SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]

[X] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12

UPTOWNER INNS, INC.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

- --------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT IF OTHER THAN REGISTRANT)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(1) and
0-11.
1) Title of each class of securities to which transaction
applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):

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4) Proposed maximum aggregate value of transaction:

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5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.

Amount Previously Paid:_________________________________________________________

Form, Schedule or Registration Statement No.:___________________________________

Filing Party:___________________________________________________________________

Date Filed:_____________________________________________________________________

UPTOWNER INNS, INC.
741 5th AVENUE
HUNTINGTON, WEST VIRGINIA 25701
(304) 525-8162

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY __, 2004

As a shareholder of Uptowner Inns, Inc. ("Uptowner" or the "company"),
you are hereby given notice of and invited to attend in person or by proxy the
Special Meeting of Shareholders of Uptowner to be held at the offices of the
company at 1415 4th Avenue, Huntington, West Virginia, on January _____, 2004,
at _______ ________.m., local time, for the following purposes:

1. To approve and adopt an amendment to the Articles of
Incorporation (the "Articles of Incorporation") of Uptowner
Inns, Inc., which amendment effectuates a Reverse Stock Split
(the "Reverse Stock Split") of Uptowner's Common Stock that
would result in (a) shareholders receiving one share of new
common stock, $1.00 par value (the "New Common Stock") owned
as of the effective date, (b) shareholders receiving cash in
lieu of any fractional share they would otherwise be entitled
to receive as a result of the Reverse Stock Split at a rate of
$1.07 per share on a pre-split basis, and (c) the reduction of
Uptowner's authorized shares of Common Stock from 10,000
shares to 500 authorized shares, which is in proportion to the
Reverse Stock Split. The Reverse Stock Split is proposed to
terminate Uptowner's reporting obligations under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") and is expected to reduce Uptowner's expenses associated
with filing reports with the Securities and Exchange
Commission. The amendment to the Articles of Incorporation
provide as follows:

RESOLVED, that Article IV of the Articles of Incorporation of
the Corporation be amended to read, in its entirety, as
follows:

IV. The amount of the total authorized capital of the
Corporation shall be Five Hundred Dollars ($500), which shall
consist of Five Hundred (500) shares of Common Stock, par
value $1.00 per share.

2. To have the proxies vote in accordance with the recommendation
of management as to any other matters, which may properly come
before the Special Meeting or any adjournments thereof.

The board of directors has fixed the close of business on December 10,
2003, as the record date (the "Record Date") for determining of shareholders
entitled to notice of and to vote at such meeting and any adjournment thereof.
Only shareholders at the close of business on the Record Date are entitled to
notice of and to vote at such meeting. For the reasons set forth in the Proxy
Statement, the board of directors unanimously recommends that you vote for
approval of the Reverse Stock Split. SHAREHOLDERS WHO DO NOT VOTE FOR THE
PROPOSAL, WHO DELIVER, BEFORE THE VOTE IS TAKEN, WRITTEN NOTICE OF THE
SHAREHOLDER'S INTENT TO DEMAND PAYMENT IF THE TRANSACTION IS CONSUMMATED, AND
WHO FOLLOW THE PROCEDURES SET FORTH ON APPENDIX I TO THE PROXY STATEMENT, WILL
HAVE APPRAISAL RIGHTS UNDER WEST VIRGINIA LAW.

You are cordially invited to attend the meeting. However, whether or
not you expect to attend the meeting, it is very important for your shares to be
represented at the meeting. We respectfully request that you date, execute and
mail promptly the enclosed proxy in the enclosed stamped envelope for which no
additional postage is required if mailed in the United States. A proxy may be
revoked by a shareholder by notifying the secretary of Uptowner in writing at
any time prior to its use, by executing and delivering a subsequently dated
proxy or by personally appearing at the Special Meeting and casting your vote,
each as specified in the enclosed Proxy Statement.

By Order of the Board of Directors

Carl Midkiff
President and Chief Executive Officer

Dated: December_______, 2003

YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN PROMPTLY
THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED.

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UPTOWNER INNS, INC.
741 5th AVENUE
HUNTINGTON, WEST VIRGINIA 25701
(304) 525-8162

PROXY STATEMENT
FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY __, 2004

To Our Shareholders:

This Proxy Statement is furnished to the shareholders of Uptowner Inns,
Inc. ("Uptowner") for use at the Special Meeting of Shareholders on January ___,
2004 (the "Special Meeting"), or at any adjournment or adjournments thereof, for
the purposes set forth in the accompanying Notice of Special Meeting of
Shareholders. The enclosed proxy is solicited on behalf of the board of
directors of Uptowner and can be revoked at any time prior to the voting of the
proxy (as provided herein). Unless a contrary choice is indicated, all duly
executed proxies received by Uptowner will be voted as follows:

RESOLVED, that Article IV of the Articles of Incorporation of
the Corporation be amended to read, in its entirety, as
follows:

IV. The amount of the total authorized capital of the
Corporation shall be Five Hundred Dollars ($500), which shall
consist of Five Hundred (500) shares of Common Stock, par
value $1.00 per share.

2. The proxies will be voted in accordance with the
recommendation of management as to any other matters, which
may properly come before the Special Meeting or any
adjournments thereof.

The record date of shareholders entitled to vote at the Special Meeting
was taken at the close of business on December 10, 2003 (the "Record Date"). The
approximate date on which this Proxy Statement and the enclosed proxy are first
being sent to shareholders is December___ , 2003. The mailing address of
Uptowner is 741 5th Avenue, Huntington, West Virginia 25701. The combined
Annual Report on Form 10-K for the fiscal year ended June 30, 2003 as well as
Form 10-Q for the quarter ended September 30, 2003, are enclosed with this Proxy
Statement.

Shareholders who do not vote in favor of the proposal and comply with
the provisions of West Virginia Code Sections 31D-13-1302, et seq. will have
appraisal rights with respect to their shares. Those Code sections are attached
as Appendix I to this Proxy Statement.

No person is authorized to give any information or to make any
representation not contained in this Proxy Statement or related Schedule 13E-3,
and if given or made, such information or representation should not be relied
upon as having been authorized by Uptowner.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE TRANSACTION PROPOSED HEREIN OR
DETERMINED IF THIS PROXY STATEMENT IS TRUTHFUL OR COMPLETE. THE COMMISSION HAS
NOT PASSED UPON THE FAIRNESS OR MERITS OF THE TRANSACTIONS CONTEMPLATED HEREBY,
NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS PROXY
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

-2-

TABLE OF CONTENTS

PAGE

SUMMARY OF TERMS OF REVERSE STOCK SPLIT.................................................... 1

SPECIAL FACTORS............................................................................ 2
Purpose and Reasons for the Reverse Stock Split....................................... 2
Background............................................................................ 4
Alternatives Considered by the Board of Directors..................................... 5
Valuation............................................................................. 6
Fairness of the Reverse Stock Split Proposal.......................................... 6
Certain Effects of Reverse Stock Split Proposal on Uptowner's Shareholders............ 8
Federal Income Tax Consequences....................................................... 13

GENERAL INFORMATION........................................................................ 13
Voting Procedures and Revocability of Proxies......................................... 13
Persons Making the Solicitation....................................................... 14

PROPOSAL--REVERSE STOCK SPLIT AND RELATED
AMENDMENT TO UPTOWNER'S ARTICLES OF INCORPORATION.......................................... 14
General............................................................................... 14
Payment of Shares..................................................................... 15
Vote Required......................................................................... 15
Source and Amount of Funds or Other Consideration; Expenses of Transaction............ 16

MANAGEMENT................................................................................. 16
Information with Respect to the Directors and Executive Officers...................... 16
Committees of the Board of Directors.................................................. 17
Report of Carl Midkiff Concerning the Audit........................................... 17
Directors' Compensation............................................................... 18
Board of Directors Report on Executive Compensation................................... 18
Section 16(a) Beneficial Ownership Reporting Compliance............................... 19
Executive Compensation and Other Information.......................................... 19

INFORMATION ABOUT UPTOWNER INNS, INC. ..................................................... 20
General............................................................................... 20
Property.............................................................................. 21
Legal Proceedings..................................................................... 22
Security Ownership of Certain Beneficial Owners and Management........................ 23

OTHER MATTERS.............................................................................. 24

FORWARD-LOOKING STATEMENTS................................................................. 24

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PAGE

AVAILABLE INFORMATION...................................................................... 24

DOCUMENTS INCORPORATED BY REFERENCE........................................................ 25

APPENDICES -

Appendix I - West Virginia Code, Article 13. Appraisal Rights, Sections
31D-13-1301 to - 03; Sections 31D-13-1320 to - 26; Sections
31D-13-1330 and - 1331.

Appendix II - Valuation of Uptowner Inns, Inc. as of June 30, 2003

Appendix III - Articles of Amendment to Articles of Incorporation of
Uptowner Inns, Inc.

-ii-

SUMMARY OF TERMS OF REVERSE STOCK SPLIT

THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROXY STATEMENT
AND MAY NOT CONTAIN ALL OF THE INFORMATION THAT IS IMPORTANT TO YOU. TO BETTER
UNDERSTAND THE TERMS AND CONDITIONS OF THE REVERSE STOCK SPLIT, AS WELL AS THE
CONSEQUENT AMENDMENTS TO OUR ARTICLES OF INCORPORATION, YOU SHOULD CAREFULLY
READ THIS ENTIRE DOCUMENT, ITS ATTACHMENTS AND THE OTHER INFORMATION TO WHICH WE
REFER.

- The board of directors of Uptowner has unanimously approved, and
recommended that the shareholders approve, a 1-for-10,000 reverse
split of the Existing Common Stock. Each 10,000 shares of
Existing Common Stock outstanding immediately prior to the
completion of the Reverse Stock Split will be automatically
converted into one share of New Common Stock (see "Special
Factors--Background" on Page 2).

- No new certificates representing fractional shares of the New
Common Stock will be issued. Instead, each fractional share will
be purchased by Uptowner for a cash payment equal to $1.07 per
share on a pre-split basis. The $1.07 per share payment reflects
the proportionate value of $1,600,000. This valuation is based
upon the valuation conducted by Somerville & Company PLLC
attached hereto as Appendix II (See "Special Factors--Background"
on page 2; and "--Fairness of the Reverse Stock
Split Proposal" on page 6).

- As a result of the Reverse Stock Split, persons who hold fewer
than 10,000 shares of Existing Common Stock immediately prior to
the Reverse Stock Split will have their entire interest in the
New Common Stock purchased by Uptowner and will no longer be
holders of New Common Stock (see "Special Factors--Certain
Effects of Reverse Stock Split Proposal on Uptowner's
Shareholders" on page 8).

- The principal purpose of the Reverse Stock Split is to reduce the
number of shareholders of record of Uptowner's Common Stock to
fewer than 300, enabling Uptowner to terminate its status as a
reporting company under the Exchange Act, and thereby eliminate
the significant expenses associated with being a reporting
company (see "Special Factors--Purpose and Reasons for the
Reverse Stock Split" on page 2).

- The principal advantage of the Reverse Stock Split to Uptowner
and its shareholders is the direct and indirect expense savings
that are expected to be realized by termination of Uptowner's
reporting company status (see "Special Factors--Purpose and
Reasons for the Reverse Stock Split" on page 2).

- A principal advantage of the Reverse Stock Split to shareholders
who held fewer than 10,000 shares of Existing Common Stock is
that Uptowner will purchase their fractional shares of New Common
Stock thereby creating a liquidity event for Uptowner's
shareholders (see "Special Factors--Certain Effects of Reverse
Stock Split Proposal on Uptowner's Shareholders" on page 8).

-1-

- The principal disadvantages of the Reverse Stock Split are that
most of Uptowner's shareholders will cease to be shareholders
following the Reverse Stock Split and will not receive certain
benefits of the Reverse Stock Split (see "Special Factors--
Certain Effects of Reverse Stock Split Proposal on Uptowner's
Shareholders" on page 8).

- Approval of the amendment to the Articles of Incorporation to
effect the Reverse Stock Split will require approval by holders
of a majority of the outstanding shares of Existing Common Stock
(see "Proposal--Reverse Stock Split and Related Amendments to
Uptowner's Articles of Incorporation--Vote Required" on page
14).

- Each shareholder whose fractional share is repurchased by
Uptowner will recognize gain or loss for federal income tax
purposes measured by the difference between the shareholder's
basis in the fractional share and the cash consideration received
for the fractional share. The gain or loss will be capital gain
or loss if the share was held as a capital asset (see "Special
Factors--Federal Income Tax Consequences" on page 13).

- Under the West Virginia Business Corporation Act, shareholders
have appraisal rights and the right to demand payment for their
shares (see "Proposal--Reverse Stock Split and Related
Amendments to Uptowner's Articles of Incorporation--Appraisal
Rights" on page 14).

- Uptowner's board of directors has concluded that the Reverse
Stock Split is fair to Uptowner's shareholders, including the
unaffiliated shareholders of Uptowner from a financial point of
view. This conclusion was based on the valuation performed by
Sommerville & Company, PLLC and based upon the analysis of
several factors described in detail in the section of this Proxy
Statement titled "Special Factors--Fairness of the Reverse
Stock Split Proposal" (see "Special Factors--Fairness of the
Reverse Stock Split Proposal" on page 6).

SPECIAL FACTORS

PURPOSE AND REASONS FOR THE REVERSE STOCK SPLIT

The reason for the Reverse Stock Split is to relieve Uptowner of the
costs and burdens of remaining a public company and reduce the costs associated
with servicing many small shareholder accounts.

The board of directors believes that there are considerable costs and
burdens to Uptowner in remaining a public reporting company. To comply with its
obligations under the Exchange Act, Uptowner incurs direct and indirect costs
associated with compliance with the filing and reporting requirements imposed on
public companies. Examples of direct costs savings from termination of
registration of common shares include: lower printing and mailing costs; reduced

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reporting and disclosure requirements due to the company's private status; and
reduction in direct expenses such as word processing and preparing electronic
filings in the EDGAR format prescribed by the Securities and Exchange Commission
(the "SEC" or the "Commission"). Uptowner has determined that there will be a
reduction in audit and legal fees, and additional savings in directors' fees and
other personnel costs once Uptowner is no longer subject to the reporting
requirements of the Exchange Act. Uptowner also incurs indirect costs as a
result of executive time expended to prepare and review such Exchange Act
filings. Ceasing registration of the Common Stock is expected to reduce
substantially many of these costs.

Uptowner also expects the Reverse Stock Split to reduce the cost of
servicing shareholder accounts. The costs of printing and mailing materials to
shareholders increases for each shareholder account, regardless of the number of
shares held by the shareholder. Many of Uptowner's shareholders hold a
relatively small number of shares, and the cost of servicing such accounts is
disproportionate to the size of the holdings.

The Reverse Stock Split would not only reduce these servicing expenses,
but would also provide a cash payment to holders of fewer than 10,000 shares for
their interest in Uptowner. Shareholders of record owning more than 10,000
shares would receive a cash payment in lieu of the fractional share they would
otherwise be entitled to receive as a result of the Reverse Stock Split.

Based on its experience, Uptowner believes that total annual savings of
approximately $75,000 in previously estimated costs of continuing as a public
company may be realized by going private. This amount, however, is just an
estimate, and the actual savings to be realized may be higher or lower than such
estimate.

If the Reverse Stock Split is approved and implemented, Uptowner
believes that the number of shareholders of record of Uptowner's common shares
will be fewer than 300 and will number eight. Uptowner intends to terminate the
registration of its New Common Stock under the Exchange Act pursuant to Section
12(g)(4) of the Exchange Act. Following the Reverse Stock Split, the decision by
Uptowner to terminate Exchange Act registration upon implementation of the
Reverse Stock Split does not require shareholder approval and will not be voted
on at the Special Meeting. Uptowner's duty to file periodic reports with the
SEC, such as quarterly and annual reports, will be suspended once Uptowner has
fewer than 300 shareholders of record and has filed the appropriate form with
the SEC. Uptowner will become a private company, and there will be no
opportunity for a public market for Uptowner's securities to develop.

In consideration of the aforementioned reasons, Uptowner's board of
directors on October 17, 2003, approved, subject to approval by Uptowner's
shareholders, a proposal to effect the Reverse Stock Split and the amendment to
Uptowner's Articles of Incorporation.

No unaffiliated representative has been retained to act solely on
behalf of unaffiliated shareholders for purposes of negotiating the terms of the
Reverse Stock Split. Additionally, the board made no specific provision to grant
unaffiliated shareholders access to Uptowner's corporate files, except as may be
required by the West Virginia Business Corporation Act, or to

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obtain counsel. Uptowner has obtained a valuation from the accounting firm of
Somerville & Company, PLLC. Somerville & Company, PLLC provides non-auditing
services for Uptowner.

BACKGROUND

At a board of directors' meeting in July 2002, the board discussed the
cost of the company's compliance with the requirements of being an SEC reporting
company and addressed the issue of the feasibility of terminating the company's
reporting obligations under the Exchange Act. At that meeting, the board
authorized the company's chief executive officer to engage the law firm, Jackson
Kelly PLLC, to study the legal ramifications of and to determine the best method
for the company to terminate its Exchange Act reporting obligations. Pursuant to
the advice of Jackson Kelly PLLC, the company engaged the accounting firm,
Somerville & Company, PLLC, to prepare a valuation of the company's stock with a
view to engaging in a reverse stock split to reduce the number of the company's
shareholders to below 300. Additionally, Jackson Kelly PLLC was instructed to
prepare the necessary SEC filings for a going private transaction.

At a board of directors' meeting on October 17, 2003, management
discussed the draft of the company's 13E-3 Transaction Statement and Proxy
Statement. Management and the board reiterated its view that Uptowner may expend
substantial amounts to maintain its present status as a public company while
Uptowner and its shareholders are deriving few, if any, benefits therefrom,
since Uptowner's Common Stock is not actively traded. The board considered the
advantages and disadvantages of being a private company.

At that meeting, Jackson Kelly PLLC discussed with the board a reverse
stock split as well as other options for taking Uptowner private. After
discussion with legal counsel and other advisors, the board determined that a
Reverse Stock Split was feasible in Uptowner's current situation.

The board discussed the fairness of the Reverse Stock Split to the
shareholders who will receive New Common Stock. See "Fairness of the Reverse
Stock Split Proposal" below. Because of the estimated cost savings associated
with no longer being a public company, the board concluded that a Reverse Stock
Split would be fair to such shareholders. Uptowner has not solicited any third
party offers to merge or acquire Uptowner, nor did it authorize any member of
the board of directors or unaffiliated party to do so.

Management recommended that a ratio of 1-to-10,000 would reduce the
record shareholder population below 300 while allowing adequate margin for any
increase in the number of shareholders that might occur prior to the
effectiveness of a Reverse Stock Split (for example, as a result of holders with
shares in "street name" requesting that share certificates be issued in their
own name, or persons other than current shareholders purchasing shares). Also,
this ratio would eliminate the cost of servicing many small shareholder
accounts.

Uptowner and its board of directors are proposing the Reverse Stock
Split at this time because the cost of remaining a public company is
significant, especially in relation to the remaining net assets and status of
Uptowner.

-4-

After the completion of the discussions, the Reverse Stock Split and
all corporate actions necessary in connection therewith were approved
unanimously by the board of directors, which directed that the Reverse Stock
Split be submitted for approval at a meeting of Uptowner's shareholders.

Failure to approve the Reverse Stock Split will continue Uptowner's
costs of being a public company with minimal corresponding benefit.

If the shareholders approve the Reverse Stock Split, Uptowner intends
to file an amendment to Uptowner's Articles of Incorporation with the Secretary
of State of the State of West Virginia in substantially the form attached hereto
as Appendix III. The Reverse Stock Split will become effective on the date the
amendment is filed with the Secretary of State of the State of West Virginia, or
such later date as is specified in the filing (the "Effective Date"). Uptowner
expects the amendment to become effective as soon as practicable following the
Special Meeting.

ALTERNATIVES CONSIDERED BY THE BOARD OF DIRECTORS

The board of directors considered alternative transactions to reduce
the number of shareholders but ultimately determined that the Reverse Stock
Split was the preferred method. The board of directors considered the following
alternative strategies:

ISSUER TENDER OFFER. The board of directors considered an issuer tender
offer to repurchase shares of Uptowner's outstanding Existing Common Stock. The
results of an issuer tender offer would be unpredictable, however, due to its
voluntary nature. The board was uncertain as to whether this alternative would
result in shares being tendered by a sufficient number of record holders so as
to permit Uptowner to reduce the number of shareholders below 300, to reduce its
administrative costs related to servicing shareholders who own a relatively
small number of shares and to terminate its SEC reporting requirements. The
board was also uncertain as to whether many holders of a small number of shares
would make the effort to tender their shares. In addition, the board considered
the cost of completing the tender offer, which could be significant in relation
to the value of the shares sought to be purchased.

PURCHASE OF SHARES IN THE OPEN MARKET. There is a limited trading
market for the Existing Common Stock with little liquidity; therefore, the board
of directors believes it would be highly unlikely that shares could be acquired
by Uptowner from a sufficient number of holders to accomplish the board's
objectives.

CONTINUING AS IS. Finally, the board of directors considered taking no
action to reduce the number of shareholders of Uptowner. However, due to
Uptowner's significant costs of compliance under the Exchange Act, especially in
relation to Uptowner's overall expenses, the board believes that taking no
action at this time is not in the best interests of Uptowner.

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Because Uptowner is an operating company that historically has operated
at a loss and it would be unlikely that a sale could generate a per share price
equal to or greater than $1.07, the board did not give serious consideration to
identifying a third party to acquire Uptowner's assets or stock in a merger or
similar transaction.

The board of directors has determined that the Reverse Stock Split is
the most expeditious and economical method of changing Uptowner's status from
that of a reporting company to that of a non-reporting company. Uptowner has not
sought, and has not received, any proposals for the merger or consolidation of
Uptowner, or for the sale or other transfer of all or any substantial portion of
Uptowner's assets, or for the securities of Uptowner that would enable the
holder thereof to exercise control of Uptowner. See "Special Factors --
Background."

VALUATION

Attached as Appendix II to this Proxy Statement is the valuation of the
company prepared by the accounting firm of Somerville & Company, PLLC, in
Huntington, West Virginia. Susan K. Richardson at Somerville & Company, PLLC,
performed the valuation on behalf of Somerville & Company, PLLC. Ms. Richardson
graduated from Marshall University in December 1982. In addition to the usual 40
hours of continuing education required to maintain licensure, she has also
attended substantial courses in the field of management services, including both
AICPA and NACVA workshops and seminars related to business valuations and
litigation services. She formally completed the instructional and testing
requirements and was certified by the National Association of Certified
Valuation Analysts during the summer of 1993. In addition to the original
requirements above, the Association requires 12 hours of continuing education
annually to maintain certification. Presently, Ms. Richardson is certified in
the States of West Virginia and Kentucky. The company selected Somerville &
Company, PLLC, to conduct the valuation because that firm is familiar with the
company's business by virtue of the fact that it has served as the company's
internal accountants since Fall 2000. For a summary of the procedures followed,
the findings and recommendations, the bases for and methods of arriving at the
findings and recommendations and the instructions received from the company in
the conduct of the valuation, see Appendix II. Please note that Appendix II does
not contain the exhibits to Somerville & Company's report, but Uptowner will
provide this information, free of charge, upon written request. To receive such
information, you may contact Carl Midkiff at Uptowner Inns, Inc., 741 5th
Avenue, Huntington, West Virginia 25701, or by calling (304) 525-8162.

FAIRNESS OF THE REVERSE STOCK SPLIT PROPOSAL

The board of directors believes that the Reverse Stock Split, taken as
a whole, is substantively and procedurally fair to and in the best interests of
Uptowner and its shareholders, including the unaffiliated shareholders. In
determining the fairness of the Reverse Stock Split, the board of directors
considered a number of factors prior to approval of the proposed transaction.

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The board of directors recognized the concerns of shareholders owning
fewer than 10,000 shares of Existing Common Stock. The Reverse Stock Split will
allow such shareholders to liquidate their holdings at a fair value, and without
brokerage or other transaction costs by receiving cash for their interest.

Shareholders receiving New Common Stock are expected to benefit from
the reduction of direct and indirect costs borne by Uptowner to maintain its
public company status. In addition, shareholders holding a number of shares not
evenly divisible by 10,000 will receive a cash payment for the portion of their
interest that would otherwise be represented by a fractional share, without
incurring brokerage or other transactions costs.

The board of directors of Uptowner by unanimous vote on October 17,
2003, with no member of the board of directors dissenting or abstaining from
such approval, adopted a resolution declaring the terms and conditions of the
Reverse Stock Split to be advisable, and directing that a proposed amendment to
the Articles of Incorporation of Uptowner effecting the Reverse Stock Split and
reducing Uptowner's authorized capital proportionately be submitted to
shareholders of Uptowner for consideration. The board considered the following
factors in reaching its conclusion:

- The status of Uptowner as a small business.

- The limited trading market and liquidity of the Existing Common
Stock.

- The opportunity afforded, in the absence of a trading market, by
the Reverse Stock split for holders of even a small number of
shares to receive a cash payment for their interest without
brokerage costs, and for larger shareholders to receive a cash
payment in respect of a portion of their interest.

- The board believed that the payment of $1.07 per pre-split share
is fair in light of (a) the valuation received from Somerville &
Company, PLLC, attached (without exhibits) to this Proxy
Statement as Appendix II, and (b) the prior transactions in the
company's stock as follows:

Date Number of Shares Price Per Share
---- ---------------- ---------------

February 1984 264,158 $0.65
June 1992 28,102 $0.65
September 1998 30,049 $0.65
November 2001 36,060 $0.65
November 2002 15,552 $0.65

The value of the company computed at $0.65 per share is $972,606
without discounts for marketability or minority interest
position. The value of the company at $1.07 per share is
$1,600,000 without discounts for marketability or minority
interest position.

-7-

- The board's knowledge of the financial condition and prospects of
Uptowner.

- The anticipated increased cost of compliance with the additional
requirements on public companies under the Sarbanes-Oxley Act of
2002 and related SEC regulations.

- The fact that at the 1-for-10,000 ratio, the Reverse Stock Split
would not significantly impact control of Uptowner, and that
Uptowner expects that it would continue to have approximately
eight shareholders that would own approximately 100% of New
Common Stock following the Reverse Stock Split. Accordingly, the
board of directors did not view the Reverse Stock Split as
significantly impacting control of Uptowner.

In determining to approve the Reverse Stock Split, the board of
directors placed the greatest weight on the status of Uptowner as a
non-reporting entity and the valuation received from Somerville & Company, PLLC,
and did not assign any particular weight to any of the other factors. After
evaluating these factors, the board determined that the Reverse Stock Split is
substantively fair to unaffiliated shareholders.

PROCEDURAL FAIRNESS DISCUSSION. Under the West Virginia Business
Corporation Act, shareholders are granted appraisal rights which, if a
shareholder does not vote in favor of the proposal and follows the appraisal
procedures set forth in West Virginia Code Sections 31D-12-1301 to 31D-13-1326,
will have the right to obtain fair value for his or her shares.

After evaluating the substance and procedural fairness of the Reverse
Stock Split, the board concluded that the Reverse Stock Split is the most
expeditious, efficient, cost effective and fair method to convert Uptowner from
a reporting company to a privately held non-reporting company.

On October 17, 2003, the board of directors determined that the
purchase price of $1.07 per whole share of New Common Stock (reflects a
$1,600,000 pre-split valuation of Existing Common Stock) for fractional shares
of Uptowner's Existing Common Stock is fair from a financial point of view to
the holders of Existing Common Stock of Uptowner. This determination was based
on the factors discussed above.

To Uptowner's knowledge, each executive officer and director of
Uptowner will vote all shares of Existing Common Stock those persons have proxy
authority for, for the proposed Reverse Stock Split and related Articles to
Uptowner's Articles of Incorporation. These shares represent approximately 56%
of the voting power on the Record Date.

CERTAIN EFFECTS OF REVERSE STOCK SPLIT PROPOSAL ON UPTOWNER'S SHAREHOLDERS

RIGHTS, PREFERENCES AND LIMITATIONS. There are no differences between
the respective rights, preferences or limitations of the Existing Common Stock
and the New Common Stock. There will be no differences with respect to dividend,
voting, liquidation or other rights associated with Uptowner's Common Stock
before and after the Reverse Stock Split.

-8-

If the Reverse Stock Split is approved, the interests of holders of
Existing Common Stock will change. Each share of Existing Common Stock which
would upon completion of the Reverse Stock Split represent a fractional share of
New Common Stock will be automatically converted into the right to receive from
Uptowner, in lieu of fractional shares of New Common Stock, cash in the amount
of $1.07 for each share of Existing Common Stock on a pre-split basis.

If the Reverse Stock Split is effected, shareholders owning fewer than
10,000 shares of Existing Common Stock will no longer have any equity interest
in Uptowner and will not participate in future increases or decreases to
Uptowner's net assets in liquidation. Further, the shareholders who will
continue to have an equity interest in Uptowner after the Reverse Stock Split
will own a security the liquidity of which will be reduced.

The Reverse Stock Split will have a different effect on shares of
Existing Common Stock held by affiliates of Uptowner as it will have on shares
of Existing Common Stock held by non-affiliates of Uptowner. As of September 30,
2003, the directors and executive officers of Uptowner held an aggregate of
55,36% of the Existing Common Stock. See "Information About Uptowner - Ownership
of Voting Securities of Uptowner". Due to the fact that each of the affiliate
shareholders of Uptowner hold more than 50% of the shares of Existing Common
Stock of Uptowner and will remain shareholders of Uptowner, none of the
affiliate shareholders of Uptowner will have their interest in the New Common
Stock purchased by Uptowner.

FINANCIAL IMPACT. Uptowner estimates that after the Reverse Stock Split
is effected, the number of shares of New Common Stock outstanding will be
approximately 81 shares in the hands of approximately four shareholders of
record. The total number of fractional shares to be purchased (exclusive of an
undetermined number of fractional shares held in "street name") is estimated to
be approximately 688,187 at a cost of less than $736,360. The cost of the
Reverse Stock Split transaction will come from Uptowner's available cash and
other liquid assets.

APPRAISAL RIGHTS. Pursuant to West Virginia Code Section 31D-13-1302, a
company shareholder may have appraisal rights as to all or any part of the
shares of company common stock registered in that shareholder's name, provided
the shareholder does not vote in favor of the Reverse Stock Split and complies
with the procedures outlined in West Virginia Code Sections 31D-13-1303 through
and including Section 31D-13-1326.

Under West Virginia Code Section 31D-13-1321, a shareholder who wishes
to exercise appraisal rights must deliver to the company before any vote is
taken on the Reverse Stock Split, written notice of that shareholder's intent to
demand payment if the proposed Reverse Stock Split is consummated. Also, that
shareholder must not vote, or cause to or permit to be voted, any shares of that
shareholder's Common Stock in favor of the proposed Reverse Stock Split. A
shareholder who does not satisfy these requirements is not entitled to appraisal
rights.

If the proposed Reverse Stock Split becomes effective, the company must
deliver a written appraisal notice in the requisite form to all shareholders who
satisfied the foregoing requirements. That notice must be sent no earlier than
the date the Reverse Stock Split becomes effective and no later than 10 days
after the Effective Date. That form would require a shareholder asserting
appraisal rights to certify whether or not beneficial ownership of that

-9-

shareholder's shares for which appraisal rights are asserted was acquired before
the date of this Proxy Statement and that the shareholder did not vote for the
Reverse Stock Split.

This form will state where it must be returned and where certificates
for shares must be deposited and the date by which those certificates must be
deposited. The form will also indicate the company's estimate of the fair value
of the shares and that, if requested in writing, the company will provide, to
the shareholders so requesting, within 10 days after the date specified in which
the form must be returned, the number of shareholders who returned the forms by
the specified date and the total number of shares owned by them. The form will
also state the date by which the notice to withdraw from the appraisal process
must be received.

A shareholder who receives notice and who wishes to exercise appraisal
rights must certify on the form sent by the company whether beneficial ownership
of the shares was acquired before the required date set forth above. If a
shareholder fails to make this certification, the company may elect to treat the
shareholder's shares as after-acquired shares that were not entitled to
appraisal rights. A shareholder who does not execute and return the form and, in
the case of certificated shares, deposit the shareholder's share certificates
where required, each by the date set forth in the notice, is not entitled to
payment.

The company shall pay in cash to those shareholders who comply with the
requirements set forth in the West Virginia Code the amount the company
estimates to be the fair value of their shares, plus interest. Any payment must
be accompanied by financial statements of the company, a statement of the
company's estimate of the fair value of the shares and a statement that
shareholders who have perfected their appraisal rights have the right to demand
further payment and that if any shareholder does not make demand for further
payment within the time specified, that shareholder is deemed to have accepted
the payment in full of satisfaction of the company's obligations under the West
Virginia Code regarding appraisal rights.

The company may elect to withhold payment from any shareholder who did
not certify the beneficial ownership of all of the shareholder's shares as set
forth above. If the company elects to withhold to such payment, it must, within
30 days, notify all shareholders who are seeking appraisal and from whom the
company has elected to withhold payment along with the following information:
the company's financial statements; the company's estimate of fair value; that
such shareholder may accept the company's estimate of fair value, plus interest,
in full satisfaction of such shareholder's demands or demand appraisal under the
West Virginia Code; that those shareholders who wish to accept the offer must
notify the bank of their acceptance within 30 days; and that those shareholders
who do not satisfy the requirements for demanding appraisal under the provisions
of the West Virginia Code will be deemed to have accepted the company's offer.

A shareholder who is paid but who is dissatisfied with the amount of
the payment must notify the company in writing of that shareholder's estimate of
the fair value of the shares and demand payment of that estimate, plus interest,
unless any payment is already made. Any shareholder offered a payment by the
company and who is dissatisfied with that offer must reject that offer and
demand payment of the shareholder's stated estimate of the fair value of the
shares, plus interest. A shareholder who fails to notify the company in writing
of that

-10-

shareholder's demand to be paid within 30 days after receiving the company's
payment or offer of payment waives the right to demand payment and is entitled
only to the payment offered by the company. THE FOREGOING SUMMARY IN THIS
SECTION OF THE PROXY STATEMENT ENTITLED "APPRAISAL RIGHTS" DOES NOT PURPORT TO
BE A COMPLETE STATEMENT OF THE RIGHTS OF SHAREHOLDERS SEEKING APPRAISAL AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PROVISIONS OF WEST VIRGINIA CODE
SECTIONS 31D-13-1302 TO AND INCLUDING 31D-13-1326, THE FULL TEXT OF WHICH IS
ATTACHED AS APPENDIX II TO THIS PROXY STATEMENT.

TERMINATION OF REGISTRATION WITH SEC. The Existing Common Stock is
currently registered under the Exchange Act. Such registration may be
terminated, under SEC rules, upon application of Uptowner to the SEC if Uptowner
has fewer than 300 record holders of its Common Stock. Uptowner intends to make
an application for termination of registration of the New Common Stock as
promptly as possible after filing the Articles of Amendment. Termination of the
registration of the New Common Stock under the Exchange Act would substantially
reduce the information required to be furnished by Uptowner to its shareholders
and to the SEC and would make certain provisions of the Exchange Act, such as
the filing of annual and quarterly reports and Proxy Statements, no longer
applicable to Uptowner.

With respect to the executive officer and directors of Uptowner, upon
termination of registration of the New Common Stock under the Exchange Act, the
executive officers, directors and other affiliates would no longer be subject to
many of the reporting requirements and restrictions of the Exchange Act,
including the reporting and short-swing profit recapture provisions of Section
16 thereof, as well as many of the provisions of the Sarbanes-Oxley Act of 2002.
Upon termination of Exchange Act registration, Uptowner will continue to be
subject to the general anti-fraud provisions of federal and applicable state
securities laws.

BENEFITS. The Reverse Stock Split is expected to result in the
following benefits to Uptowner, its remaining shareholders, and those persons
who will cease to be shareholders of Uptowner upon completion of the Reverse
Stock Split:

- The termination of Uptowner's reporting obligations under the
Exchange Act will result in a reduction in Uptowner's previously
estimated costs to be incurred during the remaining liquidation
period. Uptowner expects to use any amounts saved as a result of
termination of Exchange Act registration to increase future
dividends and/or use such cost savings in the business.

- The Reverse Stock Split affords shareholders owning fewer than 50
shares of Existing Common Stock the opportunity to realize fair
value for their shares. In the absence of the Reverse Stock
Split, even if a more active trading market developed for the
Existing Common Stock, such holders would nonetheless realize
less net value for their shares since the sale of their shares
would ordinarily involve disproportionately high brokerage
commissions.

- The percentage ownership of New Common Stock of the remaining
shareholders of Uptowner following the Reverse Stock Split will
increase due to the repurchase of fractional shares by Uptowner.

-11-

DETRIMENTS. The Reverse Stock Split is expected to result in the
following detriments to Uptowner, its remaining shareholders, and those persons
who will cease to be shareholders of Uptowner upon completion of the Reverse
Stock Split:

- If the Reverse Stock Split is approved, it is estimated that
approximately 1,391 shareholders, owning in the aggregate
approximately 688,187 shares of Existing Common Stock, will cease
to be shareholders of Uptowner and will no longer hold an equity
interest in Uptowner. Such shareholders, therefore, will not
share in future increases in Uptowner's net assets or in future
dividends, if any, and will no longer have the right to vote on
any corporate matter. Such shareholders also will be deprived of
the ability to liquidate their shares of Existing Common Stock at
a time and for a price of their choosing (assuming a purchaser
for such shares could be found).

- Termination of registration of the shares of New Common Stock
under the Exchange Act will reduce substantially the information
required to be furnished by Uptowner to its shareholders and will
make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b) of the
Exchange Act, the requirement of furnishing a proxy or
information statement in connection with certain shareholder
meetings pursuant to Section 14(a) of the Exchange Act, and the
requirements of Rule 13e-3 promulgated by the SEC under the
Exchange Act with respect to "going private" transactions no
longer applicable to Uptowner and its executive officer and
directors. In addition, termination of such registration will
deprive "affiliates" of Uptowner of the ability to dispose of
such securities pursuant to Rule 144 promulgated under the
Securities Act.

- If the Reverse Stock Split is approved and, as contemplated, the
shares of New Common Stock are deregistered under the Exchange
Act, it is anticipated that a market for the New Common Stock
will not be available by market makers.

- Shareholders owning whole shares, rather than fractions of a
share, after the Reverse Stock Split will not be entitled to
receive any cash payment for their whole shares of New Common
Stock, but will receive cash only for their fractional share.

BENEFICIAL OWNERS OF COMPANY STOCK. The Reverse Stock Split will affect
shareholders holding Uptowner stock in street name through a nominee (such as a
bank or broker). Nominees may have different procedures, and shareholders
holding Uptowner stock in street name should contact their nominees to determine
how they are affected by the Reverse Stock Split.

DIRECTORS AND OFFICERS. The directors and officers of Uptowner
immediately prior to the Reverse Stock Split will remain the directors and
officers of Uptowner immediately following the effectiveness of the Reverse
Stock Split.

-12-

FEDERAL INCOME TAX CONSEQUENCES

The following discussion summarizing certain federal tax consequences
is based on current law and is included for general information only.
Shareholders should consult their own tax advisors as to the federal, state,
local and foreign tax effects of the Reverse Stock Split in light of their
individual circumstances.

Shareholders who receive cash or fractional shares (as the case may be)
will be treated as receiving cash as payment in exchange for their shares of
Existing Common Stock of New Common Stock, and they will recognize capital gain
or loss in an amount equal to the difference between the amount of cash received
and the adjusted basis of the shares or fractional shares surrendered for cash.

GENERAL INFORMATION

VOTING PROCEDURES AND REVOCABILITY OF PROXIES

This Proxy Statement is being furnished in connection with the
solicitation by the board of directors of Uptowner, a West Virginia corporation,
of proxies to be voted at the Special Meeting of Shareholders of Uptowner to be
held at the offices of Uptowner, at 741 5th Avenue, Huntington, West Virginia
25701, on January ___________ , 2004, at ______.m., local time, and at any
postponement or adjournment thereof. The only shareholders entitled to vote at
the Special Meeting are the holders of record at the close of business on the
Record Date. On the Record Date there were 1,583,563 outstanding shares of
Existing Common Stock. Each outstanding share of Existing Common Stock is
entitled to one vote on each matter to come before the Special Meeting.

At the Special Meeting, the shareholders of Uptowner will vote (i) to
approve the amendment to Uptowner's Articles of Incorporation to effect the
proposed one-for-10,000 Reverse Stock Split, and (ii) to transact such other
business as may properly come before the Special Meeting, as set forth in the
preceding Notice of Special Meeting.

The holders of a majority of the outstanding shares of Existing Common
Stock present, in person or by proxy, and entitled to vote at the Special
Meeting will constitute a quorum for the transaction of business at the Special
Meeting. If a quorum should not be present, the Special Meeting may be adjourned
from time to time until a quorum is obtained. Abstentions and broker non-votes
are considered for purposes of determining the presence or absence of a quorum
for the transaction of business. Abstentions and broker non-votes will have the
effect of a vote against the Reverse Stock Split and the related amendment to
Uptowner's Articles of Incorporation. Shareholders are urged to sign the
accompanying form of proxy and return it promptly.

When a signed proxy card is returned with choices specified with
respect to voting matters, the shares represented are voted by proxies
designated on the proxy card in accordance with the shareholder's instructions.
If a signed proxy card is returned and the shareholder has

-13-

made no specifications with respect to voting matters, the shares will be voted
for the proposed Reverse Stock Split described in this Proxy Statement and, at
the discretion of the designated proxies, on any other matter that may properly
come before the Special Meeting or any adjournment. Uptowner does not know of
any business that will be presented for consideration at the Special Meeting
other than the Reverse Stock Split and related Amendment to Uptowner's Articles
of Incorporation. However, if any other business should come before the Special
Meeting, it is the intention of the designated proxies to vote on any such
business in accordance with the recommendation of management.

Any shareholder of Uptowner has the unconditional right to revoke his
or her proxy at any time prior to the voting thereof by (i) notifying the
Secretary of Uptowner in writing at Uptowner's principal executive office, (ii)
executing and delivering a subsequent proxy, or (iii) personally appearing at
the Special Meeting and casting a vote in person. However, no revocation shall
be effective unless and until notice of such revocation has been received by
Uptowner at or prior to the Special Meeting.

PERSONS MAKING THE SOLICITATION

The enclosed proxy is solicited on behalf of the board of directors of
Uptowner. The chief executive officer may participate in the solicitation but
will not receive any separate or additional compensation in connection
therewith. The cost of soliciting proxies in the accompanying form will be borne
by Uptowner. Proxies may also be solicited personally or by telephone by
directors and officers of Uptowner, without additional compensation therefor.
Upon request, Uptowner will reimburse brokers, dealers, banks and trustees or
their nominees, for reasonable expenses incurred by them in forwarding proxy
material to beneficial owners of shares of Existing Common Stock.

PROPOSAL--REVERSE STOCK SPLIT AND RELATED
AMENDMENT TO UPTOWNER'S ARTICLES OF INCORPORATION

GENERAL

The board of directors has unanimously adopted a resolution approving,
and recommending to shareholders for approval, an amendment to Uptowner's
Articles of Incorporation to effect the proposed one-for-10,000 Reverse Stock
Split. The form of amendment is attached hereto as Appendix III.

If the shareholders approve the Reverse Stock Split, Uptowner intends
to file the amendment to Uptowner's Articles of Incorporation with the Secretary
of State of West Virginia. The Reverse Stock Split will become effective on the
date the amendment is filed with the Secretary of State of West Virginia.
Uptowner expects the amendment to become effective as soon as practicable
following the Special Meeting.

Uptowner had 1,583,563 shares of Existing Common Stock outstanding as
of the Record Date. If the Reverse Stock Split is approved and implemented, each
share of Existing Common

-14-

Stock will automatically be reclassified into one ten thousandth of a fully paid
and non-assessable share of New Common Stock without any further action on the
part of the shareholders. Assuming no change in the number of outstanding shares
from the Record Date if the Reverse Stock Split is approved, the currently
outstanding shares of Existing Common Stock will be converted into approximately
81 shares of New Common Stock.

PAYMENT FOR SHARES

Within 10 days after the Effective Date, Uptowner will mail to the
holders of fractional shares a notice of the filing of the Articles of Amendment
and a letter of transmittal containing instructions with respect to the
submission of shares of Existing Common Stock to Uptowner. No certificates or
scrip representing fractional shares of New Common Stock shall be issued in
connection with the Reverse Stock Split. Instead, shareholders holding a number
of shares of Existing Common Stock not evenly divisible by 10,000, and
shareholders holding fewer than 10,000 shares of Existing Common Stock, upon
surrender of their old certificates, will receive cash in lieu of fractional
shares of New Common Stock. The price payable by Uptowner for Existing Common
stock will be determined by multiplying the Existing Common Stock by $1.07.
Payment for fractional shares will be determined by multiplying the fraction of
New Common Stock by $1.07. Holders of shares will be entitled to receive, and
Uptowner will be obligated to make payment for, cash in lieu of shares only by
transmitting stock certificate(s) for shares of Existing Common Stock to
Uptowner, together with the properly executed and completed letter of
transmittal and such evidence of ownership of such shares as Uptowner may
require.

Any holder of record of fewer than 10,000 shares of Existing Common
Stock who desires to retain an equity interest in Uptowner after the Effective
Date may do so by purchasing, prior to the Effective Date, a sufficient number
of shares of Existing Common Stock such that the total number of shares held of
record in his name immediately prior to the Reverse Stock Split is equal to or
greater than 10,000. However, due to the limited trading market for Uptowner's
Existing Common Stock it is possible that a shareholder desiring to retain an
equity interest in Uptowner may not be able to purchase enough shares to retain
an equity interest in Uptowner at a fair price or at all.

VOTE REQUIRED

Approval of the Reverse Stock Split will require approval by a majority
of the shares of Existing Common Stock that were outstanding on the Record Date.
Accordingly, the Reverse Stock Split will be approved if at least 791,782 shares
of Existing Common Stock are voted in favor of the Reverse Stock Split. A
majority of the shares will be voted in favor of the Reverse Stock Split as
affiliates of Uptowner (Carl Midkiff, Violet Midkiff, various Midkiff family
members and management) hold 55.36% of the shares outstanding.

-15-

SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION; EXPENSES OF TRANSACTION

The total amount of funds needed to cash out the fractional shares is
estimated to be $649,830. Uptowner estimates incurring the following costs and
expenses to structure and complete the Reverse Stock Split:

Filing fees $ 350
Legal expenses 35,000
Accounting expenses 15,000
Printing and mailing costs 10,000
Other miscellaneous costs 5,000
---------
Total $ 65,350
---------

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" THE REVERSE STOCK SPLIT AND THE RELATED AMENDMENT TO UPTOWNER'S ARTICLES
OF INCORPORATION.

MANAGEMENT

INFORMATION WITH RESPECT TO THE DIRECTORS AND EXECUTIVE OFFICERS

For each member of the board of directors and Uptowner's executive
officers, there follows information given by each concerning his or her
principal occupation and business experience for the past five years, his or her
age and his or her length of service as a director of Uptowner. The address and
telephone for each person named in the table is in care of Uptowner Inns, Inc.,
741 5th Avenue, Huntington, West Virginia 25701, Telephone (304) 525-8162.

POSITION WITH TERM PRINCIPAL OCCUPATION FOR PAST
NAME AGE THE COMPANY EXPIRES FIVE YEARS
- ---------------- --- ----------------------- ------- -------------------------------

Hobart A. Adkins 47 Director Since 2001 2003 Owner of Quality Exhaust, Inc.;
Secretary of the Board President, 31st Street
Enterprises, Inc. (Business
includes auto repair and
exhaust repair)

Richard Monga 38 Director Since 2001 2003 General Manager of Uptowner
Inns, Inc. (1997-present);
Prior Experience: General
Manager, separate Holiday Inn
property

-16-

POSITION WITH TERM PRINCIPAL OCCUPATION FOR PAST
NAME AGE THE COMPANY EXPIRES FIVE YEARS
- ------------------ --- ---------------------- ------- -------------------------------

Carl E. Midkiff 52 Director Since 1997 2003 President, CEO and Chairman of
President, CEO, the Board of Uptowner Inns,
Chairman of the Board Inc.; Owner and Manager of
Hazmat Environmental
Contractors, Inc. (1995-2001);
Owner and Manager of Prestige
Properties, Inc. (2000-present)
(Owns and manages residential
rental properties)

Charles D. Robinson 48 Director Since 2001; 2003 Insurance Agent and Vice
Treasurer of the Board President of Insurance Systems,
Inc.

Other than Mr. Midkiff and Mr. Robinson, there are no other executive
officers of Uptowner.

During the past five years, none of the above named persons has been
convicted in a criminal proceeding or has been a party to any judicial or
administrative proceeding that resulted in a judgment, decree or final order
enjoining him from future violations of, or prohibiting activities subject to,
federal or state securities laws, or a finding of any violation of federal or
state securities laws. All of the above named persons are citizens of the United
States.

The board of directors met three times during the fiscal year ended
June 30, 2003.

COMMITTEES OF THE BOARD OF DIRECTORS

The board of directors currently has no committees and the entire board
served in the capacity of the Compensation Committee and the Audit Committee.

REPORT OF CARL MIDKIFF CONCERNING THE AUDIT

Carl Midkiff oversees the company's financial reporting process. Mr.
Midkiff has the primary responsibility for the financial statements and the
reporting process, including the systems of internal controls. In fulfilling his
oversight responsibilities for fiscal 2003, Mr. Midkiff reviewed the audited
financial statements in the Form 10-K with the company's auditors including a
discussion of the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments and the clarity and
disclosures in the financial statements.

-17-

Mr. Midkiff reviewed with the independent auditors, who are responsible
for expressing an opinion on the conformity of those audited financial
statements with generally accepted accounting principles, his judgments as to
the quality, not just the acceptability, of the company's accounting principles
and such other matters as are required to be discussed under generally accepted
auditing standards.

In reliance on the reviews and discussions referred to above, Mr.
Midkiff recommended to the board of directors (and the board has approved) that
the audited financial statements be included in the Form 10-K for the fiscal
year ended June 30, 2003, for filing with the SEC. Mr. Midkiff and the board
have also approved the selection of the company's independent auditors.

Based upon the review and discussions referred to above, the board of
directors recommended that the audited financial statements for the fiscal year
ended June 30, 2003, be included in the company's Annual Report on Form 10-K and
filed with the SEC.

September 15, 2003
Hobart A. Adkins
Richard Monga
Carl E. Midkiff
Charles D. Robinson

This report shall not be deemed to be incorporated by reference into
any filing under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, unless the company specifically incorporates
this report by reference. They will not otherwise be filed under such Acts.

AUDIT FEES AND ALL OTHER FEES. For the year ended June 30, 2003,
Uptowner paid Sullivan, Ware & Hall, PLLC for audit fees and $27,662 for all
other fees. The board has considered that the provision of the non-audit
services noted above is compatible with maintaining Sullivan, Ware & Hall,
PLLC's independence.

In reliance on the reviews and discussions referred to above, the board
determined that the audited financial statements be included in the Annual
Report on Form 10-K for the fiscal year ended June 30, 2003 for filing with the
Securities and Exchange Commission. The board has selected Sullivan, Ware & Hall
PLLC as independent auditors of Uptowner for the fiscal year ended June 30,
2003.

DIRECTORS' COMPENSATION

Board members receive $500 for each board meeting of the Company they
attend. In the fiscal year ended June 30, 2003, the board of directors of the
Company received $300 each, in the aggregate, for all board of directors'
meeting attended.

BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION

Mr. Midkiff's salary is determined annually by the board of directors
based on several objective and subjective factors. The board considers
industry-wide salary information for

-18-

executives in the hotel industry which is compiled through surveys conducted by
recognized publications in the hotel industry. Members of the board of directors
also subjectively apply their own familiarity of the local market for business
executives to ensure Mr. Midkiff's annual salary is set at an appropriate level
considering the local business climate, Mr. Midkiff's expertise in the hotel
business, the cost to replace Mr. Midkiff with another executive with equivalent
experience and the success of the company.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the
company's directors and executive officers, and persons who own more than 10% of
the registered class of the company's equity securities, to make stock ownership
and transaction filings with the Securities and Exchange Commission and to
provide copies to the company. The company is currently reviewing the stock
ownership and transaction filings of its directors and executive officers. The
company is currently aware of non-compliance with the section 16(a) beneficial
ownership reporting requirements and is assisting Mr. Midkiff, Violet Midkiff,
Mr. Adkins, Mr. Robinson and Mr. Monga with making the necessary filings.

EXECUTIVE COMPENSATION AND OTHER INFORMATION

SUMMARY OF COMPENSATION. The table below reflects information
concerning the annual compensation for services in all capacities to the
corporation for the fiscal years ended June 30, 2002, 2001 and 2000, of those
persons who were, as of June 30, 2002, (a) the chief executive officer, and (b)
the four other most highly compensated executive officers to the extent that
such persons total annual salary and bonus exceeded $100,000.

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION (1)
------------------------------------------
OTHER ANNUAL
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY BONUS COMPENSATION
--------------------------- ----------- ------ ----- ------------

Carl E. Midkiff, President 2003 $86,000 $52,348 $ 0
and Chief Executive Officer 2002 $45,923 $38,668 $ 0
2001 $38,912 $51,796 $ 0

(1) Does not include perquisites and other personal benefits, the amount of
which are not shown because the aggregate amount of such compensation
during the years presented did not exceed the lesser of $50,000 or 10% of
total salary and bonus reported for such executive officer. The company
provides Mr. Midkiff with the use of a vehicle.

The company does not maintain any form of stock option, stock
appreciation rights, or other long-term compensation plans. There are no
employment or change in control agreements.

-19-

INFORMATION ABOUT UPTOWNER INNS, INC.

GENERAL

Uptowner was incorporated in the State of West Virginia on July 1,
1961. Uptowner had operated a 137-room full service hotel, the Uptowner Inn,
built in 1962 by Uptowner and operated by Uptowner until January 2002. The
property was sold in July 2002. In late August 1998, Uptowner opened a 135-room
Holiday Inn Hotel & Suites facility adjacent to the Huntington Civic Arena. The
franchise agreement under which it operates generally requires standard fees for
advertising, reservation system, etc.

The hotel clientele are predominantly business travelers due to the
downtown location. The Holiday Inn Hotel & Suites occupancy for the year
averaged 79% with an average room rate of $80. This yielded a revenue for
available rooms of $20,736.

A wholly owned subsidiary of Uptowner, Motel and Restaurant Supply,
which was incorporated in the State of West Virginia on July 16, 1966, has had
no activity since 1981.

Neither Uptowner nor its subsidiary have experienced bankruptcy,
receivership or similar proceedings; has been involved in a reclassification,
merger or consolidation; has acquired or, except as hereinafter set forth,
disposed of any material amount of assets otherwise than in the ordinary course
of business; or has undertaken any material change in the mode of conducting its
business.

During fiscal 2003, Uptowner was engaged in substantially two lines of
businesses, to-wit, the operation of a hotel with dining facilities, and
residential/commercial rentals. The income of Uptowner from rentals did not
exceed ten percent of the consolidated revenue of Uptowner and its subsidiaries
for years ended June 30, 2002, 2001 and 2000. Consolidated revenue did not
exceed $50,000,000, during any of the last three fiscal years.

The hotel industry is highly competitive with Uptowner competing
against numerous national hotel franchises in Huntington, West Virginia. As the
company's operations are generally one business segment, its competition locally
includes Radisson Hotel, Ramada Inn, Comfort Inn, Red Room Inn and Hampton Inn.

Seasonality directly affects this business as a result of people not
traveling or vacationing in large numbers in the late fall and winter because of
pool weather at these geographical locations.

At September 30, 2003, Uptowner and its subsidiaries employ
approximately 50 employees.

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PROPERTY

Uptowner has no foreign operations.

A description of the properties Uptowner owns follows:

(a) Uptowner owned a 137-room, four-story motor hotel known
currently as the Uptowner Inn with a swimming pool and a lounge, located in
downtown Huntington, West Virginia, at 1415 4th Avenue. This property was owned
in fee by Uptowner. The motor hotel was subject to a mortgage in favor of the
City National Bank, Huntington, West Virginia, in the original amount of
$1,648,107, payable in monthly installments of $17,268 per month, including
interest at 9.42% until December 20, 2002, at which time the variable rate may
have changed. The original note of $2,000,000, along with two other promissory
notes, were refinanced with the above-mentioned note on December 20, 1999. This
property was sold on July 3, 2002 for $1,770,073.

(b) Uptowner owned in fee two lots used for the overflow parking,
across the street from its main motor hotel at 1432-34 4th Avenue, in
Huntington, West Virginia. These lots were put up for auction on September 12,
2002 along with the parcel of real estate and building listed at item (j).

(c) Uptowner owned in fee an undeveloped lot acquired for future
development or parking across an alley from its main motor hotel at 1400 5th
Avenue in Huntington, West Virginia. The lot was sold on July 3, 2002 with the
main motor hotel.

(d) Uptowner owned in fee two lots immediately west of its motor
hotel, 1401 4th Avenue, in Huntington, West Virginia, acquired for future
development and currently used for parking. This property was subject to a first
mortgage in favor of City National Bank in the original amount of $1,648,107.
These lots were sold on July 3, 2002 with the main motor hotel.

(e) Uptowner owned in fee and operated a 40-unit, two-story
apartment building within one city block of the motor hotel, at 1340 4th Avenue,
in Huntington, West Virginia. The apartment building was sold at auction on
September 12, 2002 for $361,000.

(f) Uptowner owned in fee a lot acquired and used for parking
across the street from its main motor hotel at 1420 4th Avenue, in Huntington,
West Virginia. This lot was sold at auction on September 12, 2002 along with the
three-story building listed at item (g).

(g) Uptowner owned in fee a lot improved by a three-story building
within one city block of the main motor hotel at 1416-18 4th Avenue, in
Huntington, West Virginia. This property was subject to a mortgage in favor of
Betty M. Dove, in the original amount of $76,000, 10% interest, maturing June
2002, the balance of which was $1,031 at June 30, 2002. This property is
utilized for the corporate offices and rental units. This three-story building
was sold at auction on September 3, 2002.

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(h) Uptowner owns in fee a vacant lot on the west side of
Huntington approximately three miles from the main motor hotel and at an exit
for Interstate 64. This purchase was finalized in October 1988 from an option
entered into in 1983. The property is currently used as a parking lot until it
is deemed beneficial to build and operate a motel in that location.

(i) Uptowner purchased a parcel of real estate with a residential
building in January 1990. This property is across an alley from the main motor
hotel and was acquired for future development and parking. This parcel of real
estate was sold at auction on September 3, 2002 with item (g) listed above.

(j) Uptowner purchased a parcel of real estate with a building
housing residential and commercial tenants in July 1991. This property is across
the street from its main motor hotel and adjacent to other rental properties and
parking facilities. The property has been renovated and is now fully utilized as
rental property. The property is subject to a mortgage in favor of West Virginia
Housing Development Fund in the original amount of $500,000, 5.5% rate of
interest, maturing November 2018, the balance of which is $399,021 at June 30,
2002. The parcel of real estate, building and the two lots listed in item (b)
were sold at auction on September 12, 2002 for $752,000.

(k) Uptowner owns in fee a Holiday Inn Hotel & Suites, a 135-room
motor hotel located in downtown Huntington at 800 3rd Avenue. The hotel
officially opened for business August 28, 1998. The property is subject to a
mortgage in favor of the Ohio National Life Insurance Company in the original
amount of $6,800,000, 8.25% rate of interest and maturing February 2012. The
balance of the note was $6,743,270 as of June 30, 2002. The facility is being
marketed for convention and business travelers. It is adjacent to the Huntington
Civic Arena and is used as a major part of marketing for conventions and
meetings in the Tri-State area.

(l) Uptowner acquired assets from an entity that is controlled by
the company's president and shareholder, Carl Midkiff. The assets consist of
land, building and equipment located in Proctorville, Ohio, and the terms of the
transaction were no less favorable than a similar transaction would have been
with an unrelated third party. The assets acquired are currently being rented.
Liabilities were assumed of $272,935 and a promissory note issued for $91,565.
The balance of the liability assumed is $-0- at June 30, 2002 and the balance of
the promissory note is $-0- at June 30, 2002.

LEGAL PROCEEDINGS

On February 19, 2003, the Huntington Municipal Development Authority
instituted a lawsuit in the Circuit Court of Cabell County, West Virginia
against the company alleging breach of contract-failure to purchase, breach of
contract-confidentiality, bad faith, and intentional interference with business
relations. The Huntington Municipal Development Authority is seeking judgment
against the company for general, compensatory, incidental and consequential
damages caused by breach of contract enumerated above, in an approximate amount
of $5,560,000 together with pre-judgment interest. The company filed its answer
and counterclaim on March 11, 2003, denying the allegations contained in the
complaint. In its

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counterclaim, the company admits that, based upon express representations made
by or on behalf of the Plaintiff, the parties entered into the agreement.
However, the company alleges Plaintiff breached its obligations contained in the
agreement and further negligently and/or fraudulently misrepresented material
facts and concealed information from Uptowner for the express purpose of
inducing Uptowner to enter into the agreement, and therefore, the language
contained in the agreement is not controlling. The company seeks damages in the
amount of $2,500,000 or an amount that will fully and fairly compensate Uptowner
Inns, Inc. as a result of the acts and omission of the Plaintiff. A pre-trial
conference is scheduled for September 14, 2004 and a trial date is scheduled for
September 21, 2004.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of June 15, 2003,
relating to the beneficial ownership of the common stock by (a) each person or
group known by the company to own beneficially more than 5% of the outstanding
common stock; (b) each of the company's directors; and (c) all directors and
executive officers of the company as a group. Ownership includes direct and
indirect (beneficial) ownership as defined by SEC rules.

AMOUNT AND NATURE OF
NAME AND ADDRESS BENEFICIAL OWNERSHIP (1) PERCENT OF CLASS
---------------- ------------------------ ----------------

Hobart A. Adkins 100 Direct *

Carl E. Midkiff 60,111 Direct 54.8%
807,669 Indirect

Violet Midkiff 462,777 Direct 29.23%

Charles D. Robinson 100 Direct *

All Directors and Executive Officers 867,669 Indirect 55.36%
As a Group

(1) For purposes of this table, beneficial ownership has been determined in
accordance with the provisions of Rule 13d-3 of the Securities Exchange
Act of 1934 under which, in general, a person is deemed to be the
beneficial owner of a security if he has or shares the power to dispose
of or direct the disposition of the security, or if he has the right to
acquire beneficial ownership of the security within 60 days.

(2) Consists of 161,792 shares owned by Violet Midkiff, Carl Midkiff's
mother which Carl Midkiff exercises voting power; 100,985 shares owned
by Violet Midkiff, Wade Midkiff and Lewis Midkiff as joint tenants with
right of survivorship (Wade Midkiff and Lewis Midkiff are the minor
sons of Carl Midkiff and Violet Midkiff is Carl Midkiff's mother);
264,158 shares owned by MMS Limited Partnership of which an entity
owned by Carl Midkiff is general partner and Carl Midkiff is a limited
partner

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owning 75% of the limited partnership; 40,727 shares owned by Prestige
Property, Inc., a corporation owned by Carl Midkiff and his immediate
family; 200,000 shares owned by the Violet Midkiff Irrevocable Trust of
which Carl Midkiff is the trustee; 10,000 shares owned by Lewis Midkiff
of which Carl Midkiff acts as custodian; 10,000 shares owned by Wade
Midkiff of which Carl Midkiff acts as custodian; 10,007 shares owned by
the Wade Midkiff Irrevocable Trust of which Carl Midkiff is the
trustee; and 10,000 shares owned by Elizabeth Midkiff who is Carl
Midkiff's wife.

* Less than one percent.

OTHER MATTERS

The board of directors is not aware of any matter to be presented for
action at the meeting other than the matters set forth herein. Should any other
matter requiring a vote of shareholders arise, the proxies in the enclosed form
confer upon the person or persons entitled to vote the shares represented by
such proxies discretionary authority to vote the same in accordance with their
best judgment in the interest of Uptowner.

FORWARD-LOOKING STATEMENTS

This Proxy Statement contains forward-looking statements. Additional
written or oral forward-looking statements may be made by us from time to time
in filings with the SEC or otherwise. The words "believe," "expect,"
"anticipate," "estimate," "project," and similar expressions identify
forward-looking statements, which speak only as of the date the statement was
made. Forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified. Further events
and actual results could differ materially than those set forth in, contemplated
by, or underlying the forward-looking statements. Statements in this Proxy
Statement describe factors that could contribute to or cause such differences.

We caution you not to place undo reliance on any forward-looking
statements made by, or on behalf of, Uptowner in this Proxy Statement or in any
of our filings with the SEC or otherwise. Additional information with respect to
factors that may cause the results to differ materially from those contemplated
by forward-looking statements is included in our current and subsequent filings
with the SEC. See "Available Information."

AVAILABLE INFORMATION

Uptowner is subject to the information requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports,
proxy statements and other information with the SEC. Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the SEC at Room 1024, 450 Fifth Street, N.W., Judiciary
Plaza, Washington, DC 20549. Copies of such materials can also be obtained at
prescribed rates by writing to the Public Reference Section of the SEC at 450
Fifth Street, N.W.,

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Judiciary Plaza, Washington, DC 20549. In addition, such reports, proxy
statements and other information are available from the SEC's Internet Website
at http://www.sec.gov.

DOCUMENTS INCORPORATED BY REFERENCE

Copies of Uptowner's Annual Report to Shareholders on Form 10-K for
fiscal year ended June 30, 2003 (File No. 0-1957) and quarterly report on Form
10-Q for the quarter ended September 30, 2003, are incorporated herein by
reference pursuant to the requirements of Schedule 13E-3 and Schedule 14A.
Copies of these reports are enclosed with this Proxy Statement. Copies of past
reports are available for review from the EDGAR filings obtained through the
SEC's Internet Website (http://www.sec.gov).

By order of the Board of Directors

Carl Midkiff
President and Chief Executive Officer

October _____, 2003

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APPENDIX I

ARTICLE 13.
APPRAISAL RIGHTS.

PART I. RIGHT TO APPRAISAL AND PAYMENT FOR SHARES.

SECTION 31D-13-1301. DEFINITIONS.

In this article:

(1) "Affiliate" means a person that directly or indirectly through
one or more intermediaries controls, is controlled by or is under common control
with another person or is a senior executive. For purposes of subdivision (4),
subsection (b), section one thousand three hundred two of this article, a person
is deemed to be an affiliate of its senior executives.

(2) "Beneficial shareholder" means a person who is the beneficial
owner of shares held in a voting trust or by a nominee on the beneficial owner's
behalf.

(3) "Corporation" means the issuer of the shares held by a
shareholder demanding appraisal and, for matters covered in sections one
thousand three hundred twenty-two, one thousand three hundred twenty-three, one
thousand three hundred twenty-four, one thousand three hundred twenty-five, one
thousand three hundred twenty-six, one thousand three hundred thirty and one
thousand three hundred thirty-one of this article, includes the surviving entity
in a merger.

(4) "Fair value" means the value of the corporation's shares
determined:

(A) Immediately before the effectuation of the corporate action to
which the shareholder objects;

(B) Using customary and current valuation concepts and techniques
generally employed for similar businesses in the context of the transaction
requiring appraisal; and

(C) Without discounting for lack of marketability or minority
status except, if appropriate, for amendments to the articles pursuant to
subdivision (5), subsection (a), section one thousand three hundred two of this
article.

(5) "Interest" means interest from the effective date of the
corporate action until the date of payment, at the rate of interest on judgments
in this state on the effective date of the corporate action.

(6) "Preferred shares" means a class or series of shares whose
holders have preference over any other class or series with respect to
distributions.

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(7) "Record shareholder" means the person in whose name shares are
registered in the records of the corporation or the beneficial owner of shares
to the extent of the rights granted by a nominee certificate on file with the
corporation.

(8) "Senior executive" means the chief executive officer, chief
operating officer, chief financial officer and anyone in charge of a principal
business unit or function.

(9) "Shareholder" means both a record shareholder and a beneficial
shareholder.

SECTION 31D-13-1302. RIGHT TO APPRAISAL.

(a) A shareholder is entitled to appraisal rights, and to obtain
payment of the fair value of that shareholder's shares, in the event of any of
the following corporate actions:

(1) Consummation of a merger to which the corporation is a party:
(A) If shareholder approval is required for the merger by section one thousand
one hundred four, article eleven of this chapter and the shareholder is entitled
to vote on the merger, except that appraisal rights may not be available to any
shareholder of the corporation with respect to shares of any class or series
that remain outstanding after consummation of the merger; or (B) if the
corporation is a subsidiary and the merger is governed by section one thousand
one hundred five, article eleven of this chapter;

(2) Consummation of a share exchange to which the corporation is a
party as the corporation whose shares will be acquired if the shareholder is
entitled to vote on the exchange, except that appraisal rights may not be
available to any shareholder of the corporation with respect to any class or
series of shares of the corporation that is not exchanged;

(3) Consummation of a disposition of assets pursuant to section
one thousand two hundred two, article twelve of this chapter if the shareholder
is entitled to vote on the disposition;

(4) An amendment of the articles of incorporation with respect to
a class or series of shares that reduces the number of shares of a class or
series owned by the shareholder to a fraction of a share if the corporation has
the obligation or right to repurchase the fractional share so created; or

(5) Any other amendment to the articles of incorporation, merger,
share exchange or disposition of assets to the extent provided by the articles
of incorporation, bylaws or a resolution of the board of directors.

(b) Notwithstanding subsection (a) of this section, the
availability of appraisal rights under subdivisions (1), (2), (3) and (4),
subsection (a) of this section are limited in accordance with the following
provisions:

(1) Appraisal rights may not be available for the holders of
shares of any class or series of shares which is:

-2-

(A) Listed on the New York stock exchange or the American stock
exchange or designated as a national market system security on an interdealer
quotation system by the national association of securities dealers, inc.; or

(B) Not so listed or designated, but has at least two thousand
shareholders and the outstanding shares of a class or series has a market value
of at least twenty million dollars, exclusive of the value of the shares held by
its subsidiaries, senior executives, directors and beneficial shareholders
owning more than ten percent of the shares.

(2) The applicability of subdivision (1), subsection (b) of this
section is to be determined as of:

(A) The record date fixed to determine the shareholders entitled
to receive notice of, and to vote at, the meeting of shareholders to act upon
the corporate action requiring appraisal rights; or

(B) The day before the effective date of the corporate action if
there is no meeting of shareholders.

(3) Subdivision (1), subsection (b) of this section is not
applicable and appraisal rights are to be available pursuant to subsection (a)
of this section for the holders of any class or series of shares who are
required by the terms of the corporate action requiring appraisal rights to
accept for the shares anything other than cash or shares of any class or any
series of shares of any corporation, or any other proprietary interest of any
other entity, that satisfies the standards set forth in subdivision (1), section
(b) of this section at the time the corporate action becomes effective.

(4) Subdivision (1), subsection (b) of this section is not
applicable and appraisal rights are to be available pursuant to subsection (a)
of this section for the holders of any class or series of shares where any of
the shares or assets of the corporation are being acquired or converted, whether
by merger, share exchange or otherwise, pursuant to the corporate action by a
person, or by an affiliate of a person, who: (A) Is, or at any time in the
one-year period immediately preceding approval by the board of directors of the
corporate action requiring appraisal rights was, the beneficial owner of twenty
percent or more of the voting power of the corporation, excluding any shares
acquired pursuant to an offer for all shares having voting power if the offer
was made within one year prior to the corporate action requiring appraisal
rights for consideration of the same kind and of a value equal to or less than
that paid in connection with the corporate action; or (B) for purpose of voting
their shares of the corporation, each member of the group formed is deemed to
have acquired beneficial ownership, as of the date of the agreement, of all
voting shares of the corporation beneficially owned by any member of the group.

(c) Notwithstanding any other provision of section one thousand
three hundred two of this article, the articles of incorporation as originally
filed or any amendment to the articles of incorporation may limit or eliminate
appraisal rights for any class or series of preferred shares,

-3-

but any limitation or elimination contained in an amendment to the articles of
incorporation that limits or eliminates appraisal rights for any of the shares
that are outstanding immediately prior to the effective date of the amendment or
that the corporation is or may be required to issue or sell pursuant to any
conversion, exchange or other right existing immediately before the effective
date of the amendment does not apply to any corporate action that becomes
effective within one year of that date if the action would otherwise afford
appraisal rights.

(d) A shareholder entitled to appraisal rights under this article
may not challenge a completed corporate action for which appraisal rights are
available unless the corporate action:

(1) Was not effectuated in accordance with the applicable
provisions of articles ten, eleven or twelve of this chapter or the
corporation's articles of incorporation, bylaws or board of directors'
resolution authorizing the corporate action; or

(2) Was procured as a result of fraud or material
misrepresentation.

SECTION 31D-13-1303. ASSERTION OF RIGHTS BY NOMINEES AND BENEFICIAL OWNERS.

(a) A record shareholder may assert appraisal rights as to fewer
than all the shares registered in the record shareholder's name but owned by a
beneficial shareholder only if the record shareholder objects with respect to
all shares of the class or series owned by the beneficial shareholder and
notifies the corporation in writing of the name and address of each beneficial
shareholder on whose behalf appraisal rights are being asserted. The rights of a
record shareholder who asserts appraisal rights for only part of the shares held
of record in the record shareholder's name under this subsection are to be
determined as if the shares as to which the record shareholder objects and the
record shareholder's other shares were registered in the names of different
record shareholders.

(b) A beneficial shareholder may assert appraisal rights as to
shares of any class or series held on behalf of the shareholder only if the
shareholder:

(1) Submits to the corporation the record shareholder's written
consent to the assertion of the rights no later than the date referred to in
paragraph (D), subdivision (2), subsection (b), section one thousand three
hundred twenty-two of this article; and

(2) Does so with respect to all shares of the class or series that
are beneficially owned by the beneficial shareholder.

PART II. PROCEDURE FOR EXERCISE OF APPRAISAL RIGHTS.

SECTION 31D-13-1320. NOTICE OF APPRAISAL RIGHTS.

(a) If proposed corporate action described in subsection (a),
section one thousand three hundred two of this article is to be submitted to a
vote at a shareholders' meeting, the

-4-

meeting notice must state that the corporation has concluded that shareholders
are, are not or may be entitled to assert appraisal rights under this article.
If the corporation concludes that appraisal rights are or may be available, a
copy of this article must accompany the meeting notice sent to those record
shareholders entitled to exercise appraisal rights.

(b) In a merger pursuant to section one thousand one hundred five,
article eleven of this chapter, the parent corporation must notify in writing
all record shareholders of the subsidiary who are entitled to assert appraisal
rights that the corporate action became effective. The notice must be sent
within ten days after the corporate action became effective and include the
materials described in section one thousand three hundred twenty-two of this
article.

SECTION 31D-13-1321. NOTICE OF INTENT TO DEMAND PAYMENT.

(a) If proposed corporate action requiring appraisal rights under
section one thousand three hundred two of this article is submitted to a vote at
a shareholders' meeting, a shareholder who wishes to assert appraisal rights
with respect to any class or series of shares:

(1) Must deliver to the corporation before the vote is taken
written notice of the shareholder's intent to demand payment if the proposed
action is effectuated; and

(2) Must not vote, or cause or permit to be voted, any shares of
the class or series in favor of the proposed action.

(b) A shareholder who does not satisfy the requirements of
subsection (a) of this section is not entitled to payment under this article.

SECTION 31D-13-1322. APPRAISAL NOTICE AND FORM.

(a) If proposed corporate action requiring appraisal rights under
subsection (a), section one thousand three hundred two of this article becomes
effective, the corporation must deliver a written appraisal notice and form
required by subdivision (1), subsection (b) of this section to all shareholders
who satisfied the requirements of section one thousand three hundred twenty-one
of this article. In the case of a merger under section one thousand one hundred
five, article eleven of this chapter, the parent must deliver a written
appraisal notice and form to all record shareholders who may be entitled to
assert appraisal rights.

(b) The appraisal notice must be sent no earlier than the date the
corporate action became effective and no later than ten days after that date and
must:

(1) Supply a form that specifies the date of the first
announcement to shareholders of the principal terms of the proposed corporate
action and requires the shareholder asserting appraisal rights to certify: (A)
Whether or not beneficial ownership of those shares for which appraisal rights
are asserted was acquired before that date; and (B) that the shareholder did not
vote for the transaction;

-5-

(2) State:

(A) Where the form must be sent and where certificates for
certificated shares must be deposited and the date by which those certificates
must be deposited, which date may not be earlier than the date for receiving the
required form under of this subdivision;

(B) A date by which the corporation must receive the form which
date may not be fewer than forty nor more than sixty days after the date the
appraisal notice and form required by subsection (a) of this section are sent
and state that the shareholder is deemed to have waived the right to demand
appraisal with respect to the shares unless the form is received by the
corporation by the specified date;

(D) That, if requested in writing, the corporation will provide,
to the shareholder so requesting, within ten days after the date specified in
paragraph (B) of this subdivision the number of shareholders who return the
forms by the specified date and the total number of shares owned by them; and

(E) The date by which the notice to withdraw under section one
thousand three hundred twenty-three of this article must be received, which date
must be within twenty days after the date specified in paragraph (B) of this
subdivision; and

(3) Be accompanied by a copy of this article.

SECTION 31D-13-1323. PERFECTION OF RIGHTS; RIGHT TO WITHDRAW.

(a) A shareholder who receives notice pursuant to section one
thousand three hundred twenty-two of this article and who wishes to exercise
appraisal rights must certify on the form sent by the corporation whether the
beneficial owner of the shares acquired beneficial ownership of the shares
before the date required to be set forth in the notice pursuant to subdivision
(1), subsection (b), section one thousand three hundred twenty-two of this
article. If a shareholder fails to make this certification, the corporation may
elect to treat the shareholder's shares as after-acquired shares under section
one thousand three hundred twenty-five of this article. In addition, a
shareholder who wishes to exercise appraisal rights must execute and return the
form and, in the case of certificated shares, deposit the shareholder's
certificates in accordance with the terms of the notice by the date referred to
in the notice pursuant to paragraph (B), subdivision (2), subsection (b),
section one thousand three hundred twenty-two of this article. Once a
shareholder deposits the shareholder's certificates or, in the case of
uncertified shares, returns the executed forms, that shareholder loses all
rights as a shareholder, unless the shareholder withdraws pursuant to subsection
(b) of this section.

(b) A shareholder who has complied with subsection (a) of this
section may decline to exercise appraisal rights and withdraw from the appraisal
process by so notifying the

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corporation in writing by the date set forth in the appraisal notice pursuant to
paragraph (E), subdivision (2), subsection (b), section one thousand three
hundred twenty-two of this article. A shareholder who fails to withdraw from the
appraisal process by that date may not withdraw without the corporation's
written consent.

(c) A shareholder who does not execute and return the form and, in
the case of certificated shares, deposit the shareholder's share certificates
where required, each by the date set forth in the notice described in subsection
(b), section one thousand three hundred twenty-two of this article, is not
entitled to payment under this article.

SECTION 31D-13-1324. PAYMENT.

(a) Except as provided in section one thousand three hundred
twenty-five of this article, within thirty days after the form required by
paragraph (B), subdivision (2), subsection (b), section one thousand three
hundred twenty-two of this article is due, the corporation shall pay in cash to
those shareholders who complied with subsection (a), section one thousand three
hundred twenty-three of this article the amount the corporation estimates to be
the fair value of their shares, plus interest.

(b) The payment to each shareholder pursuant to subsection (a) of
this article must be accompanied by:

(1) Financial statements of the corporation that issued the shares
to be appraised, consisting of a balance sheet as of the end of a fiscal year
ending not more than sixteen months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for that
year and the latest available interim financial statements, if any;

(2) A statement of the corporation's estimate of the fair value of
the shares, which estimate must equal or exceed the corporation's estimate given
pursuant to paragraph (C), subdivision (2), subsection (b), section one thousand
three hundred twenty-two of this article; and

(3) A statement that shareholders described in subsection (a) of
this section have the right to demand further payment under section one thousand
three hundred twenty-six of this article and that if any shareholder does not
make a demand for further payment within the time period specified, shareholder
is deemed to have accepted the payment in full satisfaction of the corporation's
obligations under this article.

SECTION 31D-13-1325. AFTER-ACQUIRED SHARES.

(a) A corporation may elect to withhold payment required by
section one thousand three hundred twenty-four of this article from any
shareholder who did not certify that beneficial ownership of all of the
shareholder's shares for which appraisal rights are asserted was acquired

-7-

before the date set forth in the appraisal notice sent pursuant to subdivision
(1), subsection (b), section one thousand three hundred twenty-two of this
article.

(b) If the corporation elected to withhold payment under
subsection (a) of this section, it must, within thirty days after the form
required by paragraph (B), subdivision (2), subsection (b), section one thousand
three hundred twenty-two of this article is due, notify all shareholders who are
described in subsection (a) of this section:

(1) Of the information required by subdivision (1), subsection
(b), section one thousand three hundred twenty-four of this article;

(2) Of the corporation's estimate of fair value pursuant to
subdivision (2), subsection (b), section one thousand three hundred twenty-four
of this article;

(3) That they may accept the corporation's estimate of fair value,
plus interest, in full satisfaction of their demands or demand appraisal under
section one thousand three hundred twenty-six of this article;

(4) That those shareholders who wish to accept the offer must
notify the corporation of their acceptance of the corporation's offer within
thirty days after receiving the offer; and

(5) That those shareholders who do not satisfy the requirements
for demanding appraisal under section one thousand three hundred twenty-six of
this article are deemed to have accepted the corporation's offer.

(c) Within ten days after receiving the shareholder's acceptance
pursuant to subsection (b) of this section, the corporation must pay in cash the
amount it offered under subdivision (2), subsection (b) of this section to each
shareholder who agreed to accept the corporation's offer in full satisfaction of
the shareholder's demand.

(d) Within forty days after sending the notice described in
subsection (b) of this section, the corporation must pay in cash the amount it
offered to pay under subdivision (2), subsection (b) of this section to each
shareholder described in subdivision (5), subsection (b) of this section.

SECTION 31D-13-1326. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR
OFFER.

(a) A shareholder paid pursuant to section one thousand three
hundred twenty-four of this article who is dissatisfied with the amount of the
payment must notify the corporation in writing of that shareholder's estimate of
the fair value of the shares and demand payment of that estimate plus interest
and less any payment due under section one thousand three hundred twenty-four of
this article. A shareholder offered payment under section one thousand three
hundred twenty-five of this article who is dissatisfied with that offer must
reject the offer and demand payment of the shareholder's stated estimate of the
fair value of the shares plus interest.

-8-

(b) A shareholder who fails to notify the corporation in writing
of that shareholder's demand to be paid the shareholder's stated estimate of the
fair value plus interest under subsection (a) of this section within thirty days
after receiving the corporation's payment or offer of payment under sections one
thousand three hundred twenty-four or one thousand three hundred twenty-five of
this article, respectively, waives the right to demand payment under this
section and is entitled only to the payment made or offered pursuant to those
respective sections.

PART III. JUDICIAL APPRAISAL OF SHARES.

SECTION 31D-13-1330. COURT ACTION.

(a) If a shareholder makes demand for payment under section one
thousand three hundred twenty-six of this article which remains unsettled, the
corporation shall commence a proceeding within sixty days after receiving the
payment demand and petition the court to determine the fair value of the shares
and accrued interest. If the corporation does not commence the proceeding within
the sixty-day period, it shall pay in cash to each shareholder the amount the
shareholder demanded pursuant to section one thousand three hundred twenty-six
of this article plus interest.

(b) The corporation shall make all shareholders, whether or not
residents of this state, whose demands remain unsettled parties to the
proceeding as in an action against their shares, and all parties must be served
with a copy of the petition. Nonresidents may be served by registered or
certified mail or by publication as provided by law.

(c) The jurisdiction of the court in which the proceeding is
commenced is plenary and exclusive. The court may appoint one or more persons as
appraisers to receive evidence and recommend a decision on the question of fair
value. The appraisers have the powers described in the order appointment them,
or in any amendment to it. The shareholders demanding appraisal rights are
entitled to the same discovery rights as parties in other civil proceedings.
There is no right to a jury trial.

(d) Each shareholder made a party to the proceeding is entitled to
judgment: (1) For the amount, if any, by which the court finds the fair value of
the shareholder's shares, plus interest, exceeds the amount paid by the
corporation to the shareholder for the shares; or (2) for the fair value, plus
interest, of the shareholder's shares for which the corporation elected to
withhold payment under section one thousand three hundred twenty-five of this
article.

SECTION 31D-13-1331. COURT COSTS AND COUNSEL FEES.

(a) The court in an appraisal proceeding commenced under section
one thousand three hundred thirty of this article shall determine all costs of
the proceeding, including the reasonable compensation and expenses of appraisers
appointed by the court. The court shall assess the costs against the
corporation, except that the court may assess costs against all or some of the
shareholders demanding appraisal, in amounts the court finds equitable, to the
extent the

-9-

court finds the shareholders acted arbitrarily, vexatiously, or not in good
faith with respect to the rights provided by this article.

(b) The court in an appraisal proceeding may also assess the fees
and expenses of counsel and experts for the respective parties, in amounts the
court finds equitable.

(1) Against the corporation and in favor of any or all
shareholders demanding appraisal if the court finds the corporation did not
substantially comply with the requirements of sections one thousand three
hundred twenty, one thousand three hundred twenty-two, one thousand three
hundred twenty-four or one thousand three hundred twenty-five of this article;
or

(2) Against either the corporation or a shareholder demanding
appraisal, in favor of any other party, if the court finds that the party
against whom the fees and expenses are assessed acted arbitrarily, vexatiously,
or not in good faith with respect to the rights provided by this article.

(c) If the court in an appraisal proceeding finds that the
services of counsel for any shareholder were of substantial benefit to other
shareholders similarly situated, and that the fees for those services should not
be assessed against the corporation, the court may award to counsel reasonable
fees to be paid out of the amounts awarded the shareholders who were benefited.

(d) To the extent the corporation fails to make a required payment
pursuant to sections one thousand three hundred twenty-four, one thousand three
hundred twenty-five or one thousand three hundred twenty-six of this article,
the shareholder may sue directly for the amount owed and, to the extent
successful, are to be entitled to recover from the corporation all costs and
expenses of the suit, including counsel fees.

C0769960

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APPENDIX II

VALUATION

UPTOWNER INNS, INC.

AS OF JUNE 30, 2003

SEPTEMBER 26, 2003

-1-

Mr. Carl Midkiff, President
Uptowner Inns, Inc.
741 Fifth Avenue
Huntington, WV 25701

Dear Carl:

We have prepared and enclosed, herewith, our valuation report of Uptowner Inns,
Inc. dated September 26, 2003. The purpose of the valuation is to render an
opinion as to the fair market value of the common stock of Uptowner Inns, Inc.
as of June 30, 2003.

The term "fair value" is defined in the West Virginia Code as follows:

" "Fair value" means the value of the corporation's shares determined:
Immediately before the effectuation of the corporate action to which
the shareholder objects; using customary and current valuation concepts
and techniques generally employed for similar businesses in the conduct
of the transaction requiring appraisal; and without discounting for
lack of marketability or minority status..."

Our report is based on historical and prospective financial information provided
to us by management and other third parties. Had we audited or reviewed the
underlying data, matters may have come to our attention which would have
resulted in our using amounts different from those provided. Accordingly, we
take no responsibility for the underlying data presented in this report. Users
of this valuation report should be aware that business valuations are based on
future earnings potential that may or may not materialize. Therefore, the actual
results achieved during the projection period will vary from the projections
used in this valuation, and the variations may be material.

Based on our study and analytical review procedures, we have concluded that a
reasonable estimate of the fair value of one hundred percent (100%) of the
common stock of Uptowner Inns, Inc. as of June 30, 2003 is $1,600,000., or $1.07
per share based on 1,496,317 shares issued and outstanding net of treasury
stock. We have no present or contemplated financial interest in

-2-

Uptowner Inns, Inc. Our fees for this valuation are based upon our normal hourly
billing rates for this type of work, and are in no way contingent upon the
results of our findings. We have no responsibility to update this report for
events and circumstances occurring subsequent to the date of this report.

This report has been prepared for the specific purpose of setting a value for
Uptowner Inns, Inc.'s common stock, as of June 30, 2003, which will be used to
establish an exchange rate for a reverse stock split. This report is not to be
copied or made available to any persons without the express written consent of
Somerville & Company, P.L.L.C.

Susan K. Richardson, CPA, CVA

September 26, 2003

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TABLE OF CONTENTS

P A G E
-------

I. INTRODUCTION
Purpose............................................................... 6
Approach.............................................................. 6
Limiting Conditions................................................... 6

II. COMPANY BACKGROUND
General............................................................... 7
Competition........................................................... 8
Management and Ownership.............................................. 8

III. ECONOMIC OUTLOOK
National.............................................................. 9 - 10
West Virginia......................................................... 11

IV. INDUSTRY OVERVIEW
General History of the Hospitality Industry........................... 12
National Industry Outlook............................................. 13 - 14
Local Outlook......................................................... 15
Management's Outlook.................................................. 16 - 17

V. FINANCIAL REVIEW
Overview.............................................................. 18
Balance Sheet......................................................... 18
Income Statement...................................................... 18

VI. COMPARATIVE ANALYSIS
Overview.............................................................. 19
Balance Sheet Comparison.............................................. 19
Income Statement Comparison........................................... 20
Comparative Analysis Summary.......................................... 20

VII. NATURE OF THE SECURITY
Overview.............................................................. 21
Control............................................................... 21
Marketability......................................................... 21

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VIII. APPROACHES TO VALUATION
Income Approach....................................................... 22
Asset Approach........................................................ 22
Market Approach....................................................... 22 - 23
Hybrid Approaches, Rules of Thumb and Agreements in Place............. 24

IX. METHODS OF VALUATION EXPLAINED
Overview.............................................................. 25
Normalizing Adjustments............................................... 25
Adjustments to Net Assets............................................. 25
Capitalization of Earnings............................................ 25
Determination of Capitalization Rate.................................. 25
Build-Up of Capitalization Rate....................................... 26

X. RECONCILIATION OF VALUATION ESTIMATES...................................... 27

APPENDICES

APPENDIX A VALUATION METHODS

APPENDIX B FINANCIAL STATEMENT SUMMARIES - ADJUSTED

APPENDIX C FINANCIAL STATEMENT ADJUSTMENTS

APPENDIX D FINANCIAL STATEMENT SUMMARIES - HISTORICAL

APPENDIX E COMPARATIVE RATIOS - RMA

APPENDIX F ILLUSTRATIVE GRAPH OF REVENUES AND SALARY EXPENSE

APPENDIX G SUMMARY APPRAISAL REPORT

APPENDIX H AUDITED FINANCIAL STATEMENTS

APPENDIX I VALUATION ANALYST'S QUALIFICATIONS

-5-

INTRODUCTION

Purpose:

Uptowner Inns, Inc. operates a hotel known as the Holiday Inn Hotel and
Suites. The Holiday Inn Hotel & Suites includes dining, lounge and banquet
facilities. The Company, located in Huntington, West Virginia, is organized as a
Corporation (type "C"), and has been in this business for approximately 40
years.

This report is to determine the fair market value (on a minority
interest basis) of the common stock of Uptowner Inns, Inc. as of June 30, 2003.
This report will be used to assist the Corporation with planning a reverse stock
split of one for 10,000, with a mandatory buyout of all those shareholders with
less than 10,000 shares and all odd lots of those who hold over 10,000 shares.

Approach:

Our approach has been to determine an estimate of the value, which
would provide a fair and reasonable return on investment to an investor or
owner, in view of the facts available to us at the time. Our opinion is based
on, among other things, our estimate of the risks facing the Company and return
on investment which would be required on alternative investments with similar
levels of risk.

Both internal and external factors influencing the value of the Company
were reviewed, analyzed and interpreted. Internal factors include the Company's
financial position, results of operations and the size and marketability of the
interest being valued. External factors include, among other things, the status
of the overall economy as well as the hospitality industry, specifically, and
the position of the Company relative to that industry.

This report has been prepared in accordance with standards established
by the National Association of Certified Valuation Analysts.

Limiting Conditions:

The estimate of value rendered in this report is based on information
provided in whole or in part by the owners and management of the Company and
also third parties. We have not audited or attempted to confirm this information
for accuracy or completeness. We have relied upon the representations of the
owner and management concerning the value and useful condition of all equipment
used in the business, real estate, investments and any other assets or
liabilities except as specifically stated to the contrary in this report. We
have not attempted to confirm whether or not all assets of the business are free
and clear of liens and encumbrances, or that the Company has good title to all
assets.

Somerville & Company, P.L.L.C. does not purport to be a guarantor of
value. Valuation of closely held companies is an imprecise science, with value
being a question of opinion and reasonable people can differ in their estimates
of value. Somerville & Company, P.L.L.C. has, however, performed conceptually
sound and commonly accepted methods of valuation in determining the estimate of
value included in this report.

The valuation estimate included in this report assumes that the
existing management of the Company will maintain the character and integrity of
the Company through any sale, reorganization or reduction of any
owners/managers' participation in the existing activities of the Company.

-6-

COMPANY BACKGROUND

General:

Uptowner Inns, Inc. currently operates one (1) hotel in Huntington,
West Virginia. The Corporation was incorporated on July 1, 1961. The Company is
structured as a corporation (type "C") and has been since its inception. The
original board of directors consisted of several prominent business leaders;
however, Robert P. Holley, the original president, was the only individual who
owned over 2% of the stock. Mr. Holley's ownership percentage was approximately
20%. Mr. Holley's background in sales set the stage for the creation of the
Uptowner Inns, Inc., and the offer to the community to purchase stock in this
new company. As a result of this move to sell Uptowner Inns, Inc. stock, the
Company ended up with over 1,000 shareholders, some with as few as five (5)
shares. It was the large number of shareholders that mandated the Company follow
SEC regulations.

Uptowner Inns, Inc. built their first two (2) hotels in the downtown
areas of Huntington and Parkersburg, West Virginia in the early 1960's. Uptowner
Inns, Inc. entered the hospitality business at the right time, as the industry
was getting ready to enter some very profitable and good years. These first two
(2) hotels were financially successful in the early years and dividends were
also paid out. With the success of the first two (2) hotels, Bob Holley began a
franchising program and sold two (2) franchises before realizing the Company did
not have the resources to promote or service these franchises.

In the late 1960's, Uptowner Inns, Inc. expanded to Augusta, Georgia
and St. Petersburg, Florida, purchasing two (2) hotels in the downtown areas.
The properties in Georgia and Florida started losing money at such a rapid rate,
the cash flow of the profitable hotels in West Virginia was soon depleted. In
1971 with the Company in danger of collapse, the board of directors dismissed
Bob Holley as President.

The next 15 years, between 1971 and 1985, were a time of survival with
little potential for growth. The board of directors hired Violet Midkiff as the
Company's President to replace Bob Holley, Uptowner Inns, Inc. held on to the
Georgia and Florida properties for several years, before selling them to cut
their losses. The sale of the two (2) properties came only after they drained
the Company of most of their resources. By 1985, the Huntington and Parkersburg
properties had physically deteriorated, resulting in decreased occupancies and
profits.

In the mid 1980's, Uptowner Inns, Inc. was on the brink of bankruptcy
with occupancy percentages falling below 30%. Violet Midkiff turned to her son,
Carl Midkiff, for help getting the property headed back in the right direction.
Mr. Midkiff established a plan to remodel the Huntington hotel and acquire a
Holiday Inn franchise. The franchise was enough to bring profitability back to
Uptowner Inns, Inc. during the early 1990's. Mr. Midkiff's ideas on growth soon
started receiving resistance from management, and he left Uptowner Inns, Inc. to
pursue other interests. The hotel soon went back to a survival state, doing well
to break even.

In 1995, Carl Midkiff once again became involved with Uptowner Inns,
Inc. He built a new hotel in Huntington at a different downtown location. The
new Holiday Inn Hotel and Suites property opened in September 1998 under the
management of Richard Monga. The new property achieved profitability in the
second full month of operation and has been profitable ever since.

In 2000, Violet Midkiff retired when diagnosed with Alzheimer's. Carl
Midkiff took over as President of Uptowner Inns, Inc. in 2000, and to date,
still holds the office of President. Mr. Midkiff sold the old property in July
2002.

-7-

COMPANY BACKGROUND

Competition

The Company has several major competitors, as follows:

- Radisson Hotel, Huntington, West Virginia

- Hampton Inn, Huntington, West Virginia

- Ramada Limited, Huntington, West Virginia

The Company also has approximately 5 to 10 other small sized
competitors.

The Company perceives that its major strengths are:

- excellent location of property

- capable management

- excellent product

The Company perceives that its major weaknesses are as follows:

- lack of capital

- due to the number of shareholders, Company is subject
to SEC filing regulations

Management and Ownership:

The majority shareholder of the Company is Carl E. Midkiff, who is
actively involved in its management as President and Chief Operating Officer.

Uptowner Inns, Inc. is organized as a corporation (type "C") and is
closely held among family members under the following stock ownership
percentages:

Shareholder Number of Shares Percent
----------- ---------------- -------

Carl E. Midkiff 271,974 Direct 17.17%

Violet Midkiff 162,262 Direct 10.25%

Various Family Members 418,238 Direct & Indirect 26.41%

Prestige Properties 40,727 Direct 2.57%
(Controlled by Carl Midkiff)

Treasury Stock 87,246 5.51%

All others 603,116 38.09%

Total shares outstanding 1,583,563 100.00%

-8-

ECONOMIC OUTLOOK

National

GENERAL ECONOMIC OVERVIEW

According to preliminary estimates released by the Department of
Commerce's Bureau of Economic Analysis, Real Gross Domestic Product ("GDP"), the
output of goods and services produced by labor and property located in the
United States, increased at an annualized rate of 1.9% during the first quarter
of 2003. While better than an expected 1.6% growth rate, many analysts believe
economic growth will come at a slow rate. The military action, in Iraq and the
aftermath of the war, have also caused a great deal of uncertainty for
businesses. Annualized growth in GDP for the fourth quarter of 2002 was revised
to 1.4%, higher than the preliminary estimated rate of 0.7%. First quarter GDP
reflected an increase in personal consumption expenditures, residential
structures, net exports of goods and services, and government spending. These
gains were partly offset by a decrease in nonresidential structures and change
in private inventories.

After leaving the federal funds target rate unchanged at 1.75% from
December 2001 through November 2002, the Federal Reserve (the "Fed") lowered the
rate in December 2002 to 1.25%. This was the first cut by the Fed after cutting
rates 11 times during 2001. The rate has been unchanged in 2003. The Fed is
closely monitoring economic growth, financial markets, and labor data for signs
of continued slow economic growth. The Fed, seeking to give another boost to the
economy and to keep the threat of deflation stabilized, cut interest rates to
1958 lows in late June 2003.

The Conference Board reported that the Composite Index of Leading
Economic Indicators ("LEI"), the government's primary forecasting gauge,
increased 1.0% in May 2003 to 111.6 after a decrease of 0.2% in March and an
increase of 0.1% in April. The index attempts to gauge economic activity six (6)
to nine (9) months in advance. Multiple consecutive moves in the same direction
are said to be indicative of the general direction of the economy. In May, eight
(8) of the ten (10) leading economic indicators increased. The positive
contributors to the leading index, from largest to smallest, were real money
supply, index of consumer expectations, stock prices, average weekly initial
claims for unemployment insurance (inverted), vendor performance, building
permits, average weekly manufacturing hours, and manufacturers' new orders for
consumer goods and materials. The negative contributors were manufacturers' new
orders, nondefense capital goods, and Interest rate spread 10 year Treasury
bonds less federal funds. In May, the Coincident Index gained 0.1% while the
Lagging Index fell 0.1%. In its data release, the Conference Board indicated
that "it is possible that the two (2) consecutive increases (April 2003 and May
2003) reflect the beginning of an upward trend, thereby ending the flat trend
that began in early 2002." The Fed's hope is that, "a long-awaited pick up in
growth - still not clearly evident in daily economic data but widely forecasted
- - soon will materialize, again with help from the Bush administration's latest
US $350-billion of tax cuts."

The Dow Jones Industrial Average finished the quarter 3.02% lower than
its fourth quarter 2002 close, while the S&P declined 3.6% for the quarter. The
NASDAQ increased 0.4% during the first quarter of 2003.

-9-

ECONOMIC OUTLOOK

National

HOTEL INDUSTRY

The travel and hospitality industry was hit with two (2) major blows
during the first quarter of 2003: the outbreak of war in Iraq and the SARS
epidemic from North Asia. The fourth quarter of 2002 suffered similar blows with
the September 11 anniversary scare, and the ongoing threat of war in Iraq.

SOURCE: "The National Economic Review" 1st Quarter 2003
Bureau of Economic Analysis June 2003

-10-

ECONOMIC OUTLOOK

West Virginia

GENERAL ECONOMIC OVERVIEW

West Virginia's Gross State Product (GSP), the value of outputs of
goods and services located in the state, averaged a growth rate of 3.8% during
the 90s while the US total GSP averaged 5.7% for the same time period. West
Virginia's GSP increased 2.5% during 2001 compared to a 3.5% increase
nationally. Recent projections by West Virginia University indicated that West
Virginia is expected to grow at a rate of 2.8% per year through calendar year
2007. These figures could change depending on how the national economy grows
between 2003 and 2007.

West Virginia's unemployment rate was 6.1% in December 2002, 5.4% in
January 2003, 6.0% in February 2003, 5.7% in March 2003, and 6.0% in April 2003.
The rate has been somewhat sporadic the last several months, but equaled that of
the national unemployment rate at the end of April 2003.

West Virginia has extensive natural resources and is among the nation's
leaders when it comes to producing bituminous coal. Natural gas, stone, cement,
salt, and oil are also important elements of West Virginia's natural resources.
Major glass, chemical, and high-technology industries are among those utilizing
West Virginia's natural resources.

SOURCE: West Virginia Economic Summary June 2003

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INDUSTRY OVERVIEW

GENERAL HISTORY OF THE HOSPITALITY INDUSTRY

At the beginning of the twentieth century, the hotel industry was made
up of small, independent operators. With the change in transportation and the
necessity of long-distance travel, national chains started to become popular and
became a good alternative to the independent operators. According to one
analyst, "Chains allow customers to interact with the same organization when
traveling across country, which reduces uncertainty and improves expectation of
good service from patronizing a hotel." In 1900, less than 1% of all hotels were
part of a chain hotel. By 1930, chains owned approximately 15%, and by 1980,
chains owned more than 50%. Hotel chains changed the complexity of the
hospitality industry, adding new opportunities for managers and those people who
specialized in a certain area. These new opportunities led the way for the
creation of management companies.

The next big change in the industry came in the 1980's with the
overbuilding of chain hotels all around the country. Most markets became heavily
saturated with an increased amount of room supply, with little or no growth in
room demand. By 1990, the chain owned properties fell to approximately 45%. By
the early 1990's, development of new properties was kept at a minimum, which
left management companies competing for fewer hotels and existing hotels. Hotel
owners then had more leverage to negotiate management fees. By the mid 1990s,
many chains merged and reorganized giving them a higher percentage of ownership.
By 2000, chains owned approximately 60% of all properties.

The recession that began in early 2001 once again slowed the
hospitality industry. Companies had to find a way to cut costs and increase
productivity as travel began to weaken. Those companies who have been able to
maintain their profit margins by cutting expenses are the properties that have
remained on top during the slow economic growth that has brought us to 2003.
Because these companies have found new ways to be profitable with less revenues,
these same properties will be the ones that flourish as the economy starts to
grow.

SOURCE: AFL-CIO Working For America Institute, "U.S. Hotels & Their Workers:
Room For Improvement"(C)2003

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INDUSTRY OVERVIEW

NATIONAL INDUSTRY OUTLOOK

After three (3) year of declining occupancy percentages, stability
appears to be returning to the hotel industry. Most forecasts for 2003 show the
decline in occupancy will end, but little, if any, growth is being projected. In
their Forecasts & Analyses for the Hospitality Industry, PricewaterHouseCoopers
states,

"In 2003, a strengthening corporate sector will stimulate a slight
rebound in lodging demand from the business segment, while further
increases from leisure demand are expected to moderate. PwC forecasts
that demand will recover to its last peak level (achieved in the fourth
quarter of 2000) by the third quarter. With supply growth at its
slowest since 1993, the demand increases will allow occupancy to
advance 0.7 percentage points to 60.0 percent in 2003. At this
occupancy level, price competition will still remain intense. (The last
time occupancies were lower than the prevailing occupancies in the
three-year period from 2001 to 2003 was during the period from 1969 to
1971.) The weakness in ADR (Average Daily Rate) is most evident in the
upper upscale segment and upscale segment where occupancies have fallen
between five and six occupancy points from 2000 to 2002.
PricewaterhouseCoopers expects the condition to persist at least
through 2003. Even with the expected sales and profit improvement in
2003, corporations will continue to control travel costs. Therefore PwC
forecasts only 0.9 percent gain in nominal ADR in 2003."

The midscale properties with food and beverage segments have suffered
more than any other segment, and is not forecasted to gain much ground in 2003.
Even though the midscale properties are projected to gain 0.2% in occupancy
percentages, the average daily rates will decrease due to the price competition
discussed in the PricewaterhouseCoopers forecast.

PricewaterhouseCoopers added to their forecast several scenarios that
involved the possibility of war in Iraq and the duration of that war. (All PwC
forecasts were completed prior to the war in Iraq.) PwC projected that occupancy
percentages would only increase to 59.6% in a brief war scenario.

Industry room supply increased 1.8% in 2002 while room demand only
increased by 0.8%. With the sluggish economy, the industry is fortunate that
more hotels were not constructed during 2002. Many operators and investors are
planning to start construction in 2003, with many properties ready to go online
during 2004 and 2005; the timeframe when the economy should be in a full growth
mode.

For now, as growth is going to continue to be slow, it appears that the
battle for market share is the way to go. This will continue to be a problem for
the midscale hotels with food and beverage facilities. As the upper scale
properties compete with each other, rates are expected to drop, pulling many
midscale customers to the lower end of the upper scale market, once again
leaving the midscale properties losing occupancy percentage points.

-13-

INDUSTRY OVERVIEW

NATIONAL INDUSTRY OUTLOOK (Cont'd)

One other concern that faces the hospitality industry is how safe do
travelers feel after the September 11, 2001 attacks, the war in Iraq, and the
continued uncertainty of terrorist attacks in the United States. A recent study,
done by PricewaterhouseCoopers shows a direct correlation between the rise in US
security alerts with occupancy percentage in the week following such change in
alert status. In most cases, occupancy percentages fell drastically after the
security alert had been raised, showing that travelers are still very much aware
of the dangers that still exist from possible terrorist attacks.

SOURCE PricewaterhouseCoopers Forecasts & Analyses for the Hospitality Industry
February 2003

Ernst & Young Lodging Forecast 2003 Edition
Smith Travel Research 2002 U.S. Lodging Industry Results
"The National Economic Review" 1st Quarter 2003

-14-

INDUSTRY OVERVIEW

LOCAL OUTLOOK

The hospitality industry in the Huntington area has always been a
little volatile due to new property construction, old properties closing down,
businesses leaving town, and the constant struggle to bring new business into
the state. Smith Travel Research compares the Holiday Inn Hotel and Suites with
five (5) other similar properties located in the Huntington and Charleston area,
and issues their findings through the STAR Report. The STAR Report provides
comparison information for this six (6) property competitive set, along with
comparisons to the entire West Virginia market, Southern West Virginia market,
upscale properties, and also the midscale chains.

The local market forecast is similar to the National outlook in the
sense that little growth is expected. In the short term, battling for market
share is going to be the main objective. During the twelve month period ending
April 30, 2003, the Holiday Inn Hotel and Suites had a 14.4% market share, and a
market penetration of 123.3%, a 2.5% increase over the same twelve (12) month
period ending April 30, 2002. This information is based on the six (6) hotels
within the Holiday Inn Hotel and Suites competitive market set, and compiled by
Smith Travel Research.

SOURCE Smith Travel Research STAR Summary Report April, 2003

-15-

MANAGEMENT'S OUTLOOK FOR YEAR 2003 AND BEYOND

Historically, the Holiday Inn has established itself as the premier
hotel for corporate business in the Huntington area.

The Pullman Square Project is going to be a multi use retail and
entertainment complex at the Southside of the Hotel, only 40 yards away.

1. Construction started in July 2003 and completion of the project is
projected in 2005.

2. As part of the project, the city of Huntington acquired 40% of the Holiday
Inn parking lot at a sales price of $1.

3. The foundation work for the project started in August 2003 and construction
and development will continue for a period of two (2) to three (3) years.

As a result of the above development, the following financial impact
has been noticed by management.

1. August 2003 vs August 2002

The room revenue in August 2003 (income statement) was $22,304. lower than
room revenue for the same period, August 2002. This is an 8.3% decline in
room revenue from the previous year. In the area of food and beverage, the
decline was $1,297. or 19.1% from the previous year. The total revenue in
August 2003 declined by $25,036. or 8.9%. Net income for the same period
declined by $23,551. or 31.4%.

2. September 2003 vs. September 2002

The projected room revenue for September 2003 will be $14,600. lower than
September 2002, a decline of 6%. The overall decline in total revenue is
projected to be 7-8% lower than September 2002.

The following reasons are attributed to this declining trend.

1. The guest parking at the Holiday Inn Hotel and Suites has been reduced to
103 parking spaces or by 42%. This has a severe impact on guests choosing
to stay at the hotel as it causes inconvenience. Prior to July 2003,
parking at the hotel was a major competitive advantage, and this advantage
no longer exists.

2. With construction commencing in July 2003, noise from the construction has
become a serious issue of contention for our guests. The construction site,
which is only 40 yards from the hotel, starts at 7:00-7:15 A.M. and has
become an irritating factor for our corporate guests. The Corporate
clientele is seeking a peaceful and harmonious environment. When
construction begins at 7:00 A.M., the guests are irritated with the
construction and do not want to continue their loyalty to the hotel. We are
experiencing a loss of at least eight-ten (8-10) guests per week that voice
their opinion but there are others who just do not return to the hotel.

-16-

MANAGEMENT'S OUTLOOK FOR YEAR 2003 AND BEYOND

3. The construction will continue for at least two (2) years. In these two (2)
years, we will experience an occupancy decline of at least 10%. The
breakeven point for the hotel is 61% in occupancy points and over and above
61% occupancy is considered profit. In the past, hotel occupancy has
averaged 72-74%. With an occupancy decline of at least 10%, management
hopes to hold the average occupancy levels at 60-63%. With this projection,
the profits will be eliminated and the hotel will function at breakeven
level or 1% or 2% higher. This decrease in the hotel operating results will
flow through directly to the corporate financial statements reflecting far
less than attractive results of operations in the near future.

Synopsis

1. As is evident with August and September 2003 income statements, the Holiday
Inn Hotel & Suites is on its way to a declining occupancy and our
conservative projections is a 10% decline in occupancy.

2. The rate structure as yet has only experienced a 1% decline. If a decline
in occupancy continues and is greater than 10%, then management will have
to reduce its rates, in order to stop revenue from declining at a quicker
rate.

3. Management can forecast the decline in occupancy for the next two (2) years
from data available in August and September 2003, but to project for 2004
and 2005 is almost impossible due to other extraneous factors in the
market.

4. To project the time frame to recapture lost market after three (3) years is
impossible. It is easier for a new hotel to capture new business than it is
for an older hotel to recapture lost market share.

-17-

FINANCIAL REVIEW

Overview

Our financial review of the Company included the review and analysis of
the Company's independently audited year-end balance sheets and income
statements for the period from June 30, 1999 through June 30, 2003. In our
opinion, the period covered [five (5) years] in our review and analysis, is
adequate to identify any existing financial and operational trends that would
affect our estimate of value.

For purposes of this valuation, we have summarized the data from the
past five (5) years' audited financial statements and reflected the appropriate
adjustments to restate the results of operations for fiscal years ending June
30, 2001, 2002 and 2003 due to the discontinuation of the long-term rental
segment during 2002 and 2003. Due to the lack of readily available detailed
information, as well as the dated quality of the information, the years ending
in 1999 and 2000 were not restated for this purpose. The resulting adjusted
figures were then compared to normal industry data of publicly held companies
and similar data of the Company for the last five years.

Included in Exhibits B & D are various summaries of financial data that
were generated in our financial review and analysis process. The following are
what we consider representative of the financial position and results of
operations of Uptowner Inns, Inc., as of the date of valuation and for the five
(5) year period analyzed.

Balance Sheet

Uptowner Inns, Inc., as of June 30, 2003, had a stable balance sheet as
evidenced by a constant debt to equity ratio through the year ended June 2003.
The current and quick ratios improved dramatically in 2002 when the Company
began disposing of the long-term rental segment of operations and now will
exceed industry comparisons. The Company's total asset turnover ratio, which
measures the efficiency with which the Company operates, has remained fairly
stable over the five (5) year period being analyzed although below industry
averages.

Income Statement

Hotel revenue has been steadily decreasing from a high of nearly $3.9
million in 2001 to approximately $3.1 million in the fiscal year ended 2003.
Current management projections are not optimistic with regard to an increase in
these revenues in the near future due to ongoing heavy construction on
neighboring properties. For at least the short run, one (1) to two (2) years,
management anticipates flat or slightly declining revenues and overall profits.

Salaries expense, the single largest component of operating expenses at
nearly 25%, has remained very stable over the five (5) years with a high of
25.32% and a low of 24.10% of sales in 2000 and 2001, respectively (Appendix F).

It should also be noted that the Company has significant net operating
loss carryovers, which will be available to shelter profits should they be
generated in the future.

-18-

COMPARATIVE ANALYSIS

Overview

In order to gain a better perspective as to the financial position and
results of operations of Uptowner Inns, Inc., it is necessary to compare the
Company's performance to the other companies in its industry. To accomplish this
purpose, we have selected information contained in the "Annual Statement
Studies" published by the Risk Management Association, formerly Robert Morris
Associates (RMA). Risk Management Association compiles and publishes financial
data on various industries including Restaurant/Lodging - Hotels and Motels.
Even though the data published by Risk Management Association is not totally
consistent with the data reported by Uptowner Inns, Inc., it is generally
accepted as being representative of the industries on which it reports and,
therefore, is a reasonable source of financial data for a comparative analysis
of Uptowner Inns, Inc.

Balance Sheet Comparison

In comparing various adjusted balance sheet items of Uptowner Inns,
Inc. to RMA's "Annual Statement Studies", several differences are evident. The
Company has a different asset mix than the companies that make up the median of
the RMA data. The Company carries a higher current asset to total asset
percentage and a slightly higher cash position. The Company's investment in net
fixed assets is in line with the industry at 80.28% of total assets compared to
the industry average of 80.50%.

The Company's capital structure varies from that which is common in the
industry. Total debt as a percent of assets is 80.17% compared to the industry
at 89%. Correspondingly, the Company carries a higher percentage of equity to
assets than the industry.

The Company's net worth as a percent of total assets steadily declined
from about 19.19% to 14.75% in 2002. This was followed by a big jump in 2003 to
19.83% of total assets following the disposition of a segment of the business
and settlement of pending legal claims related to the discontinuation of plans
to build a second hotel in the area. These ratios compare favorably to the
industry median of 11.0%. Although its interest coverage ratio continues to be
somewhat below industry statistics, its current and quick ratios are well above
2003 averages at 2.19 and 2.18, respectively, as compared to .70 and .50,
respectively, for the industry as a whole.

-19-

COMPARATIVE ANALYSIS

Income Statement Comparison

The Company's adjusted operating expenses as a percent of sales are at
a five (5) year low of 94.22% of sales in 2003. Over the most recent five (5)
years, the Company's adjusted before-tax return on assets and equity has
averaged (0.66%) and (3.78%), respectively, both of which are significantly
below levels currently reported by RMA. It should be noted that averages for the
past five (5) years are severely skewed by the operating loss recorded for
fiscal 2002. The adjusted pre-tax return on assets and equity reported for
fiscal 2003 were 0.54% and 3.18%, respectively.

Comparative Analysis Summary

In summary, the Company's asset mix and liability mix is somewhat
different than the industry median. The Company's operating performance has been
well below the industry over the most recent five years, but its financial
position and liquidity ratios have remained fairly stable or slightly improved
over the last several years. Thus, with management's attention directed toward
overcoming the past and coping with adverse circumstances related to the nearby
construction, the Company is striving for a brighter future.

-20-

NATURE OF THE SECURITY

Overview

Before estimates of value can be made, the nature of the security being
valued and the expected income of the subject security must be discussed. The
value of a security is influenced by many of its characteristics, including
control and marketability.

Control

The market value of publicly traded securities normally reflects the
minority interest being traded. The price of a successful tender offer seeking
control is usually higher than previous minority trades and reflects the value
of the premium for control. The intention of this report is to estimate the
value of a non-controlling interest in Uptowner Inns, Inc. However, the purpose
of this report is to determine the "fair value" at which the Corporation will
establish an exchange rate for a reverse stock split of the Company's common
stock. Chapter 31D-13-1301 of the West Virginia Code defines "fair value" as
follows:

" "Fair value" means the value of the corporation's shares
determined: Immediately before the effectuation of the corporate
action to which the shareholder objects; using customary and current
valuation concepts and techniques generally employed for similar
businesses in the conduct of the transaction requiring appraisal;
and without discounting for lack of marketability or minority
status..."

Therefore, no discount for minority ownership is included.

Marketability

The income value methods of valuation are based on comparisons with
current values of securities traded on national exchanges. There are, however,
certain marketability differences between Uptowner Inns, Inc. securities and
publicly traded securities. An owner of publicly traded securities can know at
all times the market value of his holding. He can sell that holding on virtually
a moment's notice and receive cash, net of brokerage fees, within several
working days.

Such is not the case with Uptowner Inns, Inc. Consequently, liquidating
a position in the Company could be a more costly and time-consuming process than
liquidating stock in publicly traded firms. A marketability discount would be
warranted. In this instance, due to the purpose for which this report is
prepared, no marketability discount is applied.

-21-

APPROACHES TO VALUATION

There are three (3) main approaches to valuing small closely held
businesses. Under these approaches there are several different valuation
methods. The following is a discussion of each approach and certain methods
under these approaches.

Income Approach

The income approach gives primary consideration to an investment's
earnings. The theory being that an investment is worth the present value of all
reasonably expected future returns. This approach is most commonly applied by
using a capitalized current earnings method or a discounted future earnings
method.

The discounted future returns method under the income approach was not
selected. Any forecasted future earnings or cash flow would have been extremely
speculative in view of the Company's operating history. Additionally, a
capitalized current earnings calculation does not consider the underlying asset
value currently in place where there is more than a minimal investment in
tangible assets. However, for the purpose of understanding the expected return
on investment, a willing buyer might realize the normalized unweighted after tax
earnings for the five (5) years ended June 30, 2003 were reviewed. Because this
calculation yielded a negative value, this method was not selected.

Asset Approach

The asset approach values an investment based on the current value of
its assets and liabilities. In valuing businesses, this approach is commonly
used when the subject business is a holding company or if the company has not
established a positive earnings history.

Due to the significantly lower profitability (as compared to industry
statistics) of the operation historically, the asset approach was selected. The
asset approach does not consider historical or possible future earnings when
determining the value of a given business. After considering adjustments to fair
value (see detailed discussion later), the adjusted net asset approach yielded a
value of $1,750,000. for 100% of the subject company without any further
discounts for lack of marketability or minority position.

Market Approach

The market approach determines the value of an investment by using
information obtained from actual sales of similar investments. This method is
widely used in valuing real property and in certain industries where comparable
sales can be discovered. This method has limited applicability in valuing a
smaller business due to the lack of information available from actual sales of
similar small businesses. Transaction data from The Institute of Business
Appraisers and private business sales transaction records as published by
"Pratt's Stats" were reviewed. Because it is nearly impossible to ascertain
whether these other company transactions represent sales of companies similar in
nature to the subject company, this method was not selected.

-22-

APPROACHES TO VALUATION

Further, it is also necessary to review prior transactions in the
Company's own stock. Over the past twenty (20) years, the following stock sales
have occurred:

DATE NUMBER OF SHARES PRICE PER SHARE
- -------------- ---------------- ---------------

February 1984 264,158 $ 0.65
June 1992 28,102 0.65
September 1998 30,049 0.65
November 2001 36,060 0.65
November 2002 15,552 0.65

These sales account for nearly 24% of the total outstanding stock of Uptowner
Inns, Inc. Additionally, there have been other miscellaneous sales over the last
30 years, with prices in the $0.50 to $0.65 range.

Because of the volume of shares changing hands and the stability of the
price in view of the lack of profitability of the enterprise, consideration of
these sales should have an impact on the final determination of "fair value".
The value of the Company computed at $0.65 per share is $972,606., without
further discounts for marketability or minority interest position.

-23-

APPROACHES TO VALUATION

Hybrid Approaches, Rules of Thumb and Agreements in Place

Hybrid approaches include excess earnings methods, which combine
characteristics of income approaches and asset approaches. The earnings in
excess of a reasonable rate of return are capitalized and added to the current
value of the business' assets. Rules of thumb are simple formulas developed for
various industries. In some cases, buy-sell agreements, retirement arrangements
or other agreements may be in place and bear consideration in the calculation of
the value of a company.

A method of valuation we reviewed to estimate the fair market of
Uptowner Inns, Inc. are the widely recognized "capitalization of excess earnings
- - return on assets" methods.

The capitalization of excess earnings - return on assets method is an
income and asset based approach to valuation where the adjusted net tangible and
intangible assets of the business entity are valued independently. These
component assets are comprised of the fair market value of the total assets of
the business less the total liabilities as of the date of the valuation. The
intangible assets are valued by capitalizing the excess earnings of the
business, where the excess earnings represent the earnings of the business in
excess of the earnings that provide a reasonable rate of return on the adjusted
net assets of the business.

The adjusted average net income after tax of ($15,458.) was reduced by
the average adjusted net assets of $1,571,840. multiplied by the risk free rate
of 4.8%. Because the average net income was negative, this method produces
skewed results. It does, however, give an indication of the impact that the
negative profitability has on the value of the business. Carrying this method
through its normal calculation using a capitalization rate of 25.6 produced a
value of $1,360,000. without any further discounts for lack of marketability or
minority interest status.

-24-

METHODS OF VALUATION EXPLAINED

Overview:

Our financial review of the Company included the review and analysis of
the Company's audited financial statements for the periods from June 30, 1999
through June 30, 2003. In our opinion, the period covered in our review and
analysis, five (5) years, is adequate to identify any existing financial and
operational trends that would affect our estimate of value. (See Appendix A for
detailed calculations of the valuation methods included in this presentation.)

Normalizing Adjustments

In June 2003, the Company sold four (4) of its rental properties. The
decision to sell these components was based on the desire of management to
discontinue the residential and commercial rental business and to focus the
efforts and resources of the Company on the hotel business. The results of
operations as well as the sale have been removed from the historical information
and the years ended 2001, 2002 and 2003 have been restated without including
these discontinued operations.

Adjustments to Net Assets:

In June 1996, an appraisal of the Holiday Inn property was conducted by
Robert Withers, MAI, RM. Although this appraisal was performed prior to the
construction phase, an expected value was given for the property at a stabilized
occupancy as of April 1, 1999. Mr. Withers concluded on a prospective market
value of $6,650,000. in full operation.

As of June 30, 2003, the net book value of the hotel property was
$6,217,300. Considering that the property is no longer new and the costs that
would be incurred in the process of disposing of the property would far exceed
any positive adjustment to book value, no adjustment was deemed necessary.

Capitalization of Earnings:

The capitalization of earnings method is an income-based approach to
valuation where the net cash flow or net earnings of the business entity are
valued. For purposes of this analysis, the most recent five (5) years average
earnings after tax were capitalized using a capitalization rate determined under
the "Build-up Method" as described below. Past earnings have been erratic and
the Company is not operating profitably.

Determination of Capitalization Rate:

To arrive at a capitalization rate, we constructed a "Build-up" model
utilizing the methodologies described by Shannon Pratt based on long-term
government bond rates as adjusted for equity risk and equity size premia (as
stated in Ibbotson Associates, "Stocks, Bonds, Bills and Inflation: 2003
Yearbook - Valuation Edition"). Additional adjustments were applied for industry
risk, specific company risk and estimated sustainable growth rate. The result
obtained was then compared to James H. Schildt's Risk Premium for Discounting
Projected Income Streams. With reference to both sources, a capitalization rate
of 25.6% for current year's net income was selected.

-25-

METHODS OF VALUATION EXPLAINED

BUILD-UP OF CAPITALIZATION RATE

Risk-free rate of return (20 year U. S. Treasury Bond) 4.8
Equity risk premium (SBBI Yearbook) 7.0
Small stock risk premium (SBBI Yearbook- Micro. Cap, Decile 10b) 9.16
Industry risk premium (SBBI Yearbook) (1.09)
Specific company risk premium 5.5
Discount rate for net cash flow 25.37
Increment to convert to net earnings capitalization rate 4.0
Less: Expected sustainable growth rate (3.0)
Capitalization rate for next year's earnings 26.37
Capitalization rate for current year's earnings [26.37/(1+g)] 25.60

-26-

RECONCILIATION OF VALUATION ESTIMATES

The estimate of the fair market value of 100% of the common stock of
Uptowner Inns, Inc. as of June 30, 2003 determined under the various methods as
explained above is as follows:

1. Adjusted Net Assets Method $ 1,750,000.
2. Prior Sales of Company Stock 972,606.
3. Capitalization of Excess Earnings - Reasonable Rate Method 1,360,000.

The history of the Company over the last five (5) years has been
erratic. It is well established that while an asset-based method of valuation
applies in the case of corporations that are essentially holding companies, an
earnings-based method is appropriate for corporations that are active operating
companies. Noting that the fixed assets are the largest contributor to total
asset value, we must also take into consideration the corporation's status as an
operating company. Furthermore, it is necessary to look at prior arms length
transactions in the Company's stock. For these reasons, a value that takes into
consideration both underlying asset value as well as the profitability and the
trading history of the company is deemed appropriate.

Based on analysis of the above methods, it is our opinion that the fair
market value of 100% of the common stock of Uptowner Inns, Inc., without
discounting, as of June 30, 2003 is:

ONE MILLION, SIX HUNDRED THOUSAND DOLLARS

$1,600,000.

ONE DOLLAR AND SEVEN CENTS PER SHARE

$1.07 PER SHARE

-27-

APPENDIX III

ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
UPTOWNER INNS, INC.

Pursuant to the provisions of Section 1005, Article 10, Chapter 31D of
the Code of West Virginia, the undersigned Corporation adopts the following
Articles of Amendment to its Articles of Incorporation:

FIRST: The name of the Corporation is Uptowner Inns, Inc.

SECOND: The following amendment of the Articles of Incorporation was
adopted by the shareholders of the Corporation on _________ ___, 200__, in the
manner prescribed by Section 1003, Article 10, Chapter 31D:

RESOLVED, that Article IV of the Articles of Incorporation of
the Corporation be amended to read, in its entirety, as follows:

IV. The amount of the total authorized capital of the
Corporation shall be Five Hundred Dollars ($500), which shall consist
of Five Hundred (500) shares of Common Stock, par value $1.00 per
share.

THIRD: The amendment of the Articles of Incorporation was adopted to
implement a reverse stock split of 1-for-10,000 shares of the common stock of
the Corporation. Upon the filing of these Articles of Amendment, each share of
existing common stock will automatically be reclassified into one ten thousandth
of a fully paid and non-assessable share of the new common stock without any
further action on the part of the shareholders. No certificates or scrip
representing fractional shares of the new common stock shall be issued in
connection with the reverse stock split. Within ten days

-1-

of the filing of these Articles of Amendment, the Corporation will mail to the
shareholders holding fewer than 10,000 shares of common stock or holding a
number of shares not evenly divisible by 10,000, a notice of the filing of the
Articles of Amendment and a letter of transmittal containing instructions with
respect to submission of shares of common stock to the Corporation. Upon
surrender of their old certificates, such shareholders will receive $1.07 per
share on a pre-split basis.

FOURTH: The amendment of the Articles of Incorporation was adopted on
__________ ___, 200__.

FIFTH: The amendment was duly approved by the shareholders in the
manner required by Section 1003, Article 10, Chapter 31D. The number of shares
of the Corporation outstanding at the time of such adoption was __________, and
the number of shares entitled to vote thereon was __________. The number of
shares voted for such amendment was ______, and the number of shares that voted
against such amendment was ________.

DATED: _____________ ______, 200___.

UPTOWNER INNS, INC.,

By:______________________________
Carl Midkiff
Its President

and

______________________________
Hobart Adkins
Its Secretary

-2-

STATE OF WEST VIRGINIA,

COUNTY OF CABELL, to-wit:

Taken, subscribed and sworn to before the undersigned authority by
____________________, as President of UPTOWNER INNS, INC., this ___ day of
_____________, 200___.

My commission expires __________________________________.

_______________________________
NOTARY PUBLIC

STATE OF WEST VIRGINIA,

COUNTY OF CABELL, to-wit:

Taken, subscribed and sworn to before the undersigned authority by
____________________, as Secretary of UPTOWNER INNS, INC., this ___ day of
_____________, 200___.

My commission expires __________________________________.

_______________________________
NOTARY PUBLIC

Articles of Amendment Prepared By:

Christina T. Brumley, Esq.
JACKSON KELLY PLLC
1600 Laidley Tower
P. O. Box 553
Charleston, West Virginia 25322

-3-

UPTOWNER INNS, INC.
741 5th AVENUE
HUNTINGTON, WEST VIRGINIA 25701
(304) 525-8162

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS FOR THE
SPECIAL MEETING OF SHAREHOLDERS,
JANUARY ___, 2004

Carl Midkiff and David Robinson, or either one of them, with full power
to act alone and with full power of substitution, are hereby authorized to
represent and to vote stock of the undersigned in Uptowner Inns, Inc., at the
Special Meeting of Shareholders to be held January __, 2004.

Unless otherwise specified on this proxy, the shares represented by
this proxy will be voted "FOR" the propositions listed on the reverse side and
described more fully in the proxy statement of Uptowner Inns, Inc., distributed
in connection with this Special Meeting. If any other business is presented at
said meeting, this proxy shall be voted in accordance with recommendations of
the board of directors.

PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)

UPTOWNER INNS, INC.

PLEASE MARK VOTE IN BOX IN THE FOLLOWING MANNER
USING DARK INK ONLY.

The board of directors recommends a vote "FOR" the listed propositions.

1. To approve and adopt an amendment to the Articles of Incorporation (the
"Articles of Incorporation") of Uptowner Inns, Inc., which amendment
effectuates a Reverse Stock Split (the "Reverse Stock Split") of Uptowner's
Common Stock that would result in (a) shareholders receiving one share of
new common stock, $1.00 par value (the "New Common Stock") owned as of the
effective date, (b) shareholders receiving cash in lieu of any fractional
share they would otherwise be entitled to receive as a result of the
Reverse Stock Split at a rate of $1.07 per share on a pre-split basis, and
(c) the reduction of Uptowner's authorized shares of Common Stock from
10,000 shares to 500 authorized shares, which is in proportion to the
Reverse Stock Split. The Reverse Stock Split is proposed to terminate
Uptowner's reporting obligations under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and is expected to reduce Uptowner's
expenses associated with filing reports with the Securities and Exchange
Commission. The amendment to the Articles of Incorporation provide as
follows:

RESOLVED, that Article IV of the Articles of Incorporation of
the Corporation be amended to read, in its entirety, as follows:

IV. The amount of the total authorized capital of the
Corporation shall be Five Hundred Dollars ($500), which shall consist
of Five Hundred (500) shares of Common Stock, par value $1.00 per
share.

For [ ] Against [ ] Abstain [ ]

2. To vote in accordance with the recommendation of management as to any other
matters, which may properly come before the Special Meeting or any
adjournments thereof.

For [ ] Against [ ] Abstain [ ]

Dated: _______________________, 2004
____________________________________
____________________________________
Signature(s)

When signing as attorney, executor,
administrator, trustee or guardian,
please give full title. If more than
one trustee, all should sign.

CO773847