10-Q 1 b24402v4.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001 Commission file number 0-17651 HIGH CASH PARTNERS, L.P. (Exact name of registrant as specified in its charter) DELAWARE 13-3347257 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) High Cash Partners, L.P. c/o Pembroke Companies Inc 70 East 55th Street 7th Floor New York, New York 10022 (Address of principal executive offices) (212) 350-9900 (Registrant's telephone number, including area code) None (Former name, former address and former fiscal year, if changed since last report) Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No - - HIGH CASH PARTNERS, L.P. FORM 10-Q March 31, 2001 INDEX PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS BALANCE SHEETS March 31, 2001 and December 31, 2000 1 STATEMENTS OF OPERATIONS - For the three months ended March 31, 2001 and 2000 2 STATEMENT OF PARTNERS' DEFICIT - For the three months ended March 31, 2001 3 STATEMENTS OF CASH FLOWS - For the three months ended March 31, 2001 and 2000 4 NOTES TO FINANCIAL STATEMENTS 5 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8 PART II - OTHER INFORMATION ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 13 SIGNATURES 14 PART I FINANCIAL INFORMATION This report contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements appear in a number of places herein and include statements regarding the intent, belief or current expectations of the Partnership, primarily with respect to the future operating performance of the Partnership or related developments. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results and developments may differ from those described in the forward-looking statements as a result of various factors, many of which are beyond the control of the Partnership. ITEM 1 FINANCIAL STATEMENTS HIGH CASH PARTNERS, L.P. BALANCE SHEETS March 31, 2001 December 31, (unaudited) 2000 ----------- ------------ ASSETS Real estate, net $14,643,946 $14,722,456 Cash and cash equivalents 1,363,779 1,103,651 Tenant receivables, net 162,337 86,896 Other assets 215,454 173,206 Prepaid real estate taxes 56,966 -- Prepaid insurance premiums 20,852 33,363 ----------- ----------- $16,463,334 $16,119,572 =========== =========== LIABILITIES AND PARTNERS' DEFICIT Liabilities Mortgage loan payable $ 6,500,000 $ 6,500,000 Deferred interest payable 18,721,275 18,026,844 Accounts payable and accrued expenses 191,315 154,300 Tenants' security deposits payable 68,129 68,129 ----------- ----------- 25,480,719 24,749,273 Commitments and contingencies Partners' deficit Limited partners' deficit (96,472 units issued and outstanding) (8,927,210) (8,543,402) General partners' deficit (90,175) (86,299) ----------- ----------- Total partners' deficit (9,017,385) (8,629,701) ------------ ------------ $16,463,334 $16,119,572 ============ ============ See notes to financial statements HIGH CASH PARTNERS, L.P. STATEMENTS OF OPERATIONS (unaudited) For the three months ended March 31, ---------- ----------- 2001 2000 ---------- ----------- Revenues Rental income $ 648,662 $ 659,905 Interest income 14,004 7,107 ---------- ---------- 662,666 667,012 ========== ========== Costs and expenses Mortgage loan interest 694,431 621,051 Operating 114,231 118,804 Depreciation and amortization 107,721 90,824 Partnership management fees 75,369 75,369 Property management fees 20,893 20,817 Administrative 37,705 17,055 ---------- ---------- 1,050,350 943,920 ---------- ---------- Net loss $ (387,684) $ (276,908) ========== ========== Net loss attributable to Limited partners $ (383,808) $ (274,139) General partners (3,876) (2,769) ---------- ---------- $ (387,684) $ (276,908) ========== ========== Net loss per unit of limited partnership interest (96,472 units outstanding) $(3.98) $(2.84) ---------- ---------- See notes to financial statements. 2 HIGH CASH PARTNERS, L.P. STATEMENT OF PARTNERS' DEFICIT (unaudited)

See notes to financial statements. 3 HIGH CASH PARTNERS, L.P. STATEMENTS OF CASH FLOWS (unaudited)

See notes to financial statements. 4 HIGH CASH PARTNERS, L.P. NOTES TO FINANCIAL STATEMENTS (unaudited) 1. BASIS OF PRESENTATION The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. However, if the Partnership is unable to refinance or otherwise restructure its outstanding indebtedness to Resources Accrued Mortgage Investors 2 L.P. ("RAM 2") prior to the Extended Maturity Date (as hereinafter defined), the Partnership will lose its entire interest in its sole real estate asset (See Note 3). These circumstances raise substantial doubt as to the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 2. INTERIM FINANCIAL INFORMATION The summarized financial information contained herein is unaudited; however, in the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of such financial information have been included. The accompanying financial statements, footnotes and discussions should be read in conjunction with the financial statements, related footnotes and discussions contained in the High Cash Partners, L.P. (the "Partnership") Annual Report on Form 10-K for the year ended December 31, 2000. The results of operations for the three months ended March 31, 2001 are not necessarily indicative of the results to be expected for the full year. 3. MORTGAGE LOAN PAYABLE Because the Partnership believed that it would be unable either to repay or refinance the Mortgage Loan at that time, the Managing General Partner negotiated and caused the Partnership to enter into a mortgage loan modification agreement (the "Mortgage Loan Modification Agreement") with RAM 2 in order to effect a modification of the Mortgage Loan and prevent the immediate foreclosure of the Mortgage Loan and the consequent loss of the Property. The Mortgage Loan Modification Agreement became effective on January 31, 2001. The mortgage loan payable (the Mortgage Loan) represents a first mortgage loan held by RAM 2, a public limited partnership sponsored by affiliates of the former general partners of the Partnership. The Mortgage Loan bears interest at the rate of 11.22% per annum, compounded monthly and did not require payment until its original maturity date of February 28, 2001. The principal balance, along with deferred interest thereon, was $25,221,275 at March 31, 2001, and aggregated approximately $25,000,000 at its original maturity date of February 28, 2001. As of March 31, 2001, the principal and deferred interest on the Mortgage Loan exceeded the estimated fair market value of the Partnership's sole real estate asset (the "Property"). 5 Effective January 31, 2001, the Partnership entered into a mortgage loan modification agreement (the "Mortgage Loan Modification Agreement") with RAM 2. Pursuant to the terms of the Mortgage Loan Modification Agreement, RAM 2 agreed to forbear, for not less than one year and up to two years, the exercise of its rights and remedies under the Mortgage Loan for the Partnerships failure to repay all amounts due and payable thereunder at its original maturity date of February 28, 2001. Under the Mortgage Loan Modification Agreement, the deed to the Property, along with a bill of sale, assignment of leases and other conveyance documents (the "Conveyance Documents") were placed in escrow with counsel to RAM 2. The Conveyance Documents will not be released to RAM 2 until the earliest to occur of the following dates (the "Extended Maturity Date"): I. Any date on which any action taken or omitted to be taken by the Partnership in bad faith, intended to hinder or impede RAM 2's exercise of its rights or remedies under the terms of the Mortgage Loan Modification Agreement, remains uncured for more than 10 days after notice thereof from RAM 2; II. Any date on or after March 1, 2002, upon the closing date of the sale or other conveyance of the Property (a) if RAM 2 identifies a bona fide third party purchaser to acquire the Property, or (b) for any other reason deemed reasonably necessary by RAM 2 to avoid a material economic disadvantage to it; and III. March 1, 2003. The Mortgage Loan Modification Agreement further provides that, from March 1, 2001, until such time as the Conveyance Documents have been released, the Partnership will be entitled to receive $100,000 per annum pro-rated monthly and paid monthly to the extent cash flow generated by the Property permits and RAM 2 will be entitled to receive the balance of the net operating income generated by the Property to be applied against current interest and the outstanding principal and deferred interest on the Mortgage Loan. Under the terms of the Mortgage Loan Modification Agreement, the Partnership will retain its interest in the Property until and unless the Conveyance Documents are released to RAM 2 in accordance with the terms thereof. Prior to March 1, 2003, until RAM 2 notifies the Partnership that it has entered into a contract to sell or convey the Property, the Partnership will have the right to satisfy the Mortgage Loan for an amount equal to the sum of (x) the then unpaid principal balance of the Mortgage Loan, and all accrued interest thereon and other charges due thereunder and (y) 66% of the value of the Property in excess of the amount described in clause (x) above, as additional interest on the Mortgage Loan. If the Mortgage Loan is satisfied, the Conveyance Documents will be returned to the Partnership. If the Partnership is unable to refinance or otherwise restructure this outstanding indebtedness prior to the Extended Maturity Date, the Partnership will lose its entire interest in the Property. Under the terms of the Mortgage Loan, the Partnership was obligated to provide RAM 2 with a current appraisal of the Property upon RAM 2's request. If it was determined, based upon the requested appraisal, that the sum of (i) the principal balance of the Mortgage Loan plus all other then outstanding indebtedness secured by the Property and (ii) all accrued and unpaid interest on the Mortgage Loan, calculated at a rate of 6.22% per annum compounded monthly through the date of such appraisal, exceeded 6 85% of the appraised value of the Property, an amount equal to such excess (the "Excess Payment") would become immediately due and payable to RAM 2. In accordance with the terms of the Mortgage Loan Modification Agreement, RAM 2 requested an appraisal of the Property by Greenwich Realty Advisors, a real estate appraisal firm unaffiliated with the Partnership, Pembroke HCP, LLC, its managing general partner (the "Managing General Partner") or RAM 2. The appraisal, which was performed as of March 1, 2001, indicated that an Excess Payment was not due or payable to RAM 2 at that date. Consequently, under the terms of the Mortgage Loan Modification Agreement, RAM 2 has no further appraisal right pursuant to the terms of the Mortgage Loan. 4. CHANGE IN GENERAL PARTNER OWNERSHIP, CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES On June 13, 1997, Resources High Cash, Inc. ("RHC") and Presidio AGP Corp. ("AGP") sold their general partnership interests in the Partnership to Pembroke HCP LLC ("Pembroke HCP") and Pembroke AGP Corp. ("Pembroke AGP") (collectively, the "General Partners"), respectively. In the same transaction, XRC Corp. ("XRC"), the parent company of RHC, sold its 8,361 Units to Pembroke Capital II, LLC, an affiliate of Pembroke HCP and Pembroke AGP. Subsequently, Pembroke Capital II LLC acquired beneficial ownership of an additional 6,257 Units in the secondary market. Prior to the sale of the general partnership interests in the Partnership to Pembroke HCP and Pembroke AGP, Wexford Management LLC had performed management and administrative services for AGP, XRC and XRC's direct and indirect subsidiaries, as well as for the Partnership. Following the sale, an affiliate of Pembroke HCP was engaged to perform administrative services for the Partnership. During each of the quarters ended March 31, 2001 and 2000, $12,000 in reimbursable payroll expenses were paid to the affiliate of Pembroke HCP for services performed during the quarter. The Partnership had been a party to a supervisory management agreement with Resources Supervisory Management Corp. ("Resources Supervisory"), an affiliate of RHC and AGP, pursuant to which Resources Supervisory performed certain property management functions. Resources Supervisory performed such services through June 13, 1997. Effective June 13, 1997, the Partnership terminated this agreement and entered into a similar agreement with Pembroke Realty Management LLC ("Pembroke Realty"), an affiliate of Pembroke HCP and Pembroke AGP. A portion of the property management fees payable to Resources Supervisory and Pembroke Realty was paid to unaffiliated local management companies that had been engaged for the purpose of performing the local property management functions. For the quarters ended March 31, 2001 and 2000, Pembroke Realty was entitled to receive $13,002 and $20,817, respectively, of which $10,033 and $15,613, respectively, was payable to unaffiliated management companies. No leasing activity compensation was paid to Pembroke Realty for the quarter ended March 31, 2001 or 2000. In connection with its entering into the Mortgage Loan Modification Agreement with RAM 2, which became effective on January 31, 2001, the Partnership retained Kestrel Management LP ("Kestrel"), an affiliate of RAM 2, to perform property management functions commencing on January 2, 2001. Kestrel has assumed all management services previously performed by Pembroke Realty and the unaffiliated management companies, pursuant to the terms of a management agreement. For the quarter ended 7 March 31, 2001, Kestrel was entitled to receive $10,892 in respect of property management services rendered to the Partnership. For managing the affairs of the Partnership, the Managing General Partner is entitled to an annual partnership management fee equal to $301,475. For each of the quarters ended March 31, 2001 and 2000, the Managing General Partner was entitled to a partnership management fee of $75,369. The General Partners are allocated 1% of the net income or losses of the Partnership, which amounted to losses of $3,876 and $2,769 in the quarters ended March 31, 2001 and 2000, respectively. They also are entitled to receive 1% of the distributions of the Partnership. 5. REAL ESTATE Real estate, which is the Partnership's sole asset, is summarized as follows: March 31, 2001 (unaudited) December 31, 2000 ---------------- ------------------- Land $ 6,667,189 $ 6,667,189 Building and improvements 12,940,226 12,940,226 ---------------- ------------------- 19,607,415 19,607,415 Accumulated depreciation (4,963,469) (4,884,959) ---------------- ------------------- $ 14,643,946 $ 14,722,456 ================ =================== The land, building and improvements that comprise the Partnership's sole real estate asset are collateralized by a mortgage loan payable. ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. However, if the Partnership is unable to refinance or otherwise restructure its outstanding indebtedness to Resources Accrued Mortgage Investors 2 L.P. ("RAM 2") prior to the Extended Maturity Date, the Partnership will lose its entire interest in its sole real estate asset. These circumstances raise substantial doubt as to the Partnership's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Partnership's sole real estate asset (the "Property") is a community shopping center located in Reno, Nevada containing approximately 233,000 square feet of net leasable area. The Partnership uses undistributed cash flow from operations as its primary measure of liquidity. As of March 31, 2001, working capital reserves amounted to approximately 8 $1,413,000, which does not include any amount which may be currently payable under the Partnership's mortgage loan (the "Mortgage Loan") payable to RAM 2 or deferred interest thereon. Such reserves may be used to fund capital expenditures, insurance, real estate taxes and loan payments. All expenditures made during the quarter ended March 31, 2001 were funded from operations. At March 31, 2001, the total amount outstanding on the Mortgage Loan was $25,221,275, which included deferred interest of $18,721,275. The scheduled maturity date of the Mortgage Loan was originally February 28, 2001, at which time the total amount outstanding on the mortgage was approximately $25,000,000. Pursuant to the Mortgage Loan Modification Agreement, RAM 2 has agreed to forbear for not less than one year and up to two years in the exercise of its rights and remedies under the Mortgage Loan triggered by the Partnership's failure to repay fully all amounts due and payable thereunder at maturity. Under the Mortgage Loan Modification Agreement, the deed to the Property, along with a bill of sale, assignment of leases and other conveyance documents (the "Conveyance Documents") have been placed in escrow with counsel to RAM 2. The Conveyance Documents will not be released to RAM 2 until the earliest to occur of (such date referred to herein as the "Extended Maturity Date"): (i) any date on which any action taken or omitted to be taken by the Partnership in bad faith, intended to hinder or impede RAM 2's exercise of its rights or remedies under the terms of the Mortgage Loan Modification Agreement, remains uncured for more than 10 days after notice of same from RAM 2; (ii) any date on or after March 1, 2002, upon the closing date of the sale or other conveyance of the Property (a) if RAM 2 identifies a bona fide third party purchaser to acquire the Property or (b) for any other reason deemed reasonably necessary by RAM 2 to avoid a material economic disadvantage to it; and (iii) March 1, 2003. The Mortgage Loan Modification Agreement further provides that 100% of the net operating income generated by the Property allocable to the period ending February 28, 2001, the original maturity date of the Mortgage Loan, will be retained by the Partnership. From and after March 1, 2001 until such time as the Conveyance Documents have been released, the Partnership will be entitled to receive $100,000 per annum pro-rated monthly and paid monthly to the extent cash flow permits and RAM 2 will be entitled to receive the balance of the net operating income generated by the Property to be applied to current interest and the outstanding principal and deferred interest on the Mortgage Loan. In addition, RAM 2 has agreed to release the Partnership and its affiliates from all claims for principal or interest due under the Mortgage Loan effective on the date that the Conveyance Documents are released to RAM 2 or such other party as agreed to by RAM 2. Such release will be effective provided that the Partnership (i) does not become the subject of any bankruptcy proceeding on or before one year from the date of release of the Conveyance Documents and (ii) has not perpetrated any fraud upon RAM 2. In addition, the Partnership will be entitled to a refund of expenses previously paid by it, to the extent that such expenses relate to any time period subsequent to February 28, 2001. Thereafter, the Partnership will use its cash flow and cash reserves to fund the payment of Partnership fees and expenses. To 9 the extent not used to pay Partnership fees and expenses, these funds will be available for distribution to the Limited Partners. However, there can be no assurance that the Partnership will have excess cash available, or that future distributions will be made to the Limited Partners. At March 31, 2001, the Partnership had cash and cash equivalents of $1,363,779. Under the terms of the Mortgage Loan, the Partnership was obligated to provide RAM 2 with a current appraisal of the Property upon RAM 2's request. If it was determined, based upon the requested appraisal, that the sum of (i) the principal balance of the Mortgage Loan plus all other then outstanding indebtedness secured by the Property and (ii) all accrued and unpaid interest on the Mortgage Loan calculated at a rate of 6.22% per annum compounded monthly through the date of such appraisal (that sum, the "Measurement Amount"), exceeded 85% of the appraised value of the Property, an amount equal to such excess (the "Excess Payment") would become immediately due and payable to RAM 2. Any amount so paid by the Partnership would be applied first against accrued and unpaid interest on the Mortgage Loan, and the balance, if any, against the principal thereof. In accordance with the terms of the Mortgage Loan Modification Agreement, RAM 2 was entitled to request an appraisal of the Property; however, if such appraisal indicated that no Excess Payment was due, RAM 2 would have no further appraisal rights. RAM 2 requested that the Property be appraised by Greenwich Realty Advisors, a real estate appraisal firm unaffiliated with the Partnership, the Managing General Partner or RAM 2. The appraisal, which was performed as of March 1, 2001, indicated a fair market value of $20 million for the Property. As of March 1, 2001 the Measurement Amount was $13,684,645. Because the Measurement Amount did not exceed 85% of the appraised value of the Property on that date, no Excess Payment was or is payable to RAM 2. Consequently, under the terms of the Mortgage Loan Modification Agreement, RAM 2 has no further appraisal right thereunder. Under the terms of the Mortgage Loan Modification Agreement, the Partnership will retain its interest in the Property until and unless the Conveyance Documents are released to RAM 2 in accordance with the terms thereof. In addition, the Partnership retained the right to repay the Mortgage Loan in accordance with its terms on any date prior to March 1, 2001. Thereafter, and prior to March 1, 2003, until RAM 2 notifies the Partnership that it has entered into a contract to sell or convey the Property, the Partnership will have the right to satisfy the Mortgage Loan for an amount equal to the sum of (x) the then unpaid principal balance of the Mortgage Loan, and all accrued interest thereon and other charges due thereunder and (y) 66% of the value of the Property in excess of the amount described in clause (x) above, as additional interest on the Mortgage Loan. If the Mortgage Loan is satisfied, the Conveyance Documents will be returned to the Partnership. In connection with the Partnership's entering into the Mortgage Loan Modification Agreement, Lawrence J. Cohen, the sole shareholder and director of Pembroke Companies Inc., which is the sole member and the manager of the Managing General Partner, has executed an unconditional limited guaranty of payment in the amount of the principal balance of the Mortgage Loan, all accrued and unpaid interest thereon and all other charges due thereunder, that will be effective only if Mr. Cohen or his affiliates cause the Partnership to file for bankruptcy or to commence a civil action seeking to hinder, impede or delay RAM 2's exercise of any right or remedy available to it. 10 Until November 1997, Levitz Furniture Corporation ("Levitz") had occupied approximately 23% of the space of the Partnership's property (i.e., approximately 53,000 out of approximately 233,000 square feet of net leasable area). In November 1997, Levitz, which had filed for protection under Chapter 11 of the Bankruptcy Code, vacated its space. Levitz ceased paying rent to the Partnership as of April 2, 1998. In 1999, Good Guys, Inc. ("Good Guys") vacated its premises and ceased paying rent under the lease as of December 1, 2000. In April 2001, the Partnership agreed to consent to Good Guys' sublet of its premises; in connection with this agreement Good Guys paid all of its past due rent. The vacancies at the Levitz and Good Guy spaces have resulted in a loss of income to the Partnership. These vacancies may have adversely affected the surrounding tenants and the Partnership's ability to attract new tenants, particularly in light of the limited visibility those tenants have to the main thoroughfare. See "Real Estate Market" below. The Partnership is actively seeking long-term, creditworthy substitute tenants. However, there can be no assurance the Partnership will succeed in finding long-term, creditworthy substitute tenants promptly or on terms comparable to those under the Levitz lease. During 1999, the Partnership entered into a short-term lease for the Levitz space with a then existing tenant at an annual rent substantially less than under the Levitz lease. The Partnership has the right to terminate this lease upon written notice in the event that the Partnership secures a long-term, creditworthy tenant for the space. The level of leasing activity cannot be predicted, particularly in light of the Levitz situation, and, therefore, the amount of further capital expenditures arising from leasing activity is uncertain. There can be no assurance the Partnership will have sufficient liquidity to make such capital expenditures. Real Estate Market The market value of the Property reflects real estate market conditions in the vicinity of Property. Recently built shopping centers in the vicinity have increased competition for tenants. This competitive factor, together with the fact that much of the unleased space in the Partnership's property (including the Levitz space) has only limited visibility to the main thoroughfare has hindered the lease-up of new space. Inflation Inflation has not had a material impact on the Partnership's operations or financial condition in recent years and is not expected to have a material impact in the foreseeable future. Results of Operations Three Months Ended March 31, 2000 Compared to Three Months Ended March 31, 2000 The Partnership realized a net loss of $387,684 ($3.98 per Unit) for the three months ended March 31, 2001 compared to a net loss of $276,908 ($2.84 per Unit) for the 11 corresponding 2000 period, an increased loss of $110,776. The increased loss was primarily a result of an increase in mortgage loan interest expense, administrative expenses, and depreciation and amortization. Revenues decreased from 2000 to 2001, principally due to decreased real estate tax reimbursements. Costs and expenses increased from 2000 to 2001 primarily due to an increase in mortgage loan interest expense, administrative expenses, and depreciation and amortization. Mortgage loan interest expense increased due to the compounding effect from the deferral of the interest expense on the Mortgage Loan. Administrative expenses increased in the 2001 period principally due to increased legal fees. Depreciation and amortization increased due to the amortization of costs associated with the Mortgage Loan modification. 12 PART II - OTHER INFORMATION ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: None (b) Reports on Form 8-K: Registrant filed the following reports on Form 8-K during the quarter ended March 31, 2001: Current Report on Form 8-K dated February 8, 2001. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HIGH CASH PARTNERS, L.P. By: Pembroke HCP, LLC Managing General Partner By: Pembroke Companies, Inc. Managing Member Dated: May 14, 2001 By: /s/ Lawrence J. Cohen --------------------- President and Principal Financial and Accounting Officer

HIGH CASH PARTNERS L P 10-Q