Iced Teas, and once Kate is totally inebriated, Princeton takes her home to bed. Kate and Princeton have enthusiastic, high-decibel sex. Gary fields angry calls from other tenants but refuses to intercede ("You Can Be as Loud as the Hell You Want When You're Makin' Love"). Meanwhile, Rod hears Nicky say, "I love you, Rod," in his sleep, and is jubilant, but he eventually realizes he was dreaming. Kate and Princeton profess their mutual love, and he gives her his lucky penny ("Fantasies Come True"). The next morning, a hung-over Kate oversleeps and misses her teaching assignment. Mrs. Thistletwat berates her, and Kate angrily quits her job before she can be fired. Christmas Eve decides unilaterally that it is time she and Brian were married. At the wedding, Nicky blurts out his suspicion that Rod is gay. Rod, furious, insists he has a girlfriend named Alberta in Vancouver ("My Girlfriend Who Lives in Canada") and tells Nicky he is no longer welcome in their apartment. When Kate catches Christmas Eve's wedding bouquet, Princeton panics, confesses his fear of commitment, and asks Kate if they can just be friends. Kate retorts that she already has many friends, and ends their relationship ("There's a Fine, Fine Line"). Act II A despondent Princeton has been holed up in his apartment after breaking up with Kate, but the neighbors coax him outside ("There is Life Outside Your Apartment"). Lucy, looking for a place to crash, seduces the rebounding Princeton. Kate is angry, but Christmas Eve explains that it means she is in love with him ("The More You Ruv Someone"). Kate writes a note to Princeton suggesting that they rendezvous at the Empire State Building and leaves it with Lucy, who promptly destroys it. A homeless Nicky laments his fate to Gary who confesses that he is deriving pleasure from Nicky's misfortune; they agree that this, while morally wrong, is yet another reality ("Schadenfreude"). On the Empire State Building's viewing platform, Kate, thinking that Princeton has stood her up, throws his lucky penny away. A hundred stories below, Lucy, walking by on Fifth Avenue, is knocked unconscious by the penny. Kate and Princeton unsuccessfully try to work out their problems over Lucy's comatose body. Rod is too proud to accept Nicky's repeated apologies, despite clearly missing him, and tearfully consults Christmas Eve. Princeton, Kate, and Nicky dream of returning to happier times ("I Wish