"My Cherie Amour"
- The band arrives in New York. Leslie, Russell's "ex-wife, current girlfriend thing" arrives.
- William learns that Penny is in the city, staying at the Plaza Hotel.
- William receives a call from Jann Wenner at Rolling Stone, who informs him the story will be a cover, and that he can tell the band. He should MOJO (an early fax machine) over what he has to be fact checked.
- At a restaurant, William breaks the news to the band that they will be on the cover of Rolling Stone.
- While the band celebrates, Russell spots Penny from across the room. So does Leslie. Dick goes over to check on her, but it isn't long before Penny leaves, clearly upset.
- William tries unsuccessfully to follow Penny.
- At the Plaza, William finally finds Penny overdosing on Quaaludes in her room. He calls for a doctor.
- We cut from shots of Elaine at William's graduation (at which he is not present), back to William, who is trying to keep Penny conscious.
- "Why doesn't he love me?" asks a fading Penny Lane.
- "I love you," William confides. "Now I'm about to go where… many men have gone before."
- William kisses Penny as the doctors arrive. They pump her stomach to the tune of "My Cherie Amour" by Stevie Wonder, the love-filled soundtrack of William's mind juxtaposing Penny's hardly flattering vomiting.
- Later, Penny and William walk together through the park. She reveals her family history, and her real name—"Lady Goodman." "Now you now all my secrets," she tells him.
- William accompanies Penny to the airport, where she takes off for home, while Nancy Wilson's introspective guitar and mandolin score plays.