<PAGE>

                                                                    EXHIBIT 4(d)




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                       PUBLIC SERVICE COMPANY OF OKLAHOMA


                                       and


                              THE BANK OF NEW YORK,
                                   AS TRUSTEE


                               -------------------


                          SECOND SUPPLEMENTAL INDENTURE

                          Dated as of November 26, 2002


                          Supplemental to the Indenture
                          dated as of November 1, 2000





                       6% Senior Notes, Series B, Due 2032





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     SECOND  SUPPLEMENTAL  INDENTURE,  dated as of November  26,  2002,  between
PUBLIC SERVICE  COMPANY OF OKLAHOMA,  a corporation  duly organized and existing
under the laws of the State of  Oklahoma  (the  "Company"),  and THE BANK OF NEW
YORK, a New York banking  corporation  organized and existing  under the laws of
the State of New York, as Trustee under the Original Indenture referred to below
(the "Trustee").

                             RECITALS OF THE COMPANY

     The  Company  has  heretofore  executed  and  delivered  to the  Trustee an
indenture  dated as of November 1, 2000 (the "Original  Indenture"),  to provide
for the issuance from time to time of its  debentures,  notes or other evidences
of  indebtedness  (the  "Senior  Notes"),  the form and terms of which are to be
established as set forth in Section 201 and 301 of the Original Indenture.

     Section 901 of the Original Indenture  provides,  among other things,  that
the  Company  and the  Trustee  may enter into  indentures  supplemental  to the
Original Indenture for, among other things, the purpose of establishing the form
and terms of the Senior Notes of any series as permitted in Sections 201 and 301
of the Original Indenture.

     The Company  desires to create a series of the Senior Notes in an aggregate
principal  amount of $200,000,000 to be designated the "6% Senior Notes,  Series
B, Due 2032" (the  "Series B Notes"),  and all action on the part of the Company
necessary  to  authorize  the  issuance of the Series B Notes under the Original
Indenture and this Second Supplemental Indenture has been duly taken.

     All acts and things necessary to make the Series B Notes,  when executed by
the  Company  and  completed,  authenticated  and  delivered  by the  Trustee as
provided in the Original Indenture and this Second Supplemental  Indenture,  the
valid and binding  obligations of the Company and to constitute these presents a
valid and binding  supplemental  indenture and agreement according to its terms,
have been done and performed.

     NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:

     That in consideration of the premises and of the acceptance and purchase of
the Series B Notes by the Holders thereof and of the acceptance of this trust by
the Trustee,  the Company  covenants and agrees with the Trustee,  for the equal
benefit of the Holders of the Series B Notes, as follows:

<PAGE>

                                   ARTICLE ONE
                                   Definitions

SECTION 101.  DEFINITIONS.
              -----------

     The use of the  terms and  expressions  herein  is in  accordance  with the
definitions,  uses and constructions contained in the Original Indenture and the
form of the Series B Notes attached hereto as Exhibit A.

                                   ARTICLE TWO
          Terms and Issuance of the 6% Senior Notes, Series B, Due 2032

SECTION 201.  Issue of the Series B Notes.
              ---------------------------

     A series of Senior Notes which shall be  designated  the "6% Senior  Notes,
Series B, Due 2032" shall be executed, authenticated and delivered in accordance
with the  provisions  of, and shall in all  respects  be subject  to, the terms,
conditions and covenants of, the Original Indenture and this Second Supplemental
Indenture (including the form of Global Security set forth in Exhibit A hereto).
The aggregate  principal  amount of the Series B Notes to be  authenticated  and
delivered  shall  be  $200,000,000,  and no  further  Series  B Notes  shall  be
authenticated  and  delivered,  except as  permitted  by the  provisions  of the
Original Indenture.

SECTION 202.  Form of Series B Notes; Incorporation of Terms.
              ----------------------------------------------

     The  Series B Notes  shall be issued  initially  in the form of one  Global
Security.  The form of the Series B Notes shall be  substantially in the form of
Exhibit  A  attached  hereto.  The  terms  of such  Series  B Notes  are  herein
incorporated by reference and are part of this Second Supplemental Indenture.

SECTION 203.  Depositary for Global Securities.
              --------------------------------

     The Depositary for any Global Securities of the series of which this Series
B Note is a part shall be the Depository Trust Company in The City of New York.

SECTION 204.  Place of Payment.
              ----------------

     The  Place of  Payment  in  respect  of the  Series B Notes  will be at the
principal  office or place of business of the Trustee or its  successor in trust
under the  Indenture,  which,  at the date  hereof,  is located  at 101  Barclay
Street, New York, NY 10286, Attention: Corporate Trust Administration.


<PAGE>



SECTION 205.  Optional Redemption.
              -------------------

     Subject to the terms of Article Eleven of the Indenture,  the Company shall
have the right to redeem the Series B Notes at its  option,  without  premium or
penalty,  in whole or, in part, at any time on or after  November 26, 2007, at a
redemption price equal to 100% of the principal amount redeemed plus any accrued
but unpaid interest to the date of such redemption.

SECTION 206.  Mandatory Redemption.
              --------------------

     (a)  The Series B Notes shall be  redeemed in the event  (i)(A) the Company
          reorganizes,  or  otherwise  transfers  a  substantial  portion of its
          assets, and (B) that reorganization or transfer results in the Company
          no longer  being a  regulated  utility  company,  and (C) the Series B
          Notes  and the  Company's  obligations  under  the  Indenture  are not
          assumed by, and do not become the direct and primary obligations of, a
          regulated   utility  company,   unless  Ambac  Assurance   Corporation
          ("Ambac")  consents  to such  reorganization  or  transfer,  (ii)  the
          Company  fails to pay to Ambac an  insurance  premium  pursuant to the
          Insurance  Agreement,  dated as of November  26, 2002 (the  "Insurance
          Agreement"),  between the Company and Ambac  unless  Ambac waives such
          failure or (iii) the Company incurs or issues additional  indebtedness
          for  borrowed  money  secured  by its  assets  and fails to secure its
          repayment  obligations to Ambac under the Insurance  Agreement  unless
          Ambac waives such failure.


     (b)  If the Series B Notes are redeemed  pursuant to this Section 205 on or
          after  November 26,  2007,  the  redemption  price will be 100% of the
          principal  amount  of the  Series  B Notes  plus  accrued  and  unpaid
          interest thereon to the date of redemption.

     (c)  If the Series B Notes are redeemed pursuant to this Section 205 before
          November 26, 2007, the  redemption  price will be equal to the accrued
          interest  on the  Series B Notes to the  date of  redemption  plus the
          greater  of: (i) 100% of the  principal  amount of the Series B Notes;
          and (ii) the sum of the present value of the  principal  amount of the
          Series B Notes  together  with the  present  values  of the  scheduled
          payments of interest on the Series B Notes (not  including any portion
          of such  payments  of interest  accrued as of the date of  redemption)
          from the date of redemption  to the interest  payment date on December
          31, 2007 (such time  period  between  the date of  redemption  and the
          interest  payment date on December  31, 2007 being  referred to as the
          "Remaining  Term"),  in each case discounted to the date of redemption
          on a quarterly  basis  (assuming a 360-day year  consisting  of twelve
          30-day  months) at the Adjusted  Treasury Rate plus  twenty-five  (25)
          basis points, as calculated by an Independent Investment Banker.

          "Adjusted  Treasury Rate" means,  with respect to any redemption  rate
          (i) the yield,  under the heading which represents the average for the
          immediately  preceding week,  appearing in the most recently published
          statistical   release   designated   "H.15(519)"   or  any   successor
          publication which is published weekly by the Board of Governors of the
          Federal Reserve System and which establishes yields on actively traded
          United States Treasury  securities adjusted to constant maturity under
          the  caption  "Treasury   Constant   Maturities",   for  the  maturity
          corresponding  to the  Comparable  Treasury  Issue (if no  maturity is
          within three months before or after the Remaining Term, yields for the
          two published maturities most closely  corresponding to the Comparable
          Treasury  issue shall be  determined  and the adjusted  Treasury  Rate
          shall be interpolated  or extrapolated  from such yields on a straight
          line basis,  rounding to the nearest  month);  or (ii) if such release
          (or any successor  release) is not published during the week preceding
          the  calculation  date or does not contain such  yields,  the rate per
          annum  equal to the  semi-annual  equivalent  yield to maturity of the
          Comparable Treasury Issue, calculated using a price for the Comparable
          Treasury  Issue  (expressed as a percentage  of its principal  amount)
          equal to the Comparable  Treasury Price for such redemption  date. The
          Adjusted  Treasury Rate shall be calculated on the third  business day
          preceding the redemption date.

          "Comparable  Treasury Issue" means the United States Treasury security
          selected  by an  Independent  Investment  Banker as having a  maturity
          comparable to the Remaining Term of the securities to be redeemed that
          would be utilized,  at the time of selection  and in  accordance  with
          customary financial practice,  in pricing new issues of corporate debt
          securities of comparable  maturity to the Remaining Term of the Series
          B Notes.

          "Comparable  Treasury  Price" means (1) the average of five  Reference
          Treasury Dealer  Quotations for such Redemption  Date, after excluding
          the highest and lowest Reference Treasury Dealer Quotations, or (2) if
          the  Independent  Investment  Banker  obtains  fewer  than  five  such
          Reference  Treasury  Dealer  Quotations,   the  average  of  all  such
          quotations.

          "Independent  Investment  Banker" means one of the Reference  Treasury
          Dealers appointed by us.

          "Reference  Treasury Dealer" means (I) each of Merrill Lynch,  Pierce,
          Fenner & Smith Incorporated, Salomon Smith Barney Inc. and UBS Warburg
          LLC, and their  respective  successors;  provided  that, if any of the
          foregoing ceases to be a primary U.S. Government  securities dealer in
          the United  States (a "Primary  Treasury  Dealer"),  the Company  will
          substitute another Primary Treasury Dealer; and (II) any other Primary
          Treasury Dealer selected by the Company.

          "Reference  Treasury Dealer  Quotations"  means,  with respect to each
          Reference  Treasury  Dealer and any redemption  date, the average,  as
          determined by the Independent  Investment Banker, of the bid and asked
          prices for the Comparable  Treasury Issue (expressed in each case as a
          percentage  of  its  principal   amount)  quoted  in  writing  to  the
          Independent Investment Banker at 5:00 p.m., New York City time, on the
          third business day preceding such redemption date.

SECTION 207.  The Insurer.
              -----------

     To the extent  permitted by law and so long as Ambac is in compliance  with
its obligations under its Financial  Guaranty  Insurance Policy No. 20300BE (the
"Financial Guaranty Insurance Policy"),  the Financial Guaranty Insurance Policy
is in full  force  and  effect  and  Ambac  is not  subject  to any  bankruptcy,
insolvency or similar proceedings:

     (i)  Any provision of this Second Supplemental Indenture, any Series B Note
          or the Indenture  (collectively,  the "Financing Documents") expressly
          recognizing  or  granting  rights in or to Ambac may not be amended in
          any manner which  affects the rights of Ambac  hereunder or thereunder
          without the prior written consent of Ambac.

     (ii) Ambac  shall be  deemed to be the  owner of all  outstanding  Series B
          Notes for all purposes (including,  without limitation, all approvals,
          consents, requests, waivers, authorizations,  directions, inspections,
          appointments  and  the  institution  of any  action),  provided,  that
          nothing  in this  clause  (ii)  shall  impair the rights of any of the
          holders of the Series B Notes (the  "Securityholders")  to receive all
          payments  due  under  the  Series B Notes.  Ambac's  consent  shall be
          required  with  respect  to (a)  the  execution  and  delivery  of any
          supplemental  indenture to the  Indenture for which the consent of the
          Securityholders is required, or any amendment, supplement or change to
          or  modification  of  any  Financing  Document  (except  as  otherwise
          provided by Section 901 of the  Indenture)  and (b) the removal of the
          Trustee or any  paying  agent and  selection  and  appointment  of any
          successor trustee or paying agent.

     (iii)Any  reorganization  or liquidation plan under  applicable  bankruptcy
          law or similar law with respect to the Company must be  acceptable  to
          Ambac. In the event of any such  reorganization or liquidation,  Ambac
          shall have the right to vote on behalf of all Securityholders who hold
          Ambac-insured  Series B Notes  absent a  default  by Ambac  under  the
          applicable  Financial Guaranty Insurance Policy insuring such Series B
          Notes.

     (iv) Anything in any  Financing  Document to the contrary  notwithstanding,
          upon the  occurrence  and  continuance  of an Event of Default,  Ambac
          shall be entitled to control and direct the  enforcement of all rights
          and  remedies  granted to the  Securityholders  or the Trustee for the
          benefit  of  the  Securityholders   under  the  Financing   Documents,
          including,  without  limitation:  (A)  the  right  to  accelerate  the
          principal of the Series B Notes as described in the Indenture, and (B)
          the right to annul any  declaration of  acceleration,  and Ambac shall
          also be  entitled  to approve  all  waivers of Events of Default  with
          respect to or effecting the Series B Notes.

     (v)  While  the  Financial  Guaranty  Insurance  Policy is in  effect,  the
          Company (and/or the Trustee,  where indicated  below) shall furnish to
          Ambac  (to  the  attention  of  the  Surveillance  Department,  unless
          otherwise indicated):

          (a)  as soon as practicable  after the filing  thereof,  a copy of any
               financial  statement  of the  Company and a copy of any audit and
               annual report of the Company;

          (b)  such additional information it may reasonably request;

          (c)  a  copy  of  any   notice   to  be   given   to  the   registered
               Securityholders,  including,  without  limitation,  notice of any
               redemption  or  defeasance  of  the  Series  B  Notes,   and  any
               certificate  rendered pursuant to any Financing Document relating
               to the Series B Notes, which obligation shall bind the Trustee as
               well as the Company;

          (d)  notice (attention: General Counsel) by the Trustee of any failure
               of the Company to provide relevant  notices,  certificates,  etc.
               under the Financing Documents; and

          (e)  notwithstanding  any other  provision of any Financing  Document,
               immediate  notice  (attention:  General  Counsel)  if at any time
               there are  insufficient  moneys to make any payments of principal
               and/or  interest on the Series B Notes as required and  immediate
               notice  of  the  occurrence  of  any  Event  of  Default,   which
               obligation shall bind the Trustee as well as the Company.

     (vi) Notwithstanding  anything herein or in any other Financing Document to
          the contrary,  in the event that the principal  and/or interest due on
          the Series B Notes shall be paid by Ambac  pursuant  to the  Financial
          Guaranty  Insurance  Policy,  (a)  the  Series  B Notes  shall  remain
          "outstanding" for all purposes under the Indenture,  not be considered
          defeased or  otherwise  satisfied  and not be  considered  paid by the
          Company,  (b) except as expressly stated herein or otherwise agreed or
          undertaken  (I) the  Paying  Agent,  if any,  shall  have no duties or
          obligations  relating  to any  payments  made by  Ambac  and  (II) the
          Trustee  shall not be deemed to have  knowledge of any default  unless
          the Trustee shall have written notice thereof,  (c) the assignment and
          pledge  of the  Indenture  and all  covenants,  agreements  and  other
          obligations  of the Company to the  Securityholders  shall continue to
          exist and shall run to the  benefit of Ambac,  and (d) Ambac  shall be
          subrogated to the rights of such Securityholders to the extent of such
          payment.

     (vii)As long as the Financial  Guaranty  Insurance  Policy shall be in full
          force and effect, the Company,  the Trustee and any Paying Agent agree
          to comply with the following provisions:

          (a)  At least  one (1) day  prior to all  Interest  Payment  Dates the
               Trustee or Paying  Agent,  if any, will  determine  whether there
               will be  sufficient  funds  available to pay the  principal of or
               interest on the Series B Notes on such Interest  Payment Date. If
               the Trustee or Paying Agent,  if any,  determines that there will
               be insufficient funds available,  the Trustee or Paying Agent, if
               any, shall so notify Ambac.  Such notice shall specify the amount
               of the anticipated  deficiency,  the Series B Notes to which such
               deficiency is applicable  and whether such Series B Notes will be
               deficient as to principal or interest, or both. If the Trustee or
               Paying Agent,  if any, has not so notified Ambac at least one (1)
               day prior to an Interest  Payment Date,  Ambac will make payments
               of  principal  or interest due on the Series B Notes on or before
               the first (1st) day next  following the date on which Ambac shall
               have  received  notice of  nonpayment  from the Trustee or Paying
               Agent, if any.

          (b)  The Trustee or Paying Agent, if any,  shall,  after giving notice
               to Ambac as provided in (a) above,  make  available to Ambac and,
               at Ambac's  direction,  to The Bank of New York, in New York, New
               York, as insurance  trustee for Ambac or any successor  insurance
               trustee (the "Insurance Trustee"),  the registration books of the
               Company  maintained by the Trustee or Paying  Agent,  if any, and
               all  records   relating  to  the  funds  and  accounts  (if  any)
               maintained under the Indenture.

          (c)  The Trustee or Paying Agent,  if any, shall provide Ambac and the
               Insurance  Trustee with a list of  registered  owners of Series B
               Notes  entitled to receive  principal or interest  payments  from
               Ambac under the terms of the Financial Guaranty Insurance Policy,
               and shall pursuant to arrangements with the Insurance Trustee (I)
               mail checks or drafts to the registered  owners of Series B Notes
               entitled to receive full or partial interest  payments from Ambac
               and (II) pay  principal  upon Series B Notes  surrendered  to the
               Insurance  Trustee  by the  registered  owners  of Series B Notes
               entitled  to receive  full or  partial  principal  payments  from
               Ambac.

          (d)  The  Trustee  or  Paying  Agent,  if any,  shall,  at the time it
               provides notice to Ambac pursuant to (a) above, notify registered
               owners of Series B Notes  entitled  to  receive  the  payment  of
               principal  or interest  thereon  from Ambac (I) as to the fact of
               such entitlement, (II) that Ambac will remit to them, through the
               Insurance  Trustee  or  pursuant  to  arrangements  made with the
               Insurance  Trustee  through the Trustee or Paying Agent,  if any,
               all or a part of the interest payments next coming due upon proof
               of  Securityholder  entitlement to interest payments and delivery
               to the Insurance  Trustee,  in form satisfactory to the Insurance
               Trustee,  of an appropriate  assignment of the registered owner's
               right to  payment,  (III) that should they be entitled to receive
               full payment of principal from Ambac,  they must surrender  their
               Series  B  Notes  (along  with  an   appropriate   instrument  of
               assignment  in form  satisfactory  to the  Insurance  Trustee  to
               permit  ownership of such Series B Notes to be  registered in the
               name of Ambac) for payment to the  Insurance  Trustee,  who shall
               then pass such Series B Notes on to the Trustee or Paying  Agent,
               if any,  for  payment of  principal  upon such Series B Notes and
               (IV) that should they be entitled to receive  partial  payment of
               principal  from Ambac,  for payment of principal on such Series B
               Notes  they  must  surrender  their  Series B Notes  for  payment
               thereon first to the Trustee or Paying  Agent,  if any, who shall
               note on such Series B Notes the portion of the principal  paid by
               the  Trustee or Paying  Agent,  if any,  and then,  along with an
               appropriate  instrument of assignment in form satisfactory to the
               Insurance Trustee, to the Insurance Trustee, which will then make
               arrangements  with the Trustee or the Paying  Agent,  if any, for
               the payment of the unpaid portion of principal.

          (e)  In the event that the Trustee or Paying Agent, if any, has notice
               that any payment of  principal  of or interest on a Series B Note
               which has become Due for  Payment  (as  defined in the  Financial
               Guaranty  Insurance Policy) and which is made to a Securityholder
               by or on behalf of the  Company  has been  deemed a  preferential
               transfer and  theretofore  recovered  from its  registered  owner
               pursuant  to the United  States  Bankruptcy  Code by a trustee in
               bankruptcy in accordance with the final, nonappealable order of a
               court having competent jurisdiction, the Trustee or Paying Agent,
               if any,  shall,  at the time Ambac is  notified  pursuant  to (a)
               above,  notify all  registered  owners that in the event that any
               registered owner's payment is so recovered, such registered owner
               will be  entitled  to  payment  from  Ambac to the extent of such
               recovery if sufficient funds are not otherwise available, and the
               Trustee  or Paying  Agent,  if any,  shall  furnish  to Ambac its
               records  evidencing  the payments of principal of and interest on
               the Series B Notes  which have been made by the Trustee or Paying
               Agent, if any, and subsequently  recovered from registered owners
               and the dates on which such payments were made.

          (f)  In addition to those  rights  granted  Ambac under the  Financing
               Documents,  Ambac  shall,  to the  extent  it  makes  payment  of
               principal of or interest on Series B Notes,  become subrogated to
               the rights of the recipients of such payments in accordance  with
               the terms of the  Financial  Guaranty  Insurance  Policy,  and to
               evidence such  subrogation  (1) in the case of  subrogation as to
               claims for past due  interest,  the Trustee or Paying  Agent,  if
               any,  shall note Ambac's  rights as subrogee on the  registration
               books of the Company  maintained  by the Trustee or Paying Agent,
               if any,  upon  receipt  from  Ambac of proof  of the  payment  of
               interest thereon to the registered  owners of the Series B Notes,
               and (2) in the  case of  subrogation  as to  claims  for past due
               principal,  the  Trustee  or Paying  Agent,  if any,  shall  note
               Ambac's  rights  as  subrogee  on the  registration  books of the
               Company  maintained by the Trustee or Paying Agent,  if any, upon
               surrender of the Series B Notes by the registered  owners thereof
               together with proof of the payment of principal thereof.

     (viii) The Trustee or Paying Agent,  if any, may be removed at any time, at
          the  request  of Ambac,  for any breach of its  obligations  under the
          Financing Documents.

     (ix) Ambac shall  receive  prior  written  notice of any Trustee (or Paying
          Agent) resignation.

     (x)  Every successor Trustee appointed pursuant to the Indenture shall be a
          trust  company or bank in good  standing  located  in or  incorporated
          under the laws of any State of the  United  States  of  America,  duly
          authorized  to exercise  trust  powers and subject to  examination  by
          federal or state  authority,  having a reported capital and surplus of
          not less than  $75,000,000  and  acceptable  to Ambac.  Any  successor
          Paying  Agent,  if  applicable,  shall not be  appointed  unless Ambac
          approves such successor in writing.

     (xi) Notwithstanding  any other  provision of the Financing  Documents,  in
          determining  whether  the  rights  of  the  Securityholders   will  be
          adversely  affected  by any  action  taken  pursuant  to the terms and
          provisions of the Financing  Documents,  the Trustee (or Paying Agent)
          shall consider the effect on the  Securityholders  as if there were no
          Financial Guaranty Insurance Policy.

     (xii)Notwithstanding  any other  provision of the Financing  Documents,  no
          removal,  resignation  or termination of the Trustee (or Paying Agent)
          shall take effect until a  successor,  acceptable  to Ambac,  shall be
          appointed.

     (xiii) To the extent that the  Financing  Documents  confer upon or give or
          grant to Ambac  any  right,  remedy or claim  thereunder  or by reason
          thereof,  Ambac is hereby explicitly recognized as being a third-party
          beneficiary  thereunder and may enforce any such right remedy or claim
          conferred, given or granted thereunder.

     (xiv)Nothing in the Financing Documents,  expressed or implied, is intended
          or shall be  construed  to confer  upon,  or to give or grant to,  any
          person or entity,  other than the  Company,  the Trustee,  Ambac,  the
          Paying Agent, if any, and the registered  Securityholders,  any right,
          remedy or claim under or by reason of the  Financing  Documents or any
          covenant,   condition  or  stipulation  thereof,  and  all  covenants,
          stipulations,  promises  and  agreements  in the  Financing  Documents
          contained  by and on behalf of the  Company  shall be for the sole and
          exclusive  benefit of the  Company,  the  Trustee,  Ambac,  the Paying
          Agent, if any, and the registered Securityholders.

     (xv) The Company may not elect to defease the Series B Notes in  accordance
          with Section 401, 403 or 1009 of the Indenture without having obtained
          the  prior  written   consent  of  Ambac,   such  consent  not  to  be
          unreasonably  withheld.  No such  defeasance  shall be effected by the
          deposit or  delivery  of U.S.  Government  Obligations  with or to the
          Trustee  unless the  securities or  instruments  used for such purpose
          would constitute "U.S. Government Obligations" under clause (i) of the
          definition of such term.

SECTION 208.  Events of Default.
              -----------------

     It shall be an Event  of  Default  under  the  Indenture  if an  "Event  of
Default" shall have occurred and be continuing under the Insurance Agreement. If
Ambac waives an Event of Default under the Insurance  Agreement or such Event of
Default is cured,  then such  Event of  Default  will not be an Event of Default
with respect to the Series B Notes under the Indenture.

SECTION 209.  Sinking Funds.
              -------------

     Article Twelve of the Indenture shall not apply to the Series B Notes.

SECTION 210.  Regular Record Date.
              -------------------

     The "Regular Record Date" will be the close of business on the Business Day
prior  to the  relevant  interest  payment  date,  except  that  the  notes  are
certificated,  the  "Regular  Record Date" shall be the close of business on the
March  15,  June 15,  September  15 or  December  15,  as the case may be,  next
preceding an interest payment date or if such March 15, June 15, September 15 or
December 15 is not a Business Day, the next preceding Business Day.

     "Business  Day"  means  any  day  that  is  not  a  day  on  which  banking
institutions in New York City are authorized or required by law or regulation to
close.

                                  ARTICLE THREE
                                  Miscellaneous

SECTION 301.  Execution as Supplemental Indenture.
              -----------------------------------

     This Second Supplemental Indenture is executed and shall be construed as an
indenture  supplemental  to the  Original  Indenture  and,  as  provided  in the
Original Indenture, this Second Supplemental Indenture forms a part thereof.

SECTION 302.  Conflict with Trust Indenture Act.
              ---------------------------------

     If any  provision  hereof  limits,  qualifies  or  conflicts  with  another
provision  hereof  which is required to be included in this Second  Supplemental
Indenture by any of the  provisions  of the Trust  Indenture  Act, such required
provision shall control.

SECTION 303.  Effect of Headings.
              ------------------

     The Article and Section  headings herein are for convenience only and shall
not affect the construction hereof.

SECTION 304.  Successors and Assigns.
              ----------------------

     All  covenants and  agreements  by the Company in this Second  Supplemental
Indenture shall bind its successors and assigns, whether so expressed or not.

SECTION 305.  Separability Clause.
              -------------------

     In case any  provision  in this  Second  Supplemental  Indenture  or in the
Series  B Notes  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.

SECTION 306.  Benefits of Second Supplemental Indenture.
              -----------------------------------------

     Subject to  Sections  207(xiii)  and (xiv)  hereof,  nothing in this Second
Supplemental  Indenture or in the Series B Notes, express or implied, shall give
to any Person,  other than the parties hereto and their successors hereunder and
the Holders,  any benefit or any legal or equitable right, remedy or claim under
this Second Supplemental Indenture.

SECTION 307.  Execution and Counterparts.
              --------------------------

     This  Second  Supplemental  Indenture  may be  executed  in any  number  of
counterparts,  each of which  shall be  deemed to be an  original,  but all such
counterparts shall together constitute but one and the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental
Indenture  to be duly  executed and  attested,  all as of the day and year first
above written.


                                            PUBLIC SERVICE COMPANY OF OKLAHOMA


                                            By     /s/ Geoffrey S. Chatas
                                            Name:    Geoffrey S. Chatas
                                            Title:   Assistant Treasurer

Attest:


/s/ Thomas G. Berkemeyer
Name:    Thomas G. Berkemeyer
Title:   Assistant Secretary

                                            THE BANK OF NEW YORK, as Trustee


                                            By    /s/ Joseph A. Lloret
                                            Name:   Joseph A. Lloret
                                            Title:  Assistant Treasurer

Attest:


      /s/Mary Lagumina
Name:  Mary Lagumina
Title: Vice President



<PAGE>


STATE OF OHIO              )
                                       : ss.:
COUNTY OF FRANKLIN         )


     On the 26th day of November,  2002, personally appeared before me, a Notary
Public  within and for said County in the State of Ohio,  Geoffrey S. Chatas and
Thomas  G.  Berkemeyer,  to me  known  and  known to me to be  respectively  the
Assistant  Treasurer  and  Assistant  Secretary  of Public  Service  Company  of
Oklahoma,  one of the  corporations  named in and which  executed the  foregoing
instrument,  who severally  acknowledged  that they did sign said  instrument as
such  Assistant  Treasurer  and  Assistant  Secretary  for and on behalf of said
corporation  and  that the  same is  their  free act and deed as such  Assistant
Treasurer and Assistant Secretary,  respectively, and the free and corporate act
and deed of said corporation.

     In witness whereof, I have hereunto set my hand notarial seal this 26th day
of November, 2002.


                                                 -----------------------------


STATE OF NEW YORK   )
                    : ss.:
COUNTY OF NEW YORK  )


     On the 26th day of November,  2002, personally appeared before me, a Notary
Public within and for said County in the State of New York,  ______________  and
_______________,   to  me  known  and  known  to  me  to  be  respectively   the
______________  and  ______________  of  The  Bank  of  New  York,  one  of  the
corporations named in and which executed the foregoing instrument, who severally
acknowledged  that  they did sign said  instrument  as such  ______________  and
______________  for and on behalf of said corporation and that the same is their
free act and deed as such ______________ and ______________,  respectively,  and
the free and corporate act and deed of said corporation.

In witness whereof, I have hereunto set my hand notarial seal this ____ day of
November, 2002.



                                                 -----------------------------




<PAGE>
                                                                       Exhibit A


This  Security  is a  Global  Security  within  the  meaning  of  the  Indenture
hereinafter  referred  to and is  registered  in the name of a  Depositary  or a
nominee of a Depositary. This Security is exchangeable for Securities registered
in the name of a Person  other than the  Depositary  or its nominee  only in the
limited  circumstances  described  in the  Indenture,  and no  transfer  of this
Security (other than a transfer of this Security as a whole by the Depositary to
a nominee of the  Depositary or by a nominee of the Depositary to the depositary
or  another  nominee  of the  Depositary)  may be  registered  except in limited
circumstances.

Unless this  certificate  is presented by an  authorized  representative  of The
Depository Trust Company (55 Water Street,  New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any certificate
to be issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized  representative  of The Depository  Trust Company and
any payment is made to Cede & Co., ANY TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR
VALUE OR  OTHERWISE BY OR TO ANY PERSON IS WRONGFUL  inasmuch as the  registered
owner hereof,  Cede & Co., has an interest herein.  Except as otherwise provided
in Section 311 of the Indenture, this Security may be transferred,  in whole but
not in  part,  only to  another  nominee  of the  Depository  or to a  successor
Depository or to a nominee of such successor Depository.

Financial  Guaranty  Insurance Policy No. 20300BE (the "Policy") with respect to
payments due for principal of and interest on this Note has been issued by Ambac
Assurance Corporation ("Ambac Assurance").  The Policy has been delivered to The
Bank of New York, New York, New York, as the Insurance Trustee under said Policy
and will be held by such Insurance Trustee or any successor  insurance  trustee.
The Policy is on file and  available for  inspection at the principal  office of
the Insurance  Trustee and a copy thereof may be secured from Ambac Assurance or
the Insurance  Trustee.  All payments required to be made under the Policy shall
be made in  accordance  with the  provisions  thereof.  The  owner of this  Note
acknowledges  and consents to the subrogation  rights of Ambac Assurance as more
fully set forth in the Policy.

No.  R-1                                                 8,000,000 Senior Notes,
                                                       $25 principal amount each

                            PUBLIC SERVICE COMPANY OF
                            OKLAHOMA 6% Senior Notes,
                               Series B, Due 2032

CUSIP:                                   Original Issue Date:  November 26, 2002

Stated Maturity:  December 31, 2032                           Interest Rate:  6%

Principal Amount:  $200,000,000 Redeemable:  Yes ___ No ___ In Whole: Yes ___ No
___ In  Part:  Yes  ___ No ___  Mandatory  Redemption:  At any  time  and at the
redemption  prices described herein Initial Optional  Redemption Date:  November
26, 2007 Initial Optional Redemption Price: 100%


<PAGE>


     PUBLIC  SERVICE  COMPANY OF OKLAHOMA,  a  corporation  duly  organized  and
existing  under the laws of the State of  Oklahoma  (herein  referred  to as the
"Company",  which term  includes any successor  corporation  under the Indenture
hereinafter  referred to), for value received,  hereby promises to pay to CEDE &
CO. or registered  assigns,  the Principal  Amount specified above on the Stated
Maturity  specified above, and to pay interest on said Principal Amount from the
Original Issue Date  specified  above or from the most recent  interest  payment
date (each such date,  an "Interest  Payment  Date") to which  interest has been
paid or duly provided for,  quarterly in arrears on March 31, June 30, September
30 and December 31 in each year, commencing March 31, 2003, at the Interest Rate
per annum specified  above,  until the Principal  Amount shall have been paid or
duly provided for.  Interest shall be computed on the basis of a 360-day year of
twelve 30-day months.

     The interest so payable,  and punctually  paid or duly provided for, on any
Interest  Payment Date, as provided in the Indenture,  as  hereinafter  defined,
shall be paid to the Person in whose name this Note (or one or more  Predecessor
Securities)  shall have been  registered at the close of business on the Regular
Record Date with respect to such Interest Payment Date, which shall be the close
of business on the Business Day next preceding  such Interest  Payment Date. Any
such interest not so punctually  paid or duly provided for shall forthwith cease
to be  payable to the Holder on such  Regular  Record  Date and shall be paid as
provided in said Indenture.

     If any Interest Payment Date, any redemption date or the Stated Maturity is
not a Business  Day,  then  payment of the amounts due on this Note on such date
will be made on the next  succeeding  Business Day, and no interest shall accrue
on such  amounts  for the period  from and after  such  Interest  Payment  Date,
redemption  date or Stated  Maturity,  as the case may be,  except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately  preceding Business Day, with the same force and effect as if
made on such date.  The principal of (and  premium,  if any) and the interest on
this Note shall be payable at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, the City of New York, New York, in any
coin or currency of the United States of America which at the time of payment is
legal tender for payment of public and private debts;  provided,  however,  that
payment of interest  (other than interest  payable on the Stated Maturity or any
redemption date) may be made at the option of the Company by check mailed to the
registered holder at such address as shall appear in the Security Register.

     This  Note is one of a duly  authorized  series  of  Notes  of the  Company
(herein sometimes referred to as the "Notes"),  specified in the Indenture,  all
issued or to be issued in one or more series  under and pursuant to an Indenture
dated as of November 1, 2000 duly executed and delivered between the Company and
The Bank of New York,  a national  banking  association  organized  and existing
under the laws of the United  States,  as  Trustee  (herein  referred  to as the
"Trustee")  (such  Indenture,  as  originally  executed  and  delivered  and  as
thereafter  supplemented  and  amended  being  hereinafter  referred  to as  the
"Indenture"),  to  which  Indenture  and  all  indentures  supplemental  thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations,  duties and immunities  thereunder of the Trustee,  the Company and
the holders of the Notes. By the terms of the Indenture,  the Notes are issuable
in series which may vary as to amount, date of maturity, rate of interest and in
other respects as in the Indenture  provided.  This Note is one of the series of
Notes designated on the face hereof.

     Subject to the terms of Article Eleven of the Indenture,  the Company shall
have the right to redeem this Note at its option, without premium or penalty, in
whole or, in part,  at any time on or after  November 26, 2007,  at a redemption
price equal to 100% of the principal amount redeemed plus any accrued but unpaid
interest to the date of such redemption.

     This Note shall be redeemable  and at the  redemption  prices to the extent
set forth herein, in the Second  Supplement  Indenture and in the Indenture upon
not less than thirty,  but not more than sixty,  days previous notice by mail to
the registered owner.

     To the extent  permitted by law and so long as Ambac is in compliance  with
its  obligations  under the  Policy,  the Policy is in full force and effect and
Ambac is not subject to any bankruptcy, insolvency or similar proceedings:

     (i)  any provision of this Note, the Second  Supplement  Indenture,  or the
          Indenture   (collectively,   the  "Financing   Documents")   expressly
          recognizing  or  granting  rights in or to Ambac may not be amended in
          any manner which  affects the rights of Ambac  hereunder or thereunder
          without the prior written consent of Ambac.

     (ii) Ambac shall be deemed to be the owner of all outstanding Notes for all
          purposes  (including,  without  limitation,  all approvals,  consents,
          requests,   waivers,    authorizations,    directions,    inspections,
          appointments  and  the  institution  of any  action),  provided,  that
          nothing in this clause (ii) shall  impair the rights of the holders of
          the Notes (the  "Securityholders")  to receive all  payments due under
          the Notes.  Ambac's  consent shall be required with respect to (a) the
          execution and delivery of any supplemental  indenture to the Indenture
          for which the consent of any of the  Securityholders  is required,  or
          any  amendment,  supplement  or  change  to  or  modification  of  any
          Financing Document (except as otherwise provided by Section 901 of the
          Indenture)  and (b) the removal of the Trustee or any paying agent and
          selection and appointment of any successor trustee or paying agent.

     (iii)Any  reorganization  or liquidation plan under  applicable  bankruptcy
          law or similar law with respect to the Company must be  acceptable  to
          Ambac. In the event of any such  reorganization or liquidation,  Ambac
          shall have the right to vote on behalf of all Securityholders who hold
          Ambac-insured  Notes  absent a default by Ambac  under the  applicable
          Financial Guaranty Insurance Policy insuring such Notes.

     (iv) Anything in any  Financing  Document to the contrary  notwithstanding,
          upon the  occurrence  and  continuance  of an Event of Default,  Ambac
          shall be entitled to control and direct the  enforcement of all rights
          and  remedies  granted to the  Securityholders  or the Trustee for the
          benefit  of  the  Securityholders   under  the  Financing   Documents,
          including,  without  limitation:  (A)  the  right  to  accelerate  the
          principal  of the Notes as  described  in the  Indenture,  and (B) the
          right to annul any declaration of  acceleration,  and Ambac shall also
          be entitled to approve all waivers of Events of Default  with  respect
          to or effecting the Notes.

     (v)  While  the  Financial  Guaranty  Insurance  Policy is in  effect,  the
          Company (and/or the Trustee,  where indicated  below) shall furnish to
          Ambac  (to  the  attention  of  the  Surveillance  Department,  unless
          otherwise indicated):

          (a)  as soon as practicable  after the filing  thereof,  a copy of any
               financial  statement  of the  Company and a copy of any audit and
               annual report of the Company;

          (b)  such additional information it may reasonably request;

          (c)  a  copy  of  any   notice   to  be   given   to  the   registered
               Securityholders,  including,  without  limitation,  notice of any
               redemption  or  defeasance  of the  Notes,  and  any  certificate
               rendered  pursuant  to any  Financing  Document  relating  to the
               Notes,  which  obligation  shall bind the  Trustee as well as the
               Company;

          (d)  notice (attention: General Counsel) by the Trustee of any failure
               of the Company to provide relevant  notices,  certificates,  etc.
               under the Financing Documents; and

          (e)  notwithstanding  any other  provision of any Financing  Document,
               immediate  notice  (attention:  General  Counsel)  if at any time
               there are  insufficient  moneys to make any payments of principal
               and/or interest on the Notes as required and immediate  notice of
               the occurrence of any Event of Default,  which  obligation  shall
               bind the Trustee as well as the Company.

     (vi) Notwithstanding  anything herein or in any other Financing Document to
          the contrary,  in the event that the principal  and/or interest due on
          the Notes shall be paid by Ambac  pursuant to the  Financial  Guaranty
          Insurance  Policy,  (a) the Notes shall remain  "outstanding"  for all
          purposes under the Indenture,  not be considered defeased or otherwise
          satisfied  and not be  considered  paid by the Company,  (b) except as
          expressly  stated  herein or otherwise  agreed or  undertaken  (I) the
          Paying Agent, if any, shall have no duties or obligations  relating to
          any payments made by Ambac and (II) the Trustee shall not be deemed to
          have  knowledge of any default  unless the Trustee  shall have written
          notice thereof, (c) the assignment and pledge of the Indenture and all
          covenants,  agreements  and other  obligations  of the  Company to the
          Securityholders  shall  continue to exist and shall run to the benefit
          of Ambac,  and (d) Ambac  shall be  subrogated  to the  rights of such
          Securityholders to the extent of each such payment.

     (vii)As long as the Financial  Guaranty  Insurance  Policy shall be in full
          force and effect, the Company,  the Trustee and any Paying Agent agree
          to comply with the following provisions:

          (a)  at least  one (1) day  prior to all  Interest  Payment  Dates the
               Trustee or Paying  Agent,  if any, will  determine  whether there
               will be  sufficient  funds  available to pay the  principal of or
               interest  on the  Notes on such  Interest  Payment  Date.  If the
               Trustee or Paying Agent,  if any,  determines  that there will be
               insufficient  funds  available,  the Trustee or Paying Agent,  if
               any, shall so notify Ambac.  Such notice shall specify the amount
               of the anticipated deficiency, the Notes to which such deficiency
               is  applicable  and whether  such Notes will be  deficient  as to
               principal or interest,  or both.  If the Trustee or Paying Agent,
               if any,  has not so notified  Ambac at least one (1) day prior to
               an Interest  Payment Date,  Ambac will make payments of principal
               or  interest  due on the Notes on or before  the first  (1st) day
               next following the date on which Ambac shall have received notice
               of nonpayment from the Trustee or Paying Agent, if any.

          (b)  the Trustee or Paying Agent, if any,  shall,  after giving notice
               to Ambac as provided in (a) above,  make  available to Ambac and,
               at Ambac's  direction,  to The Bank of New York, in New York, New
               York, as insurance  trustee for Ambac or any successor  insurance
               trustee (the "Insurance Trustee"),  the registration books of the
               Company  maintained by the Trustee or Paying  Agent,  if any, and
               all  records   relating  to  the  funds  and  accounts  (if  any)
               maintained under the Indenture.

          (c)  the Trustee or Paying Agent,  if any, shall provide Ambac and the
               Insurance  Trustee  with a list of  registered  owners  of  Notes
               entitled to receive  principal  or interest  payments  from Ambac
               under the terms of the Financial  Guaranty  Insurance Policy, and
               shall  pursuant to  arrangements  with the Insurance  Trustee (I)
               mail checks or drafts to the registered  owners of Notes entitled
               to receive full or partial interest  payments from Ambac and (II)
               pay principal upon Notes  surrendered to the Insurance Trustee by
               the  registered  owners  of Notes  entitled  to  receive  full or
               partial principal payments from Ambac.

          (d)  the  Trustee  or  Paying  Agent,  if any,  shall,  at the time it
               provides notice to Ambac pursuant to (a) above, notify registered
               owners of Notes  entitled to receive the payment of  principal or
               interest   thereon  from  Ambac  (I)  as  to  the  fact  of  such
               entitlement,  (II) that  Ambac will  remit to them,  through  the
               Insurance  Trustee  or  pursuant  to  arrangements  made with the
               Insurance  Trustee  through the Trustee or Paying Agent,  if any,
               all or a part of the interest payments next coming due upon proof
               of  Securityholder  entitlement to interest payments and delivery
               to the Insurance  Trustee,  in form satisfactory to the Insurance
               Trustee,  of an appropriate  assignment of the registered owner's
               right to  payment,  (III) that should they be entitled to receive
               full payment of principal from Ambac,  they must surrender  their
               Notes (along with an appropriate instrument of assignment in form
               satisfactory to the Insurance Trustee to permit ownership of such
               Notes to be  registered  in the name of Ambac) for payment to the
               Insurance  Trustee,  who shall  then  pass  such  Notes on to the
               Trustee or Paying  Agent,  if any, for payment of principal  upon
               such  Notes and (IV) that  should  they be  entitled  to  receive
               partial payment of principal from Ambac, for payment of principal
               on such Notes they must surrender their Notes for payment thereon
               first to the Trustee or Paying  Agent,  if any, who shall note on
               such Notes the  portion of the  principal  paid by the Trustee or
               Paying  Agent,  if any,  and  then,  along  with  an  appropriate
               instrument of assignment  in form  satisfactory  to the Insurance
               Trustee,   to  the  Insurance  Trustee,   which  will  then  make
               arrangements  with the Trustee or the Paying  Agent,  if any, for
               the payment of the unpaid portion of principal.

          (e)  in the event that the Trustee or Paying Agent, if any, has notice
               that any payment of  principal of or interest on a Note which has
               become Due for  Payment  (as  defined in the  Financial  Guaranty
               Insurance  Policy) and which is made to a Securityholder by or on
               behalf of the Company has been deemed a preferential transfer and
               theretofore  recovered from its registered  owner pursuant to the
               United  States  Bankruptcy  Code by a trustee  in  bankruptcy  in
               accordance with the final,  nonappealable order of a court having
               competent  jurisdiction,  the  Trustee or Paying  Agent,  if any,
               shall,  at the time  Ambac is  notified  pursuant  to (a)  above,
               notify  all  registered   owners  that  in  the  event  that  any
               registered owner's payment is so recovered, such registered owner
               will be  entitled  to  payment  from  Ambac to the extent of such
               recovery if sufficient funds are not otherwise available, and the
               Trustee  or Paying  Agent,  if any,  shall  furnish  to Ambac its
               records  evidencing  the payments of principal of and interest on
               the Notes which have been made by the Trustee or Paying Agent, if
               any, and  subsequently  recovered from registered  owners and the
               dates on which such payments were made.

          (f)  in addition to those  rights  granted  Ambac under the  Financing
               Documents,  Ambac  shall,  to the  extent  it  makes  payment  of
               principal  of or  interest  on Notes,  become  subrogated  to the
               rights of the recipients of such payments in accordance  with the
               terms of the Financial Guaranty Insurance Policy, and to evidence
               such  subrogation (1) in the case of subrogation as to claims for
               past due  interest,  the Trustee or Paying Agent,  if any,  shall
               note Ambac's rights as subrogee on the registration  books of the
               Company  maintained by the Trustee or Paying Agent,  if any, upon
               receipt from Ambac of proof of the payment of interest thereon to
               the  registered  owners  of the  Notes,  and  (2) in the  case of
               subrogation as to claims for past due  principal,  the Trustee or
               Paying Agent,  if any,  shall note Ambac's  rights as subrogee on
               the registration  books of the Company  maintained by the Trustee
               or  Paying  Agent,  if any,  upon  surrender  of the Notes by the
               registered  owners thereof  together with proof of the payment of
               principal thereof.

     (viii) The Trustee or Paying Agent,  if any, may be removed at any time, at
          the  request  of Ambac,  for any breach of its  obligations  under the
          Financing Documents.

     (ix) Ambac shall  receive  prior  written  notice of any Trustee (or Paying
          Agent) resignation.

     (x)  Every successor Trustee appointed pursuant to the Indenture shall be a
          trust  company or bank in good  standing  located  in or  incorporated
          under the laws of any State of the  United  States  of  America,  duly
          authorized  to exercise  trust  powers and subject to  examination  by
          federal or state  authority,  having a reported capital and surplus of
          not less than  $75,000,000  and  acceptable  to Ambac.  Any  successor
          Paying  Agent,  if  applicable,  shall not be  appointed  unless Ambac
          approves such successor in writing.

     (xi) Notwithstanding  any other  provision of the Financing  Documents,  in
          determining  whether  the  rights  of  the  Securityholders   will  be
          adversely  affected  by any  action  taken  pursuant  to the terms and
          provisions of the Financing  Documents,  the Trustee (or Paying Agent)
          shall consider the effect on the  Securityholders  as if there were no
          Financial Guaranty Insurance Policy.

     (xii)Notwithstanding  any other  provision of the Financing  Documents,  no
          removal,  resignation  or termination of the Trustee (or Paying Agent)
          shall take effect until a  successor,  acceptable  to Ambac,  shall be
          appointed.

     (xiii) To the extent that the  Financing  Documents  confer upon or give or
          grant to Ambac  any  right,  remedy or claim  thereunder  or by reason
          thereof,  Ambac is hereby explicitly recognized as being a third-party
          beneficiary  thereunder and may enforce any such right remedy or claim
          conferred, given or granted thereunder.

     (xiv)Nothing in the Financing Documents,  expressed or implied, is intended
          or shall be  construed  to confer  upon,  or to give or grant to,  any
          person or entity,  other than the  Company,  the Trustee,  Ambac,  the
          Paying Agent, if any, and the registered  Securityholders,  any right,
          remedy or claim under or by reason of the  Financing  Documents or any
          covenant,   condition  or  stipulation  thereof,  and  all  covenants,
          stipulations,  promises  and  agreements  in the  Financing  Documents
          contained  by and on behalf of the  Company  shall be for the sole and
          exclusive  benefit of the  Company,  the  Trustee,  Ambac,  the Paying
          Agent, if any, and the registered Securityholders.

     (xv) The Company may not elect to defease the Series B Notes in  accordance
          with Section 401, 403 or 1009 of the Indenture without having obtained
          the  prior  written   consent  of  Ambac,   such  consent  not  to  be
          unreasonably  withheld.  No such  defeasance  shall be effected by the
          deposit or  delivery  of U.S.  Government  Obligations  with or to the
          Trustee  unless the  securities or  instruments  used for such purpose
          would constitute "U.S. Government Obligations" under clause (i) of the
          definition of such term.

     It shall be an Event  of  Default  under  the  Indenture  if an  "Event  of
Default"  shall have occurred and be continuing  under the Insurance  Agreement,
dated as of November 26, 2002, between the Company and Ambac. If Ambac waives an
Event of  Default  under the  Insurance  Agreement  or such  Event of Default is
cured,  then such Event of Default  will not be an Event of Default with respect
to the Senior Notes under the Indenture.

     The Company  shall not be required to (i) issue,  exchange or register  the
transfer of any Notes  during a period  beginning  at the opening of business 15
days  before the day of the mailing of a notice of  redemption  of less than all
the outstanding  Notes of the same series and ending at the close of business on
the day of such  mailing,  nor (ii)  register the transfer of or exchange of any
Notes of any series or portions thereof called for redemption.  This Global Note
is  exchangeable  for Notes in  definitive  registered  form only under  certain
limited circumstances set forth in the Indenture.

     In the event of  redemption  of this Note in part only, a new Note or Notes
of this series, of like tenor, for the unredeemed  portion hereof will be issued
in the name of the Holder hereof upon the surrender of this Note.

     In case an Event of  Default,  as  defined  in the  Indenture,  shall  have
occurred and be  continuing,  the principal of all of the Notes may be declared,
and upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.

     The Indenture contains  provisions for defeasance at any time of the entire
indebtedness of this Note upon compliance by the Company with certain conditions
set forth therein.

     The Indenture contains  provisions  permitting the Company and the Trustee,
with the  consent  of the  Holders  of not less  than a  majority  in  aggregate
principal  amount of the Notes of each series affected at the time  outstanding,
as defined in the Indenture,  to execute supplemental indentures for the purpose
of adding any provisions to or changing in any manner or eliminating  any of the
provisions of the Indenture or of any supplemental  indenture or of modifying in
any manner the rights of the Holders of the Notes;  provided,  however,  that no
such supplemental  indenture shall (i) extend the fixed maturity of any Notes of
any series, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon,  or reduce any premium payable upon the
redemption thereof, or reduce the amount of the principal of a Discount Security
that would be due and payable upon a declaration of acceleration of the maturity
thereof  pursuant  to the  Indenture,  without the consent of the holder of each
Note then  outstanding  and affected;  (ii) reduce the  aforesaid  percentage of
Notes,  the holders of which are  required  to consent to any such  supplemental
indenture,  or reduce the percentage of Notes, the holders of which are required
to waive any default and its consequences,  without the consent of the holder of
each Note then outstanding and affected  thereby;  or (iii) modify any provision
of Section 502 of the Indenture  (except to increase the percentage of principal
amount of securities  required to rescind and annul any  declaration  of amounts
due and payable under the Notes), without the consent of the holder of each Note
then outstanding and affected  thereby.  The Indenture also contains  provisions
permitting the Holders of a majority in aggregate  principal amount of the Notes
of all series at the time outstanding affected thereby, on behalf of the Holders
of the Notes of such series, to waive any past default in the performance of any
of the covenants  contained in the  Indenture,  or  established  pursuant to the
Indenture with respect to such series, and its consequences, except a default in
the payment of the  principal  of or premium,  if any, or interest on any of the
Notes of such  series.  Any such consent or waiver by the  registered  Holder of
this Note (unless revoked as provided in the Indenture)  shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this Note and
of  any  Note  issued  in  exchange  herefor  or in  place  hereof  (whether  by
registration  of  transfer  or  otherwise),  irrespective  of whether or not any
notation of such consent or waiver is made upon this Note.

     No reference  herein to the  Indenture  and no provision of this Note or of
the  Indenture  shall alter or impair the  obligation  of the Company,  which is
absolute and  unconditional,  to pay the  principal of and premium,  if any, and
interest  on this  Note at the time and  place  and at the rate and in the money
herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set
forth, this Note is transferable by the registered holder hereof on the Security
Register  of the  Company,  upon  surrender  of this  Note for  registration  of
transfer  at the  office or agency of the  Company as may be  designated  by the
Company  accompanied by a written  instrument or instruments of transfer in form
satisfactory  to the Company or the  Trustee  duly  executed  by the  registered
Holder hereof or his or her attorney duly  authorized in writing,  and thereupon
one or more new Notes of  authorized  denominations  and for the same  aggregate
principal  amount  and series  will be issued to the  designated  transferee  or
transferees.  No  service  charge  will be made for any such  transfer,  but the
Company  may  require  payment  of a sum  sufficient  to cover  any tax or other
governmental charge payable in relation thereto.

     Prior to due  presentment  for  registration  of transfer of this Note, the
Company,  the Trustee,  any paying agent and any Security Registrar may deem and
treat the registered  Holder hereof as the absolute owner hereof (whether or not
this Note shall be  overdue  and  notwithstanding  any  notice of  ownership  or
writing hereon made by anyone other than the Security Registrar) for the purpose
of receiving  payment of or on account of the principal  hereof and premium,  if
any, and interest due hereon and for all other purposes, and neither the Company
nor the  Trustee  nor any  paying  agent  nor any  Security  Registrar  shall be
affected by any notice to the contrary.

     No  recourse  shall  be had  for the  payment  of the  principal  of or the
interest on this Note,  or for any claim based  hereon,  or otherwise in respect
hereof,  or based on or in respect of the Indenture,  against any  incorporator,
stockholder,  officer or  director,  past,  present or future,  as such,  of the
Company or of any predecessor or successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise,  all such liability being, by the acceptance hereof and as
part  of the  consideration  for  the  issuance  hereof,  expressly  waived  and
released.

     The Notes of this  series are  issuable  only in  registered  form  without
coupons in denominations of $25 and any integral multiple  thereof.  As provided
in the  Indenture and subject to certain  limitations,  Notes of this series are
exchangeable for a like aggregate  principal amount of Notes of this series of a
different authorized  denomination,  as requested by the Holder surrendering the
same.

     All terms used in this Note which are defined in the  Indenture  shall have
the meanings assigned to them in the Indenture.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

     This  Note  shall  not be  entitled  to any  benefit  under  the  Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of  Authentication  hereon shall have been signed by or on behalf of
the Trustee.

         IN WITNESS WHEREOF, the Company has caused this Instrument to be
executed.

                       PUBLIC SERVICE COMPANY OF OKLAHOMA


                         By:___________________________
                            Assistant Treasurer

Attest:


By:___________________________
       Assistant Secretary


                          CERTIFICATE OF AUTHENTICATION

     This is one of the Notes of the series of Notes  designated  in  accordance
with, and referred to in, the within-mentioned Indenture.

Dated:  November 26, 2002

THE BANK OF NEW YORK, as Trustee


By:___________________________
   Authorized Signatory



<PAGE>


FOR VALUE RECEIVED,  the undersigned  hereby sell(s),  assign(s) and transfer(s)
unto

(PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE)

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(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
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ASSIGNEE) the within Note and all rights thereunder, hereby
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irrevocably constituting and appointing such person attorney to
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transfer such Note on the books of the Issuer, with full
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power of substitution in the premises.



Dated:________________________              _________________________



     NOTICE: The signature to this  assignment  must correspond with the name as
          written upon the face of the within Note in every particular,  without
          alteration  or  enlargement   or  any  change   whatever  and  NOTICE:
          Signature(s)  must be guaranteed by a financial  institution that is a
          member of the Securities  Transfer Agents Medallion Program ("STAMP"),
          the Stock Exchange  Medallion  Program  ("SEMP") or the New York Stock
          Exchange, Inc. Medallion Signature Program ("MSP").