SECOND SUPPLEMENT

                          DATED FEBRUARY 6, 2001 TO THE

                        CONFIDENTIAL PLACEMENT MEMORANDUM

                               DATED JUNE 23, 2000

            Fayetteville Lithotripters Limited Partnership-Arizona I

                  Fayetteville  Lithotripters Limited  Partnership-Arizona I, an
Arizona  limited  partnership  (the  "Partnership"),  by this Second  Supplement
hereby amends and  supplements its  Confidential  Private  Placement  Memorandum
dated June 23,  2000,  as amended  (the  "Memorandum").  Capitalized  terms used
herein and not otherwise  defined have the meanings  provided in the Memorandum.
Persons who have  subscribed  for or are  considering an investment in the Units
offered by the Memorandum should carefully review this Second Supplement.

Extension of the Offering

                  The termination  date of the offering is February 11, 2001. In
order  to  provide  potential  new  subscribers  the  time  and  opportunity  to
thoughtfully  review the information  contained in this Second  Supplement,  the
General  Partner  hereby extends the offering  termination  date until April 30,
2001.  The  offering   termination  date  is  likewise   extended  for  existing
subscribers  that follow the steps to reaffirm their  subscriptions  as outlined
herein.

Stark II Final Regulations

                  As set forth in the Memorandum, on January 9, 1998, the Health
Care Financing  Administration  ("HCFA") published proposed regulations designed
to interpret  and clarify the  application  of certain  legislation  prohibiting
physician  self-referral  of Medicare  and Medicaid  patients  for  specifically
enumerated  designated  health  services,  including  inpatient  and  outpatient
hospital  services  ("Stark II"). As these  regulations were simply proposed and
subject to future  modification or repeal, the legal status of the Partnership's
method of  operations  remained  unaffected  by proposed  regulations  while the
issuance  of final Stark II  regulations  was  awaited.  On January 4, 2001 HCFA
issued  the  first  of two  rules  intended  to  implement  the  final  Stark II
regulations (the "Final Regulations"). The first rule ("Phase I") implements the
Final  Regulations  pertaining  to (i) Stark II's  general  prohibition  against
physician   self-referrals   to   entities   in  which  they  have  a  financial
relationship,  (ii) the general exceptions  applicable to both the ownership and
compensation arrangement prohibitions,  (iii) certain new regulatory exceptions,
and (iv) the  definitions  that are used  throughout  Stark II. HCFA  intends to
publish a second  final  rule  ("Phase  II")  shortly  which  will  address  the
remainder of the Stark II statute and its  application to the Medicaid  program,
as well as certain  proposals  for new  exceptions  not included in the proposed
Stark II regulations, but suggested in the public comments thereto. Phase I will
become  effective  on January 4, 2002.  HCFA has delayed the  effective  date of
Phase I to allow  individuals  and  entities  engaged in  business  arrangements
impacted by Phase I time to restructure  those  arrangements  to comply with the
provisions in Phase I.  Consequently,  as discussed  below, the Partnership will
have time to take the steps required to ensure Stark II compliance.

                  Currently,   Medicare  and   Medicaid   only   reimburse   for
lithotripsy  if the service is  provided  through a  hospital.  The  lithotripsy
services provided by the Partnership to  Medicare/Medicaid  hospital outpatients
are provided  "under  arrangements"  with  hospitals,  with the treatment  being
billed under the hospital's  provider  billing  number.  Prior to the release of
Phase I, the existence of ambiguities  and the lack of  definitions  for certain
terms in the Stark II statute,  as well as the uncertainty as to the contents of
the Final Regulations,  gave rise to alternative interpretations of the Stark II
statute.  One  alternative  interpretation  led to a reasonable  conclusion that
Stark  II  did  not   apply  to  the   operations   of  the   Partnership.   See
"Regulation-Self-Referral Restrictions" in the Memorandum.

                  As  related  in  the  Memorandum,  HCFA  acknowledged  in  its
commentary to the proposed Stark II regulations  that physician  overutilization
of lithotripsy is unlikely and specifically  solicited comments on whether there
should  be a  regulatory  exception  to Stark II  specifically  for  lithotripsy
services. See  "Regulation-Self-Referral  Restrictions" in the Memorandum.  Upon
consideration of numerous public comments  received on the proposed  regulations
and upon  review of the Stark II  legislative  history,  HCFA  concludes  in its
commentary  to the  Final  Regulations  that it did not  have the  authority  to
exclude  lithotripsy as an inpatient or outpatient  hospital  service covered by
Stark II.  Consequently,  the  Partnership's  practice of providing  lithotripsy
services  "under  arrangements"  to  hospitals  for  treatment  of Medicare  and
Medicaid patients must comply with the provisions of the Final Regulations.

                  Although the General  Partner is  disappointed  that the Final
Regulations  do not  provide  a  specific  Stark II  exception  for  lithotripsy
services, it is pleased that the regulations provided needed clarity and certain
opportunities  for the  Partnership to operate in compliance with Stark II. HCFA
asserts  in Phase I that its  express  purpose  in the Final  Regulations  is to
interpret  the  prohibitions  of  Stark  II  narrowly  while   interpreting  its
exceptions  broadly.  HCFA  also  notes its  desire  to  permit  physician-owned
lithotripsy  ventures to continue if such ventures are  structured  such that no
direct or indirect compensation  arrangement is created, or the arrangement fits
within a compensation  arrangement  exception to the Stark II statute. The Final
Regulations  accomplish HCFA's stated purpose and desire by: (i) clarifying that
physician-owned lithotripsy vendors providing services "under arrangements" with
hospitals   are  either   structured   such  that  they  are  not   compensation
arrangements,  as  defined  in the  Final  Regulations,  or that  they need only
qualify under a compensation exception,  and not an ownership interest exception
as well;  (ii)  broadening  certain  existing  Stark II statutory  exceptions by
redefining certain standards to allow "per use" lithotripsy payments, as long as
such  payments  are at fair  market  value;  and (iii)  adding  two new Stark II
regulatory exceptions that are potentially available for Partnership operations.

                  In  order  for the  Partnership  to  comply  with  Stark II as
modified by the Final  Regulations,  the Partnership's  financial  relationships
with its  Contract  Hospitals  must either  fall  outside  the  definition  of a
compensation  arrangement,  or comply with a Stark II  compensation  arrangement
exception. The General Partner, along with the Partnership's legal counsel, have
worked  to   establish  a   compliance   program  that  is  in  the  process  of
implementation.  As noted above, due to the Final Regulations  delayed effective
date,  the  Partnership  has until January 4, 2002 to take  reasonable  steps to
review the Partnership's  operations under the Final Regulations.  Specifically,
the  Partnership  intends to work with all its Contract  Hospitals to review and
modify, if necessary, its lithotripsy service contracts so that they satisfy the
standards  set  forth in the new  Final  Regulations.  To the  extent  financial
arrangements   with  Contract   Hospitals   meet  the   definition  of  indirect
compensation  under the Final Regulations,  then the Partnership  intends to see
that such  agreements  fit  within  the new  indirect  compensation  arrangement
exception.  Indirect compensation  arrangements have several important elements,
including the presence of an intervening entity,  such as the Partnership,  that
directly  links  referring  physician  owners  with  the  entity  providing  the
designated  health  service (e.g.,  the  Hospital).  In order to comply with the
indirect compensation exception,  the Partnership's hospital contracts must meet
each of the following standards:

o                      The  compensation  received  directly by the  Partnership
                       from the Contract Hospitals must be fair market value for
                       the items or services  provided under the arrangement and
                       must  not take  into  account  the  value  or  volume  of
                       referrals or other  business  generated by the  referring
                       physician for the Contract Hospital;

o                      The compensation  arrangement between the Partnership and
                       the Contract Hospitals must be set out in writing, signed
                       by the parties,  and specify the services  covered by the
                       arrangement; and

o                      The   compensation   arrangement  must  not  violate  the
                       Anti-Kickback   Statute   or  any  laws  or   regulations
                       governing billing or claims submission.

                  In  regard  to  the  Partnership's  operations,  the  indirect
compensation  arrangement  exception  may be  used  with  respect  to any or all
payments made by Contract  Hospitals to the Partnership,  including payments for
the use of the  lithotripter,  as well as the personal  services of a technician
and/or nurse. It is important to note that the Final  Regulations  allow per use
payments for  lithotripsy  services,  as long as they reflect fair market value.
The General Partner believes that the Partnership's  current Hospital  Contracts
can be  modified to the extent  necessary  to satisfy  the  requirements  of the
indirect  compensation   arrangement  exception,   and  that  accordingly,   the
Partnership will be able to operate in compliance with Stark II. To succeed with
its  compliance  plan, the General  Partner must obtain the Contract  Hospitals'
cooperation  in making any  necessary  revisions  to their  lithotripsy  service
agreements  consistent  with the indirect  compensation  arrangement  exception.
Expired  hospital  contracts,  such  as the  Samaritan  Health  System  contract
discussed  below,  must be  reaffirmed  in  writing  signed  by the  parties  in
compliance  with the indirect  compensation  exception.  Whereas the Partnership
believes that its financial  relationships  with Contract  Hospitals have always
met the fair market value  standard,  the Final  Regulations  clearly shifts the
burden  to the  contracting  parties  that  rely  on the  indirect  compensation
exception  to prove the standard is met.  The  Partnership  intends to engage an
independent   valuation   expert  or  pursue   other   commercially   reasonable
methodologies to assist it in meeting that burden of proof.

                  The General Partner  believes it will  successfully  implement
its above described  compliance  plan,  however,  there can be no assurance that
such  will  be  the  case.   Contract  Hospitals  may  not  cooperate  with  the
Partnership.  Further, reliable fair market value assessments regarding Contract
Hospital  payments  to  the  Partnership  may be  difficult  to  obtain.  If the
Partnership  is unable to  successfully  implement  its plan to comply  with the
indirect compensation  arrangement exception (to the extent a Stark II exception
is needed),  then the General Partner intends to explore and implement any other
available  options that would allow the  Partnership to comply with Stark II, as
well  as  all  other  material  health  care  statutes  and  regulations.   Such
alternative  options may include  contracting  with  ambulatory  surgery centers
("ASCs")  rather  than  hospitals,  since  lithotripsy  services at ASCs are not
covered  by Stark II.  The  Medicare  and  Medicaid  programs,  however,  do not
reimburse for lithotripsy  services at ASCs at this time. It is anticipated that
ASCs will receive  reimbursement for treatment of Medicare and Medicaid patients
in the near future, but there can be no assurance that such will be the case. It
should be noted that there can be no assurances that compliance  action taken by
the Partnership  under any potential  alternative can be carried out in a manner
that does not have a material adverse effect on the Partnership.

Hospital Contracts

                  The  Partnership's  Hospital  Contract with  Samaritan  Health
System expired on June 30, 2000. The Samaritan  Health System Hospital  Contract
covers  lithotripsy  services  provided  by the  Partnership  at  the  following
hospitals:  Desert Samaritan  Regional Medical Center;  Good Samaritan  Regional
Medical  Center;  Thunderbird  Samaritan  Regional  Medical  Center and Maryvale
Hospital.  The  Partnership  continues to provide  services at these  facilities
under the provisions of the original  agreement on a  month-to-month  basis. The
General Partner is currently negotiating a renewal of the Hospital Contract with
Samaritan Health System. No assurance can be given that the General Partner will
be successful in procuring  such renewal.  The inability of the  Partnership  to
renew  this  important  contract  would have a  material  adverse  impact on the
Partnership.

The General Partner

     Pursuant to his recent retirement,  effective December 31, 2000, Dr. Joseph
Jenkins  resigned as Director,  and as President and Chief Executive  Officer of
the General  Partner.  Dr.  Jenkins'  position on the Board of Directors will be
assumed by Brad Hummel.  Mr.  Hummel will also succeed Dr.  Jenkins as President
and Chief Executive  Officer of the General Partner.  Set forth below is a brief
description of Mr. Hummel's background.

                  Brad Hummel was elected  President and Chief Executive Officer
of Prime in May 2000, and previously  served as Chief Operating Officer of Prime
from  October 1999 until May 2000.  Effective  January 1, 2001,  Mr.  Hummel was
appointed  a Director of the General  Partner and was elected as  President  and
Chief Executive  Officer of the General  Partner.  From 1984 to 1999, Mr. Hummel
served in various operating capacities at Diagnostic Health Services, and served
as its Chief Executive Officer from ____________ until _______________.

Investor Election Options

                  Each Investor who has already delivered executed  subscription
materials to the Sales Agent must make an election to either (i)  withdraw  from
the  Offering,  or  (ii)  reaffirm  his  or  her  subscription  in  view  of the
information provided in this Second Supplement. Instructions on how to make this
election are set forth below under  "Reaffirmation  Statement" and in Appendix A
attached  hereto.  Investors  should  note that the  failure to timely  make any
election,  as provided  herein,  by April 27, 2001 will be deemed an election to
withdraw  one's  subscription  in the  Partnership.  If an  Investor  elects  to
withdraw or is deemed to  withdraw,  the  General  Partner,  Sales Agent  and/or
Escrow  Agent (as  applicable)  will  immediately  return to such  Investor  all
executed  subscription  documents,  subscription  funds (plus  interest) held in
escrow,  as  well  as all  executed  Loan  Documents,  if  any.  If an  Investor
affirmatively  elects  to  reaffirm  his or her  subscription,  then  his or her
subscription funds will remain in escrow and his or her Loan Documents,  if any,
will be retained by the Sales Agent until his or her subscription is accepted or
rejected by the Partnership or the termination of the Offering, whichever occurs
first.

The Reaffirmation Statement

                  Attached  to  this  Second  Supplement  as  Appendix  A  is  a
Reaffirmation  Statement that is to be utilized by each subscribing  Investor to
evidence his or her  election to either (i) withdraw  from the Offering and have
returned his or her  subscription  funds (plus interest) and Loan Documents,  if
any, or (ii) reaffirm his or her subscription.  The  Reaffirmation  Statement is
self-explanatory.  Each  Investor  should  mark  the box  evidencing  his or her
election,  and then sign, date and return the Election Ballot to the Sales Agent
in the  enclosed,  self-addressed  stamped  envelope  by  April  27,  2001.  Any
subscribing  Investor  who  does  not  timely  return  his or her  Reaffirmation
Statement  by  April  27,  2001  will be  deemed  to have  withdrawn  his or her
subscription in the Partnership.

                  Any questions you may have regarding this Second Supplement or
the Reaffirmation Statement should be directed to Stan Johnson at 1-520-906-4730
or Jay Abbes at 1-800-248-0620.


<PAGE>


           FAYETTEVILLE LITHOTRIPTERS LIMITED PARTNERSHIP - ARIZONA I

                         AN ARIZONA LIMITED PARTNERSHIP

                             REAFFIRMATION STATEMENT

                  Capitalized  terms  used  herein are  defined in the  Glossary
appearing in the Partnership's Confidential Private Placement Memorandum of June
23, 2000, as amended,  (the  "Memorandum")  and accompanying  Second  Supplement
thereto.

                  The undersigned hereby acknowledges  receipt of the Memorandum
and the Second  Supplement.  After careful  review of the  Memorandum and Second
Supplement,  by  completion  and execution of this  Reaffirmation  Statement the
undersigned  wishes to evidence his or her election  either to withdraw from the
Offering or to reaffirm his or her subscription.

                  Please check only one of the boxes set forth below to evidence
your desired election:

                  ?        I wish to withdraw  from the  Offering  and desire to
                           have my  subscription  funds (plus interest) and Loan
                           Documents, if any, returned to me.

                  ?        I wish to  reaffirm  my  subscription  and  waive any
                           withdrawal  rights  associated  with the  information
                           provided in the Second Supplement.

                  This _______ day of ____________________, 2001.


SIGNATURE FOR ENTITIES                      SIGNATURE FOR INDIVIDUALS

----------------------------------          ----------------------------------
Print or Type Name of Subscriber                     Signature of Subscriber


By:_______________________________          _________________________________
                                            Print or Type Name as set forth in
      _______________________________              Subscription Agreement
      Print or Type Name and Title