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                                                                EXHIBIT 5.4



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                    PREFERRED SECURITIES GUARANTEE AGREEMENT


                                MCN Financing I


                           Dated as of July 26, 1996


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                               TABLE OF CONTENTS
 

                                                                                                       Page

                                                                                                 
                                   ARTICLE I
                         DEFINITIONS AND INTERPRETATION

SECTION 1.1      Definitions and Interpretation  . . . . . . . . . . . . . . .. . . . . . . . . . . .   2


                                   ARTICLE II
                              TRUST INDENTURE ACT

SECTION 2.1      Trust Indenture Act; Application . . . . . . . . . . . . . . . . . . . . . . . . . .   5
SECTION 2.2      Lists of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
SECTION 2.3      Reports by the Preferred Guarantee
                      Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
SECTION 2.4      Periodic Reports to Preferred Guarantee Trustee  . . . . . . . . . . . . . . . . . .   6
SECTION 2.5      Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . .   6
SECTION 2.6      Events of Default; Waiver  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
SECTION 2.7      Event of Default; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
SECTION 2.8      Conflicting Interests  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7

                                  ARTICLE III
                          POWERS, DUTIES AND RIGHTS OF
                          PREFERRED GUARANTEE TRUSTEE

SECTION 3.1      Powers and Duties of the Preferred Guarantee Trustee . . . . . . . . . . . . . . . .   7
SECTION 3.2      Certain Rights of Preferred Guarantee Trustee  . . . . . . . . . . . . . . . . . . .   9
SECTION 3.3.     Not Responsible for Recitals or Issuance of Guarantee  . . . . . . . . . . . . . . .  11 

                                   ARTICLE IV
                          PREFERRED GUARANTEE TRUSTEE



SECTION 4.1      Preferred Guarantee Trustee; Eligibility   . . . . . . . . . . . . . . . . . . . . .  12
SECTION 4.2      Appointment, Removal and Resignation of Preferred Guarantee Trustees   . . . . . . .  12


                                   ARTICLE V
                                   GUARANTEE

                                               
SECTION 5.1      Guarantee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
SECTION 5.2      Waiver of Notice and Demand  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
SECTION 5.3      Obligations Not Affected   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
SECTION 5.4      Rights of Holders  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
SECTION 5.5      Guarantee of Payment   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
SECTION 5.6      Subrogation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
SECTION 5.7      Independent Obligations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16







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                                   ARTICLE VI
                   LIMITATION OF TRANSACTIONS; SUBORDINATION

                                                                                                      


SECTION 6.1      Limitation of Transactions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
SECTION 6.2      Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16


                                  ARTICLE VII
                                  TERMINATION

SECTION 7.1      Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17


                                  ARTICLE VIII
                                INDEMNIFICATION

                                         


SECTION 8.1      Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
SECTION 8.2      Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18


                                   ARTICLE IX
                                 MISCELLANEOUS

SECTION 9.1      Successors and Assigns  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
SECTION 9.2      Amendments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
SECTION 9.3      Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
SECTION 9.4      Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
SECTION 9.5      Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20









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                    PREFERRED SECURITIES GUARANTEE AGREEMENT


                 This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of July 26, 1996, is executed and delivered by MCN
Corporation, a Michigan corporation (the "Guarantor"), and  Wilmington Trust
Company, as trustee (the "Preferred Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of MCN Financing I, a Delaware statutory business trust (the
"Issuer").

                 WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of July 24, 1996, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof 3,200,000 preferred securities, having an
aggregate liquidation amount of $80,000,000, designated the 8 5/8% Trust
Originated Preferred Securities (the "Preferred Securities");

                 WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Preferred Securities Guarantee, to pay
to the Holders of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein; and

                 WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") in substantially
identical terms to this Preferred Securities Guarantee for the benefit of the
holders of the Common Securities (as defined herein), except that if an Event
of Default (as defined in the Indenture), has occurred and is continuing, the
rights of holders of the Common Securities to receive Guarantee Payments under
the Common Securities Guarantee are subordinated to the rights of Holders of
Preferred Securities to receive Guarantee Payments under this Preferred
Securities Guarantee.

                 NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of the Holders.





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                                   ARTICLE I
                         DEFINITIONS AND INTERPRETATION

SECTION 1.1      Definitions and Interpretation

                 In this Preferred Securities Guarantee, unless the context
otherwise requires:

                 (a)      Capitalized terms used in this Preferred Securities
                          Guarantee but not defined in the preamble above have
                          the respective meanings assigned to them in this
                          Section 1.1;

                 (b)      a term defined anywhere in this Preferred Securities
                          Guarantee has the same meaning throughout;

                 (c)      all references to "the Preferred Securities
                          Guarantee" or "this Preferred Securities Guarantee"
                          are to this Preferred Securities Guarantee as
                          modified, supplemented or amended from time to time;

                 (d)      all references in this Preferred Securities Guarantee
                          to Articles and Sections are to Articles and Sections
                          of this Preferred Securities Guarantee, unless
                          otherwise specified;

                 (e)      a term defined in the Trust Indenture Act has the
                          same meaning when used in this Preferred Securities
                          Guarantee, unless otherwise defined in this Preferred
                          Securities Guarantee or unless the context otherwise
                          requires; and

                 (f)      a reference to the singular includes the plural and
                          vice versa.

                 "Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.

                 "Authorized Officer" of a Person means any Person that is
authorized to bind such Person.

                 "Business Day" means any day other than a day on which banking
institutions in the City of New York, New York are authorized or required by
any applicable law to close.

                 "Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.





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                 "Corporate Trust Office" means the office of the Preferred
Guarantee Trustee at which the corporate trust business of the Preferred
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Agreement is located at
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attention: Corporate Trust Administration.

                 "Covered Person" means any Holder or beneficial owner of
Preferred Securities.

                 "Debentures" means the series of junior subordinated debt
securities of the Guarantor designated the 8 5/8% Junior Subordinated
Debentures due 2036 held by the Institutional Trustee (as defined in the
Declaration) of the Issuer.

                 "Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Preferred Securities Guarantee.

                 "Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer:  (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Preferred Securities to the extent the Issuer shall have funds available
therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds available therefor, with respect to any Preferred
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on
the Preferred Securities to the date of payment, to the extent the Issuer shall
have funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer
(in either case, the "Liquidation Distribution").  If an event of default under
the Indenture has occurred and is continuing, the rights of holders of the
Common Securities to receive payments under the Common Securities Guarantee
Agreement are subordinated to the rights of Holders of Preferred Securities to
receive Guarantee Payments.

                 "Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.





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                 "Indemnified Person" means the Preferred Guarantee Trustee,
any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.

                 "Indenture" means the Indenture dated as of September 1, 1994,
among the Guarantor (the "Debenture Issuer") and NBD Bank, as trustee,
and any indenture supplemental thereto pursuant to which certain subordinated
debt securities of the Debenture Issuer are to be issued to the Institutional
Trustee of the Issuer.

                 "Majority in liquidation amount of the Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all Preferred Securities.

                 "Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person.  Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:

                 (a)  a statement that each officer signing the Officers'
         Certificate has read the covenant or condition and the definition
         relating thereto;

                 (b)  a brief statement of the nature and scope of the
         examination or investigation undertaken by each officer in rendering
         the Officers' Certificate;

                 (c)  a statement that each such officer has made such
         examination or investigation as, in such officer's opinion, is
         necessary to enable such officer to express an informed opinion as to
         whether or not such covenant or condition has been complied with; and

                 (d)  a statement as to whether, in the opinion of each
         such officer, such condition or covenant has been complied with.

                 "Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.





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                 "Preferred Guarantee Trustee" means
, until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Preferred Securities Guarantee and thereafter means each such Successor
Preferred Guarantee Trustee.

                 "Responsible Officer" means, with respect to the Preferred
Guarantee Trustee, any officer within the Corporate Trust Office of the
Preferred Guarantee Trustee, including any vice-president, any assistant
vice-president, any assistant secretary, the treasurer, any assistant treasurer
or other officer of the Corporate Trust Office of the Preferred Guarantee
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.

                 "Successor Preferred Guarantee Trustee" means a successor
Preferred Guarantee Trustee possessing the qualifications to act as Preferred
Guarantee Trustee under Section 4.1.

    "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.


                                   ARTICLE II
                              TRUST INDENTURE ACT

SECTION 2.1      Trust Indenture Act; Application

                 (a)      This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions; and

                 (b)      if and to the extent that any provision of this
Preferred Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.

SECTION 2.2      Lists of Holders of Securities

         (a)     The Guarantor shall provide the Preferred Guarantee Trustee
with a list, in such form as the Preferred Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the Preferred Securities
("List of Holders") as of such date, (i) within 1 Business Day after January 1
and June 30 of each year, and (ii) at any other time within 30 days of receipt
by the Guarantor of a written request for a List of Holders as of a date no
more than 14 days before such List of Holders is given to the Preferred
Guarantee Trustee provided, that the





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Guarantor shall not be obligated to provide such List of Holders at any time
the List of Holders does not differ from the most recent List of Holders given
to the Preferred Guarantee Trustee by the Guarantor.  The Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.

            (b)  The Preferred Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.

SECTION 2.3      Reports by the Preferred Guarantee Trustee

                 Within 60 days after May 15 of each year, the Preferred
Guarantee Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.

SECTION 2.4      Periodic Reports to Preferred Guarantee Trustee

                 The Guarantor shall provide to the Preferred Guarantee Trustee
such documents, reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.

SECTION 2.5      Evidence of Compliance with Conditions Precedent

                 The Guarantor shall provide to the Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Preferred Securities Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act.  Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.

SECTION 2.6      Events of Default; Waiver

                 The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences.  Upon such
waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.





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SECTION 2.7      Event of Default; Notice

                 (a)      The Preferred Guarantee Trustee shall, within 90 days
after the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Preferred Securities, notices of all
Events of Default actually known to a Responsible Officer of the Preferred
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice, provided, that, the Preferred Guarantee Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer of the
Preferred Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Preferred Securities.

                 (b)      The Preferred Guarantee Trustee shall not be deemed
to have knowledge of any Event of Default unless the Preferred Guarantee
Trustee shall have received written notice, or of which a Responsible Officer
of the Preferred Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge.

SECTION 2.8      Conflicting Interests

                 The Declaration shall be deemed to be specifically described
in this Preferred Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.

                                  ARTICLE III
                          POWERS, DUTIES AND RIGHTS OF
                          PREFERRED GUARANTEE TRUSTEE

SECTION 3.1      Powers and Duties of the Preferred Guarantee Trustee

                 (a)      This Preferred Securities Guarantee shall be held by
the Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee.  The right, title and interest of the Preferred Guarantee Trustee
shall automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.

                (b)      If an Event of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee has occurred and





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is continuing, the Preferred Guarantee Trustee shall enforce this Preferred
Securities Guarantee for the benefit of the Holders of the Preferred
Securities.

                 (c)      The Preferred Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Preferred Securities Guarantee, and no
implied covenants shall be read into this Preferred Securities Guarantee
against the Preferred Guarantee Trustee.  In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer of the Preferred Guarantee Trustee, the
Preferred Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Preferred Securities Guarantee, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.

                 (d)      No provision of this Preferred Securities Guarantee
shall be construed to relieve the Preferred Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:

                 (i)      prior to the occurrence of any Event of Default and
         after the curing or waiving of all such Events of Default that may
         have occurred:

                          (A)     the duties and obligations of the Preferred
                 Guarantee Trustee shall be determined solely by the express
                 provisions of this Preferred Securities Guarantee, and the
                 Preferred Guarantee Trustee shall not be liable except for the
                 performance of such duties and obligations as are specifically
                 set forth in this Preferred Securities Guarantee, and no
                 implied covenants or obligations shall be read into this
                 Preferred Securities Guarantee against the Preferred Guarantee
                 Trustee; and

                          (B)     in the absence of bad faith on the part of
                 the Preferred Guarantee Trustee, the Preferred Guarantee
                 Trustee may conclusively rely, as to the truth of the
                 statements and the correctness of the opinions expressed
                 therein, upon any certificates or opinions furnished to the
                 Preferred Guarantee Trustee and conforming to the requirements
                 of this Preferred Securities Guarantee; but in the case of any
                 such certificates or opinions that by any provision hereof are
                 specifically required to be furnished to the Preferred
                 Guarantee Trustee, the Preferred Guarantee Trustee shall be
                 under a duty to examine the same to determine





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         whether or not they conform to the requirements of this Preferred
         Securities Guarantee;

                 (ii)  the Preferred Guarantee Trustee shall not be liable
         for any error of judgment made in good faith by a Responsible Officer
         of the Preferred Guarantee Trustee, unless it shall be proved that the
         Preferred Guarantee Trustee was negligent in ascertaining the
         pertinent facts upon which such judgment was made;

                 (iii) the Preferred Guarantee Trustee shall not be liable with
         respect to any action taken or omitted to be taken by it in good faith
         in accordance with the direction of the Holders of not less than a
         Majority in liquidation amount of the Preferred Securities relating to
         the time, method and place of conducting any proceeding for any remedy
         available to the Preferred Guarantee Trustee, or exercising any trust
         or power conferred upon the Preferred Guarantee Trustee under this
         Preferred Securities Guarantee; and

                 (iv)  no provision of this Preferred Securities Guarantee
         shall require the Preferred Guarantee Trustee to expend or risk its
         own funds or otherwise incur personal financial liability in the
         performance of any of its duties or in the exercise of any of its
         rights or powers, if the Preferred Guarantee Trustee shall have
         reasonable grounds for believing that the repayment of such funds or
         liability is not reasonably assured to it under the terms of this
         Preferred Securities Guarantee or indemnity, reasonably satisfactory
         to the Preferred Guarantee Trustee, against such risk or liability is
         not reasonably assured to it.

SECTION 3.2      Certain Rights of Preferred Guarantee Trustee

                 (a)   Subject to the provisions of Section 3.1:

                 (i)   The Preferred Guarantee Trustee may conclusively
         rely, and shall be fully protected in acting or refraining from acting
         upon, any resolution, certificate, statement, instrument, opinion,
         report, notice, request, direction, consent, order, bond, debenture,
         note, other evidence of indebtedness or other paper or document
         believed by it to be genuine and to have been signed, sent or
         presented by the proper party or parties.

                 (ii)  Any direction or act of the Guarantor contemplated by
         this Preferred Securities Guarantee shall be sufficiently evidenced by
         a Direction or an Officers' Certificate.

                 (iii) Whenever, in the administration of this Preferred
         Securities Guarantee, the Preferred Guarantee Trustee shall deem it
         desirable that a matter be proved or established





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         before taking, suffering or omitting any action hereunder, the
         Preferred Guarantee Trustee (unless other evidence is herein
         specifically prescribed) may, in the absence of bad faith on its part,
         request and conclusively rely upon an Officers' Certificate which,
         upon receipt of such request, shall be promptly delivered by the
         Guarantor.

                 (iv)     The Preferred Guarantee Trustee shall have no duty to
         see to any recording, filing or registration of any instrument (or any
         rerecording, refiling or registration thereof).

                 (v)      The Preferred Guarantee Trustee may consult with
         counsel, and the written advice or opinion of such counsel with
         respect to legal matters shall be full and complete authorization and
         protection in respect of any action taken, suffered or omitted by it
         hereunder in good faith and in accordance with such advice or opinion.
         Such counsel may be counsel to the Guarantor or any of its Affiliates
         and may include any of its employees.  The Preferred Guarantee Trustee
         shall have the right at any time to seek instructions concerning the
         administration of this Preferred Securities Guarantee from any court
         of competent jurisdiction.

                 (vi)     The Preferred Guarantee Trustee shall be under no
         obligation to exercise any of the rights or powers vested in it by
         this Preferred Securities Guarantee at the request or direction of any
         Holder, unless such Holder shall have provided to the Preferred
         Guarantee Trustee such security and indemnity, reasonably satisfactory
         to the Preferred Guarantee Trustee, against the costs, expenses
         (including attorneys' fees and expenses and the expenses of the
         Preferred Guarantee Trustee's agents, nominees or custodians) and
         liabilities that might be incurred by it in complying with such
         request or direction, including such reasonable advances as may be
         requested by the Preferred Guarantee Trustee; provided that, nothing
         contained in this Section 3.2(a)(vi) shall be taken to relieve the
         Preferred Guarantee Trustee, upon the occurrence of an Event of
         Default, of its obligation to exercise the rights and powers vested in
         it by this Preferred Securities Guarantee.

                 (vii)    The Preferred Guarantee Trustee shall not be bound to
         make any investigation into the facts or matters stated in any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, direction, consent, order, bond, debenture, note,
         other evidence of indebtedness or other paper or document, but the
         Preferred Guarantee Trustee, in its discretion, may make such further
         inquiry or investigation into such facts or matters as it may see fit.





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                 (viii)   The Preferred Guarantee Trustee may execute any of
         the trusts or powers hereunder or perform any duties hereunder either
         directly or by or through agents, nominees, custodians or attorneys,
         and the Preferred Guarantee Trustee shall not be responsible for any
         misconduct or negligence on the part of any agent or attorney
         appointed with due care by it hereunder.

                 (ix)     Any action taken by the Preferred Guarantee Trustee
         or its agents hereunder shall bind the Holders of the Preferred
         Securities, and the signature of the Preferred Guarantee Trustee or
         its agents alone shall be sufficient and effective to perform any such
         action.  No third party shall be required to inquire as to the
         authority of the Preferred Guarantee Trustee to so act or as to its
         compliance with any of the terms and provisions of this Preferred
         Securities Guarantee, both of which shall be conclusively evidenced by
         the Preferred Guarantee Trustee's or its agent's taking such action.

                 (x)      Whenever in the administration of this Preferred
         Securities Guarantee the Preferred Guarantee Trustee shall deem it
         desirable to receive instructions with respect to enforcing any remedy
         or right or taking any other action hereunder, the Preferred Guarantee
         Trustee (i) may request instructions from the Holders of a Majority in
         liquidation amount of the Preferred Securities, (ii) may refrain from
         enforcing such remedy or right or taking such other action until such
         instructions are received, and (iii) shall be protected in
         conclusively relying on or acting in accordance with such
         instructions.

                 (b)      No provision of this Preferred Securities Guarantee
shall be deemed to impose any duty or obligation on the Preferred Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Preferred Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation.  No permissive power
or authority available to the Preferred Guarantee Trustee shall be construed to
be a duty.

SECTION 3.3.     Not Responsible for Recitals or Issuance of Guarantee

                 The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not
assume any responsibility for their correctness.  The Preferred Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Preferred Securities Guarantee.





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                                   ARTICLE IV
                          PREFERRED GUARANTEE TRUSTEE

SECTION 4.1      Preferred Guarantee Trustee; Eligibility

                 (a)      There shall at all times be a Preferred Guarantee
Trustee which shall:

                 (i)      not be an Affiliate of the Guarantor; and

                 (ii)     be a corporation organized and doing business under
         the laws of the United States of America or any State or Territory
         thereof or of the District of Columbia, or a corporation or Person
         permitted by the Securities and Exchange Commission to act as an
         institutional trustee under the Trust Indenture Act, authorized under
         such laws to exercise corporate trust powers, having a combined
         capital and surplus of at least 50 million U.S. dollars ($50,000,000),
         and subject to supervision or examination by Federal, State,
         Territorial or District of Columbia authority.  If such corporation
         publishes reports of condition at least annually, pursuant to law or
         to the requirements of the supervising or examining authority referred
         to above, then, for the purposes of this Section 4.1(a)(ii), the
         combined capital and surplus of such corporation shall be deemed to be
         its combined capital and surplus as set forth in its most recent
         report of condition so published.

                 (b)      If at any time the Preferred Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a), the Preferred Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).

                 (c)      If the Preferred Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.

SECTION 4.2      Appointment, Removal and Resignation of Preferred Guarantee
                 Trustees

                 (a)      Subject to Section 4.2(b), the Preferred Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor.

                 (b)      The Preferred Guarantee Trustee shall not be removed
in accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Guarantee Trustee and delivered to the
Guarantor.





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                 (c)      The Preferred Guarantee Trustee appointed to office
shall hold office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation.  The Preferred Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such
appointment by instrument in writing executed by such Successor Preferred
Guarantee Trustee and delivered to the Guarantor and the resigning Preferred
Guarantee Trustee.

                 (d)      If no Successor Preferred Guarantee Trustee shall
have been appointed and accepted appointment as provided in this Section 4.2
within 60 days after delivery to the Guarantor of an instrument of resignation,
the resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee.  Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.

                 (e)      No Preferred Guarantee Trustee shall be liable for
the acts or omissions to act of any Successor Preferred Guarantee Trustee.

                 (f)      Upon termination of this Preferred Securities
Guarantee or removal or resignation of the Preferred Guarantee Trustee pursuant
to this Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee
all amounts accrued to the date of such termination, removal or resignation.


                                   ARTICLE V
                                   GUARANTEE

SECTION 5.1      Guarantee

                 The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert.  The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.

SECTION 5.2      Waiver of Notice and Demand

                 The Guarantor hereby waives notice of acceptance of this
Preferred Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any





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right to require a proceeding first against the Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.

SECTION 5.3      Obligations Not Affected

                 The obligations, covenants, agreements and duties of the
Guarantor under this Preferred Securities Guarantee shall in no way be affected
or impaired by reason of the happening from time to time of any of the
following:

                 (a)      the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;

                 (b)      the extension of time for the payment by the Issuer
of all or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities (other
than an extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from the extension
of any interest payment period on the Debentures or any extension of the
maturity date of the Debentures permitted by the Indenture);

                 (c)      any failure, omission, delay or lack of diligence on
the part of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;

                 (d)      the voluntary or involuntary liquidation,
dissolution, sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings affecting,
the Issuer or any of the assets of the Issuer;

                 (e)      any invalidity of, or defect or deficiency in, the
Preferred Securities;

                 (f)      the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or

                 (g)      any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of





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a guarantor, it being the intent of this Section 5.3 that the obligations of
the Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.

                 There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

SECTION 5.4      Rights of Holders

                 (a)      The Holders of a Majority in liquidation amount of
the Preferred Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee.

                 (b)      If the Preferred Guarantee Trustee fails to enforce
this Preferred Securities Guarantee, any Holder of Preferred Securities may
institute a legal proceeding directly against the Guarantor to enforce its
rights under this Preferred Securities Guarantee, without first instituting a
legal proceeding against the Issuer, the Preferred Guarantee Trustee or any
other Person.  Notwithstanding the foregoing, if the Guarantor has failed to
make a Guarantee Payment, a holder of Preferred Securities may directly
institute a proceeding against the Guarantor for enforcement of the Preferred
Security Guarantee for such payment.

SECTION 5.5      Guarantee of Payment

 This Preferred Securities Guarantee creates a guarantee of payment and not of
 collection.

SECTION 5.6      Subrogation

                 The Guarantor shall be subrogated to all (if any) rights of
the Holders of Preferred Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Preferred Securities
Guarantee; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Preferred Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Preferred Securities Guarantee.  If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.





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SECTION 5.7      Independent Obligations

                 The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.


                                   ARTICLE VI
                   LIMITATION OF TRANSACTIONS; SUBORDINATION

SECTION 6.1      Limitation of Transactions

                 So long as any Preferred Securities remain outstanding, if
there shall have occurred an Event of Default or an event of default under the
Declaration, then (a) the Company shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of its common stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plans
or the satisfaction by the Company of its obligations pursuant to any contract
or security requiring the Company to purchase shares of its common stock, (ii)
as a result of a reclassification of its capital stock or the exchange or
conversion of one class or series of its capital stock for another class or
series of its capital stock or, (iii) the purchase of fractional interests in
shares of its capital stock pursuant to the conversion or exchange provisions
of such capital stock or security being converted or exchanged) or make any
guarantee payment with respect thereto, (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company which rank pari passu with or
junior to the Debentures and the Company shall not make any guarantee payments
with respect to the foregoing (other than pursuant to the Preferred Security
Guaranty).

SECTION 6.2      Ranking

                 This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor except those
liabilities of the Guarantor made pari passu or subordinate by their terms,
(ii) pari passu with the most senior preferred or preference stock now or
hereafter issued by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or preference





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stock of any Affiliate of the Guarantor, and (iii) senior to the Guarantor's
common stock.


                                  ARTICLE VII
                                  TERMINATION

SECTION 7.1      Termination

                 This Preferred Securities Guarantee shall terminate upon (i)
full payment of the Redemption Price of all Preferred Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the Preferred
Securities or (iii) upon full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Issuer.  Notwithstanding the foregoing,
this Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or under this Preferred Securities Guarantee.


                                  ARTICLE VIII
                                INDEMNIFICATION

SECTION 8.1      Exculpation

                 (a)      No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except
that an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.

                 (b)      An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon such
information, opinions, reports or statements presented to the Guarantor by any
Person as to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Preferred Securities
might properly be paid.





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SECTION 8.2      Indemnification

                 (a)      To the fullest extent permitted by applicable law,
the Guarantor shall indemnify and hold harmless each Indemnified Person from
and against any loss, damage or claim incurred by such Indemnified Person by
reason of any act or omission performed or omitted by such Indemnified Person
in good faith in accordance with this Guarantee Agreement and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Guarantee Agreement, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or omissions.

                 (b)      To the fullest extent permitted by applicable law,
reasonable expenses (including legal fees) incurred by an Indemnified person
in defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Guarantor prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.2(a).

                 (c)      The obligation to indemnify as set forth in this
Section 8.2 shall survive the termination of the Preferred Securities
Guarantee.


                                   ARTICLE IX
                                 MISCELLANEOUS

SECTION 9.1      Successors and Assigns

                 All guarantees and agreements contained in this Preferred
Securities Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding.

SECTION 9.2      Amendments

                 Except with respect to any changes that do not adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred Securities.
The provisions of Section 12.2 of the





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Declaration with respect to meetings of Holders of the Securities apply to the
giving of such approval.

SECTION 9.3      Notices

                 All notices provided for in this Preferred Securities
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by registered or certified mail, as
follows:

                 (a)      If given to the Preferred Guarantee Trustee, at the 
Preferred Guarantee Trustee's mailing address set forth below (or such other 
address as the Preferred Guarantee Trustee may give notice of to the Holders
of the Preferred Securities):

                          Wilmington Trust Company
                          Rodney Square North
                          1100 North Market Street
                          Wilmington, Delaware 19890
                          Attention:  Corporate Trust Administration

                 (b)      If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders of the Preferred Securities):

                          MCN Corporation
                          500 Griswold Street
                          Detroit, MI 48226
                          Attention:  Office of General Counsel

                 (c)      If given to any Holder of Preferred Securities, at
the address set forth on the books and records of the Issuer.

                 All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.

SECTION 9.4      Benefit

                 This Preferred Securities Guarantee is solely for the benefit
of the Holders of the Preferred Securities and, subject to Section 3.1(a), is
not separately transferable from the Preferred Securities.





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SECTION 9.5      Governing Law

                 THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.





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                 THIS PREFERRED SECURITIES GUARANTEE is executed as of the day
and year first above written.

                                         MCN CORPORATION, as Guarantor
                                         
                                         
                                         
                                         By: /s/ Sebastian Coppola
                                            ----------------------------
                                            Name: Sebastian Coppola
                                            Title:  Vice President and Treasurer
                                         
                                         
                                         WILMINGTON TRUST COMPANY,
                                            as Preferred Guarantee Trustee
                                         
                                         
                                         
                                              
                                         By: /s/ W. Chris Sponenberg
                                            ----------------------------
                                            Name: W. Chris Sponenberg
                                            Title: Financial Services Officer