any kind relating to the
foregoing, nor is the Company bound by or a party to any options, licenses or
agreements of any kind with respect to the patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses, information and other
proprietary rights and processes of any other person or entity other than such
licenses or agreements arising from the purchase of "off the shelf" or standard
products. The Company has not received any communications alleging that the
Company has violated or, by conducting its business as proposed, would violate
any of the patents, trademarks, service marks, trade names, copyrights or trade
secrets or other proprietary rights of any other person or entity. The Company
is not aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments or any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with their duties to the Company's business by the
employees of the Company. The conduct of the Company's business as proposed,
will not, to the Company's knowledge, conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any employee is now obligated. The Company
does not believe it is or will be necessary to utilize any inventions, trade
secrets or proprietary information of any of its employees made prior to their
employment by the Company, except for inventions, trade secrets or proprietary
information that have been assigned to the Company.

     3.12  Compliance with Other Instruments. The Company is not in violation or
default of any term of its Certificate or Bylaws, or of any provision of any
mortgage, indenture, contract, agreement, instrument or contract to which it is
party or by which it is bound or of any judgment, decree, order, writ or, to its
knowledge, any statute, rule or regulation applicable to the Company which would
materially and adversely affect the business, assets, liabilities, financial
condition, operations or prospects of the Company. The execution, delivery, and
performance of and compliance with this Agreement and the Investors' Rights
Agreement, and the issuance and sale of the Shares pursuant hereto and of the
Conversion Shares pursuant to the Certificate, will not, with or without the
passage of time or giving of notice, result in any such material violation, or
be in conflict with or constitute a default under any such term, or result in
the creation of any mortgage, pledge, lien, encumbrance or charge upon any of
the properties or assets of the Company or the suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or
approval applicable to the Company, its business or operations or any of its
assets or properties.

                                       6.
<PAGE>

     3.13  Litigation.  There is no action, suit, proceeding or investigation
pending, or to the Company's knowledge, currently threatened against the Company
that questions the validity of this Agreement or the Investors' Rights Agreement
or the right of the Company to enter into any of such agreements, or to
consummate the transactions contemplated hereby or thereby, or which might
result, either individually or in the aggregate, in any material adverse change
in the assets, condition, affairs or prospects of the Company, financially or
otherwise, or any change in the current equity ownership of the Company, nor is
the Company aware that there is any basis for the foregoing.  The foregoing
includes, without limitation, actions pending or threatened (or any basis
therefor known to the Company) involving the prior employment of any of the
Company's employees, their use in connection with the Company's business of any
information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers.  The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality.  There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company intends to initiate.

     3.14  Tax Returns and Payments.  The Company has timely filed all tax
returns (federal, state and local) required to be filed by it.  All taxes shown
to be due and payable on such returns, any assessments imposed, and to the
Company's knowledge all other taxes due and payable by the Company on or before
the Closing have been paid or will be paid prior to the time they become
delinquent.  The Company has not been advised (i) that any of its returns,
federal, state or other, have been or are being audited as of the date hereof,
or (ii) of any deficiency in assessment or proposed judgment to its federal,
state or other taxes.  The Company has no knowledge of any liability of any tax
to be imposed upon its properties or assets as of the date of this Agreement
that is not adequately provided for.

     3.15  Employees.  The Company is not a party to or bound by any currently
effective employment contract, deferred compensation arrangement, bonus plan,
incentive plan, profit sharing plan, retirement agreement or other employee
compensation plan or agreement.  To the Company's knowledge, no employee of the
Company, nor any consultant with whom the Company has contracted, is in
violation of any term of any employment contract, proprietary information
agreement or any other agreement relating to the right of any such individual to
be employed by, or to contract with, the Company because of the nature of the
business to be conducted by the Company; and to the Company's knowledge the
continued employment by the Company of its present employees, and the
performance of the Company's contracts with its independent contractors, will
not result in any such violation.  The Company has not received any notice
alleging that any such violation has occurred.  No employee of the Company has
been granted the right to continued employment by the Company or to any material
compensation following termination of employment with the Company.  The Company
is not aware that any officer or key employee, or that any group of key
employees, intends to terminate, his, her or their employment with the Company,
nor does the Company have a present intention to terminate the employment of any
officer, key employee or group of key employees.

     3.16  Proprietary Information and Inventions Agreements.  Each current
employee, officer and consultant of the Company has executed a Proprietary
Information and Inventions Agreement in a form acceptable to the Purchasers.  No
current employee, officer or consultant of the Company has excluded works or
inventions made prior to his or her employment with the

                                       7.
<PAGE>

Company from his or her assignment of inventions pursuant to such employee,
officer or consultant's Proprietary Information and Inventions Agreement.

     3.17  Obligations of Management.  Each officer of the Company is currently
devoting one hundred percent (100%) of his business time to the conduct of the
business of the Company.  The Company is not aware of any officer or key
employee of the Company who plans to work less than full time at the Company in
the future.

     3.18  Registration Rights.  Except as required pursuant to the Investors'
Rights Agreement, the Company is presently not under any obligation, and has not
granted any rights, to register (as defined in Section 1 of the Investors'
Rights Agreement) any of the Company's presently outstanding securities or any
of its securities that may hereafter be issued.

     3.19  Compliance with Laws; Permits. The Company is not in violation of any
applicable statute, rule, regulation, order or restriction of any domestic or
foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership of its properties which violation would
materially and adversely affect the business, assets, liabilities, financial
condition, operations or prospects of the Company. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution and delivery of this Agreement and the issuance of the Shares or
the Conversion Shares, except such as has been duly and validly obtained or
filed, or with respect to any filings that must be made after the Closing, as
will be filed in a timely manner. The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which could materially and adversely
affect the business, properties, prospects or financial condition of the Company
and believes it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted.

     3.20  Offering Valid.  Assuming the accuracy of the representations and
warranties of the Purchasers contained in Section 4.2 hereof, the offer, sale
and issuance of the Shares and the Conversion Shares will be exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and will have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws.  Neither the
Company nor any agent on its behalf has solicited or will solicit any offers to
sell or has offered to sell or will offer to sell all or any part of the Shares
to any person or persons so as to bring the sale of such Shares by the Company
within the registration provisions of the Securities Act or any state securities
laws.

     3.21  Full Disclosure.  This Agreement, the Exhibits hereto, the Investors'
Rights Agreement and all other documents delivered by the Company to Purchasers
or their attorneys or agents in connection herewith or therewith or with the
transactions contemplated hereby or thereby, do not contain any untrue statement
of a material fact nor, to the Company's knowledge, omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading.

                                       8.
<PAGE>

SECTION 4.  REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

     Each Purchaser hereby represents and warrants to the Company as follows
(such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):

     4.1   Requisite Power and Authority.  Purchaser has all necessary power and
authority under all applicable provisions of law to execute and deliver this
Agreement and the Investors' Rights Agreement and to carry out their provisions.
All action on Purchaser's part required for the lawful execution and delivery of
this Agreement and the Investors' Rights Agreement have been or will be
effectively taken prior to the Closing.  Upon their execution and delivery, this
Agreement and the Investors' Rights Agreement will be valid and binding
obligations of Purchaser, enforceable in accordance with their terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights,
(ii) general principles of equity that restrict the availability of equitable
remedies and (iii) to the extent that the enforceability of the indemnification
provisions of the Investors' Rights Agreement may be limited by applicable laws.

     4.2   Investment Representations.  Purchaser understands that neither the
Shares nor the Conversion Shares have been registered under the Securities Act.
Purchaser also understands that the Shares are being offered and sold pursuant
to an exemption from registration contained in the Securities Act based in part
upon Purchaser's representations contained in the Agreement.  Purchaser hereby
represents and warrants as follows:

           (a)  Purchaser Bears Economic Risk. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear the economic risk of
this investment indefinitely unless the Shares (or the Conversion Shares) are
registered pursuant to the Securities Act, or an exemption from registration is
available. Purchaser understands that the Company has no present intention of
registering the Shares, the Conversion Shares or any shares of its Common Stock.
Purchaser also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if
available, such exemption may not allow Purchaser to transfer all or any portion
of the Shares or the Conversion Shares under the circumstances, in the amounts
or at the times Purchaser might propose.

           (b)  Acquisition for Own Account. Purchaser is acquiring the Shares
and the Conversion Shares for Purchaser's own account for investment only, and
not with a view towards their distribution.

           (c)  Purchaser Can Protect Its Interest. Purchaser represents that by
reason of its, or of its management's, business or financial experience,
Purchaser has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement. Further, Purchaser is aware of no
publication of any advertisement in connection with the transactions
contemplated in the Agreement.

                                       9.
<PAGE>

           (d)  Accredited Investor.  Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.

           (e)  Rule 144. Purchaser acknowledges and agrees that the Shares,
and, if issued, the Conversion Shares must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act as in effect from
time to time, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things, the availability of certain current public information about the
Company, the resale occurring following the required holding period under Rule
144 and the number of shares being sold during any three-month period not
exceeding specified limitations.

           (f)  Residence. If the Purchaser is an individual, then the Purchaser
resides in the state or province identified in the address of the Purchaser set
forth on Exhibit A; if the Purchaser is a partnership, corporation, limited
liability company or other entity, then the office or offices of the Purchaser
in which its investment decision was made is located at the address or addresses
of the Purchaser set forth on Exhibit A.

     4.3   Transfer Restrictions.  Each Purchaser acknowledges and agrees that
the Shares and, if issued, the Conversion Shares are subject to restrictions on
transfer as set forth in the Investors' Rights Agreement.

SECTION 5.  CONDITIONS TO CLOSING

     5.1   Conditions to Purchasers' Obligations at the Closing. Purchasers'
obligations to purchase the Shares at the Closing are subject to the
satisfaction, at or prior to the Closing, of the following conditions:

           (a)  Representations and Warranties True; Performance of Obligations.
The representations and warranties made by the Company in Section 3 hereof shall
be true and correct in all material respects as of the Closing Date with the
same force and effect as if they had been made as of the Closing Date, and the
Company shall have performed all obligations and conditions herein required to
be performed or observed by it on or prior to the Closing.

           (b)  Legal Investment. On the Closing Date, the sale and issuance of
the Shares and the proposed issuance of the Conversion Shares shall be legally
permitted by all laws and regulations to which Purchasers and the Company are
subject.

           (c)  Consents, Permits, and Waivers. The Company shall have obtained
any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the
Investors' Rights Agreement (except for such as may be properly obtained
subsequent to the Closing).

           (d)  Filing of Certificate. The Certificate shall have been filed
with the Secretary of State of the State of Delaware.

                                      10.
<PAGE>

           (e)  Reservation of Conversion Shares. The Conversion Shares issuable
upon conversion of the Shares shall have been duly authorized and reserved for
issuance upon such conversion.

           (f)  Compliance Certificate. The Company shall have delivered to
Purchasers a Compliance Certificate, executed by an officer of the Company,
dated as of the Closing Date, to the effect that the conditions specified in
subsections (a), (c), (d) and (e) of this Section 5.1 have been satisfied.

           (g)  Investors' Rights Agreement.  An Investors' Rights Agreement,
substantially in the form attached hereto as Exhibit C, shall have been executed
and delivered by the parties thereto.

           (h)  Board of Directors. Upon the Closing, the authorized size of the
Board of Directors of the Company shall be six (6) members and the Board shall
consist of Drs. Marvin Caruthers, Ralph Christoffersen, Arnold Levine and Thomas
Marr and Messrs. Robert Nelsen and James Rathmann.

           (i)  Legal Opinion. The Purchasers shall have received from legal
counsel to the Company an opinion addressed to them, dated as of the Closing
Date, in substantially the form attached hereto as Exhibit D.

           (j)  Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated at the Closing hereby, all
documents and instruments incident to such transactions and all documents,
instruments and proceedings related to the Purchasers' business, technical and
legal due diligence shall be reasonably satisfactory in substance and form to
the Purchasers and their special counsel, and the Purchasers and such special
counsel shall have received all such counterpart originals or certified or other
copies of such documents as they may reasonably request.

           (k)  Minimum Investment.  The Company shall have received a minimum
investment of $5,000,000 at the first closing, including cancellation of
indebtedness.

     5.2   Conditions to Obligations of the Company. The Company's obligation to
issue and sell the Shares at the Closing is subject to the satisfaction, on or
prior to the Closing, of the following conditions:

           (a)  Representations and Warranties True.  The representations and
warranties made by the Purchasers in Section 4 hereof shall be true and correct
in all material respects as of the Closing Date, with the same force and effect
as if they had been made on and as of said date.

           (b)  Performance of Obligations.  Purchasers shall have performed and
complied with all agreements and conditions herein required to be performed or
complied with by Purchasers on or before the Closing.

           (c)  Filing of Certificate. The Certificate shall have been filed
with the Secretary of State of the State of Delaware.

                                      11.
<PAGE>

           (d)  Investors' Rights Agreement.  An Investors' Rights Agreement,
substantially in the form attached hereto as Exhibit C, shall have been executed
and delivered by the Purchasers.

           (e)  Consents, Permits, and Waivers. The Company shall have obtained
any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the
Investors' Rights Agreement (except for such as may be properly obtained
subsequent to the Closing).

           (f)  Minimum Investment. The Company shall have received a minimum
investment of $5,000,000 at the first Closing, including cancellation of
indebtedness.

SECTION 6.  MISCELLANEOUS

     6.1    Governing Law.  This Agreement shall be governed in all respects by
the laws of the State of Colorado as such laws are applied to agreements between
Colorado residents entered into and performed entirely in Colorado.

     6.2    Survival.  The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Purchaser and the
closing of the transactions contemplated hereby.  All statements as to factual
matters contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.

     6.3    Successors and Assigns.  Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares from time to time.

     6.4    Entire Agreement.  This Agreement, the Exhibits and Schedules
hereto, including the Investors' Rights Agreement, and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and no party
shall be liable or bound to any other in any manner by any representations,
warranties, covenants and agreements except as specifically set forth herein and
therein.

     6.5    Severability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

     6.6    Amendment and Waiver.

            (a)  This Agreement may be amended or modified only upon the written
consent of the Company and holders of at least a majority of the Shares (treated
as if converted and including any Conversion Shares into which the Shares have
been converted that have not been sold to the public).

                                      12.
<PAGE>

           (b)  The obligations of the Company and the rights of the holders of
the Shares and the Conversion Shares under the Agreement may be waived only with
the written consent of the holders of at least a majority of the Shares (treated
as if converted and including any Conversion Shares into which the Shares have
been converted that have not been sold to the public).

     6.7  Delays or Omissions.  It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, the Investors'
Rights Agreement or the Certificate, shall impair any such right, power or
remedy, nor shall it be construed to be a waiver of any such breach, default or
noncompliance thereafter occurring.  It is further agreed that any waiver,
permit, consent or approval of any kind of character on any Purchaser's part of
any breach, default or noncompliance under this Agreement, the Investors' Rights
Agreement or under the Certificate or any waiver on such party's part of any
provisions or conditions of the Agreement, the Investors' Rights Agreement or
the Certificate must be in writing and shall be effective only to the extent
specifically set forth in such writing.  All remedies, either under this
Agreement, the Investors' Rights Agreement, the Certificate, by law, or
otherwise afforded to any party, shall be cumulative and not alternative.

     6.8   Notices.  All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given:  (i) upon personal delivery to
the party to be notified; (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt.  All communications shall be sent to the
Company at the address as set forth on the signature page hereof and to
Purchaser at the address set forth on Exhibit A attached hereto or at such other
address as the Company or Purchaser may designate by ten (10) days advance
written notice to the other parties hereto.

     6.9   Titles and Subtitles. The titles of the sections and subsections of
the Agreement are for convenience of reference only and are not to be considered
in construing this Agreement.

     6.10  Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

     6.11  Broker's Fees.  Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein; provided, however, that the Company is
obligated to pay a fee to Punk, Ziegel & Co. related to purchases by certain of
the Purchasers.  Each party hereto further agrees to indemnify each other party
for any claims, losses or expenses incurred by such other party as a result of
the representation in this Section 6.11 being untrue.

     6.12  Expenses. The Company shall pay all costs and expenses that it incurs
with respect to the negotiation, execution, delivery and performance of the
Agreement. The Company

                                      13.
<PAGE>

shall reimburse the reasonable fees and expenses of one counsel to the
Purchasers, not to exceed $25,000, incurred in connection with the negotiation,
execution and delivery of this Agreement.

     6.13  Attorneys' Fees. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.

     6.14  Exculpation Among Purchasers.  Each Purchaser acknowledges that it is
not relying upon any person, firm, or corporation, other than the Company and
its officers and directors, in making its investment or decision to invest in
the Company. Each Purchaser agrees that no Purchaser nor the respective
controlling persons, officers, directors, partners, agents, or employees of any
Purchaser shall be liable for any action heretofore or hereafter taken or
omitted to be taken by any of them in connection with the Shares and Conversion
Shares.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      14.
<PAGE>

     In Witness Whereof, the parties hereto have executed the Series B Preferred
Stock Purchase Agreement as of the date set forth in the first paragraph hereof.

COMPANY:                                     PURCHASERS:

Genomica Corporation                         Falcon Technology Partners, L.P.
4001 Discovery Drive
Boulder, CO 80303

By: /s/ Thomas G. Marr                       By:  /s/ James L. Rathmann
-----------------------------------          -----------------------------------
Name:   Thomas G. Marr                       Name:    James L. Rathmann
-----------------------------------          -----------------------------------

Title: President & Chief Scientist           Title: General Partner
-----------------------------------          -----------------------------------

                  Series B Preferred Stock Purchase Agreement

<PAGE>

COMPANY:                                     PURCHASERS:

Genomica Corporation                         ARCH Ventures Fund III, L.P.
4001 Discovery Drive
Boulder, CO 80303                            By: ARCH Venture Partners, L.L.C.,
                                                 general partner

By:________________________________          By: /s/ Robert Nelsen

Name:______________________________          Name:   Robert Nelsen

Title:_____________________________          Title:  Managing Director

                  Series B Preferred Stock Purchase Agreement

<PAGE>

COMPANY:                                     PURCHASERS:

Genomica Corporation                         Boulder Ventures, L.P.
4001 Discovery Drive
Boulder, CO 80303                            By: BV Partners, L.L.C., general
                                                 partner

By:________________________________          By: /s/ Kyle Lefkoff

Name:______________________________          Name:______________________________

Title:_____________________________          Title:_____________________________

                                             Boulder Ventures II, L.P.

                                             By: BV Partners II, L.L.C., general
                                                 partner

                                             By: /s/ Kyle Lefkoff

                                             Name:______________________________

                                             Title:_____________________________

                                             Boulder Ventures II (Annex), L.P.

                                             By: BV Partners II, L.L.C., general
                                                 partner

                                             By: /s/ Kyle Lefkoff

                                             Name:______________________________

                                             Title:_____________________________

                  Series B Preferred Stock Purchase Agreement
<PAGE>

COMPANY:                                     PURCHASERS:

Genomica Corporation                         The Caruthers Family L.L.C.
4001 Discovery Drive
Boulder, CO 80303

By:                                          By: /s/ Marvin H. Caruthers
   ________________________________             ________________________________

Name:                                        Name:  Marvin H. Caruthers
     ______________________________               ______________________________

Title:                                       Title:    Manager
      _____________________________                _____________________________

                  Series B Preferred Stock Purchase Agreement

<PAGE>

COMPANY:                                 PURCHASERS:

Genomica Corporation                     Nominee of Invesco
4001 Discovery Drive                     Global Health Sciences Fund
Boulder, CO 80303

By:________________________________      By: /s/ Glen A. Payne

Name:______________________________      Name:   Glen A. Payne

Title:_____________________________      Title:  Secretary

                  Series B Preferred Stock Purchase Agreement
<PAGE>

COMPANY:                                     PURCHASERS:

Genomica Corporation                         Anvers, L.P.
4001 Discovery Drive                         by: FSIP LLC
Boulder, CO 80303                                General Partner

By:                                          By: /s/ Leopold Swergold
   ________________________________             ________________________________

Name:                                        Name:   Leopold Swergold
     ______________________________               ______________________________

Title:                                       Title: Sr. Managing Director
      _____________________________                _____________________________

                  Series B Preferred Stock Purchase Agreement

<PAGE>

COMPANY:                                     PURCHASERS:

Genomica Corporation                         Anvers II, L.P.
4001 Discovery Drive                         by: FSIP LLC
Boulder, CO 80303                                General Partner

By:                                          By:  /s/ Leopold Swergold
   ________________________________             _______________________________

Name:                                        Name:    Leopold Swergold
     ______________________________               _____________________________

Title:                                       Title: Sr. Managing Director
      _____________________________                ____________________________

                  Series B Preferred Stock Purchase Agreement

<PAGE>

COMPANY:                                     PURCHASERS:

Genomica Corporation
4001 Discovery Drive
Boulder, CO 80303

By:                                          By: /s/ Stuart Epstein
   ________________________________             ________________________________
                                                  Stuart Epstein

Name:______________________________

Title:_____________________________

                                      2.
<PAGE>

COMPANY:                                     PURCHASERS:

Genomica Corporation
4001 Discovery Drive
Boulder, CO 80303

By:                                         By: /s/ Marc Epstein
   ________________________________            ________________________________
                                                  Marc Epstein

Name:______________________________

Title:_____________________________

                                      3.
<PAGE>

COMPANY:                                     PURCHASERS:

Genomica Corporation                         GC&H Investments
4001 Discovery Drive
Boulder, CO 80303

By:                                          By: /s/ John L. Cardoza
   ________________________________             ________________________________

Name:                                        Name: John L. Cardoza
     ______________________________               ______________________________

Title:                                       Title: Executive Partner
      _____________________________                _____________________________

                  Series B Preferred Stock Purchase Agreement
<PAGE>

COMPANY:                                     PURCHASERS:

Genomica Corporation
4001 Discovery Drive
Boulder, CO 80303

By:________________________________          By: /s/ Joseph Klein III
                                                --------------------------------

Name:______________________________          Name:   Joseph Klein III
                                                  ------------------------------

Title:_____________________________          Title:  Health Analyst
                                                   -----------------------------

                  Series B Preferred Stock Purchase Agreement

<PAGE>

                                        Tyjo Corp. Defined Benefit
                                        Plan and Trust
                                        70 Redland Woods Way
                                        Tiburon, CA 94920

                                        By: /s/ Robert K. Schalter
                                           -------------------------------------
                                        Name:   Robert K. Schalter
                                             -----------------------------------
                                        Title:  President
                                              ----------------------------------

<PAGE>

                                   Exhibit A
                  Series B Preferred Stock Purchase Agreement

<TABLE>
<CAPTION>
                                          Shares of Series B
                                          ------------------
Name                                        Preferred Stock            Purchase Price
----                                        ---------------            --------------
<S>                                       <C>                          <C>
Initial Closing December 16, 1998:

Falcon Technology Partners, L.P.
Attn:  James L. Rathmann
600 Dorset Road                                2,594,310               $ 1,867,903.20
Devon, PA  19333

Invesco Global Health Sciences Fund
Attn: Buck Phillips
7800 East Union Avenue
Mail Stop 1102
Denver, CO  80237                              1,899,865                 1,367,902.80

ARCH Ventures Fund III, L.P.
Attn:  Robert Nelsen
1000 2/nd/ Avenue, Suite 3700
Seattle, WA  98104                             1,723,667                 1,241,040.24

Boulder Ventures II, L.P.
Attn:  Kyle Lefkoff
1634 Walnut Street, Suite 301
Boulder, CO  80302                             1,208,334                   870,000.48

Anvers, L.P.
Attn:  Leo Swergold
230 Park Avenue, 13/th/ Floor
New York, NY  10169                              555,556                   400,000.32

Anvers II, L.P.
Attn:  Leo Swergold
230 Park Avenue, 13/th/ Floor
New York, NY  10169                              277,778                   200,000.16

Boulder Ventures II (Annex), L.P.
Attn:  Kyle Lefkoff
1634 Walnut Street, Suite 301
Boulder, CO  80302                               180,556                   130,000.32
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                Shares of Series B
                                                ------------------
Name                                              Preferred Stock                  Purchase Price
----                                              ---------------                  --------------
<S>                                             <C>                                <C>
The Caruthers Family L.L.C.
Attn: Marvin H. Caruthers
2450 Cragmoor
Boulder, CO  80303                                    108,600                         78,192.00

Boulder Ventures, L.P.
Attn:  Kyle Lefkoff
1634 Walnut Street, Suite 301
Boulder, CO  80302                                     69,962                         50,372.64

GC&H Investments
Attn:  Jim Kindler
One Maritime Plaza, 20/th/ Floor
San Francisco, CA  94111                               69,444                         49,999.68

Second Closing:  December 17, 1998

Marc Epstein
3091 Miro Drive North
Palm Beach Gardens, FL  33411                          34,722                         24,999.84

Stuart A. Epstein
3091 Miro Drive North
Palm Beach Gardens, FL  33411                          34,722                         24,999.84

Third Closing:  February 12, 1999

Kaufmann Fund, Inc.
Attn:  Skip Klein
25 Light Street, Suite 300                            9,722,222                      6,999,999.84
Baltimore, MD  21202

Punk, Ziegel & Company
    Investors, L.L.C.                                   208,333                       149,999.76
520 Madison Avenue

New York, NY  10022
Tyjo Corporation Defined Benefit
    Plan and Trust                                      138,888                        99,999.36
70 Reedland Woods Way
Tiburon, CA  94920

Total                                                18,826,959                   $13,555,410.48
</TABLE>

                                      2.
<PAGE>

                                   Exhibit B

                     Restated Certificate of Incorporation

                               See Tabs 5 and 22

<PAGE>

                                   Exhibit C

                          Investors' Rights Agreement

                                  See Tab 21

<PAGE>

                                   Exhibit D

                                 Legal Opinion

     1.   The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware.

     2.   The Company has the requisite corporate power to own its property and
assets and to conduct its business as it is currently being conducted.

     3.   The Series B Preferred Stock Purchase Agreement (the "Purchase
Agreement") and the Investors' Rights Agreement (collectively, the "Agreements")
have been duly and validly authorized, executed and delivered by the Company and
constitute valid and binding obligations of the Company enforceable against the
Company in accordance with their terms.

     4.   The authorized capital stock of the Company, immediately prior to the
Closing, will consist of (a) thirty-four million (34,000,000) shares of Common
Stock, of which three million one hundred sixty-one thousand six hundred eighty-
five (3,161,685) shares are issued and outstanding, and (b) twenty-six million
seven hundred eighty-five thousand four hundred (26,785,400) shares of Preferred
Stock, of which twelve million six hundred eighty-eight thousand one hundred
seventy-eight (12,688,178) shares are designated Series A Preferred Stock, of
which twelve million five hundred thirty-three thousand six hundred seventy-six
(12,533,676) are issued and outstanding, and of which fourteen million ninety-
seven thousand two hundred twenty-two (14,097,222) shares are designated Series
B Preferred Stock, none of which are issued and outstanding.  The outstanding
shares of Common Stock have been duly authorized and validly issued and are
fully paid and nonassessable.  The rights, preferences and privileges of the
Series B Preferred Stock are as stated in the Restated Certificate of
Incorporation.  The Shares have been duly authorized, and upon issuance and
delivery against payment therefor in accordance with the terms of the Purchase
Agreement, will be validly issued, outstanding, fully paid and nonassessable.
The shares of Common Stock issuable upon conversion of the Shares have been duly
authorized and reserved for issuance, and upon issuance and delivery against
payment therefor in accordance with the terms of the Shares, will be validly
issued, outstanding, fully paid and nonassessable.  Except as disclosed in the
Purchase Agreement or the Schedule of Exceptions, there are no options,
warrants, conversion privileges, preemptive rights or other rights presently
outstanding to purchase any of the authorized but unissued capital stock of the
Company, other than the conversion privileges of the Series A Preferred Stock
and Series B Preferred Stock and rights created in connection with the
transactions contemplated by the Agreements.

     5.   The execution and delivery of the Agreements by the Company and the
issuance of the Shares pursuant to the Purchase Agreement do not violate any
provision of the Company's Restated Certificate of Incorporation or Bylaws.

     6.   There is no action, proceeding or investigation pending or threatened
against the Company before any court or administrative agency that questions the
validity of the Agreements or might result, either individually on in the
aggregate, in any material adverse change in the assets, financial condition, or
operations of the Company.<PAGE>

                                                                     Exhibit 4.3

                       XM SATELLITE RADIO HOLDINGS INC.
                          CERTIFICATE OF DESIGNATION

                               establishing the

            Voting Powers, Designations, Preferences, Limitations,
                     Restrictions, and Relative Rights of

        8.25% Series B Convertible Redeemable Preferred Stock due 2012

                   _________________________________________

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

                   _________________________________________
<PAGE>

          XM SATELLITE RADIO HOLDINGS INC., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Issuer"), does
hereby certify that (i) pursuant to authority conferred upon the Board of
Directors of the Issuer by its Restated Certificate of Incorporation, as amended
to date, and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the Board of Directors authorized the
creation and issuance of the Issuer's 8.25% Series B Convertible Redeemable
Preferred Stock (the "Preferred Stock"), and (ii) the following resolution
fixing the designations, preferences and rights of such Preferred Stock, which
was duly adopted by the Board of Directors, on January 25, 2000, remains in full
force and effect.  Certain capitalized terms used herein are defined in Article
10.

     RESOLVED, that pursuant to the authority expressly granted to and vested in
     the Board of Directors of the Issuer by the provisions of the Restated
     Certificate of Incorporation, as amended from time to time (the
     "Certificate of Incorporation"), and pursuant to Section 151(g) of the
     General Corporation Laws of the State of Delaware, there be from the
     60,000,000 shares of preferred stock, $0.01 par value, of the Issuer,
     authorized to be issued pursuant to the Certificate of Incorporation, a
     series of preferred stock, consisting of 3,000,000 shares of 8.25% Series B
     Convertible Redeemable Preferred Stock (referred to herein as the
     "Preferred Stock"), having the number of shares and, to the extent that the
     designations, powers, preferences and relative and other special rights and
     the qualifications, limitations and restrictions of such Preferred Stock
     are not stated and expressed in the Certificate of Incorporation, the
     powers, preferences and relative and other special rights and the
     qualifications, limitations and restrictions thereof, as follows:

1.   Designation and Number of Shares

     1.1  The series will be known as the 8.25% Series B Convertible Redeemable
Preferred Stock.

     1.2  The Preferred Stock will be a series consisting of 3,000,000 shares
with a liquidation preference of $50 per share of the authorized but unissued
preferred stock of the Issuer.

2.   Dividends

     2.1  Payment of Dividends

          (a)  Holders of Preferred Stock will be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available
therefor, cumulative dividends from the issue date of the Preferred Stock (the
"Issuance Date") accruing at the rate per annum equal to 8.25% of the
liquidation preference per share, payable quarterly in arrears on February 1,
May 1, November 1 and August 1 of each year (each such date being referred to
herein as a "Dividend Payment Date"), commencing May 1, 2000. All dividends will
be cumulative, whether or not earned or declared.

          (b)  Each distribution in the form of a dividend shall be payable in
arrears to Holders of record as they appear on the stock books of the Issuer on
each record date as
<PAGE>

established by the Board of Directors of the Issuer (the "Dividend Payment
Record Date") not more than 60 nor less than ten days preceding a Dividend
Payment Date.

          (i)   Dividends payable on the Preferred Stock for each full dividend
     period will be computed by dividing the annual dividend rate by four.
     Dividends payable on the Preferred Stock for any period less than a full
     dividend period will be computed on the basis of a 360-day year consisting
     of twelve 30-day months.

          (ii)  The Preferred Stock will not be entitled to any dividends,
     whether payable in cash, property or securities, in excess of the full
     cumulative dividends.

          (iii) No interest, or sum of money in lieu of interest, will be
     payable in respect of any accumulated and unpaid dividends which may be in
     arrears.

          (c)   Dividends, to the extent declared by the Issuer's Board of
Directors may, at the option of the Issuer, be paid in cash, by delivery of
fully paid and nonassessable shares of the Issuer's Class A common stock (the
"Common Stock"), or a combination thereof. If the Issuer elects to pay dividends
in shares of Common Stock, such shares of Common Stock shall be valued for such
purpose:

          (i)   If on the date of such payment, such shares of Common Stock are
     freely tradable, such shares of Common Stock shall be valued at 95% of
     Average Market Value.

          (ii)  If on the date of such payment, such shares of Common Stock are
     not freely tradable, such shares of Common Stock shall be valued at 90% of
     Average Market Value.

     2.2  Declaration of Dividends

          (a)   No dividends or other distributions (other than a dividend or
distribution in Junior Securities) may be declared, made or paid or funds set
apart for payment on the Junior Securities or Parity Securities, and no Junior
Securities or any Parity Securities, including the Preferred Stock, may be
repurchased, redeemed or otherwise acquired for any consideration (or any money
paid to or made available for a sinking fund for the redemption of any shares of
any such stock) by the Issuer (except by conversion into or exchange for Junior
Securities or in the case that monies for such dividends, distributions,
redemptions, purchases, or other acquisitions are derived from the proceeds of a
substantially concurrent offering of such securities), unless full cumulative
dividends shall have been or contemporaneously are paid or declared and a sum
sufficient for the payment thereof is set apart for such payment on all
outstanding shares of Preferred Stock for all Dividend Payment Dates on or prior
to such declaration, payment, redemption, purchase or acquisition.

          (b)   No dividends may be declared, made or paid or funds set apart
for the payment of dividends upon any outstanding share of Preferred Stock with
respect to any dividend period unless all dividends for all preceding periods
have been paid or declared and a sum sufficient for the payment thereof is set
apart for the payment of such dividend upon all outstanding shares of Senior
Securities.

                                       2
<PAGE>

          (c)  The holder of record of a share of Preferred Stock at the close
of business on a record date with respect to the payment of dividends on the
Preferred Stock will be entitled to receive such dividends with respect to such
share of Preferred Stock (except that Holders of shares called for redemption or
conversion on a Redemption Date or Conversion Date between the record date and a
date which is two days after the Dividend Payment Date will be entitled to
receive such dividend on such Redemption Date as indicated in Section 5.1 hereof
or such Conversion Date as indicated in Section 4 hereof, as applicable) on the
corresponding Dividend Payment Date, notwithstanding the conversion of such
share after such record date and prior to such Dividend Payment Date. A share of
Preferred Stock surrendered for conversion during the period from the close of
business on any record date for the payment of dividends to the opening of
business of the corresponding Dividend Payment Date must be accompanied by a
payment in cash, Common Stock or a combination thereof, depending on the method
of payment that the Issuer may choose to pay the dividend, in an amount equal to
the dividend payable on such dividend payment date, unless such share of
Preferred Stock has been called for redemption on a redemption date occurring
during the period from the close of business on any record date for the payment
of dividends to the close of business on the business day immediately following
the corresponding Dividend Payment Date. The dividend payment with respect to a
share of Preferred Stock called for redemption on a date during the period from
the close of business on any record date for the payment of dividends to the
close of business on the business day immediately following the corresponding
dividend payment date will be payable on such Dividend Payment Date to the
record holder of such share on such record date, notwithstanding the conversion
of such share after such record date and prior to such dividend payment date or
the Issuer's default in payment of the dividend due on that Dividend Payment
Date.  No payment or adjustment will be made upon conversion of shares of
Preferred Stock for accumulated and unpaid dividends or for dividends with
respect to the Common Stock issued upon such conversion.

          (d)  Except as provided in Section 2.2(b) and in Section 4.2, the
Issuer shall make no payment or allowance for unpaid dividends, whether or not
in arrears, on converted shares or for dividends on the shares of Common Stock
issued upon conversion.

          (e)  The Issuer will take all actions required or permitted under
Delaware corporate law to permit the payment of dividends on the Preferred
Stock, including, without limitation, through the revaluation of its assets in
accordance with Delaware General Corporation Laws.

3.   Ranking

     3.1  The Preferred Stock will, with respect to dividend distributions and
distributions upon the liquidation, winding up or dissolution of the Issuer,
rank:

          (a)  senior to all classes of Common Stock, Series A Convertible
Preferred Stock and each other class of Capital Stock or series of preferred
stock issued by the Issuer, which is established after the date of this
Certificate of Designation, the terms of which do not expressly provide that
such class or series will rank senior to or on a parity with the Preferred Stock
as to dividend distributions and distributions upon the liquidation, winding up
or

                                       3
<PAGE>

dissolution of the Issuer (collectively, with the Common Stock, referred to as
the "Junior Securities");

          (b)  on a parity with any class of Capital Stock or series of
preferred stock issued by the Issuer, which is established after the date of
this Certificate of Designation by the Board of Directors, the terms of which
expressly provide that such class or series will rank on a parity with the
Preferred Stock as to dividend distributions and distributions upon the
liquidation, winding up or dissolution of the Issuer (collectively referred to
as "Parity Securities"); and

          (c)  junior to each class of Capital Stock or series of preferred
stock issued by the Issuer, which is established after the date of this
Certificate of Designation by the Board of Directors, the terms of which
expressly provide that such class or series will rank senior to the Preferred
Stock as to dividend distributions and distributions upon liquidation, winding-
up or dissolution of the Issuer (collectively referred to as "Senior
Securities").

     3.2  Except as otherwise provided herein, the Issuer is entitled to amend
its Certificate of Incorporation to authorize one or more additional series of
preferred stock, file certificates of designation, and issue without restriction
from time to time, any series of Junior Securities, Parity Securities, or Senior
Securities.

4.   Conversion

     4.1  Conversion Rights

          (a)  Each Holder of Preferred Stock shall have the right, at its
option, at any time and from time to time to convert, subject to the terms and
provisions of this Article 4, any or all of such Holder's shares of Preferred
Stock. In such case, the shares of Preferred Stock shall be converted into such
whole number of fully paid and nonassessable shares of Common Stock as is equal,
subject to Section 4.3, to:

     the product of the number of shares of Preferred Stock being
     so converted multiplied by the quotient of (i) the Liquidation
     Preference divided by (ii) the Conversion Price then in effect,

except that with respect to any share which shall be called for redemption such
right shall terminate at the close of business on the Business Day prior to the
Redemption Date unless the Issuer shall default in making the payment due upon
redemption thereof.

          (b)  The conversion right of a Holder of Preferred Stock shall be
exercised by the Holder by the surrender of the certificate representing shares
to be converted to the Issuer or to the Transfer Agent accompanied by the
Conversion Notice.

          (i)  Immediately prior to the close of business on the Conversion
     Date, each converting Holder of Preferred Stock shall be deemed to be the
     Holder of record of Common Stock issuable upon conversion of such Holder's
     Preferred Stock notwithstanding that the share register of the Issuer shall
     then be closed or that certificates representing such Common Stock shall
     not then be actually delivered to such person.

                                       4
<PAGE>

          (ii)  Upon notice from the Issuer, each Holder of Preferred Stock so
     converted shall promptly surrender to the Issuer or the Transfer Agent
     certificates representing the shares so converted (if not previously
     delivered), duly endorsed in blank or accompanied by proper instruments of
     transfer.

          (iii) On any Conversion Date, all rights with respect to the shares of
     Preferred Stock so converted, including the rights, if any, to receive
     notices, will terminate, except the rights of Holders thereof to: (1)
     receive certificates for the number of shares of Common Stock into which
     such shares of Preferred Stock have been converted; (2) receive the payment
     in cash or shares of Common Stock of any accumulated and unpaid dividends
     accrued thereon pursuant to Section 4.2 hereof; and (3) exercise the rights
     to which they are entitled as Holders of Common Stock.

          (c)   If the Conversion Date shall not be a Business Day, then such
conversion right shall be deemed exercised on the next Business Day.

          (d)   When shares of Preferred Stock are converted pursuant to this
Section 4.1, all accumulated and unpaid dividends, including dividends payable
on the Conversion Date pursuant to Section 2.2, or liquidated damages (whether
or not in arrears or currently payable) on the Preferred Stock so converted to
(and not including) the Conversion Date shall immediately be due and payable, at
the Issuer's option:

          (i)   in cash;

          (ii)  by delivery of the Issuer's Common Stock; or

          (iii) a combination thereof.

     4.2  The Conversion Price shall be subject to adjustment from time to time
as follows:

          (a)  Stock Splits and Combinations.  In case the Issuer shall at any
               -----------------------------
time or from time to time after the Issuance Date (i) subdivide or split the
outstanding shares of Common Stock, (ii) combine or reclassify the outstanding
shares of Common Stock into a smaller number of shares or (iii) issue by
reclassification of the shares of Common Stock any shares of capital stock of
the Issuer, then, and in each such case, the Conversion Price in effect
immediately prior to such event or the record date therefor, whichever is
earlier, shall be adjusted so that the holder of any shares of Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the number of
shares of Common Stock or other securities of the Issuer which such holder would
have owned or have been entitled to receive after the occurrence of any of the
events described above, had such shares of Preferred Stock been surrendered for
conversion immediately prior to the occurrence of such event or the record date
therefor, whichever is earlier. An adjustment made pursuant to this subparagraph
(a) shall become effective at the close of business on the day upon which such
corporate action becomes effective. Such adjustment shall be made successively
whenever any event listed above shall occur.

          (b)  Stock Dividends in Common Stock. In case the Issuer shall at any
time or from time to time after the Issuance Date pay a dividend or make a
distribution in shares of Common Stock on any class of capital stock of the
Issuer other than dividends or distributions of

                                       5
<PAGE>

shares of Common Stock or other securities with respect to which adjustments are
provided in paragraph (a) above, the Conversion Price shall be adjusted so that
the holder of each share of Preferred Stock shall be entitled to receive upon
conversion thereof the number of shares of Common Stock determined by
multiplying (1) the applicable Conversion Price by (2) a fraction, the numerator
of which shall be the number of shares of Common Stock theretofore outstanding
and the denominator of which shall be the sum of such number of shares and the
total number of shares issued in such dividend or distribution.

          (c)  Issuance of Rights or Warrants.  In case the Issuer shall issue
               ------------------------------
to all holders of Common Stock rights or warrants entitling such holders to
subscribe for or purchase Common Stock at a price per share less than the
Current Market Price, the Conversion Price in effect immediately prior to the
close of business on the record date fixed for determination of shareholders
entitled to receive such rights or warrants shall be reduced by multiplying such
Conversion Price by a fraction, the numerator of which is the sum of the number
of shares of Common Stock outstanding at the close of business on such record
date and the number of shares of Common Stock that the aggregate offering price
of the total number of shares of Common Stock so offered for subscription or
purchase would purchase at such Current Market Price, and the denominator of
which is the sum of the number of shares of Common Stock outstanding at the
close of business on such record date and the number of additional shares of
Common Stock so offered for subscription or purchase. For purposes of this
subparagraph (c), the issuance of rights or warrants to subscribe for or
purchase securities convertible into Common Stock shall be deemed to be the
issuance of rights or warrants to purchase the Common Stock into which such
securities are convertible at an aggregate offering price equal to the sum of
the aggregate offering price of such securities and the minimum aggregate amount
(if any) payable upon conversion of such securities into Common Stock. Such
adjustment shall be made successively whenever any such event shall occur.

          (d)  Distribution of Indebtedness, Securities or Assets.  In case the
               --------------------------------------------------
Issuer shall distribute to all holders of Common Stock (whether by dividend or
in a merger, amalgamation or consolidation or otherwise) evidences of
indebtedness, shares of capital stock of any class or series, other securities,
cash or assets (other than Common Stock, rights or warrants referred to in
subparagraph (c) above or a dividend payable exclusively in cash and other than
as a result of a Fundamental Change), the Conversion Price in effect immediately
prior to the close of business on the record date fixed for determination of
shareholders entitled to receive such distribution shall be reduced by
multiplying such Conversion Price by a fraction, the numerator of which is the
Current Market Price on such record date less the fair market value (as
determined by the Board of Directors of the Issuer, whose determination in good
faith shall be conclusive) of the portion of such evidences of indebtedness,
shares of capital stock, other securities, cash and assets so distributed
applicable to one share of Common Stock and the denominator of which is the
Current Market Price. Such adjustment shall be made successively whenever any
such event shall occur.

          (e)  Fundamental Changes.  In case of any Fundamental Change, the
               -------------------
holder of each share of Preferred Stock outstanding immediately prior to the
occurrence of such Fundamental Change shall have the right upon any subsequent
conversion to receive (but only out of legally available funds of the Issuer, to
the extent required by applicable law) the kind and

                                       6
<PAGE>

amount of stock, other securities, cash and assets that such holder would have
received if such share had been converted immediately prior thereto.

          (f)  Anything in the above sections (a)-(e) to the contrary
notwithstanding, the Issuer shall not be required to give effect to any
adjustment in the Conversion Price unless and until the net effect of one or
more adjustments (each of which shall be carried forward until counted toward
adjustment), determined as above provided, shall have resulted in a change of
the Conversion Price by at least 1%, and when the cumulative net effect of more
than one adjustment so determined shall be to change the Conversion Price by at
least 1%, such change in the Conversion Price shall thereupon be given effect.
In the event that, at any time as a result of the provisions of this Section,
the holder of shares of Preferred Stock upon subsequent conversion shall become
entitled to receive any shares of capital stock of the Issuer other than Common
Stock, the number of such other shares so receivable upon conversion of shares
of Preferred Stock shall thereafter be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the provisions
contained herein.

          (g)  There shall be no adjustment of the Conversion Price in case of
the issuance of any stock of the Issuer in a merger, reorganization,
acquisition, reclassification, recapitalization or other similar transaction
except as set forth in the above paragraphs (a)-(e).

          (h)  In any case in which the above paragraphs (a)-(e) require that an
adjustment as a result of any event become effective from and after a record
date, the Issuer may elect to defer until after the occurrence of such event (i)
issuing to the holder of any shares of Preferred Stock converted after such
record date and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion over and above the shares issuable on
the basis of the Conversion Price in effect immediately prior to adjustment and
(ii) paying to such holder any amount in cash in lieu of a fractional share of
Common Stock.

          (i)  If the Issuer shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or other
distribution, and shall thereafter and before the distribution to shareholders
thereof legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the number of shares of Common
Stock issuable upon exercise of the right of conversion granted by the above
paragraphs (a)-(e) or in the Conversion Price then in effect shall be required
by reason of the taking of such record.

     4.3  Upon a Change of Control, each Holder of Preferred Stock will have the
option, during the period commencing on the date that the applicable notice of
such Change of Control is mailed to Holders of Preferred Stock and ending on the
close of business on the 45/th/ day thereafter (the "Special Conversion Date")
to convert all, but not less than all, of such Holder's shares of Preferred
Stock into Common Stock at a conversion rate equal to the Liquidation Preference
divided by the Special Conversion Price.

          (a)  Within fifteen days after a Change of Control, notice of such
Change of Control shall be given by the Issuer by first-class mail to each
record Holder of shares of Preferred Stock, at such Holder's address as the same
appears on the books of the Issuer. Each such notice shall state: (i) that a
Change of Control has occurred; (ii) the last day on which the Change of Control
option may be exercised (the "Expiration Date"); (iii) the name and address of

                                       7
<PAGE>

the paying agent; and (iv) the procedures that Holders must follow to exercise
the Change of Control option.

          (b)  On or before the Expiration Date, each Holder of shares of
Preferred Stock wishing to exercise the Change of Control option shall surrender
the certificate or certificates representing the shares of Preferred Stock to be
converted, in the manner and at the place designated in the notice described in
Section 4.3 and on such date the cash or shares of Common Stock due to such
Holder shall be delivered to the person whose name appears on such certificate
or certificates as the owner thereof and each surrendered certificate shall be
returned to authorized but unissued shares. Upon surrender (in accordance with
the notice described in Section 4.3(a)) of the certificate or certificates
representing any shares to be so converted (properly endorsed or assigned for
transfer, if the Issuer shall so require and the notice shall so state), such
shares shall be converted by the Issuer at the Conversion Price as adjusted.

          (c)  Exercise by a holder of such holder's special conversion right
following a change of control is irrevocable, except that a holder may withdraw
its election to exercise such holder's special conversion right at any time
prior to the close of business on the Special Conversion Date by delivering a
written or facsimile transmission notice to the transfer agent at the address or
facsimile number specified in the change of control notice. Such notice, to be
effective, must be received by the transfer agent prior to the close of business
on the Special Conversion Date. All shares of Preferred stock tendered for
conversion pursuant to holders' special conversion rights as described herein
and not withdrawn will be converted at the close of business on the Special
Conversion Date.

     4.4  If, as a result of any Conversion Price Adjustment Event, a Holder of
the Preferred Stock becomes entitled to receive upon conversion shares of two or
more classes of Capital Stock, the Issuer shall determine the reasonable
allocation of the adjusted Conversion Price between the classes of Capital
Stock. After such allocation, the Conversion Price of each class of Capital
Stock shall thereafter be subject to adjustment on terms applicable to the
Preferred Stock in this Article 4.

     4.5  The Issuer shall at all times reserve and keep available for issuance
upon the conversion of the Preferred Stock such number of its authorized but
unissued shares of Common Stock as will from time to time be sufficient to
permit the conversion of all outstanding shares of Preferred Stock, and shall
take all action required to increase the authorized number of shares of Common
Stock if at any time there shall be insufficient authorized unissued shares of
Common Stock to permit such reservation or to permit the conversion of all
outstanding shares of Preferred Stock.

     4.6  The issuance or delivery of certificates for Common Stock upon the
conversion of shares of Preferred Stock shall be made without charge to the
converting Holder of shares of Preferred Stock for such certificates or for any
tax in respect of the issuance or delivery of such certificates or the
securities represented thereby, and such certificates shall be issued or
delivered in the respective names of, or in such names as may be directed by,
the Holders of the shares of Preferred Stock converted; provided, however, that
the Issuer shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate in
a name other than that of the Holder of the shares of Preferred Stock

                                       8
<PAGE>

converted, and the Issuer shall not be required to issue or deliver such
certificate unless or until the Person or Persons requesting the issuance or
delivery thereof shall have paid to the Issuer the amount of such tax or shall
have established to the reasonable satisfaction of the Issuer that such tax has
been paid.

5.   Redemption of Preferred Stock

     5.1  Optional Redemption of the Preferred Stock

          (a)  Shares of the Preferred Stock may not be required to be redeemed
prior to February 3, 2003.

          (b)  On or after February 3, 2003, the Preferred Stock may be redeemed
for cash, in whole or in part, at the option of the Issuer, at the following
Redemption Prices per share (expressed as percentages of the Liquidation
Preference), in each case, together with accumulated and unpaid dividends
(including an amount equal to a prorated dividend for any partial dividend
period), if any, to the Redemption Date, upon not less than 30 nor more than 60
days' prior written notice (the "Redemption Notice"), if redeemed during each
period set forth below, commencing on each of the dates set forth below:

          Date                                      Redemption
                                                  Price Per Share

          February 3, 2003...................        105.775%
          February 2, 2004...................        104.950%
          February 2, 2005...................        104.125%
          February 2, 2006...................        103.300%
          February 2, 2007...................        102.475%
          February 2, 2008...................        101.650%
          February 2, 2009...................        100.825%
          February 2, 2010 and thereafter....        100.000%

          (c)  In the event that fewer than all the outstanding shares of the
Preferred Stock are to be redeemed, the shares to be redeemed will be determined
pro rata or by lot, as determined by the Issuer.

          (d)  From and after the applicable Redemption Date (unless the Issuer
shall be in default of payment of the Redemption Price), dividends on the shares
of the Preferred Stock to be redeemed on such Redemption Date shall cease to
accumulate, such shares shall no longer be deemed to be outstanding, and all
rights of the Holders thereof as stockholders of the Issuer (except the right to
receive the Redemption Price and accumulated dividend amounts and liquidation
penalties, if any through the Redemption Date) will cease.

          (e)  No such optional redemption may be authorized or made unless,
prior to giving the applicable Redemption Notice, all accumulated and unpaid
dividends for periods ended prior to the date of such Redemption Notice shall
have been paid in cash or Common Stock.

                                       9
<PAGE>

     5.2  (a)   In the event the Issuer shall elect to redeem shares of the
Preferred Stock pursuant to Section 5.1 hereof:

          (i)   The Issuer must make a public announcement of the redemption and
     provide the Holders with the Redemption Notice referred to in Section
     5.1(b) not fewer than 30 days nor more than 60 days' prior to the
     Redemption Date.

          (ii)  On or before any Redemption Date, each Holder of shares of
     Preferred Stock to be redeemed shall surrender the certificate or
     certificates representing such shares of Preferred Stock (properly endorsed
     or assigned, or transferred, if the Issuer shall so require and the
     Redemption Notice shall so state) to the Issuer or the Redemption Agent (if
     appointed) in the manner and at the place designated in the Redemption
     Notice.

          (iii) On the Redemption Date, the Issuer or the Redemption Agent, as
     applicable, shall pay or deliver to the Holder whose name appears on such
     certificate or certificates as the owner thereof, the full Redemption Price
     due such Holder in cash, in fully paid and nonassessable shares of Common
     Stock or in a combination thereof.

          (iv)  The shares represented by each certificate to be surrendered
     shall be automatically (and without any further action of the Issuer or the
     Holder) canceled as of the Redemption Date whether or not certificates for
     such shares are returned to the Issuer and returned to authorized but
     unissued shares of preferred stock of no series.

          (v)   If fewer than all the shares represented by any such certificate
     are to be redeemed, a new certificate shall be issued representing the
     unredeemed shares, without cost to the Holder, together with the amount of
     cash, if any, in lieu of fractional shares.

          (b)   If a Redemption Notice shall have been given as provided in
Section 5.1, all rights of the Holders thereof as stockholders of the Issuer
with respect to shares so called for redemption (except for the right to receive
from the Issuer the Redemption Price) shall cease either (i) from and after the
Redemption Date (unless the Issuer shall default in the payment of the
Redemption Price, in which case such rights shall not terminate at the
Redemption Date) or (ii) if the Issuer shall so elect and state in the
Redemption Notice, from and after the time and date (which date shall be the
Redemption Date or an earlier date not less than 20 days after the date of
mailing of the Redemption Notice) on which the Issuer shall irrevocably deposit
in trust for the Holders of the shares to be redeemed with a designated
Redemption Agent as paying agent sufficient to pay at the office of such paying
agent, on the Redemption Date, the Redemption Price. Any money or shares of
Common Stock so deposited with such Redemption Agent which shall not be required
for such redemption shall be returned to the Issuer forthwith. Subject to
applicable escheat laws, any moneys or shares of Common Stock so set aside by
the Issuer and unclaimed at the end of one year from the Redemption Date shall
revert to the general funds of the Issuer, after which reversion the Holders of
such shares so called for redemption shall look only to the general funds of the
Issuer for the payment of the Redemption Price without interest. Any interest
accrued on funds held by the Redemption Agent shall be paid to the Issuer from
time to time.

                                       10
<PAGE>

          (c)  In the event that fewer than all the outstanding shares of the
Preferred Stock are to be redeemed, the shares to be redeemed shall be
determined pro rata or by lot, as determined by the Issuer, except that the
Issuer may redeem such shares held by any Holder of fewer than 100 shares (or
shares held by Holders who would hold fewer than 100 shares as a result of such
redemption), as may be determined by the Issuer.

     5.3  Mandatory Redemption of Preferred Stock

          (a)  The Issuer will redeem all shares of Preferred Stock on February
1, 2012, at a Mandatory Redemption Price equaling 100% of the Liquidation
Preference, together with any accumulated and unpaid dividends to the date of
Mandatory Redemption, unless the Preferred Stock has already been redeemed or
converted. The Issuer shall send notice of such redemption to Holders upon not
less than 30 nor more than 60 days' prior written notice.

          (b)  The Issuer must make mandatory redemption payments on the
Preferred Stock by delivery of shares of Common Stock and makes such payments as
follows:

          (i)  If on the date of such payment, such shares of Common Stock are
     freely tradable, such shares of Common Stock shall be valued at 95% of
     Average Market Value.

          (ii) If on the date of such payment, such shares of Common Stock are
     not freely tradable, such shares of Common Stock shall be valued at 90% of
     Average Market Value.

          (c)  If, as a matter of law, the Issuer is unable to issue Common
Stock in payment of the Mandatory Redemption Price, then the Issuer shall cause
the Preferred Stock to be converted on the date of such mandatory redemption
into the same number of shares of Common Stock as could otherwise have been
issued in satisfaction of the Mandatory Redemption Price, provided that the
Issuer shall have given the Holders of Preferred Stock notice of the exercise of
this option at least 30 days prior to the date of such mandatory redemption.

          (d)  The Issuer shall pay a Cash Adjustment, determined based on the
proceeds received by the Transfer Agent from the sale of that number of shares
of Common Stock, which the Issuer will deliver to the Transfer Agent for such
purpose, equal to the aggregate of all such fractions rounded up to the nearest
whole share, to each Holder that would otherwise be entitled to a fraction of a
share of Common Stock.

          (i)  The Transfer Agent shall sell such shares of Common Stock at the
     best available prices and distribute the proceeds to the Holders in
     proportion to their respective interests therein.

          (ii) The Issuer will pay the expenses of the Transfer Agent with
     respect to such sale, including brokerage commissions. Any portion of any
     such payment that is declared and not paid through the delivery of shares
     of Common Stock will be paid in cash. The Issuer shall make a public
     announcement no later than the close of business on the tenth business day
     prior to the record date for each dividend as to whether the Issuer

                                       11
<PAGE>

     will pay such dividend and, if so, the form of consideration the Issuer
     will use to make such payment.

6.   Liquidation Preference

     6.1  Upon any voluntary or involuntary liquidation, dissolution or winding
up of the Issuer or reduction or decrease in its capital stock resulting in a
distribution of assets to the holders of any class or series of the Issuer's
capital stock, Holders of the Preferred Stock will be entitled to be paid, out
of assets of the Issuer available for distribution, the Liquidation Preference
per share plus an amount in cash equal to all accumulated and unpaid dividends
thereon to the date fixed for liquidation, dissolution or winding up (including
an amount equal to a prorated dividend for the period from the last dividend
payment date to the date fixed for liquidation, dissolution or winding up),
before any distribution is made on any Junior Securities, including, without
limitation, the Common Stock.

     6.2  If, upon any voluntary liquidation, dissolution or winding-up of the
Issuer, the amounts payable with respect to the liquidation performance of the
Preferred Stock and all other Parity Securities are not paid in full, the
Holders of the Preferred Stock and the Parity Securities will share pro rata in
proportion to the full distribution to which each is entitled.

     6.3  After payment of the full amount of the Liquidation Preference to
which they are entitled, the Holders of shares of the Preferred Stock will have
no right or claim to any of the remaining assets of the Issuer.

     6.4  Neither the voluntary sale, conveyance, exchange or transfer (for
cash, shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Issuer nor the consolidation
or merger of the Issuer with or into one or more entities will be deemed to be a
voluntary or involuntary liquidation, dissolution or winding-up of the Issuer or
reduction or decrease in capital stock, unless such sale, conveyance, exchange
or transfer shall be in connection with a liquidation, dissolution or winding-up
of the business of the Issuer or reduction or decrease in capital stock.

7.   Voting Rights

     7.1  Holders of the Preferred Stock have no voting rights with respect to
general corporate matters except as provided by law or as set forth herein.

     7.2  Special Voting Rights

          (a)  If dividends payable on the Preferred Stock are in arrears and
unpaid for six quarterly periods, whether or not consecutive, the Holders of a
majority of the outstanding Preferred Stock voting separately as a class with
the shares of any other subsequently issued Parity Securities then titled to
similar voting rights (the "Voting Rights Class") will be entitled at the next
regular or special meeting of stockholders of the Issuer to elect such number of
members to the board of directors constituting at least 20% of the then existing
board of directors before such election, rounded to the nearest whole number,
provided, however, that such number shall be no less than one nor greater than
two, and the number of members of the board of directors will be immediately and
automatically increased by one or two, as the case may be.

                                       12
<PAGE>

          (b)  Such voting rights may be exercised at a special meeting of the
holders of the shares of the Voting Rights Class, called as hereinafter
provided, or at any annual meeting of stockholders held for the purpose of
electing directors, and thereafter at each such annual meeting until such time
as all dividends in arrears on the shares of Preferred Stock shall have been
paid in full, at which time or times such voting rights and the term of the
directors elected pursuant to Section 7.2(a) shall terminate and such directors
shall be deemed to have resigned.

          (c)  At any time when such voting rights shall have vested in holders
of shares of the Voting Rights Class described in Section 7.2(a), a proper
officer of the Issuer may call, and, upon the written request of the record
holders of shares representing twenty-five percent (25%) of the voting power of
the shares then outstanding of the Voting Rights Class addressed to the
Secretary of the Issuer, shall call a special meeting of the holders of shares
of the Voting Rights Class. Such meeting shall be held at the earliest
practicable date upon the notice required for annual meetings of stockholders at
the place for holding annual meetings of stockholders of the Issuer, or, if
none, at a place designated by the Board of Directors. Notwithstanding the
provisions of this Section 7.2(c), no such special meeting shall be called
during a period within the 60 days immediately preceding the date fixed for the
next annual meeting of stockholders, in which such case the election of
directors pursuant to Section 7.2(a) shall be held at such annual meeting of
stockholders.

          (d)  At any meeting held for the purpose of electing directors at
which the holders of the Voting Rights Class shall have the right to elect
directors as provided herein, the presence in person or by proxy of the holders
of shares representing more than fifty percent (50%) in voting power of the then
outstanding shares of the Voting Rights Class shall be required and shall be
sufficient to constitute a quorum of such class for the election of directors by
such class.

          (e)  Any director elected pursuant to the voting rights created under
this Section 7.2 shall hold office until the next annual meeting of stockholders
(unless such term has previously terminated pursuant to Section 7.2(b)) and any
vacancy in respect of any such director shall be filled only by vote of the
remaining director so elected by holders of the Voting Rights Class, or if there
be no such remaining director, by the holders of shares of the Voting Rights
Class at a special meeting called in accordance with the procedures set forth in
this Section 7.2, or, if no such special meeting is called, at the next annual
meeting of stockholders. Upon any termination of such voting rights, the term of
office of all directors elected pursuant to this Section 7 shall terminate and
such directors shall be deemed to have resigned.

     7.3  The affirmative vote or consent of the Holders of at least 50% of the
outstanding Preferred Stock will be required for the issuance of any class of
Senior Securities (or security convertible into Senior Securities or evidencing
a right to purchase any shares or any class or series of Senior Securities), and
amendments to this Certificate of Designation that would affect adversely the
rights of Holders of Preferred Stock or authorize the issuance of any additional
shares of Preferred Stock.

     7.4  The affirmative vote or consent of the Holders of at least 66 2/3% of
the outstanding Preferred Stock will be required for amendments to the Change of
Control

                                       13
<PAGE>

provisions in this certificate. In all such cases each share of Preferred Stock
shall be entitled to one vote.

     7.5  Except as set forth in this Certificate of Designation, the creation,
authorization or issuance of any shares of Junior Securities or Parity
Securities or an increase or decrease in the amount of authorized Capital Stock
of any class, including any preferred stock, shall not require the consent of
the Holders of the Preferred Stock and shall not be deemed to affect adversely
the rights, preferences, privileges or voting rights of Holders of shares of the
Preferred Stock.

     7.6  The consent of the Holders of Preferred Stock shall not be required to
authorize (by way of reclassification or otherwise) or issue any Parity
Securities or any obligation or security convertible into or exchangeable into
or evidencing a right to purchase shares of any class or series of Parity
Securities.

8.   Merger, Consolidation and Sale of Assets

     8.1  Without the vote or consent of the Holders of at least 50% of the then
outstanding shares of Preferred Stock, the Issuer may not consolidate or merge
with or into, or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its assets to, any person unless (a) the entity
formed by such consolidation or merger (if other than the Issuer) or to which
such sale, assignment, transfer, lease, conveyance or other disposition shall
have been made (in any such case, the "resulting entity") is a corporation
organized and existing under the laws of the United States or any State thereof
or the District of Columbia; (b) if the Issuer is not the resulting entity, the
Preferred Stock is converted into or exchanged for and becomes shares of such
resulting entity, having in respect of such resulting entity the same (or more
favorable) powers, preferences and relative, participating, optional or other
special rights thereof that the Preferred Stock had immediately prior to such
transaction; and (c) immediately after giving effect to such transaction, no
dividend arrearages which trigger voting rights have occurred and are
continuing. The resulting entity of such transaction shall thereafter be deemed
to be the issuer of the Preferred Stock or securities into which it is converted
for all purposes of this Certificate of Designation.

9.   Amendment, Supplement and Waiver

     9.1  Without the consent of any Holder of the Preferred Stock, subject to
the requirements of the Delaware General Corporation Law, the Issuer may amend
or supplement this Certificate of Designation to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Preferred Stock in addition to or
in place of certificated Preferred Stock, to provide for the assumption of the
Issuer's obligations to Holders of the Preferred Stock in the case of a merger
or consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Preferred Stock or that does not adversely affect
the legal rights under this Certificate of Designation of any such Holder.

10.  Certain Definitions

     Set forth below are certain defined terms used in this Certificate of
Designation.

                                       14
<PAGE>

     10.1  "Act" means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.

     10.2  "Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities, by agreement of or otherwise.

     10.3  "Average Market Value" of Common Stock means the arithmetic average
of the current market value of the Common Stock for the ten trading days ending
on the fifth business day prior to (a) in the case of the payment of any
dividend, the record date for such dividend and (b) in the case of the mandatory
redemption payment, the date of such payment.

     10.4  "Business Day" means any day other than a Legal Holiday.

     10.5  "Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock or
partnership or membership interests, whether common or preferred.

     10.6  "Cash Adjustment" will be determined based on the proceeds received
by the Transfer Agent from the sale of that number of shares of Common Stock,
which the Issuer will deliver to the Transfer Agent for such purpose, equal to
the aggregate of all such fractions rounded up to the nearest whole share.

     10.7  "Closing Price" with respect to the Common Stock on any trading day,
means the last reported regular-way sale price of the Common Stock on the NYSE,
or if the Common Stock is not then listed on the NYSE, the last reported
regular-way sale price of the Common Stock on the principal stock exchange or
market of the Nasdaq Stock Market on which the Common Stock is then listed or
traded, or if the Common Stock is not then listed or traded on any such stock
exchange or market, the average of the closing bid and asked prices in the over-
the-counter market as furnished by any NYSE member firm selected from time to
time by the Issuer for that purpose.

     10.8  "Change of Control" means: (a) the sale, lease, transfer, conveyance
or other disposition of all or substantially all of the assets of the Issuer to
any "person" or "group" (within the meaning of Sections 13(d)(3) and 14(d)(2) of
the Exchange Act or any successor provision to either of the foregoing,
including any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act), in
one transaction or a series of related transactions, other than a Permitted
Owner or (b) the acquisition of beneficial ownership of shares of the Issuer's
Capital Stock by any "person" or "group" (within a meaning of Sections 13(d)(3)
and 14(d)(2) of the Exchange Act or any successor provision to either of the
foregoing, including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act), other a Permitted Owner, by means of an exchange offer,
liquidation, tender offer, consolidation,

                                       15
<PAGE>

merger, combination, reclassification, recapitalization or otherwise of more
than fifty percent (50%) of the total voting power of all classes of the Voting
Stock of the Issuer or a successor and/or warrants or options to acquire such
Voting Stock, entitled to vote generally in elections of the Issuer's board of
directors.

Notwithstanding clause (b) above, a merger or consolidation that would otherwise
constitute a Change of Control hereunder shall not constitute a Change of
Control if (i) the closing price per share of Common Stock for any five trading
days within the period of ten consecutive trading days ending immediately after
the announcement of such change of control equals or exceeds 105% of the
conversion price of the Preferred Stock in effect on each such trading day or
(ii) at least 90% of the consideration in the transaction or transactions
constituting a change of control pursuant to this clause consists of shares of
Common Stock traded or to be traded immediately following such change of control
on a national securities exchange or the Nasdaq National Market and, as a result
of such transaction or transactions, the Preferred Stock becomes convertible
solely into such Common Stock (and any rights attached thereto).

However, a transaction of a type described above that results in the Common
Stock no longer being listed on a stock exchange or traded on the Nasdaq
National Market would also be treated as a change in control even if a Permitted
Owner were involved.

     10.9  "Common Stock" means the Issuer's authorized $.01 par value Class A
Common Stock.

     10.10 "Conversion Date" means the date the Issuer or the Transfer Agent
receives the Conversion Notice.

     10.11 "Conversion Notice" means written notice from the Holder to the
Issuer stating that the Holder elects to convert all or a portion of the shares
of Preferred Stock represented by certificates delivered to the Issuer or the
Transfer Agent contemporaneously. The Conversion Notice will specify or include:

           (i)   The number of shares of Preferred Stock being converted by the
     Holder,

           (ii)  The name or names (with address and taxpayer identification
     number) in which a certificate or certificates for shares of Common Stock
     are to be issued,

           (iii) A written instrument or instruments of transfer in form
     reasonably satisfactory to the Issuer or the Transfer Agent, duly executed
     by the Holder or its duly authorized legal representative, or in blank, and

           (iv)  Transfer tax stamps or funds thereof, if required pursuant to
     Section 4.6.

     10.12 "Conversion Price" shall initially be $40.

     10.13 "Conversion Price Adjustment Events" are any of those events
specified in Section 4.2.

                                       16
<PAGE>

     10.14  "Current Market Price" means, as of any date, the average of the
daily Closing Price for the five consecutive Trading Days selected by the Board
of Directors beginning not more than 20 trading days before, and ending not
later than the date of the applicable event described in Section 4.2(c) or
4.2(d) hereof and the date immediately preceding the record date fixed in
connection with that event.

     10.15  "Current Market Value" of Common Stock means the average of the high
and low sale prices of the Common Stock as reported on the Nasdaq National
Market or such other SEC-recognized national securities exchange or trading
system which the Issuer may from time to time designate upon which the greatest
number of shares of the Common Stock is then listed or traded, for the trading
day in question.

     10.16  "Dividend Payment Date" is as defined in Section 2.1, above.

     10.17  "Dividend Payment Record Date" is as defined in Section 2.1, above.

     10.18  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

     10.19  "Expiration Date" is as defined in Section 4.4(a)(i), above.

     10.20  "Fundamental Change" means any transaction or event, including,
without limitation, any merger, consolidation, sale of assets, tender or
exchange offer, reclassification, compulsory share exchange or liquidation, in
which all or substantially all outstanding shares of the Issuer's Common Stock
are converted into or exchanged for stock, other securities, cash or assets.

     10.21  "Holder" means a Person in whose name shares of Capital Stock is
registered.

     10.22  "Issuance Date" is as defined in Section 2.1

     10.23  "Issuer" means XM Satellite Radio Holdings Inc., a Delaware
corporation.

     10.24  "Junior Security" is as defined in Section 3.1, above.

     10.25  "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place payment is to be received are
authorized by law, regulation or executive order to remain closed. If a payment
date is Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.

     10.26  "Liquidation Preference" means $50 per share of Preferred Stock.

     10.27  "Mandatory Redemption Price" is as defined in Section 5.4(a), above

     10.28  "Market Capitalization" means the product of the then-current market
price times the total number of shares of Common Stock then outstanding.

                                       17
<PAGE>

     10.29  "Market Value" means the average of the Closing Prices of the Common
Stock for the five trading days ending on the last trading day preceding the
date of occurrence of a Change of Control.

     10.30  "Notice Date" means the tenth day prior to a Deposit Payment Date.

     10.31  "Parity Security" is as defined in Section 3.1, above.

     10.32  "Permitted Owner" means American Mobile Satellite Corporation,
General Motors Corporation, DIRECTV and Clear Channel Communications, Inc. and
their respective affiliates.

     10.33  "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock issuer, interest, trust or unincorporated
organization (including any subdivision or ongoing business of any such entity
or substantially all of the assets of any such entity, subdivision or business).

     10.34  "Preferred Stock" means the Preferred Stock authorized in this
Certificate of Designation.

     10.35  "Redemption Agent" means that Person, if any, appointed by the
Issuer to hold funds deposited by the Issuer in trust to pay to the Holders of
shares to be redeemed.

     10.36  "Redemption Date" means that certain date set forth in the
Redemption Notice on which date the redemption of the Preferred Stock is
completed.

     10.37  "Redemption Notice" means that notice to be given by the Issuer to
the Holders notifying the Holders as to the redemption, in whole or in part, of
the Preferred Stock pursuant to Article 5 hereof. The Redemption Notice shall
include the following information: (i) the Redemption Date and the time of day
on such date; (ii) the total number of shares of Preferred Stock to be redeemed
and, if fewer than all the shares held by such Holder are to be redeemed, the
number of such shares to be redeemed from such Holder; (iii) the Redemption
Price (whether to be paid in cash or shares of Common Stock); (iv) the place or
places where certificates for such shares are to be surrendered for payment of
the Redemption Price and delivery of certificates representing shares of Common
Stock (if the Issuer so chooses); (v) that dividends on the shares to be
redeemed will cease to accrue on such Redemption Date unless the Issuer defaults
in the payment of the Redemption Price; and (vi) the name of any bank or trust
company, if any, performing the duties of Redemption Agent. Redemption Notice
shall be given by first-class mail to each record Holder of the shares to be
redeemed, at such holder's address as the same appears on the books of the
Issuer.

     10.38  "Redemption Notice Date" means the date the Redemption Notice is
first mailed or delivered to any Holder.

     10.39  "Redemption Price" means that price established for redemption of
the Preferred Stock established in Section 5.1(b) hereof.

     10.40  "Special Conversion Date" is as defined in Section 4.3, above.

                                       18
<PAGE>

     10.41  "Special Conversion Price" is the higher of (a) the Market Value of
the Common Stock and (b) $21.3333 per share, which amount, in the case of this
clause (b), shall be adjusted each time that the conversion price is adjusted so
that the ratio of such amount (as so adjusted) to the conversion price (as so
adjusted) equals the ratio of $21.3333 to the initial conversion price.

     10.42  "Subsidiary" means, with respect to any person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other Subsidiaries of such person or a combination
thereof.

     10.43  The "Transfer Agent" shall be as established pursuant to Article 11
hereof.

     10.44  "Trading Day" means any business day on which the Nasdaq National
Stock Market (or any U.S. national securities exchange or quotation system on
which the Common Stock is then listed) is open for the transaction of business.

     10.45  "Voting Stock" means with respect to any Person, Capital Stock of
any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.

11.  Transfer Agent and Registrar

            The duly appointed Transfer Agent and registrar for the Preferred
Stock shall be BankBoston, N.A. The Issuer may, in its sole discretion, remove
the Transfer Agent in accordance with the agreement between the Issuer and the
Transfer Agent; provided that the Issuer shall appoint a successor transfer
agent who shall accept such appointment prior to the effectiveness of such
removal.

12.  Other Provisions

     12.1   With respect to any notice to a Holder of shares of the Preferred
Stock required to be provided hereunder, neither failure to mail such notice,
nor any defect therein or in the mailing thereof, to any particular Holder shall
affect the sufficiency of the notice or the validity of the proceedings referred
to in such notice with respect to the other Holders or affect the legality or
validity of any distribution, rights, warrant, reclassification, consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up, or the
vote upon any such action. Any notice which was mailed in the manner herein
provided shall be conclusively presumed to have been duly given whether or not
the Holder receives the notice.

     12.2   Shares of Preferred Stock issued and reacquired will be retired and
canceled promptly after reacquisition thereof and, upon compliance with the
applicable requirements of Delaware law, have the status of authorized but
unissued shares of preferred stock of the Issuer undesignated as to series and
may with any and all other authorized but unissued shares of preferred stock of
the Issuer be designated or redesignated and issued or reissued, as the case may
be, as part of any series of preferred stock of the Issuer except that any
issuance or reissuance of shares of Preferred Stock must be in compliance with
this Certificate of Designation.

                                       19
<PAGE>

     12.3  In the Issuer's discretion, no fractional shares of Common Stock or
securities representing fractional shares of Common Stock will be issued upon
conversion, redemption, or as dividends payable in the Preferred Stock. Any
fractional interest in a share of Common Stock resulting from conversion,
redemption, or dividend payment will be paid in cash based on the last reported
sale price of the Common Stock on the Nasdaq National Stock Market (or any
national securities exchange or authorized quotation system on which the Common
Stock is then listed) at the close of business on the trading day next preceding
the date of conversion or such later time as the Issuer is legally and
contractually able to pay for such fractional shares.

     12.4  The shares of Preferred Stock shall be issuable in whole shares.

     12.5  All notices periods referred to herein shall commence on the date of
the mailing of the applicable notice.

                                       20
<PAGE>

          IN WITNESS WHEREOF, XM Satellite Radio Holdings Inc. caused this
Certificate to be signed this 25/th/ day of January, 2000.

                                   XM SATELLITE RADIO HOLDINGS INC.

                                   By:       /s/ Joseph M. Titlebaum

                                      Name:  Joseph M. Titlebaum
                                      Title: Senior Vice President, General
                                             Counsel and Secretary

                                       21

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