<PAGE>   1


                                                                Exhibit 10.42


                                    NOTE

$20,000,000.00
                                                  Raleigh, North Carolina
                                                  October 29, 1996

                 For value received, the undersigned, WINSTON HOTELS, INC., a
North Carolina corporation (the "Company"), and WINN LIMITED PARTNERSHIP, a
North Carolina limited partnership (the "Partnership") (the Company and the
Partnership shall hereinafter be referred to, jointly and severally, as the
"Borrower"), jointly and severally promise to pay to the order of NATIONSBANK,
N.A., a national banking association (the "Bank"), for the account of its
Lending Office, the principal sum of TWENTY MILLION AND NO/100 DOLLARS
($20,000,000.00), or such lesser amount as shall equal the unpaid principal
amount of each Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below, on the dates and in the amounts provided in the
Credit Agreement.  The Borrower promises to pay interest on the unpaid
principal amount of this Note on the dates and at the rate or rates provided
for in the Credit Agreement.  Interest on any overdue principal of and, to the
extent permitted by law, overdue interest on the principal amount hereof shall
bear interest at the Default Rate, as provided for in the Credit Agreement.
All such payments of principal and interest shall be made in lawful money of
the United States in Federal or other immediately available funds at the office
of Wachovia Bank of Georgia, N.A., 191 Peachtree Street, N.E., Atlanta, Georgia
30303, or such other address as may be specified from time to time pursuant to
the Credit Agreement.

                 All Loans made by the Bank, the respective maturities thereof,
the interest rates from time to time applicable thereto and all repayments of
the principal thereof shall be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that
the failure of the Bank to make, or any error of the Bank in making, any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.

                 This note is one of the Notes referred to in the Credit
Agreement dated as of October 29, 1996, among the Borrower, the banks listed on
the signature pages thereof and their successors and assigns, Wachovia Bank of
North Carolina, N.A., as Collateral Agent and Wachovia Bank of Georgia, N.A.,
as Administrative Agent (as the same may be amended or modified from time to
time, the "Credit Agreement").  Terms defined in the Credit Agreement are used
herein with the same meanings.  Reference is made to the Credit Agreement for
provisions for the prepayment and the repayment hereof and the acceleration of
the maturity hereof.

                 Time is of the essence of this Note.  In the event all or any
part of any installment due under the terms of this Note is delinquent for more
than fifteen (15) days (excluding the final payment of principal and interest
due on the Maturity Date), there shall be due to the Bank, in addition to the
delinquent installment or part thereof and in order to compensate the Bank for
extra costs and expenses caused by such late payment, a sum equal to four
percent (4%) of the
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amount so delinquent.

                 THIS NOTE MAY NOT BE CHANGED ORALLY AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.

                 The Borrower hereby waives presentment, demand, protest,
notice of demand, protest and nonpayment and any other notice required by law
relative hereto, except to the extent as otherwise may be expressly provided
for in the Credit Agreement.

                 The Borrower agrees, in the event that this Note or any
portion hereof is collected by law or through an attorney at law, to pay all
reasonable costs of collection, including, without limitation, reasonable
attorneys' fees.

                 IN WITNESS WHEREOF, the Borrower has caused this Note to be
duly executed under seal, by its duly authorized officers as of the day and
year first above written.

                              BORROWER:

                              WINSTON HOTELS, INC., a North Carolina corporation


                              By: _____________________________
                                      Senior Vice President
ATTEST:

______________________________
Assistant Secretary

[CORPORATE SEAL]





<PAGE>   3

                            WINN LIMITED PARTNERSHIP, a North Carolina 
                            limited partnership (SEAL)

                            By:   WINSTON HOTELS, INC., its sole general partner


                                   By: _____________________________
                                           Senior Vice President
ATTEST:

______________________________
Assistant Secretary

[CORPORATE SEAL]





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                                     Note
                        LOANS AND PAYMENTS OF PRINCIPAL

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          Type                               Amount          Amount of   
           of          Interest  of         Principal        Maturity            Notation
Date     Loan(1)        Rate    Loan         Repaid            Date               Made By
----     ----          ------- ------       ---------        --------            --------
<S>      <C>           <C>     <C>          <C>              <C>                 <C>

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</TABLE>

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    (1)   I.e., a Base Rate or Euro-Dollar Loan.