Written by Terence Winter
Directed by Allen Coulter
Richie meets Assistant U.S. Attorney Nate Druker and Agent Seeley at a seedy biker bar to discuss the terms of his deal. Richie is dismayed to learn that informing on Corrado Galasso comes with no offer of protection.
The Nasty Bits rehearse for their upcoming performance at the Academy of Music, but tension is high between Kip and Alex following their threesome. When the band breaks, Jamie calls out Kip for his "passive-aggressive bullshit," forcing him to admit his jealousy.
Zak meets with Galasso to complain about Richie's recent bad behavior. Explaining ACR has a morality clause in its corporate by-laws, Zak wants to know if he has Galasso's support in ousting Richie. He leaves feeling confident in his decision.
Maury Gold tells Richie Rondelay Records owns the publishing rights to "Woman Like You," meaning Richie has to get permission from Lester for the Bits to cover the song. Richie's horrified when Maury suggests they send some of Corrado's men to "soften" Lester into complying.
Galasso and his right-hand man, Tony Del Greco, go see Richie and Zak, and Galasso confronts Zak about ratting out his partner: "I've got a chop shop by Yankee Stadium, use it crush stolen cars. You're lucky you're not in the trunk of one of 'em." He warns Zak against stirring up any more trouble; he doesn't care who runs ACR, so long as his loan is repaid -- by any means necessary.
After everyone leaves, Richie tells off Zak for being so na�ve. "I lost some money, I hurt your feelings," he shouts. "I didn't serve you up to get killed." Their fight is interrupted when Devon arrives. She starts on Richie about his recent revelation, but he cuts her off -- his office is bugged. Richie and Devon head outside to discuss what happened with Buck Rogers and Richie's deal with the Feds.
At the police station, Detectives Whorisky and Renk pick up a fuzzy recording from Richie's office of Galasso talking about his chop shop. The information leads to the arrest of four of Galasso's guys, including Del Greco.
Worried about Kip, Jaime apologizes for the threesome, calling it a mistake. She admits she cares about both Kip and Alex, and believes she and Alex have a connection. Kip freaks out, announces he's quitting the band and throws Jamie out of the apartment.
Skip, Scott and Julie are astonished to see Indigo charting -- after Scott dropped them as instructed. While the three argue, the unsent letter to Indigo's manager lands at their feet. Clark reveals he and Jorge have been pushing the album at clubs across the city. "This fucking dance music? It is a totally untapped market," he tells them.
Richie heads to Lester's apartment building to ask him for permission to use "Woman Like You," but Lester doesn't give in easily. He demands $20,000, five points and more bands to manage. Richie agrees to the deal.
Jamie pounces on Richie when he returns at ACR: Kip didn't show up for rehearsal after threatening to quit the band. Cece hands Richie the phone -- Zak is on the other end, claiming an emergency. Richie rushes to his friend's aid, telling Jamie that if she wants to be an A&R rep, she needs to fix the situation with Kip on her own.
Richie finds Zak at an empty warehouse, surrounded by Galasso, Del Greco, Corso and other henchmen. The raid on the chop shop, following their earlier conversation, was too big of a coincidence. Richie, realizing it was the bug, deflects the blame on Corso, who was also present. Corso flies into a rage, then reveals the murder of Buck Rogers, jeopardizing Galasso as an accessory after the fact. Galasso signals Del Greco to shoot Corso in the head, and Zak and Richie take heed.
Lester and Jamie break into Kip's apartment, and find him unresponsive with a needle in his arm. After partially reviving him with a cold bath, Lester and Jamie continue to sober him up backstage at the Academy. Richie arrives and injects Kip with cocaine so he and the band can perform as scheduled. As soon as Kip revives, he and Alex start throwing punches, and when Richie realizes the guys are about to blow the biggest night of their lives over Jamie, he fires her on the spot. Afterwards, Jamie confronts him about the decision and Richie tells her he said whatever he needed to get the guys onstage. Jamie's fired from the band, not ACR.
The Nasty Bits take the stage, but only get through one song -- Richie, knowing it would make for great press, called the cops and tipped them off about the band's obscene lyrics. The police storm the stage, and Kip and the band attempt to fight them off. The crowd goes wild.
Richie again meets with Agent Seeley at the biker bar but only offers a benign tip that both Galasso and Del Greco were wearing the same raincoat, perhaps they were stolen? After a disappointed Seeley leaves, the bartender, Hilly Kristal, tells Richie he's turning the bar into a live music venue. He shows Richie a scrap of paper with the proposed name: CBGB OMFUG -- Country, Bluegrass, Blues and Other Music For Uplifting Gormandizers.
At ACR's launch party for Alibi Records, Richie reads a glowing review of the Nasty Bits' performance at the Academy. Richie explains why he called the sublabel "Alibi Records": An alibi is an excuse for bad behavior, and he's not going to make any more excuses for his. He also reveals the Nasty Bits cover art -- Devon's photo of the Gretsch through their TV. Richie passes out cans of spray paint and orders the staff to destroy the offices, in the spirit of their new sublabel. As their guests ravage the space, Zak and Richie make tense eye contact, unsure of what the future holds.