Exhibit 10.4
                                                                    ------------
                                                     Certificate of Designations






                           CERTIFICATE OF DESIGNATIONS
                              FOR NON-PARTICIPATING
                                 PREFERRED STOCK

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


                  Source  Media,   Inc.  (the   "Corporation"),   a  corporation
organized  and  existing  under  the  General  Corporation  Law of the  State of
Delaware,  does hereby  certify that,  pursuant to authority  conferred upon the
board of  directors  of the  Corporation  (the  "Board") by its  Certificate  of
Incorporation, as amended (the "Certificate of Incorporation"),  and pursuant to
the  provisions  of Section 151 of the General  Corporation  Law of the State of
Delaware,  on August 25, 1999, the Board duly approved and adopted the following
resolution:

                           RESOLVED,  that,  pursuant to the authority vested in
                  the Board by the Certificate of Incorporation,  the Board does
                  hereby  create,  authorize  and provide for the  issuance of a
                  class of  Non-Participating  Preferred Stock, par value $0.001
                  per share, such class consisting of one (1) share,  having the
                  designations  and rights that are set forth in the Certificate
                  of Incorporation and in this Resolution as follows:

                  1. Designation.  There is hereby created out of the authorized
and unissued  shares of Preferred  Stock of the Corporation a class of Preferred
Stock  designated  as the  "Non-Participating  Preferred  Stock."  The number of
shares  constituting  such class shall be one (1). The holder (the  "Holder") of
the share of Non-Participating  Preferred Stock shall not be entitled to receive
dividends or have any other special rights except as provided herein.

                  2. Rank. The  Non-Participating  Preferred  Stock shall,  with
respect to  distributions  upon  liquidation,  winding-up and dissolution of the
Corporation,  rank  senior to all  classes of Common  Stock of the  Corporation,
junior to the Corporation's 13 1/2% Senior Payment-In-Kind  Preferred Stock and,
with  respect  to any  other  class or series of  preferred  stock,  as shall be
provided in the resolutions of the Board creating such other classes or series.

                  3. Liquidation  Preference.  (a) In the event of any voluntary
or  involuntary  liquidation,  dissolution  or winding up of the  affairs of the
Corporation,  the Holder  shall be

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entitled to be paid out of the assets of the Corporation  available for
distribution  to its  stockholders an amount in cash equal to the liquidation
preference as set forth in paragraph (c) below. Except as provided in the
preceding  sentence,  the Holder shall not be entitled to any distribution in
the event of any  liquidation,  dissolution or winding up of the affairs of the
Corporation.

                  (b) For the  purposes  of this  Section 3,  neither  the 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
Corporation nor the  consolidation or merger of the Corporation with or into one
or more entities shall be deemed to be a liquidation,  dissolution or winding up
of the affairs of the Corporation.

                  (c)  The  liquidation   preference  of  the  Non-Participating
Preferred Stock shall be $100.00 per share.

                  4.       Voting  Rights.  (a) Except as  otherwise  required
under  Delaware law or as set forth in this Section 4, the Holder  shall not be
entitled or  permitted  to vote on any matter  required or permitted to be voted
 upon by the stockholders of the Corporation.

                  (b) At all such times as the Board  shall  consist of seven or
ten members,  the Holder shall have the exclusive right,  voting separately as a
single class, to elect the number of members of the Board in accordance with the
following schedule:

<TABLE>
   <S>                          <C>                                    <C>


      Number of Board Seats            Member of Board Seats               Percentage of Voting Stock Owned by the Holder
  Appointed by the Holder on 7     Appointed by the Holder on 10           ----------------------------------------------
  -----------------------------    ------------------------------            on a Fully Voting Diluted Basis
          Person Board                      Person Board                   ----------------------------------
          ------------                      ------------
                3                                 4                           15% or greater
                2                                 3                         7.5% or more but less than 15%
                1                                 2                          5% of more but less than 7.5%
                1                                 1                          2.5% or more but less than 5%
                0                                 0                          less than 2.5%














   (c) The written  consent of the Holder will be required in the
event the Board is ever to be comprised of a number of members  other than seven
or ten. The Holder may protect its proportionate representation in giving or not
giving its consent in its sole discretion.

                  (d) At any time that the Holder is  entitled to elect at least
one Board  representative,  the  Holder  will be  entitled  to elect one  voting
representative to each committee of the Board.

                  (e) The foregoing  rights of the Holder to take any actions as
provided  in  this  Section  4  may  be  exercised  at  any  annual  meeting  of
stockholders  or any special meeting of stockholders or the Holder held for such
purposes as provided  herein or at any  adjournment  thereof,  or by the written
consent of the Holder delivered to the Secretary of the Corporation.

<PAGE>


                  (f) So long as such right to vote  continues  (and unless such
right has been exercised by written consent of the Holder),  the Chairman of the
Board of the  Corporation  may call, and upon the written  request of the Holder
delivered to the Secretary of the  Corporation  shall call, a special meeting of
the Holder.  Such  meeting  shall be held within 10 days after  delivery of such
request to the Secretary,  at the place and upon the notice  provided by law and
in the By-laws of the Corporation for the holding of meetings of stockholders.

                  (g) The  failure of the  Holder to elect  members of the Board
shall not prevent the  election of  directors  other than those to be elected by
the  Holder,  and the  absence of a quorum of the holders of shares of any other
class or series of capital  stock shall not prevent the election of directors to
be elected by the Holder or the taking of any action as provided in this Section
4.

                  (h) Each director  elected by the Holder,  as provided in this
Section  4 shall,  unless  such  director's  term  shall  expire  earlier  or be
terminated  in  accordance  with this  Section 4, hold  office  until the annual
meeting of stockholders next succeeding his election or until his successor,  if
any, is elected and qualified.

                  (i) In case  any  vacancy  shall  occur  among  the  directors
elected by the Holder,  such vacancy may be filled for the unexpired  portion of
the term by vote of the remaining director or directors  theretofore  elected by
the Holder (if there is a remaining director or directors).  If any such vacancy
is not so filled  within 10 days after the creation  thereof or if any or all of
the directors so elected by the Holder shall cease to serve as directors  before
their terms shall expire, the Holder, by written consent as herein provided,  or
at a special  meeting  of the  Holder  called as  provided  herein,  may elect a
successor or successors to hold office for the unexpired  terms of the directors
whose places shall be vacant.

                  (j) Any  director  elected by the  Holder may be removed  from
office with or without  cause by the vote or written  consent of the  Holder.  A
special  meeting of the Holder may be called in accordance  with the  procedures
set forth in paragraph 4(f) above to effect such removal.

                  (k) The Non-Participating  Preferred Stock shall be subject to
mandatory  redemption at a redemption price equal to the liquidation  preference
set forth in paragraph 3(c) above in the event the Holder owns less than two and
a half percent (2.5%) of the Voting Stock of the  Corporation on a Fully Diluted
Basis.  Such  redemption  shall be automatic and shall not require any notice or
other action on the part of the Corporation.  Upon such  redemption,  the Holder
shall  surrender the  certificate  representing  the share of  Non-Participating
Preferred Stock to the  Corporation,  duly endorsed (or otherwise in proper form
for  transfer,  as determined  by the  Corporation),  in such manner and at such
place as may be designated by the Corporation.

                  12.      Preemptive  Rights.  (a) The Holder  shall have the
preemptive right to purchase up to its Proportionate Share of any New Securities
which the Corporation  may, from time to time,  propose to sell or issue.

<PAGE>


                  (b) In the event the  Corporation  proposes  to  undertake  an
issuance or sale of New Securities,  the Corporation will give the Holder thirty
(30) days prior  written  notice of its  intention,  describing  the type of New
Securities  and the price and the  specific  terms  upon  which the  Corporation
proposes to issue or sell the same. Thereafter, the Holder will have thirty (30)
days from the date of such notice to give the Corporation  written notice of its
intention to purchase up to its Proportionate Share of such New Securities,  for
the same price and upon the terms pursuant to which the New  Securities  will be
offered,  as  specified in the  Corporation's  notice,  and stating  therein the
quantity  of  such  New  Securities  the  Holder  intends  to  purchase.  If the
consideration  for the New  Securities is in a form other than cash,  the Holder
shall  pay  equivalent  value on a per share  basis in cash.  The  Holder  shall
further have a forty-five  (45) day period from the date of the original  notice
from the  Corporation  in which to commit  funding  to the  purchase  of any New
Securities  and close the  acquisition  thereof.  Failure  by the Holder to give
notice  within the thirty (30) day period shall be deemed a waiver by the Holder
of the  preemptive  right with  respect  to such New  Securities,  provided  the
Corporation  consummates the issuance of New Securities  within ninety (90) days
after  the  expiration  of  such  thirty  (30)  day  period  in the  amount,  at
substantially  the same price and on  substantially  the same terms specified in
the notice given by the Corporation  under this paragraph 5(b). In the event the
New Securities are to be issued pursuant to an  underwritten  public offering or
under similar  circumstances  so that the final price or other material terms of
the New Securities are not established by the Corporation at the time the thirty
day notice is  provided to the Holder,  the  Corporation's  notice to the Holder
will provide its  anticipated  price of, and general terms  pursuant to which it
intends to issue such New Securities.  Notwithstanding  the fact that the Holder
may notify the  Corporation  within  such  thirty day period  that it intends to
purchase up to its Proportionate  Share of such New Securities,  the Holder will
not be bound by such  election  until the final price and terms of such offering
are  established  by the  Corporation.  Upon the final  price  and  terms  being
established,  the Corporation  shall provide the Holder immediate notice thereof
prior to the  Corporation's  proposed sale and issuance.  If such final price is
not  greater  than one hundred  ten  percent  (110%) of the price  stated in the
original  notice,  the  Holder  will be  bound by its  notice  to  exercise  its
preemptive  rights;  if such final price is greater than one hundred ten percent
(110%) of the price stated in the original notice, the Holder shall not be bound
by its  original  election,  but shall have the right for a period not to exceed
two (2) hours after receiving  notice of the final price to elect to purchase in
accordance  with the  terms of this  Section  5. In order to both  minimize  the
potential  disruption to the Corporation's  ability to offer such New Securities
in an underwritten  public offering and to afford the Holder with as much notice
and  information  as  possible  regarding  the terms and  pricing  thereof,  the
Corporation  will  keep the  Holder  reasonably  informed  of the  status of the
on-going  negotiations with the managing  underwriter with respect to such terms
and anticipated  pricing,  and further will afford the Holder,  if the Holder so
requests,  the right to have a representative present to observe the negotiation
of the final pricing terms  immediately prior to the execution of the applicable
underwriting agreement.

                  (c)  The  right  of the  Holder  to  purchase  New  Securities
pursuant to this Section 5 may be exercised,  in whole or in part, by any of the
Holder's  Affiliates,  if the Holder  expressly grants such right of exercise to
such  Affiliates,  subject  to  compliance  with  applicable  federal  and state
securities laws.

<PAGE>


                  (d) The right of the Holder to elect members to the Board (and
committees thereof) in accordance with the provisions of Sections 4(b) and 4(d),
and the preemptive rights granted to the Holder as set forth in Section 5, shall
lapse in the event the  Holder  owns less than five  percent  (5%) of the Voting
Stock of the Company on a Fully Diluted basis.

                  13. Transfer  Restrictions.  Except as specifically  permitted
under this  Section 6, the Holder may not without the prior  written  consent of
the   Corporation   sell,   assign,   transfer  or  otherwise   dispose  of  the
Non-Participating  Preferred  Stock,  or any  attribute,  component  or right in
respect thereof, except to an Affiliate of the Holder. Any purported disposition
in  violation  of this  Section  6 shall  be void  and of no  force  or  effect.
"Affiliate"  as used  herein  shall mean any person or entity  that  directly or
indirectly or through one or more intermediaries  Controls,  is Controlled by or
is under common Control with, the Holder, with "Control" meaning the possession,
directly or  indirectly,  of the power to direct or cause the  direction  of the
management  and  policies of the person or entity  Controlled  (whether  through
ownership of securities,  partnership interests or other ownership interests, by
contract or otherwise).

                  14.  Certain  Definitions.  As  used in  this  Certificate  of
Designations, the following terms have the meanings set forth below. Other terms
that are defined  elsewhere in this  Certificate of Designations  shall have the
meaning as therein set forth.

                  "Fully  Diluted" shall mean, as of any date of  determination,
         that for purposes of calculating the relevant percentage there shall be
         deemed  outstanding  at the time of  calculation  all  shares of Voting
         Stock issuable, whether at such time or upon the passage of time or the
         occurrence of future events, upon the exercise,  conversion or exchange
         of any  warrant,  option or other right to subscribe  for,  purchase or
         otherwise  acquire  directly or  indirectly,  any such shares of Voting
         Stock.

                  "New  Securities"  shall  mean any  equity  securities  of the
         Corporation,  whether now or hereafter  authorized and including Common
         Stock and  preferred  stock,  and all  rights,  options or  warrants to
         purchase any such  securities of the  Corporation,  and  securities and
         indebtedness of any type whatsoever that are, or may become convertible
         into or exchangeable for capital stock of the Corporation, in each case
         to the extent  issued after the date of filing of this  Certificate  of
         Designation,  other  than (i) up to a maximum  of  8,147,139  shares of
         Common  Stock  which may  hereafter  be issued in  accordance  with the
         exercise  of  warrants,  stock  options  or put  rights  identified  on
         Schedule 4.3 to the Common Stock and Warrants Purchase Agreement by and
         between the Corporation and Insight  Interactive,  LLC dated as of July
         29,  1999 (the  "Purchase  Agreement"),  (ii) the  stock,  options  and
         warrants  (and the stock  issued  upon  exercise  of such  options  and
         warrants) set forth in Notes A, B and C on Schedule 4.3 to the Purchase
         Agreement,   (iii)  the  grant  of  employee   stock   options,   stock
         appreciation  rights or other awards  pursuant to any stock option plan
         adopted by the Board of Directors of the Corporation, (iv) the issuance
         of Common Stock upon the exercise of any of the employee stock options,
         stock  appreciation  rights or other  awards  specified in clause (iii)
         above, (v) the issuance of any Common Stock,  preferred stock or Rights
         in order to effect any merger,  consolidation  or other  acquisition of
         any Person, business, division or assets outside the ordinary course of

<PAGE>

         business,  and (vi) the issuance of any capital  stock or Rights by the
         Corporation  for sale pursuant to a registration  statement  filed with
         the Securities and Exchange Commission.

                  "Person"  shall mean a domestic  or  foreign  natural  person,
         general or limited partnership,  limited liability partnership, limited
         liability company, trust, estate, association or corporation.

                  "Proportionate Share" shall mean a fraction,  the numerator of
         which is the total number of shares of Common Stock of the  Corporation
         owned by a Person and the  denominator  of which is the total number of
         shares of Common Stock of the Corporation issued and outstanding.

                  "Rights" shall mean any option, warrant,  security,  rights or
         other  instrument  convertible into or exchangeable or exercisable for,
         or otherwise  giving the holder thereof the right to acquire,  directly
         or  indirectly,  any Common Stock of the  Corporation or any other such
         option,  warrant,  security,  right or  instrument,  including  without
         limitation,  any instrument the value of which is measured by reference
         to the value of the Common Stock of the Corporation.

                  "Voting  Stock" shall mean equity  interests with voting power
         under ordinary circumstances entitling the holders thereof to elect the
         board of directors or other governing body.


                  IN  WITNESS  WHEREOF,  Source  Media,  Inc.  has  caused  this
Certificate of Designations to be signed by Stephen W. Palley, its President and
Chief Executive Officer, this 17th day of November, 1999.

                                                     SOURCE MEDIA, INC.


                                           By:/s/Stephen W. Palley
                                           -------------------------------------
                                           Stephen W. Palley

                                           President and Chief Executive Officer



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