Document:

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                                                                   Exhibit 10.21
STATE OF
         -----------------------------------

COUNTY OF
          ----------------------------------

                               WINSTON SPE II LLC
                                   (Borrower)

                                       to

                      GENERAL ELECTRIC CAPITAL CORPORATION
                                    (Lender)

                                     FORM OF
                 MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING

                           Dated: As of March 11, 2005

                                    Property:

               DOCUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:

                       Akin Gump Strauss Hauer & Feld, LLP
                          1333 New Hampshire Avenue, NW
                              Washington, DC 20036
                       Attention: Frank H. Henneburg, Esq.

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                 MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING

         This Mortgage, Security Agreement and Fixture Filing (this "MORTGAGE")
is executed as of March 11, 2005, by WINSTON SPE II LLC, a Delaware limited
liability company ("MORTGAGOR"), whose address for notice hereunder is c/o
Winston Hotels, Inc., 2626 Glenwood Avenue, Suite 200, Raleigh, North Carolina
27608, for the benefit of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation ("MORTGAGEE"), whose address for notice is c/o GE Real Estate -
Specialized Industries, 500 West Monroe Street, Suite 1500, Chicago, Illinois
60611, Attention: Asset Manager - Winston Portfolio.

ARTICLE 1

                                   DEFINITIONS

         Section 1.1 CERTAIN DEFINITIONS. As used herein, the following terms
shall have the following meanings:

         "INDEBTEDNESS": The sum of all (1) principal, interest and other
amounts due under or secured by the Loan Documents, (2) principal, interest, and
other amounts which may hereafter be loaned by Mortgagee, its successors or
assigns, to or for the benefit of the owner of the Mortgaged Property, when
evidenced by a promissory note or other instrument which, by its terms, is
secured hereby, and (3) all other indebtedness, obligations and liabilities now
or hereafter existing of any kind of Mortgagor to Mortgagee under documents
which recite that they are intended to be secured by this Mortgage.

         "LOAN DOCUMENTS": The (1) Loan Agreement of even date between Mortgagor
and Mortgagee (the "LOAN AGREEMENT"), (2) two (2) separate promissory notes of
even date, executed by Mortgagor, payable to the order of Mortgagee, in the
stated aggregate principal amount of $155,000,000 (together, the "NOTE"), which
mature on March 11, 2010, (3) this Mortgage, (4) the Assignment of Rents and
Leases, (5) the Security Agreement, (6) the Uniform Commercial Code Financing
Statements, (7) all other documents now or hereafter executed by Mortgagor or
any other person or entity to evidence or secure the payment of the Indebtedness
or the performance of the Obligations, and (8) all modifications, restatements,
extensions, renewals and replacements of the foregoing.

         "MORTGAGED PROPERTY": all estate, right, title, interest, claim and
demand whatsoever which Mortgagor now has or hereafter acquires, either in law
or in equity, in possession or expectancy, of, in and to (1) the real property
described in Exhibit A attached hereto and made a part hereof (the "LAND"), (2)
all buildings, structures and other improvements, now or at any time situated,
placed or constructed upon the Land (the "IMPROVEMENTS"), (3) all materials,
supplies, appliances, equipment (as such term is defined in the UCC), apparatus
and other items of personal property now owned or hereafter acquired by
Mortgagor and now or hereafter attached to, installed in or used in connection
with any of the Improvements or the Land, and water, gas, electrical, storm and
sanitary sewer facilities and all other utilities whether or not situated in
easements (the "FIXTURES"), (4) all right, title and interest of Mortgagor in
and to the following items of personal property now owned or hereafter acquired
by Mortgagor and now or

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hereafter affixed to, placed upon, used in connection with or otherwise related
to the Land and Improvements: all machinery; signs; artwork; office furnishings
and equipment; partitions and screens; refrigeration equipment; laundry, drying,
dishwashing and garbage disposal machinery or equipment; communication
apparatus, including television, radio, music and cable antennae and systems;
floor coverings, rugs, carpets, window coverings, blinds, awnings, shades,
curtains, drapes and rods; screens, storm doors and windows; stoves,
refrigerators, dishwashers and other installed appliances; attached cabinets;
trees, plants and other items of landscaping; motorized, manual, mechanical or
other buses, boats, aircrafts and vehicles of any nature whatsoever; visual and
electronic surveillance systems and other security systems; switchboards,
exchanges, wires and phone jacks; maintenance equipment, golf carts, pro shop
merchandise, tables, chairs, mirrors, desks, beds, pillows, sheets, blankets and
towels, wall coverings, clocks, lamps; kitchen, restaurant, bar, lounge, public
room, public area and other operating or specialized equipment, including menus,
dishes, flatware, dishware, glassware, cooking utensils, tables, refrigerating
units, microwave equipment, ovens, timers; food and beverages; liquor; cleaning
materials, other similar items; swimming pool heaters and equipment;
recreational equipment and maintenance supplies; clubhouse equipment,
furnishings and supplies, including lockers and sporting equipment; and health
and recreational facilities; and linens; (5) all goods, inventory, accounts,
general intangibles, software, investment property, instruments, letters of
credit, letter-of credit rights, deposit accounts, documents, chattel paper and
supporting obligations, as each such term is presently or hereafter defined in
the UCC, and all other personal property of any kind or character, including
such items of personal property as defined in the UCC, now owned or hereafter
acquired by Mortgagor and now or hereafter affixed to, placed upon, used in
connection with, arising from or otherwise related to the Land and Improvements
or which may be used in or relating to the planning, development, financing or
operation of the Mortgaged Property, including, without limitation, furniture,
furnishings, equipment, machinery, money, insurance proceeds, accounts, contract
rights, software, trademarks, goodwill, promissory notes, electronic and
tangible chattel paper, payment intangibles, documents, trade names, licenses
and/or franchise agreements, rights of Mortgagor under leases of Fixtures or
other personal property or equipment, inventory, all refundable, returnable or
reimbursable fees, deposits or other funds or evidences of credit or
indebtedness deposited by or on behalf of Mortgagor with any governmental
authorities, boards, corporations, providers of utility services, public or
private, including specifically, but without limitation, all refundable,
returnable or reimbursable tap fees, utility deposits, commitment fees and
development costs, and commercial tort claims arising from the development,
construction, use, occupancy, operation, maintenance, enjoyment, acquisition or
ownership of the Mortgaged Property (together with the items described in clause
(4), the "PERSONALTY"), (6) all reserves, escrows or impounds required under the
Loan Agreement and all deposit accounts (including accounts holding security
deposits) maintained by Mortgagor with respect to the Mortgaged Property, (7)
all plans, specifications, shop drawings and other technical descriptions
prepared for construction, repair or alteration of the Improvements, and all
amendments and modifications thereof (the "PLANS"), (8) to the extent assignable
by Mortgagor without the consent of any third party, all leases, subleases,
licenses, concessions, occupancy agreements or other agreements (written or
oral, now or at any time in effect) which grant a possessory interest in, or the
right to use, all or any part of the Mortgaged Property, together with all
related security and other deposits (the "Leases"), (9) to the extent assignable
by Mortgagor without the consent of any third party, all of the rents, revenues,
income, proceeds, profits, security and other types of deposits, lease
cancellation payments and other benefits paid or

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payable by parties to the Leases other than Mortgagor for using, leasing,
licensing, possessing, operating from, residing in, selling, terminating the
occupancy of or otherwise enjoying the Mortgaged Property (the "RENTS"), and all
other revenues, receipts, income, accounts and other receivables arising under,
out of, in connection with or related to the Mortgaged Property and including,
without limitation, revenues, receipts, income, receivables and accounts
relating to or arising from rentals, rent equivalent income, income and profit
from the use or occupancy of guest rooms, meeting rooms, food and beverage
facilities, other public facilities, vending machines, telephone and television
systems, guest laundry, sundry shop, gift shop, pool, golf course and exercise
facilities, the provision or sale of food, beverages or other goods and
services, and any other items of revenue, receipts or other income as identified
in the Uniform System of Accounts for Hotels published by the International
Association of Hospitality Accountants as revised from time to time, and all
rights to payment from any consumer credit charge card organization or entity
such as or similar to the organizations or entities that sponsor and administer
the American Express, Visa and MasterCard cards (collectively, "INCOME"), it
being the intention of this Mortgage that Mortgagee shall have a continuing
security interest in the Rents and Income pursuant to 11 U.S.C. Section 552(b)
after the commencement of any proceeding under the Bankruptcy Code involving
Mortgagor or Operating Lessee, (10) to the extent assignable by Mortgagor
without the consent of any third party, all other agreements, such as
construction contracts, architects' agreements, engineers' contracts, utility
contracts, maintenance agreements, management agreements, service contracts,
permits, licenses, certificates and entitlements in any way relating to the
development, construction, use, occupancy, operation, maintenance, enjoyment,
acquisition or ownership of the Mortgaged Property (including, without
limitation, the License Agreement and the Property Management Agreement) (the
"PROPERTY AGREEMENTS"), (11) all rights, privileges, tenements, hereditaments,
rights-of-way, easements, appendages and appurtenances appertaining to the
foregoing, and all right, title and interest, if any, of Mortgagor in and to any
streets, ways, alleys, strips or gores of land adjoining the Land or any part
thereof, (12) all accessions, replacements and substitutions for any of the
foregoing and all proceeds thereof, (13) all insurance policies (regardless of
whether required by Mortgagee), unearned premiums therefor and proceeds from
such policies covering any of the above property now or hereafter acquired by
Mortgagor, (14) all mineral, water, oil and gas rights now or hereafter acquired
and relating to all or any part of the Mortgaged Property, and (15) all of
Mortgagor's right, title and interest in and to any awards, remunerations,
reimbursements, settlements or compensation heretofore made or hereafter to be
made by any governmental authority pertaining to the Land, Improvements,
Fixtures or Personalty. As used in this Mortgage, the term "MORTGAGED PROPERTY"
shall mean all or, where the context permits or requires, any portion of the
above or any interest therein, wherever located.

         "OBLIGATIONS": All of the agreements, covenants, conditions,
warranties, representations and other obligations (other than to repay the
Indebtedness) made or undertaken by Mortgagor or any other person or entity to
Mortgagee or others as set forth in the Loan Documents.

         "OPERATING LEASE": The lease pursuant to which Operating Lessee
operates the Mortgaged Property, together with all amendments and extensions
thereof.

         "OPERATING LESSEE": Barclay Hospitality Services Inc., a North Carolina
corporation.

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         "PERMITTED ENCUMBRANCES": The outstanding liens, easements,
restrictions, security interests and other exceptions to title set forth in the
policy of title insurance insuring the lien of this Mortgage, together with (1)
the Permitted Liens (as defined in the Loan Agreement), and (2) the liens and
security interests in favor of Mortgagee created by the Loan Documents, none of
which, individually or in the aggregate, materially and adversely interferes
with the benefits of the security intended to be provided by this Mortgage,
materially and adversely affects the value of the Mortgaged Property, materially
and adversely impairs the use or operations of the Mortgaged Property or impairs
Mortgagor's ability to pay its obligations in a timely manner.

         "UCC": The Uniform Commercial Code as enacted and in effect in the
state where the Land is located (and as it may from time to time be amended);
provided that, to the extent that the UCC is used to define any term herein or
in any other Loan Document and such term is defined differently in different
Articles or Divisions of the UCC, the definition of such term contained in
Article or Division 9 shall govern; provided further, however, that if, by
reason of mandatory provisions of law, any or all of the attachment, perfection
or priority of, or remedies with respect to, any security interest herein
granted is governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the state where the Land is located, the term "UCC"
shall mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for the purposes of the provisions thereof relating to such
attachment, perfection, priority or remedies and for purposes of definitions
related to such provisions.

         Section 1.2 OTHER DEFINITIONS. Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in the Loan Agreement.

                                   ARTICLE 2

                                      GRANT

         Section 2.1 GRANT. To secure the full and timely payment of the
Indebtedness and the full and timely performance of the Obligations, Mortgagor
MORTGAGES, GRANTS, BARGAINS, SELLS and CONVEYS to Mortgagee the Mortgaged
Property, subject, however, to the Permitted Encumbrances, TO HAVE AND TO HOLD
the Mortgaged Property to Mortgagee, and Mortgagor does hereby bind itself, its
successors and assigns to WARRANT AND FOREVER DEFEND the title to the Mortgaged
Property unto Mortgagee.

                                   ARTICLE 3

                    WARRANTIES, REPRESENTATIONS AND COVENANTS

         Mortgagor warrants, represents and covenants to Mortgagee as follows:

         Section 3.1 TITLE TO MORTGAGED PROPERTY AND LIEN OF THIS INSTRUMENT.
Mortgagor owns the Mortgaged Property free and clear of any liens, claims or
interests, except the Permitted Encumbrances, and has rights and the power to
transfer each item of the Mortgaged Property. This Mortgage creates valid,
enforceable first priority liens and security interests against the Mortgaged
Property. Where any of the Mortgaged Property is in the possession of a

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third party, Mortgagor will join with Mortgagee in notifying the third party of
Mortgagee's security interest and obtaining an acknowledgment from the third
party that it is holding such Mortgaged Property for the benefit of Mortgagee.
Subject to the provisions of the Loan Agreement, Mortgagor will cooperate with
Mortgagee in obtaining control (for lien perfection purposes under the UCC) with
respect to any Mortgaged Property consisting of deposit accounts, investment
property, letter of credit rights or electronic chattel paper.

         Section 3.2 FIRST LIEN STATUS. Mortgagor shall preserve and protect the
first lien and security interest status of this Mortgage and the other Loan
Documents. If any lien or security interest other than the Permitted
Encumbrances is asserted against the Mortgaged Property, Mortgagor shall
promptly, and at its expense, (a) give Mortgagee a detailed written notice of
such lien or security interest (including origin, amount and other terms), and
(b) pay the underlying claim in full or take such other action so as to cause it
to be released or contest the same in compliance with the requirements of the
Loan Agreement (including the requirement of providing a bond or other security
satisfactory to Mortgagee).

         Section 3.3 PAYMENT AND PERFORMANCE. Mortgagor shall pay the
Indebtedness when due under the Loan Documents and shall perform the Obligations
in full when they are required to be performed.

         Section 3.4 REPLACEMENT OF FIXTURES AND PERSONALTY. Mortgagor shall
not, without the prior written consent of Mortgagee or as otherwise permitted by
the Loan Agreement, permit any of the Fixtures or Personalty to be removed at
any time from the Land or Improvements, unless the removed item is removed
temporarily for maintenance and repair or, if removed permanently, is obsolete
and is replaced by an article of equal or better suitability and value, owned by
Mortgagor subject to the liens and security interests of this Mortgage and the
other Loan Documents, and free and clear of any other lien or security interest
except such as may be first approved in writing by Mortgagee. Except as
permitted by the Loan Agreement, Mortgagor shall not incorporate into the
Mortgaged Property any item of personalty, fixtures or other property that is
not owned by Mortgagor free and clear of all liens or security interests except
the liens and security interests in favor of Mortgagee created by the Loan
Documents.

         Section 3.5 MAINTENANCE OF RIGHTS OF WAY, EASEMENTS AND LICENSES. To
the extent required by the Loan Agreement, Mortgagor shall maintain all rights
of way, easements, grants, privileges, licenses, certificates, permits,
entitlements, and franchises necessary for the use of the Mortgaged Property and
will not, without the prior consent of Mortgagee, consent to any public
restriction (including any zoning ordinance) or private restriction as to the
use of the Mortgaged Property. Mortgagor shall comply in all material respects
with all restrictive covenants affecting the Mortgaged Property, and all zoning
ordinances and other public or private restrictions as to the use of the
Mortgaged Property.

         Section 3.6 INSPECTION. Mortgagor shall permit Mortgagee, and
Mortgagee's agents, representatives and employees, upon the conditions and
subject to the limitations set forth in the Loan Agreement, to inspect the
Mortgaged Property and conduct such environmental and engineering studies as
Mortgagee may require, provided that such inspections and studies shall not
materially interfere with the use and operation of the Mortgaged Property.

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         Section 3.7 OTHER COVENANTS. All of the covenants in the Loan Agreement
are incorporated herein by reference and, together with covenants in this
Article 3, shall be covenants running with the land. The covenants set forth in
the Loan Agreement include, among other provisions, covenants relating to: (a)
the prohibition against the further sale, transfer or encumbering of any of the
Mortgaged Property [insert entire Due on Sale or Encumbrance Section from Loan
Agreement if required by local law], (b) the obligation to pay when due all
taxes on the Mortgaged Property or assessed against Mortgagee with respect to
the Loan, (c) the right of Mortgagee to inspect the Mortgaged Property, (d) the
obligation to keep the Mortgaged Property insured, (e) the obligation to comply
with all legal requirements (including environmental laws), maintain the
Mortgaged Property in good condition, and promptly repair any damage or
casualty, and (f) except as otherwise permitted under the Loan Agreement, the
obligation of Mortgagor to obtain Mortgagee's consent prior to entering into,
modifying or taking other actions with respect to Leases.

         Section 3.8 CONDEMNATION AWARDS AND INSURANCE PROCEEDS.

                  (a) CONDEMNATION AWARDS. Mortgagor assigns all awards and
compensation for any condemnation or other taking, or any purchase in lieu
thereof, to Mortgagee and authorizes Mortgagee to collect and receive such
awards and compensation and to give proper receipts and acquittances therefor,
subject to the terms of the Loan Agreement.

                  (b) INSURANCE PROCEEDS. Mortgagor collaterally assigns to
Mortgagee all proceeds of any insurance policies insuring against loss or damage
to the Mortgaged Property. Subject to the provisions of the Loan Agreement,
Mortgagor authorizes Mortgagee to collect and receive such proceeds and
authorizes and directs the issuer of each of such insurance policies to make
payment for all such losses directly to Mortgagee, instead of to Mortgagor and
Mortgagee jointly, for application pursuant to the terms of the Loan Agreement.

                                   ARTICLE 4

                             DEFAULT AND FORECLOSURE

         Section 4.1 REMEDIES. If an Event of Default (as defined in the Loan
Agreement) exists, Mortgagee may, at Mortgagee's election, exercise any or all
of the following rights, remedies and recourses:

                  (a) ACCELERATION. Declare the Indebtedness to be immediately
due and payable, without further notice, presentment, protest, notice of intent
to accelerate, notice of acceleration, demand or action of any nature whatsoever
(each of which hereby is expressly waived by Mortgagor), whereupon the same
shall become immediately due and payable.

                  (b) ENTRY ON MORTGAGED PROPERTY. Enter the Mortgaged Property
and take exclusive possession thereof and of all books, records and accounts
relating thereto. If Mortgagor remains in possession of the Mortgaged Property
after an Event of Default and without Mortgagee's prior written consent,
Mortgagee may invoke any legal remedies to dispossess Mortgagor.

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                  (c) OPERATION OF MORTGAGED PROPERTY. Hold, lease, develop,
manage, operate or otherwise use the Mortgaged Property upon such terms and
conditions as Mortgagee may deem reasonable under the circumstances (making such
repairs, alterations, additions and improvements and taking other actions, from
time to time, as Mortgagee deems necessary or desirable), and apply all Rents
and other amounts collected by Mortgagee in connection therewith in accordance
with the provisions of Section 4.7.

                  (d) FORECLOSURE AND SALE. Institute proceedings for the
complete foreclosure of this Mortgage, in which case the Mortgaged Property may
be sold for cash or credit in one or more parcels. Such sale shall be made in
accordance with the laws of the state where the Land is located relating to the
sale of real estate or by Chapter 9 of the UCC relating to the sale of
collateral after default by a debtor (as such laws now exist or may be hereafter
amended or succeeded), or by any other present or subsequent articles or
enactments relating to same. With respect to any notices required or permitted
under the UCC, Mortgagor agrees that ten (10) days' prior written notice shall
be deemed commercially reasonable. At any such sale by virtue of any judicial
proceedings or any other legal right, remedy or recourse, the title to and right
of possession of any such property shall pass to the purchaser thereof, and to
the fullest extent permitted by law, Mortgagor shall be completely and
irrevocably divested of all of its right, title, interest, claim and demand
whatsoever, either at law or in equity, in and to the property sold and such
sale shall be a perpetual bar both at law and in equity against Mortgagor, and
against all other persons claiming or to claim the property sold or any part
thereof, by, through or under Mortgagor. Mortgagee may be a purchaser at such
sale and if Mortgagee is the highest bidder, may credit the portion of the
purchase price that would be distributed to Mortgagee against the Indebtedness
in lieu of paying cash. Subject to compliance with applicable law, in connection
with any foreclosure sale: (i) Mortgagee shall have no obligation to clean up,
repair or otherwise prepare the Mortgaged Property for sale; (ii) Mortgagor
waives any right it may have to require Mortgagee to pursue any third party for
any of the Indebtedness; (iii) Mortgagee may comply with any applicable state or
federal law requirements in connection with a disposition of the Mortgaged
Property; (iv) Mortgagee may specifically disclaim any warranties of title or
the like; (v) if Mortgagee sells any of the Mortgaged Property on credit,
Mortgagor will be credited only with payments actually made by purchaser,
received by Mortgagee and applied to the indebtedness of the purchaser; and (vi)
Mortgagee may apply any noncash proceeds of a disposition of the Mortgaged
Property in any commercially reasonable manner selected by Mortgagee. Compliance
by Mortgagee with the standards set forth in the foregoing sentence shall not be
deemed to adversely affect the commercial reasonableness of any sale of the
Mortgaged Property or portion thereof.

                  (e) RECEIVER. Make application to a court of competent
jurisdiction for, and obtain from such court as a matter of strict right and
without notice to Mortgagor (to the extent permitted by applicable law) or
regard to the adequacy of the Mortgaged Property for the repayment of the
Indebtedness, the appointment of a receiver of the Mortgaged Property, and
Mortgagor irrevocably consents to such appointment. Any such receiver shall have
all the usual powers and duties of receivers in similar cases, including the
full power to rent, maintain and otherwise operate the Mortgaged Property upon
such terms as may be approved by the court, and shall apply such Rents in
accordance with the provisions of Section 4.7.

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                  (f) OTHER. Exercise all other rights, remedies and recourses
granted under the Loan Documents or otherwise available at law or in equity
(including an action for specific performance of any covenant contained in the
Loan Documents, or a judgment on the Note either before, during or after any
proceeding to enforce this Mortgage).

         Section 4.2 SEPARATE SALES. The Mortgaged Property may be sold in one
or more parcels and in such manner and order as Mortgagee, in its sole
discretion, may elect; the right of sale arising out of any Event of Default
shall not be exhausted by any one or more sales.

         Section 4.3 REMEDIES CUMULATIVE, CONCURRENT AND NONEXCLUSIVE. Mortgagee
shall have all rights, remedies and recourses granted in the Loan Documents and
available at law or equity (including the UCC), which rights (a) shall be
cumulative and concurrent, (b) may be pursued separately, successively or
concurrently against Mortgagor or others obligated under the Note and the other
Loan Documents, or against the Mortgaged Property, or against any one or more of
them, at the sole discretion of Mortgagee, (c) may be exercised as often as
occasion therefor shall arise, and the exercise or failure to exercise any of
them shall not be construed as a waiver or release thereof or of any other
right, remedy or recourse, and (d) are intended to be, and shall be,
nonexclusive. No action by Mortgagee in the enforcement of any rights, remedies
or recourses under the Loan Documents or otherwise at law or equity shall be
deemed to cure any Event of Default.

         Section 4.4 RELEASE OF AND RESORT TO COLLATERAL. Mortgagee may release,
regardless of consideration and without the necessity for any notice to or
consent by the holder of any subordinate lien on the Mortgaged Property, its
lien on any part of the Mortgaged Property without, as to the remainder, in any
way impairing, affecting, subordinating or releasing the lien or security
interests created in or evidenced by the Loan Documents or their stature as a
first and prior lien and security interest in and to the Mortgaged Property. For
payment of the Indebtedness, Mortgagee may resort to any other security in such
order and manner as Mortgagee may elect.

         Section 4.5 WAIVER OF REDEMPTION, NOTICE AND MARSHALLING OF ASSETS. To
the fullest extent permitted by law and except as otherwise provided in this
Mortgage, Mortgagor hereby irrevocably and unconditionally waives and releases
(a) all benefit that might accrue to Mortgagor by virtue of any present or
future statute of limitations or law or judicial decision exempting the
Mortgaged Property from attachment, levy or sale on execution or providing for
any appraisement, valuation, stay of execution, exemption from civil process,
redemption or extension of time for payment, (b) all notices of any Event of
Default or of Mortgagee's election to exercise or the actual exercise of any
right, remedy or recourse provided for under the Loan Documents, and (c) any
right to a marshalling of assets or a sale in inverse order of alienation.

         Section 4.6 DISCONTINUANCE OF PROCEEDINGS. If Mortgagee shall have
proceeded to invoke any right, remedy or recourse permitted under the Loan
Documents and shall thereafter elect to discontinue or abandon it for any
reason, Mortgagee shall have the unqualified right to do so and, in such an
event, Mortgagor and Mortgagee shall be restored to their former positions with
respect to the Indebtedness, the Obligations, the Loan Documents, the Mortgaged
Property and otherwise, and the rights, remedies, recourses and powers of
Mortgagee shall continue as if

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the right, remedy or recourse had never been invoked, but no such discontinuance
or abandonment shall waive any Event of Default which may then exist or the
right of Mortgagee thereafter to exercise any right, remedy or recourse under
the Loan Documents for such Event of Default.

         Section 4.7 APPLICATION OF PROCEEDS. The proceeds of any sale of, and
the Rents and other amounts generated by the holding, leasing, management,
operation or other use of, the Mortgaged Property, shall be applied by Mortgagee
(or the receiver, if one is appointed) in the following order unless otherwise
required by applicable law:

                  (a) to the payment of the costs and expenses of taking
possession of the Mortgaged Property and of holding, using, leasing, repairing,
improving and selling the same, including, without limitation (1) receiver's
fees and expenses, (2) court costs, (3) attorneys' and accountants' fees and
expenses, (4) costs of advertisement, and (5) the payment of all ground rent,
real estate taxes and assessments, except any taxes, assessments, or other
charges subject to which the Mortgaged Property shall have been sold;

                  (b) to the payment of all amounts (including interest), other
than the unpaid principal balance of the Note and accrued but unpaid interest,
which may be due to Mortgagee under the Loan Documents;

                  (c) to the payment of the Indebtedness and performance of the
Obligations in such manner and order of preference as Mortgagee in its sole
discretion may determine; and

                  (d) the balance, if any, to the payment of the persons legally
entitled thereto.

         Section 4.8 OCCUPANCY AFTER FORECLOSURE. The purchaser at any
foreclosure sale pursuant to Section 4.1(d) shall become the legal owner of the
Mortgaged Property, and Mortgagor and Operating Lessee shall deliver possession
thereof immediately to the purchaser upon demand. It shall not be necessary for
the purchaser at said sale to bring any action for possession of the Mortgaged
Property other than the statutory action of forcible detainer in any justice
court having jurisdiction over the Mortgaged Property.

         Section 4.9 ADDITIONAL ADVANCES AND DISBURSEMENTS; COSTS OF
ENFORCEMENT.

                  (a) If any Event of Default exists, Mortgagee shall have the
right, but not the obligation, to cure such Event of Default in the name and on
behalf of Mortgagor. All sums advanced and expenses incurred at any time by
Mortgagee under this Section 4.9, or otherwise under this Mortgage or any of the
other Loan Documents or applicable law, shall bear interest from the date that
such sum is advanced or expense incurred, to and including the date of
reimbursement, computed at the Default Rate (as defined in the Loan Agreement),
and all such sums, together with interest thereon, shall be secured by this
Mortgage.

                  (b) Mortgagor shall pay all expenses (including reasonable
attorneys' fees and expenses) of or incidental to the perfection and enforcement
of this Mortgage and the other Loan Documents, or the enforcement, compromise or
settlement of the Indebtedness or any claim

                                       9
<PAGE>

under this Mortgage and the other Loan Documents, and for the curing thereof, or
for defending or asserting the rights and claims of Mortgagee in respect
thereof, by litigation or otherwise.

         Section 4.10 NO MORTGAGEE IN POSSESSION. Neither the enforcement of any
of the remedies under this Article 4, the assignment of the Rents and Leases
under Article 5, the security interests under Article 6, nor any other remedies
afforded to Mortgagee under the Loan Documents, at law or in equity shall cause
Mortgagee to be deemed or construed to be a mortgagee in possession of the
Mortgaged Property, to obligate Mortgagee to lease the Mortgaged Property or
attempt to do so, or to take any action, incur any expense, or perform or
discharge any obligation, duty or liability whatsoever under any of the Leases
or otherwise.

                                   ARTICLE 5

                         ASSIGNMENT OF RENTS AND LEASES

         Section 5.1 ASSIGNMENT. Mortgagor acknowledges and confirms that it has
executed and delivered to Mortgagee an Assignment of Rents, Leases and Income of
even date (the "ASSIGNMENT OF RENTS AND LEASES"), intending that such instrument
create a present, absolute assignment to Mortgagee of the Leases and Rents.
Without limiting the intended benefits or the remedies provided under the
Assignment of Rents and Leases, Mortgagor hereby assigns to Mortgagee, as
further security for the Indebtedness and the Obligations, the Leases and Rents.
While any Event of Default exists, Mortgagee shall be entitled to exercise any
or all of the remedies provided in the Assignment of Rents and Leases and in
Article 4 hereof, including the right to have a receiver appointed. If any
conflict or inconsistency exists between the assignment of the Rents and the
Leases in this Mortgage and the absolute assignment of the Rents and the Leases
in the Assignment of Rents and Leases, the terms of the Assignment of Rents and
Leases shall control.

         Section 5.2 NO MERGER OF ESTATES. So long as any part of the
Indebtedness and the Obligations secured hereby remain unpaid and undischarged,
the fee and leasehold estates to the Mortgaged Property shall not merge, but
shall remain separate and distinct, notwithstanding the union of such estates
either in Mortgagor, Mortgagee, any lessee or any third party by purchase or
otherwise.

                                   ARTICLE 6

                               SECURITY AGREEMENT

         Section 6.1 SECURITY INTEREST. This Mortgage constitutes a "Security
Agreement" on personal property within the meaning of the UCC and other
applicable law with respect to the Personalty, Fixtures, Plans, Leases, Rents,
Income and Property Agreements. To this end, Mortgagor grants to Mortgagee, a
first and prior security interest in the Personalty, Fixtures, Plans, Leases,
Rents, Income and Property Agreements and all other Mortgaged Property which is
personal property to secure the payment of the Indebtedness and performance of
the Obligations, and agrees that Mortgagee shall have all the rights and
remedies of a secured party under the UCC with respect to such property. Any
notice of sale, disposition or other intended

                                       10
<PAGE>

action by Mortgagee with respect to the Personalty, Fixtures, Plans, Leases,
Rents, Income and Property Agreements sent to Mortgagor at least ten (10) days
prior to any action under the UCC shall constitute reasonable notice to
Mortgagor.

         Section 6.2 FINANCING STATEMENTS. Mortgagor hereby irrevocably
authorizes Mortgagee at any time and from time to file in any filing office in
any UCC jurisdiction one or more financing or continuation statements and
amendments thereto, relative to all or any part of the Mortgaged Property,
without the signature of Mortgagor where permitted by law. Mortgagor agrees to
furnish Mortgagee, promptly upon request, with any information required by
Mortgagee to complete such financing or continuation statements. If Mortgagee
has filed any initial financing statements or amendments in any UCC jurisdiction
prior to the date hereof, Mortgagor ratifies and confirms its authorization of
all such filings. Mortgagor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any
financing statement without the prior written consent of Mortgagee, and agrees
that it will not do so without Mortgagee's prior written consent, subject to
Mortgagor's rights under Section 9-509(d)(2) of the UCC. Mortgagor shall execute
and deliver to Mortgagee, in form and substance reasonably satisfactory to
Mortgagee, such additional financing statements and such further assurances as
Mortgagee may, from time to time, reasonably consider necessary to create,
perfect and preserve Mortgagee's security interest hereunder and Mortgagee may
cause such statements and assurances to be recorded and filed, at such times and
places as may be required or permitted by law to so create, perfect and preserve
such security interest. Mortgagor's principal place of business is in the State
of North Carolina at the address set forth in the first paragraph of this
Mortgage.

         Section 6.3 FIXTURE FILING. This Mortgage shall also constitute a
"fixture filing" for the purposes of the UCC against all of the Mortgaged
Property which is or is to become fixtures. Information concerning the security
interest herein granted may be obtained at the addresses of Debtor (Mortgagor)
and Secured Party (Mortgagee) as set forth in the first paragraph of this
Mortgage.

                                   ARTICLE 7

                                  MISCELLANEOUS

         Section 7.1 NOTICES. Any notice required or permitted to be given under
this Mortgage shall be in writing and sent in the manner and otherwise subject
to the provisions for notices set forth in Article 12 of the Loan Agreement.

         Section 7.2 COVENANTS RUNNING WITH THE LAND. All Obligations contained
in this Mortgage are intended by Mortgagor and Mortgagee to be, and shall be
construed as, covenants running with the Mortgaged Property. As used herein,
"Mortgagor" shall refer to the party named in the first paragraph of this
Mortgage and to any subsequent owner of all or any portion of the Mortgaged
Property (without in any way implying that Mortgagee has or will consent to any
such conveyance or transfer of the Mortgaged Property). All persons or entities
who may have or acquire an interest in the Mortgaged Property shall be deemed to
have notice of, and be

                                       11
<PAGE>

bound by, the terms of the Loan Agreement and the other Loan Documents; however,
no such party shall be entitled to any rights thereunder without the prior
written consent of Mortgagee.

         Section 7.3 ATTORNEY-IN-FACT. Mortgagor hereby irrevocably appoints
Mortgagee and its successors and assigns, as its attorney-in-fact, which agency
is coupled with an interest, (a) to execute and/or record any notices of
completion, cessation of labor, or any other notices that Mortgagee deems
appropriate to protect Mortgagee's interest, if Mortgagor shall fail to do so
within ten (10) days after written request by Mortgagee, (b) upon the issuance
of a deed pursuant to the foreclosure of this Mortgage or the delivery of a deed
in lieu of foreclosure, to execute all instruments of assignment, conveyance or
further assurance with respect to the Leases, Rents, Income, Personalty,
Fixtures, Plans and Property Agreements in favor of the grantee of any such deed
and as may be necessary or desirable for such purpose, (c) to prepare, execute
and file or record financing statements, continuation statements, applications
for registration and like papers necessary to create, perfect or preserve
Mortgagee's security interests and rights in or to any of the collateral, and
(d) while any Event of Default exists, to perform any obligation of Mortgagor
hereunder; however: (1) Mortgagee shall not under any circumstances be obligated
to perform any obligation of Mortgagor; (2) any sums advanced by Mortgagee in
such performance shall be added to and included in the Indebtedness and shall
bear interest at the Default Rate; (3) Mortgagee as such attorney-in-fact shall
only be accountable for such funds as are actually received by Mortgagee; and
(4) Mortgagee shall not be liable to Mortgagor or any other person or entity for
any failure to take any action which it is empowered to take under this Section.

         Section 7.4 SUCCESSORS AND ASSIGNS. This Mortgage shall be binding upon
and inure to the benefit of Mortgagee and Mortgagor and their respective
permitted successors and assigns. Mortgagor shall not, without the prior written
consent of Mortgagee or as otherwise permitted by the Loan Agreement, assign any
rights, duties or obligations hereunder.

         Section 7.5 NO WAIVER. Any failure by Mortgagee to insist upon strict
performance of any of the terms, provisions or conditions of the Loan Documents
shall not be deemed to be a waiver of same, and Mortgagee shall have the right
at any time to insist upon strict performance of all of such terms, provisions
and conditions.

         Section 7.6 SUBROGATION. To the extent proceeds of the Note have been
used to extinguish, extend or renew any indebtedness against the Mortgaged
Property, then Mortgagee shall be subrogated to all of the rights, liens and
interests existing against the Mortgaged Property and held by the holder of such
indebtedness and such former rights, liens and interests, if any, are not
waived, but are continued in full force and effect in favor of Mortgagee.

         Section 7.7 LOAN AGREEMENT. If any conflict or inconsistency exists
between this Mortgage and the Loan Agreement, the Loan Agreement shall govern.

         Section 7.8 RELEASE OR RECONVEYANCE. Upon payment in full of the
Indebtedness and performance in full of the Obligations, Mortgagee, at
Mortgagor's expense, shall release the liens and security interests created by
this Mortgage and reconvey the Mortgaged Property to Mortgagor.

                                       12
<PAGE>

         Section 7.9 WAIVER OF STAY, MORATORIUM AND SIMILAR RIGHTS. Mortgagor
agrees, to the full extent that it may lawfully do so, that it will not at any
time insist upon or plead or in any way take advantage of any appraisement,
valuation, stay, marshalling of assets, extension, redemption or moratorium law
now or hereafter in force and effect so as to prevent or hinder the enforcement
of the provisions of this Mortgage or the indebtedness secured hereby, or any
agreement between Mortgagor and Mortgagee or any rights or remedies of
Mortgagee.

         Section 7.10 LIMITATION ON LIABILITY. Mortgagor's liability hereunder
is subject to the limitation on liability provisions of Article 13 of the Loan
Agreement.

         Section 7.11 OBLIGATIONS OF MORTGAGOR, JOINT AND SEVERAL. If more than
one person or entity has executed this Mortgage as "Mortgagor," the obligations
of all such persons or entities hereunder shall be joint and several.

         Section 7.12 GOVERNING LAW. This Mortgage shall be governed by the laws
of the State of New York in all respects, including, without limitation, matters
of construction, validity and performance, except that at all times the
provisions for the creation, perfection, enforcement, termination and release of
the liens and security interests created pursuant hereto and the conveyance of
any right, title and interest in and to any of the Mortgaged Property shall be
governed by and construed in accordance with the laws of the state in which the
Mortgaged Property is located, it being understood that, to the fullest extent
permitted by the law of such state, the law of the State of New York shall
govern the construction, validity and performance of this Mortgage and of all of
the obligations arising hereunder. To the fullest extent permitted by law,
Mortgagor hereby unconditionally waives any claim to assert that the law of any
other jurisdiction governs this Mortgage.

         Section 7.13 HEADINGS. The Article, Section and Subsection titles
hereof are inserted for convenience of reference only and shall in no way alter,
modify or define, or be used in construing, the text of such Articles, Sections
or Subsections.

         Section 7.14 COUNTERPARTS. This Mortgage may be executed in
counterparts, all of which counterparts together shall constitute one and the
same instrument (and original signature pages and notary pages from each
counterpart may be assembled into one original document to be recorded).

         Section 7.15 ENTIRE AGREEMENT. This Mortgage and the other Loan
Documents embody the entire agreement and understanding between Mortgagee and
Mortgagor and supersede all prior agreements and understandings between such
parties relating to the subject matter hereof and thereof. Accordingly, the Loan
Documents may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.

         Section 7.16 JOINDER BY OPERATING LESSEE.

                  (a) Operating Lessee acknowledges that it is under common
ownership and control with Mortgagor and that, in order to induce Mortgagee to
make the Loan and accept the Note, Operating Lessee desires to join in this
Mortgage to expressly subordinate the Operating

                                       13
<PAGE>

Lease to the lien and security title of this Mortgage, and to grant to Mortgagee
a first and prior security interest in any portion or item of the Mortgaged
Property in which Operating lessee has any right, title or interest.

                  (b) Operating Lessee hereby agrees that the Operating Lease
and the leasehold estate created thereby and all of Operating Lessee's rights
thereunder are and shall at all times remain subject, subordinate and inferior
to this Mortgage and the lien hereof and Mortgagee's rights hereunder, and to
all modifications, replacements, restatements, extensions, increases and
renewals hereof.

                  (c) To the extent that Operating Lessee now owns or hereafter
acquires any right, title or interest in or to any portion or item of the
Mortgaged Property, Operating Lessee hereby mortgages, grants, bargains, sells
and conveys such Mortgaged Property to Mortgagee to have and to hold such
Mortgaged Property to Mortgagee, pursuant to the provisions of Section 2.1
hereof and subject to all of the terms, conditions and provisions of this
Mortgage.

                  (d) Mortgagee acknowledges that Operating Lessee leases hotels
owned by persons other than Mortgagor and agrees that nothing contained in this
Section 7.16 shall apply to any hotel not owned by Mortgagor or be deemed to
convey any interest in the land, improvements, fixtures or personalty of any
kind that constitutes all or any portion of any hotel not owned by Mortgagor.

         [Section 7.17 STATE LAW PROVISIONS.]

                            [Signature Page Follows]

                                       14
<PAGE>

         EXECUTED as of the date first above written.

                                             WINSTON SPE II LLC, a Delaware
                                               limited liability company

                                             By: _________________________

                                             Name: ______________________

                                             Title: _______________________

         The undersigned, Operating Lessee, hereby joins in this Mortgage solely
for the purposes set forth in Section 7.16 hereof.

                                             BARCLAY HOSPITALITY SERVICES INC.,
                                               a North Carolina corporation

                                             By: _________________________

                                             Name: ______________________

                                             Title: _______________________

                                       15
<PAGE>

                                 ACKNOWLEDGMENT

STATE OF                                    )
         -----------------------------------)
                                            )  ss.
COUNTY OF                                   )
          ----------------------------------)

         On March __, 2005, before me, __________________________________,
Notary Public, personally appeared ________________________________________, who
is personally known to me or proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument as
_________________ of Winston SPE II LLC, a Delaware limited liability company,
and acknowledged to me that he/she executed the same in his/her authorized
capacity, and that by his/her signature on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

         WITNESS my hand and official seal.

                                            ------------------------------------
                                            Signature of Notary Public

STATE OF                                    )
         -----------------------------------)
                                            )  ss.
COUNTY OF                                   )
          ----------------------------------)

         On March __, 2005, before me, __________________________________,
Notary Public, personally appeared ____________________________________, who is
personally known to me or proved to me on the basis of satisfactory evidence to
be the person whose name is subscribed to the within instrument as
_______________ of Barclay Hospitality Services Inc., a North Carolina
corporation, and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.

         WITNESS my hand and official seal.

                                            ------------------------------------
                                            Signature of Notary Public

                                       16
<PAGE>

                                    EXHIBIT A

                          Legal Description of the Land<PAGE>

                                                                   Exhibit 10.22
STATE OF
         -----------------------------------

COUNTY OF
          ----------------------------------

                               WINSTON SPE II LLC
                                   (Borrower)

                                       to

                      GENERAL ELECTRIC CAPITAL CORPORATION
                                    (Lender)

                                     FORM OF
              DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING

                           Dated: As of March 11, 2005

                                    Property:

               DOCUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:

                       Akin Gump Strauss Hauer & Feld, LLP
                          1333 New Hampshire Avenue, NW
                              Washington, DC 20036
                       Attention: Frank H. Henneburg, Esq.

<PAGE>

              DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING

         This Deed of Trust, Security Agreement and Fixture Filing (this "DEED
OF TRUST") is executed as of March 11, 2005, by WINSTON SPE II LLC, a Delaware
limited liability company ("GRANTOR"), whose address for notice hereunder is c/o
Winston Hotels, Inc., 2626 Glenwood Avenue, Suite 200, Raleigh, North Carolina
27608, to ____________________________________________________, Trustee
("TRUSTEE"), whose address is ________________
______________________________________________, for the benefit of GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation ("BENEFICIARY"), whose
address for notice is c/o GE Real Estate - Specialized Industries, 500 West
Monroe Street, Suite 1500, Chicago, Illinois 60611, Attention: Asset Manager -
Winston Portfolio.

                                   ARTICLE 1

                                   DEFINITIONS

         Section 1.1 CERTAIN DEFINITIONS. As used herein, the following terms
shall have the following meanings:

         "INDEBTEDNESS": The sum of all (1) principal, interest and other
amounts due under or secured by the Loan Documents, (2) principal, interest, and
other amounts which may hereafter be loaned by Beneficiary, its successors or
assigns, to or for the benefit of the owner of the Mortgaged Property, when
evidenced by a promissory note or other instrument which, by its terms, is
secured hereby, and (3) all other indebtedness, obligations and liabilities now
or hereafter existing of any kind of Grantor to Beneficiary under documents
which recite that they are intended to be secured by this Deed of Trust.

         "LOAN DOCUMENTS": The (1) Loan Agreement of even date between Grantor
and Beneficiary (the "LOAN AGREEMENT"), (2) two (2) separate promissory notes of
even date, executed by Grantor, payable to the order of Beneficiary, in the
stated aggregate principal amount of $155,000,000 (together, the "NOTE"), which
mature on March 11, 2010, (3) this Deed of Trust, (4) the Assignment of Rents
and Leases, (5) the Security Agreement, (6) the Uniform Commercial Code
Financing Statements, (7) all other documents now or hereafter executed by
Grantor or any other person or entity to evidence or secure the payment of the
Indebtedness or the performance of the Obligations, and (8) all modifications,
restatements, extensions, renewals and replacements of the foregoing.

         "MORTGAGED PROPERTY": all estate, right, title, interest, claim and
demand whatsoever which Grantor now has or hereafter acquires, either in law or
in equity, in possession or expectancy, of, in and to (1) the real property
described in Exhibit A attached hereto and made a part hereof (the "LAND"), (2)
all buildings, structures and other improvements, now or at any time situated,
placed or constructed upon the Land (the "IMPROVEMENTS"), (3) all materials,
supplies, appliances, equipment (as such term is defined in the UCC), apparatus
and other items of personal property now owned or hereafter acquired by Grantor
and now or hereafter attached

<PAGE>

to, installed in or used in connection with any of the Improvements or the Land,
and water, gas, electrical, storm and sanitary sewer facilities and all other
utilities whether or not situated in easements (the "FIXTURES"), (4) all right,
title and interest of Grantor in and to the following items of personal property
now owned or hereafter acquired by Grantor and now or hereafter affixed to,
placed upon, used in connection with or otherwise related to the Land and
Improvements: all machinery; signs; artwork; office furnishings and equipment;
partitions and screens; refrigeration equipment; laundry, drying, dishwashing
and garbage disposal machinery or equipment; communication apparatus, including
television, radio, music and cable antennae and systems; floor coverings, rugs,
carpets, window coverings, blinds, awnings, shades, curtains, drapes and rods;
screens, storm doors and windows; stoves, refrigerators, dishwashers and other
installed appliances; attached cabinets; trees, plants and other items of
landscaping; motorized, manual, mechanical or other buses, boats, aircrafts and
vehicles of any nature whatsoever; visual and electronic surveillance systems
and other security systems; switchboards, exchanges, wires and phone jacks;
maintenance equipment, golf carts, pro shop merchandise, tables, chairs,
mirrors, desks, beds, pillows, sheets, blankets and towels, wall coverings,
clocks, lamps; kitchen, restaurant, bar, lounge, public room, public area and
other operating or specialized equipment, including menus, dishes, flatware,
dishware, glassware, cooking utensils, tables, refrigerating units, microwave
equipment, ovens, timers; food and beverages; liquor; cleaning materials, other
similar items; swimming pool heaters and equipment; recreational equipment and
maintenance supplies; clubhouse equipment, furnishings and supplies, including
lockers and sporting equipment; and health and recreational facilities; and
linens; (5) all goods, inventory, accounts, general intangibles, software,
investment property, instruments, letters of credit, letter-of credit rights,
deposit accounts, documents, chattel paper and supporting obligations, as each
such term is presently or hereafter defined in the UCC, and all other personal
property of any kind or character, including such items of personal property as
defined in the UCC, now owned or hereafter acquired by Grantor and now or
hereafter affixed to, placed upon, used in connection with, arising from or
otherwise related to the Land and Improvements or which may be used in or
relating to the planning, development, financing or operation of the Mortgaged
Property, including, without limitation, furniture, furnishings, equipment,
machinery, money, insurance proceeds, accounts, contract rights, software,
trademarks, goodwill, promissory notes, electronic and tangible chattel paper,
payment intangibles, documents, trade names, licenses and/or franchise
agreements, rights of Grantor under leases of Fixtures or other personal
property or equipment, inventory, all refundable, returnable or reimbursable
fees, deposits or other funds or evidences of credit or indebtedness deposited
by or on behalf of Grantor with any governmental authorities, boards,
corporations, providers of utility services, public or private, including
specifically, but without limitation, all refundable, returnable or reimbursable
tap fees, utility deposits, commitment fees and development costs, and
commercial tort claims arising from the development, construction, use,
occupancy, operation, maintenance, enjoyment, acquisition or ownership of the
Mortgaged Property (together with the items described in clause (4), the
"PERSONALTY"), (6) all reserves, escrows or impounds required under the Loan
Agreement and all deposit accounts (including accounts holding security
deposits) maintained by Grantor with respect to the Mortgaged Property, (7) all
plans, specifications, shop drawings and other technical descriptions prepared
for construction, repair or alteration of the Improvements, and all amendments
and modifications thereof (the "PLANS"), (8) to the extent assignable by Grantor
without the consent of any third party, all leases, subleases, licenses,
concessions, occupancy agreements or other agreements (written or oral, now or
at any time in effect) which grant a

                                       2
<PAGE>

possessory interest in, or the right to use, all or any part of the Mortgaged
Property, together with all related security and other deposits (the "LEASES"),
(9) to the extent assignable by Grantor without the consent of any third party,
all of the rents, revenues, income, proceeds, profits, security and other types
of deposits, lease cancellation payments and other benefits paid or payable by
parties to the Leases other than Grantor for using, leasing, licensing,
possessing, operating from, residing in, selling, terminating the occupancy of
or otherwise enjoying the Mortgaged Property (the "RENTS"), and all other
revenues, receipts, income, accounts and other receivables arising under, out
of, in connection with or related to the Mortgaged Property and including,
without limitation, revenues, receipts, income, receivables and accounts
relating to or arising from rentals, rent equivalent income, income and profit
from the use or occupancy of guest rooms, meeting rooms, food and beverage
facilities, other public facilities, vending machines, telephone and television
systems, guest laundry, sundry shop, gift shop, pool, golf course and exercise
facilities, the provision or sale of food, beverages or other goods and
services, and any other items of revenue, receipts or other income as identified
in the Uniform System of Accounts for Hotels published by the International
Association of Hospitality Accountants as revised from time to time, and all
rights to payment from any consumer credit charge card organization or entity
such as or similar to the organizations or entities that sponsor and administer
the American Express, Visa and MasterCard cards (collectively, "INCOME"), it
being the intention of this Deed of Trust that Beneficiary shall have a
continuing security interest in the Rents and Income pursuant to 11 U.S.C.
Section 552(b) after the commencement of any proceeding under the Bankruptcy
Code involving Grantor or Operating Lessee, (10) to the extent assignable by
Grantor without the consent of any third party, all other agreements, such as
construction contracts, architects' agreements, engineers' contracts, utility
contracts, maintenance agreements, management agreements, service contracts,
permits, licenses, certificates and entitlements in any way relating to the
development, construction, use, occupancy, operation, maintenance, enjoyment,
acquisition or ownership of the Mortgaged Property (including, without
limitation, the License Agreement and the Property Management Agreement) (the
"PROPERTY AGREEMENTS"), (11) all rights, privileges, tenements, hereditaments,
rights-of-way, easements, appendages and appurtenances appertaining to the
foregoing, and all right, title and interest, if any, of Grantor in and to any
streets, ways, alleys, strips or gores of land adjoining the Land or any part
thereof, (12) all accessions, replacements and substitutions for any of the
foregoing and all proceeds thereof, (13) all insurance policies (regardless of
whether required by Beneficiary), unearned premiums therefor and proceeds from
such policies covering any of the above property now or hereafter acquired by
Grantor, (14) all mineral, water, oil and gas rights now or hereafter acquired
and relating to all or any part of the Mortgaged Property, and (15) all of
Grantor's right, title and interest in and to any awards, remunerations,
reimbursements, settlements or compensation heretofore made or hereafter to be
made by any governmental authority pertaining to the Land, Improvements,
Fixtures or Personalty. As used in this Deed of Trust, the term "MORTGAGED
PROPERTY" shall mean all or, where the context permits or requires, any portion
of the above or any interest therein, wherever located.

         "OBLIGATIONS": All of the agreements, covenants, conditions,
warranties, representations and other obligations (other than to repay the
Indebtedness) made or undertaken by Grantor or any other person or entity to
Beneficiary, Trustee or others as set forth in the Loan Documents.

                                       3
<PAGE>

         "OPERATING LEASE": The lease pursuant to which Operating Lessee
operates the Mortgaged Property, together with all amendments and extensions
thereof.

         "OPERATING LESSEE": Barclay Hospitality Services Inc., a North Carolina
corporation.

         "PERMITTED ENCUMBRANCES": The outstanding liens, easements,
restrictions, security interests and other exceptions to title set forth in the
policy of title insurance insuring the lien of this Deed of Trust, together with
(1) the Permitted Liens (as defined in the Loan Agreement), and (2) the liens
and security interests in favor of Beneficiary created by the Loan Documents,
none of which, individually or in the aggregate, materially and adversely
interferes with the benefits of the security intended to be provided by this
Deed of Trust, materially and adversely affects the value of the Mortgaged
Property, materially and adversely impairs the use or operations of the
Mortgaged Property or impairs Grantor's ability to pay its obligations in a
timely manner.

         "UCC": The Uniform Commercial Code as enacted and in effect in the
state where the Land is located (and as it may from time to time be amended);
provided that, to the extent that the UCC is used to define any term herein or
in any other Loan Document and such term is defined differently in different
Articles or Divisions of the UCC, the definition of such term contained in
Article or Division 9 shall govern; provided further, however, that if, by
reason of mandatory provisions of law, any or all of the attachment, perfection
or priority of, or remedies with respect to, any security interest herein
granted is governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the state where the Land is located, the term "UCC"
shall mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for the purposes of the provisions thereof relating to such
attachment, perfection, priority or remedies and for purposes of definitions
related to such provisions.

         Section 1.2 OTHER DEFINITIONS. Capitalized terms used and not otherwise
defined herein shall have the meanings assigned to them in the Loan Agreement.

                                   ARTICLE 2

                                      GRANT

         Section 2.1 GRANT. To secure the full and timely payment of the
Indebtedness and the full and timely performance of the Obligations, Grantor
GRANTS, BARGAINS, SELLS and CONVEYS to Trustee the Mortgaged Property, subject,
however, to the Permitted Encumbrances, TO HAVE AND TO HOLD, IN TRUST, WITH
POWER OF SALE, and Grantor does hereby bind itself, its successors and assigns
to WARRANT AND FOREVER DEFEND the title to the Mortgaged Property unto Trustee.

                                   ARTICLE 3

                    WARRANTIES, REPRESENTATIONS AND COVENANTS

         Grantor warrants, represents and covenants to Beneficiary as follows:

                                       4
<PAGE>

         Section 3.1 TITLE TO MORTGAGED PROPERTY AND LIEN OF THIS INSTRUMENT.
Grantor owns the Mortgaged Property free and clear of any liens, claims or
interests, except the Permitted Encumbrances, and has rights and the power to
transfer each item of the Mortgaged Property. This Deed of Trust creates valid,
enforceable first priority liens and security interests against the Mortgaged
Property. Where any of the Mortgaged Property is in the possession of a third
party, Grantor will join with Beneficiary in notifying the third party of
Beneficiary's security interest and obtaining an acknowledgment from the third
party that it is holding such Mortgaged Property for the benefit of Beneficiary.
Subject to the provisions of the Loan Agreement, Grantor will cooperate with
Beneficiary in obtaining control (for lien perfection purposes under the UCC)
with respect to any Mortgaged Property consisting of deposit accounts,
investment property, letter of credit rights or electronic chattel paper.

         Section 3.2 FIRST LIEN STATUS. Grantor shall preserve and protect the
first lien and security interest status of this Deed of Trust and the other Loan
Documents. If any lien or security interest other than the Permitted
Encumbrances is asserted against the Mortgaged Property, Grantor shall promptly,
and at its expense, (a) give Beneficiary a detailed written notice of such lien
or security interest (including origin, amount and other terms), and (b) pay the
underlying claim in full or take such other action so as to cause it to be
released or contest the same in compliance with the requirements of the Loan
Agreement (including the requirement of providing a bond or other security
satisfactory to Beneficiary).

         Section 3.3 PAYMENT AND PERFORMANCE. Grantor shall pay the Indebtedness
when due under the Loan Documents and shall perform the Obligations in full when
they are required to be performed.

         Section 3.4 REPLACEMENT OF FIXTURES AND PERSONALTY. Grantor shall not,
without the prior written consent of Beneficiary or as otherwise permitted by
the Loan Agreement, permit any of the Fixtures or Personalty to be removed at
any time from the Land or Improvements, unless the removed item is removed
temporarily for maintenance and repair or, if removed permanently, is obsolete
and is replaced by an article of equal or better suitability and value, owned by
Grantor subject to the liens and security interests of this Deed of Trust and
the other Loan Documents, and free and clear of any other lien or security
interest except such as may be first approved in writing by Beneficiary. Except
as permitted by the Loan Agreement, Grantor shall not incorporate into the
Mortgaged Property any item of personalty, fixtures or other property that is
not owned by Grantor free and clear of all liens or security interests except
the liens and security interests in favor of Beneficiary created by the Loan
Documents.

         Section 3.5 MAINTENANCE OF RIGHTS OF WAY, EASEMENTS AND LICENSES. To
the extent required by the Loan Agreement, Grantor shall maintain all rights of
way, easements, grants, privileges, licenses, certificates, permits,
entitlements, and franchises necessary for the use of the Mortgaged Property and
will not, without the prior consent of Beneficiary, consent to any public
restriction (including any zoning ordinance) or private restriction as to the
use of the Mortgaged Property. Grantor shall comply in all material respects
with all restrictive covenants affecting

                                       5
<PAGE>

the Mortgaged Property, and all zoning ordinances and other public or private
restrictions as to the use of the Mortgaged Property.

         Section 3.6 INSPECTION. Grantor shall permit Trustee and Beneficiary,
and their agents, representatives and employees, upon the conditions and subject
to the limitations set forth in the Loan Agreement, to inspect the Mortgaged
Property and conduct such environmental and engineering studies as Beneficiary
may require, provided that such inspections and studies shall not materially
interfere with the use and operation of the Mortgaged Property.

         Section 3.7 OTHER COVENANTS. All of the covenants in the Loan Agreement
are incorporated herein by reference and, together with covenants in this
Article 3, shall be covenants running with the land. The covenants set forth in
the Loan Agreement include, among other provisions, covenants relating to: (a)
the prohibition against the further sale, transfer or encumbering of any of the
Mortgaged Property [insert entire Due on Sale or Encumbrance Section from Loan
Agreement if required by local law], (b) the obligation to pay when due all
taxes on the Mortgaged Property or assessed against Beneficiary with respect to
the Loan, (c) the right of Beneficiary to inspect the Mortgaged Property, (d)
the obligation to keep the Mortgaged Property insured, (e) the obligation to
comply with all legal requirements (including environmental laws), maintain the
Mortgaged Property in good condition, and promptly repair any damage or
casualty, and (f) except as otherwise permitted under the Loan Agreement, the
obligation of Grantor to obtain Beneficiary's consent prior to entering into,
modifying or taking other actions with respect to Leases.

         Section 3.8 CONDEMNATION AWARDS AND INSURANCE PROCEEDS.

                  (a) CONDEMNATION AWARDS. Grantor assigns all awards and
compensation for any condemnation or other taking, or any purchase in lieu
thereof, to Beneficiary and authorizes Beneficiary to collect and receive such
awards and compensation and to give proper receipts and acquittances therefor,
subject to the terms of the Loan Agreement.

                  (b) INSURANCE PROCEEDS. Grantor collaterally assigns to
Beneficiary all proceeds of any insurance policies insuring against loss or
damage to the Mortgaged Property. Subject to the provisions of the Loan
Agreement, Grantor authorizes Beneficiary to collect and receive such proceeds
and authorizes and directs the issuer of each of such insurance policies to make
payment for all such losses directly to Beneficiary, instead of to Grantor and
Beneficiary jointly, for application pursuant to the terms of the Loan
Agreement.

                                   ARTICLE 4

                             DEFAULT AND FORECLOSURE

                                       6
<PAGE>

         Section 4.1 REMEDIES. If an Event of Default (as defined in the Loan
Agreement) exists, Beneficiary may, at Beneficiary's election and by or through
Trustee or otherwise, exercise any or all of the following rights, remedies and
recourses:

                  (a) ACCELERATION. Declare the Indebtedness to be immediately
due and payable, without further notice, presentment, protest, notice of intent
to accelerate, notice of acceleration, demand or action of any nature whatsoever
(each of which hereby is expressly waived by Grantor), whereupon the same shall
become immediately due and payable.

                  (b) ENTRY ON MORTGAGED PROPERTY. Enter the Mortgaged Property
and take exclusive possession thereof and of all books, records and accounts
relating thereto. If Grantor remains in possession of the Mortgaged Property
after an Event of Default and without Beneficiary's prior written consent,
Beneficiary may invoke any legal remedies to dispossess Grantor.

                  (c) OPERATION OF MORTGAGED PROPERTY. Hold, lease, develop,
manage, operate or otherwise use the Mortgaged Property upon such terms and
conditions as Beneficiary may deem reasonable under the circumstances (making
such repairs, alterations, additions and improvements and taking other actions,
from time to time, as Beneficiary deems necessary or desirable), and apply all
Rents and other amounts collected by Trustee in connection therewith in
accordance with the provisions of Section 4.7.

                  (d) FORECLOSURE AND SALE. Sell or offer for sale the Mortgaged
Property in such portions, order and parcels as Beneficiary may determine, with
or without having first taken possession of same, to the highest bidder for cash
at public auction. Such sale shall be made in accordance with the laws of the
state where the Land is located relating to the sale of real estate or by
Chapter 9 of the UCC relating to the sale of collateral after default by a
debtor (as such laws now exist or may be hereafter amended or succeeded), or by
any other present or subsequent articles or enactments relating to same. With
respect to any notices required or permitted under the UCC, Grantor agrees that
ten (10) days' prior written notice shall be deemed commercially reasonable. At
any such sale (i) whether made under the power herein contained, the UCC, any
other legal requirement or by virtue of any judicial proceedings or any other
legal right, remedy or recourse, it shall not be necessary for Trustee to be
physically present at or to have constructive possession of the Mortgaged
Property (Grantor shall deliver to Trustee any portion of the Mortgaged Property
not actually or constructively possessed by Trustee immediately upon demand by
Trustee), and the title to and right of possession of any such property shall
pass to the purchaser thereof as completely as if Trustee had been actually
present and delivered to purchaser at such sale, (ii) each instrument of
conveyance executed by Trustee shall contain a general warranty of title,
binding upon Grantor, (iii) each recital contained in any instrument of
conveyance made by Trustee shall conclusively establish the truth and accuracy
of the matters recited therein, including, without limitation, nonpayment of the
Indebtedness, advertisement and conduct of such sale in the manner provided
herein and otherwise by law, and appointment of any successor Trustee hereunder,
(iv) any prerequisites to the validity of such sale shall be presumed to have
been performed, (v) the receipt of Trustee or other party making the sale shall
be a sufficient discharge to the purchaser or purchasers for his or their
purchase money and no such purchaser or purchasers, or his or their assigns or
personal representatives,

                                       7
<PAGE>

shall thereafter be obligated to see to the application of such purchase money
or be in any way answerable for any loss, misapplication or nonapplication
thereof, and (vi) to the fullest extent permitted by law, Grantor shall be
completely and irrevocably divested of all of its right, title, interest, claim,
equity, equity of redemption, and demand whatsoever, either at law or in equity,
in and to the property sold and such sale shall be a perpetual bar both at law
and in equity against Grantor, and against all other persons claiming or to
claim the property sold or any part thereof, by, through or under Grantor.
Beneficiary may be a purchaser at such sale and if Beneficiary is the highest
bidder, may credit the portion of the purchase price that would be distributed
to Beneficiary against the Indebtedness in lieu of paying cash. Subject to
compliance with applicable law, in connection with any foreclosure sale: (A)
Beneficiary shall have no obligation to clean up, repair or otherwise prepare
the Mortgaged Property for sale; (B) Grantor waives any right it may have to
require Beneficiary to pursue any third party for any of the Indebtedness; (C)
Beneficiary may comply with any applicable state or federal law requirements in
connection with a disposition of the Mortgaged Property; (D) Beneficiary may
specifically disclaim any warranties of title or the like; (E) if Beneficiary
sells any of the Mortgaged Property on credit, Grantor will be credited only
with payments actually made by purchaser, received by Beneficiary and applied to
the indebtedness of the purchaser; and (F) Beneficiary may apply any noncash
proceeds of a disposition of the Mortgaged Property in any commercially
reasonable manner selected by Beneficiary. Compliance by Beneficiary with the
standards set forth in the foregoing sentence shall not be deemed to adversely
affect the commercial reasonableness of any sale of the Mortgaged Property or
portion thereof.

                  (e) RECEIVER. Make application to a court of competent
jurisdiction for, and obtain from such court as a matter of strict right and
without notice to Grantor (to the extent permitted by applicable law) or regard
to the adequacy of the Mortgaged Property for the repayment of the Indebtedness,
the appointment of a receiver of the Mortgaged Property, and Grantor irrevocably
consents to such appointment. Any such receiver shall have all the usual powers
and duties of receivers in similar cases, including the full power to rent,
maintain and otherwise operate the Mortgaged Property upon such terms as may be
approved by the court, and shall apply such Rents in accordance with the
provisions of Section 4.7.

                  (f) OTHER. Exercise all other rights, remedies and recourses
granted under the Loan Documents or otherwise available at law or in equity
(including an action for specific performance of any covenant contained in the
Loan Documents, or a judgment on the Note either before, during or after any
proceeding to enforce this Deed of Trust).

         Section 4.2 SEPARATE SALES. The Mortgaged Property may be sold in one
or more parcels and in such manner and order as Trustee, in its sole discretion,
may elect; the right of sale arising out of any Event of Default shall not be
exhausted by any one or more sales.

         Section 4.3 REMEDIES CUMULATIVE, CONCURRENT AND NONEXCLUSIVE.
Beneficiary shall have all rights, remedies and recourses granted in the Loan
Documents and available at law or equity (including the UCC), which rights (a)
shall be cumulative and concurrent, (b) may be pursued separately, successively
or concurrently against Grantor or others obligated under the

                                       8
<PAGE>

Note and the other Loan Documents, or against the Mortgaged Property, or against
any one or more of them, at the sole discretion of Beneficiary, (c) may be
exercised as often as occasion therefor shall arise, and the exercise or failure
to exercise any of them shall not be construed as a waiver or release thereof or
of any other right, remedy or recourse, and (d) are intended to be, and shall
be, nonexclusive. No action by Beneficiary or Trustee in the enforcement of any
rights, remedies or recourses under the Loan Documents or otherwise at law or
equity shall be deemed to cure any Event of Default.

         Section 4.4 RELEASE OF AND RESORT TO COLLATERAL. Beneficiary may
release, regardless of consideration and without the necessity for any notice to
or consent by the holder of any subordinate lien on the Mortgaged Property, its
lien on any part of the Mortgaged Property without, as to the remainder, in any
way impairing, affecting, subordinating or releasing the lien or security
interests created in or evidenced by the Loan Documents or their stature as a
first and prior lien and security interest in and to the Mortgaged Property. For
payment of the Indebtedness, Beneficiary may resort to any other security in
such order and manner as Beneficiary may elect.

         Section 4.5 WAIVER OF REDEMPTION, NOTICE AND MARSHALLING OF ASSETS. To
the fullest extent permitted by law and except as otherwise provided in this
Deed of Trust, Grantor hereby irrevocably and unconditionally waives and
releases (a) all benefit that might accrue to Grantor by virtue of any present
or future statute of limitations or law or judicial decision exempting the
Mortgaged Property from attachment, levy or sale on execution or providing for
any appraisement, valuation, stay of execution, exemption from civil process,
redemption or extension of time for payment, (b) all notices of any Event of
Default or of Beneficiary's or Trustee's election to exercise or the actual
exercise of any right, remedy or recourse provided for under the Loan Documents,
and (c) any right to a marshalling of assets or a sale in inverse order of
alienation.

         Section 4.6 DISCONTINUANCE OF PROCEEDINGS. If Beneficiary shall have
proceeded to invoke any right, remedy or recourse permitted under the Loan
Documents and shall thereafter elect to discontinue or abandon it for any
reason, Beneficiary shall have the unqualified right to do so and, in such an
event, Grantor and Beneficiary shall be restored to their former positions with
respect to the Indebtedness, the Obligations, the Loan Documents, the Mortgaged
Property and otherwise, and the rights, remedies, recourses and powers of
Beneficiary shall continue as if the right, remedy or recourse had never been
invoked, but no such discontinuance or abandonment shall waive any Event of
Default which may then exist or the right of Beneficiary thereafter to exercise
any right, remedy or recourse under the Loan Documents for such Event of
Default.

         Section 4.7 APPLICATION OF PROCEEDS. The proceeds of any sale of, and
the Rents and other amounts generated by the holding, leasing, management,
operation or other use of, the Mortgaged Property, shall be applied by
Beneficiary or Trustee (or the receiver, if one is appointed) in the following
order unless otherwise required by applicable law:

                                       9
<PAGE>

                  (a) to the payment of the costs and expenses of taking
possession of the Mortgaged Property and of holding, using, leasing, repairing,
improving and selling the same, including, without limitation (1) trustee's and
receiver's fees and expenses, (2) court costs, (3) attorneys' and accountants'
fees and expenses, (4) costs of advertisement, and (5) the payment of all ground
rent, real estate taxes and assessments, except any taxes, assessments, or other
charges subject to which the Mortgaged Property shall have been sold;

                  (b) to the payment of all amounts (including interest), other
than the unpaid principal balance of the Note and accrued but unpaid interest,
which may be due to Beneficiary under the Loan Documents;

                  (c) to the payment of the Indebtedness and performance of the
Obligations in such manner and order of preference as Beneficiary in its sole
discretion may determine; and

                  (d) the balance, if any, to the payment of the persons legally
entitled thereto.

         Section 4.8 OCCUPANCY AFTER FORECLOSURE. The purchaser at any
foreclosure sale pursuant to Section 4.1(d) shall become the legal owner of the
Mortgaged Property, and Grantor and Operating Lessee shall deliver possession
thereof immediately to the purchaser upon demand. It shall not be necessary for
the purchaser at said sale to bring any action for possession of the Mortgaged
Property other than the statutory action of forcible detainer in any justice
court having jurisdiction over the Mortgaged Property.

         Section 4.9 ADDITIONAL ADVANCES AND DISBURSEMENTS; COSTS OF
ENFORCEMENT.

                  (a) If any Event of Default exists, Beneficiary shall have the
right, but not the obligation, to cure such Event of Default in the name and on
behalf of Grantor. All sums advanced and expenses incurred at any time by
Beneficiary under this Section 4.9, or otherwise under this Deed of Trust or any
of the other Loan Documents or applicable law, shall bear interest from the date
that such sum is advanced or expense incurred, to and including the date of
reimbursement, computed at the Default Rate (as defined in the Loan Agreement),
and all such sums, together with interest thereon, shall be secured by this Deed
of Trust.

                  (b) Grantor shall pay all expenses (including reasonable
attorneys' fees and expenses) of or incidental to the perfection and enforcement
of this Deed of Trust and the other Loan Documents, or the enforcement,
compromise or settlement of the Indebtedness or any claim under this Deed of
Trust and the other Loan Documents, and for the curing thereof, or for defending
or asserting the rights and claims of Beneficiary in respect thereof, by
litigation or otherwise.

         Section 4.10 NO MORTGAGEE IN POSSESSION. Neither the enforcement of any
of the remedies under this Article 4, the assignment of the Rents and Leases
under Article 5, the security interests under Article 6, nor any other remedies
afforded to Beneficiary under the Loan Documents, at law or in equity shall
cause Beneficiary or Trustee to be deemed or construed to

                                       10
<PAGE>

be a mortgagee in possession of the Mortgaged Property, to obligate Beneficiary
or Trustee to lease the Mortgaged Property or attempt to do so, or to take any
action, incur any expense, or perform or discharge any obligation, duty or
liability whatsoever under any of the Leases or otherwise. ARTICLE 5

                         ASSIGNMENT OF RENTS AND LEASES

         Section 5.1 ASSIGNMENT. Grantor acknowledges and confirms that it has
executed and delivered to Beneficiary an Assignment of Rents, Leases and Income
of even date (the "ASSIGNMENT OF RENTS AND LEASES"), intending that such
instrument create a present, absolute assignment to Beneficiary of the Leases
and Rents. Without limiting the intended benefits or the remedies provided under
the Assignment of Rents and Leases, Grantor hereby assigns to Beneficiary, as
further security for the Indebtedness and the Obligations, the Leases and Rents.
While any Event of Default exists, Beneficiary shall be entitled to exercise any
or all of the remedies provided in the Assignment of Rents and Leases and in
Article 4 hereof, including the right to have a receiver appointed. If any
conflict or inconsistency exists between the assignment of the Rents and the
Leases in this Deed of Trust and the absolute assignment of the Rents and the
Leases in the Assignment of Rents and Leases, the terms of the Assignment of
Rents and Leases shall control.

         Section 5.2 NO MERGER OF ESTATES. So long as any part of the
Indebtedness and the Obligations secured hereby remain unpaid and undischarged,
the fee and leasehold estates to the Mortgaged Property shall not merge, but
shall remain separate and distinct, notwithstanding the union of such estates
either in Grantor, Beneficiary, any lessee or any third party by purchase or
otherwise.

                                   ARTICLE 6

                               SECURITY AGREEMENT

         Section 6.1 SECURITY INTEREST. This Deed of Trust constitutes a
"Security Agreement" on personal property within the meaning of the UCC and
other applicable law with respect to the Personalty, Fixtures, Plans, Leases,
Rents, Income and Property Agreements. To this end, Grantor grants to Trustee
and Beneficiary, a first and prior security interest in the Personalty,
Fixtures, Plans, Leases, Rents, Income and Property Agreements and all other
Mortgaged Property which is personal property to secure the payment of the
Indebtedness and performance of the Obligations, and agrees that Beneficiary
shall have all the rights and remedies of a secured party under the UCC with
respect to such property. Any notice of sale, disposition or other intended
action by Beneficiary with respect to the Personalty, Fixtures, Plans, Leases,
Rents, Income and Property Agreements sent to Grantor at least ten (10) days
prior to any action under the UCC shall constitute reasonable notice to Grantor.

                                       11
<PAGE>

         Section 6.2 FINANCING STATEMENTS. Grantor hereby irrevocably authorizes
Beneficiary at any time and from time to file in any filing office in any UCC
jurisdiction one or more financing or continuation statements and amendments
thereto, relative to all or any part of the Mortgaged Property, without the
signature of Grantor where permitted by law. Grantor agrees to furnish
Beneficiary, promptly upon request, with any information required by Beneficiary
to complete such financing or continuation statements. If Beneficiary has filed
any initial financing statements or amendments in any UCC jurisdiction prior to
the date hereof, Grantor ratifies and confirms its authorization of all such
filings. Grantor acknowledges that it is not authorized to file any financing
statement or amendment or termination statement with respect to any financing
statement without the prior written consent of Beneficiary, and agrees that it
will not do so without Beneficiary's prior written consent, subject to Grantor's
rights under Section 9-509(d)(2) of the UCC. Grantor shall execute and deliver
to Beneficiary, in form and substance reasonably satisfactory to Beneficiary,
such additional financing statements and such further assurances as Beneficiary
may, from time to time, reasonably consider necessary to create, perfect and
preserve Beneficiary's security interest hereunder and Beneficiary may cause
such statements and assurances to be recorded and filed, at such times and
places as may be required or permitted by law to so create, perfect and preserve
such security interest. Grantor's principal place of business is in the State of
North Carolina at the address set forth in the first paragraph of this Deed of
Trust.

         Section 6.3 FIXTURE FILING. This Deed of Trust shall also constitute a
"fixture filing" for the purposes of the UCC against all of the Mortgaged
Property which is or is to become fixtures. Information concerning the security
interest herein granted may be obtained at the addresses of Debtor (Grantor) and
Secured Party (Beneficiary) as set forth in the first paragraph of this Deed of
Trust.

                                   ARTICLE 7

                             CONCERNING THE TRUSTEE

         Section 7.1 CERTAIN RIGHTS. With the approval of Beneficiary, Trustee
shall have the right to select, employ and consult with counsel. Trustee shall
have the right to rely on any instrument, document or signature authorizing or
supporting any action taken or proposed to be taken by him hereunder, reasonably
believed by him in good faith to be genuine. Trustee shall be entitled to
reimbursement for actual, reasonable expenses incurred by him in the performance
of his duties. Grantor shall, from time to time, pay the compensation due to
Trustee hereunder and reimburse Trustee for, and indemnify, defend and save
Trustee harmless against, all liability and reasonable expenses which may be
incurred by him in the performance of his duties, including those arising from
the joint, concurrent, or comparative negligence of Trustee; however, Grantor
shall not be liable under such indemnification to the extent such liability or
expenses result solely from Trustee's or Beneficiary's gross negligence or
willful misconduct hereunder. Grantor's obligations under this Section 7.1 shall
not be reduced or impaired by principles of comparative or contributory
negligence.

                                       12
<PAGE>

         Section 7.2 RETENTION OF MONEY. All moneys received by Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated in any manner from any
other moneys (except to the extent required by law), and Trustee shall be under
no liability for interest on any moneys received by him hereunder.

         Section 7.3 SUCCESSOR TRUSTEES. If Trustee or any successor Trustee
shall die, resign or become disqualified from acting in the execution of this
trust, or Beneficiary shall desire to appoint a substitute Trustee, Beneficiary
shall have full power to appoint one or more substitute Trustees and, if
preferred, several substitute Trustees in succession who shall succeed to all
the estates, rights, powers and duties of Trustee. Such appointment may be
executed by any authorized agent of Beneficiary, and as so executed, such
appointment shall be conclusively presumed to be executed with authority, valid
and sufficient, without further proof of any action. All costs and expenses
associated with the appointment of any substitute Trustee will be borne by
Beneficiary unless such substitution occurs during the continuance of an Event
of Default or is necessitated by the death, resignation or disqualification of
Trustee.

         Section 7.4 PERFECTION OF APPOINTMENT. Should any deed, conveyance or
instrument of any nature be reasonably required from Grantor by any successor
Trustee to more fully and certainly vest in and confirm to such successor
Trustee such estates, rights, powers and duties, then, upon request by such
Trustee, all such deeds, conveyances and instruments shall be made, executed,
acknowledged and delivered and shall be caused to be recorded and/or filed by
Grantor.

         Section 7.5 TRUSTEE LIABILITY. In no event or circumstance shall
Trustee or any substitute Trustee hereunder be personally liable under or as a
result of this Deed of Trust, either as a result of any action by Trustee (or
any substitute Trustee) in the exercise of the powers hereby granted or
otherwise.

                                   ARTICLE 8

                                  MISCELLANEOUS

         Section 8.1 NOTICES. Any notice required or permitted to be given under
this Deed of Trust shall be in writing and sent in the manner and otherwise
subject to the provisions for notices set forth in Article 12 of the Loan
Agreement.

         Section 8.2 COVENANTS RUNNING WITH THE LAND. All Obligations contained
in this Deed of Trust are intended by Grantor, Beneficiary and Trustee to be,
and shall be construed as, covenants running with the Mortgaged Property. As
used herein, "Grantor" shall refer to the

                                       13
<PAGE>

party named in the first paragraph of this Deed of Trust and to any subsequent
owner of all or any portion of the Mortgaged Property (without in any way
implying that Beneficiary has or will consent to any such conveyance or transfer
of the Mortgaged Property). All persons or entities who may have or acquire an
interest in the Mortgaged Property shall be deemed to have notice of, and be
bound by, the terms of the Loan Agreement and the other Loan Documents; however,
no such party shall be entitled to any rights thereunder without the prior
written consent of Beneficiary.

         Section 8.3 ATTORNEY-IN-FACT. Grantor hereby irrevocably appoints
Beneficiary and its successors and assigns, as its attorney-in-fact, which
agency is coupled with an interest, (a) to execute and/or record any notices of
completion, cessation of labor, or any other notices that Beneficiary deems
appropriate to protect Beneficiary's interest, if Grantor shall fail to do so
within ten (10) days after written request by Beneficiary, (b) upon the issuance
of a deed pursuant to the foreclosure of this Deed of Trust or the delivery of a
deed in lieu of foreclosure, to execute all instruments of assignment,
conveyance or further assurance with respect to the Leases, Rents, Income,
Personalty, Fixtures, Plans and Property Agreements in favor of the grantee of
any such deed and as may be necessary or desirable for such purpose, (c) to
prepare, execute and file or record financing statements, continuation
statements, applications for registration and like papers necessary to create,
perfect or preserve Beneficiary's security interests and rights in or to any of
the collateral, and (d) while any Event of Default exists, to perform any
obligation of Grantor hereunder; however: (1) Beneficiary shall not under any
circumstances be obligated to perform any obligation of Grantor; (2) any sums
advanced by Beneficiary in such performance shall be added to and included in
the Indebtedness and shall bear interest at the Default Rate; (3) Beneficiary as
such attorney-in-fact shall only be accountable for such funds as are actually
received by Beneficiary; and (4) Beneficiary shall not be liable to Grantor or
any other person or entity for any failure to take any action which it is
empowered to take under this Section.

         Section 8.4 SUCCESSORS AND ASSIGNS. This Deed of Trust shall be binding
upon and inure to the benefit of Beneficiary and Grantor and their respective
permitted successors and assigns. Grantor shall not, without the prior written
consent of Beneficiary or as otherwise permitted by the Loan Agreement, assign
any rights, duties or obligations hereunder.

         Section 8.5 NO WAIVER. Any failure by Trustee or Beneficiary to insist
upon strict performance of any of the terms, provisions or conditions of the
Loan Documents shall not be deemed to be a waiver of same, and Trustee or
Beneficiary shall have the right at any time to insist upon strict performance
of all of such terms, provisions and conditions.

         Section 8.6 SUBROGATION. To the extent proceeds of the Note have been
used to extinguish, extend or renew any indebtedness against the Mortgaged
Property, then Beneficiary shall be subrogated to all of the rights, liens and
interests existing against the Mortgaged Property and held by the holder of such
indebtedness and such former rights, liens and interests, if any, are not
waived, but are continued in full force and effect in favor of Beneficiary.

                                       14
<PAGE>

         Section 8.7 LOAN AGREEMENT. If any conflict or inconsistency exists
between this Deed of Trust and the Loan Agreement, the Loan Agreement shall
govern.

         Section 8.8 RELEASE OR RECONVEYANCE. Upon payment in full of the
Indebtedness and performance in full of the Obligations, Beneficiary, at
Grantor's expense, shall release the liens and security interests created by
this Deed of Trust and reconvey the Mortgaged Property to Grantor.

         Section 8.9 WAIVER OF STAY, MORATORIUM AND SIMILAR RIGHTS. Grantor
agrees, to the full extent that it may lawfully do so, that it will not at any
time insist upon or plead or in any way take advantage of any appraisement,
valuation, stay, marshalling of assets, extension, redemption or moratorium law
now or hereafter in force and effect so as to prevent or hinder the enforcement
of the provisions of this Deed of Trust or the indebtedness secured hereby, or
any agreement between Grantor and Beneficiary or any rights or remedies of
Beneficiary.

         Section 8.10 LIMITATION ON LIABILITY. Grantor's liability hereunder is
subject to the limitation on liability provisions of Article 13 of the Loan
Agreement.

         Section 8.11 OBLIGATIONS OF GRANTOR, JOINT AND SEVERAL. If more than
one person or entity has executed this Deed of Trust as "Grantor," the
obligations of all such persons or entities hereunder shall be joint and
several.

         Section 8.12 GOVERNING LAW. This Deed of Trust shall be governed by the
laws of the State of New York in all respects, including, without limitation,
matters of construction, validity and performance, except that at all times the
provisions for the creation, perfection, enforcement, termination and release of
the liens and security interests created pursuant hereto and the conveyance of
any right, title and interest in and to any of the Mortgaged Property shall be
governed by and construed in accordance with the laws of the state in which the
Mortgaged Property is located, it being understood that, to the fullest extent
permitted by the law of such state, the law of the State of New York shall
govern the construction, validity and performance of this Deed of Trust and of
all of the obligations arising hereunder. To the fullest extent permitted by
law, Grantor hereby unconditionally waives any claim to assert that the law of
any other jurisdiction governs this Deed of Trust.

         Section 8.13 HEADINGS. The Article, Section and Subsection titles
hereof are inserted for convenience of reference only and shall in no way alter,
modify or define, or be used in construing, the text of such Articles, Sections
or Subsections.

         Section 8.14 COUNTERPARTS. This Deed of Trust may be executed in
counterparts, all of which counterparts together shall constitute one and the
same instrument (and original signature

                                       15
<PAGE>

pages and notary pages from each counterpart may be assembled into one original
document to be recorded).

         Section 8.15 ENTIRE AGREEMENT. This Deed of Trust and the other Loan
Documents embody the entire agreement and understanding between Beneficiary and
Grantor and supersede all prior agreements and understandings between such
parties relating to the subject matter hereof and thereof. Accordingly, the Loan
Documents may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.

         Section 8.16 JOINDER BY OPERATING LESSEE.

                  (a) Operating Lessee acknowledges that it is under common
ownership and control with Grantor and that, in order to induce Beneficiary to
make the Loan and accept the Note, Operating Lessee desires to join in this Deed
of Trust to expressly subordinate the Operating Lease to the lien and security
title of this Deed of Trust, and to grant to Trustee and Beneficiary a first and
prior security interest in any portion or item of the Mortgaged Property in
which Operating lessee has any right, title or interest.

                  (b) Operating Lessee hereby agrees that the Operating Lease
and the leasehold estate created thereby and all of Operating Lessee's rights
thereunder are and shall at all times remain subject, subordinate and inferior
to this Deed of Trust and the lien hereof and Beneficiary's rights hereunder,
and to all modifications, replacements, restatements, extensions, increases and
renewals hereof.

                  (c) To the extent that Operating Lessee now owns or hereafter
acquires any right, title or interest in or to any portion or item of the
Mortgaged Property, Operating Lessee hereby grants, bargains, sells and conveys
such Mortgaged Property to Trustee to have and to hold in trust with power of
sale, pursuant to the provisions of Section 2.1 hereof and subject to all of the
terms, conditions and provisions of this Deed of Trust.

                  (d) Beneficiary acknowledges that Operating Lessee leases
hotels owned by persons other than Grantor and agrees that nothing contained in
this Section 8.16 shall apply to any hotel not owned by Grantor or be deemed to
convey any interest in the land, improvements, fixtures or personalty of any
kind that constitutes all or any portion of any hotel not owned by Grantor.

         [Section 8.17 STATE LAW PROVISIONS.]

                            [Signature Page Follows]

                                       16
<PAGE>

         EXECUTED as of the date first above written.

                                            WINSTON SPE II LLC, a Delaware
                                              limited liability company

                                            By: _________________________

                                            Name: ______________________

                                            Title: _______________________

         The undersigned, Operating Lessee, hereby joins in this Deed of Trust
solely for the purposes set forth in Section 8.16 hereof.

                                             BARCLAY HOSPITALITY SERVICES INC.,
                                               a North Carolina corporation

                                             By: _________________________

                                             Name: ______________________

                                             Title: _______________________

                                       17
<PAGE>

                                 ACKNOWLEDGMENT

STATE OF                                    )
         -----------------------------------)
                                            )  ss.
COUNTY OF                                   )
          ----------------------------------)

         On March __, 2005, before me, __________________________________,
Notary Public, personally appeared ___________________________________, who is
personally known to me or proved to me on the basis of satisfactory evidence to
be the person whose name is subscribed to the within instrument as
___________________ of Winston SPE II LLC, a Delaware limited liability company,
and acknowledged to me that he/she executed the same in his/her authorized
capacity, and that by his/her signature on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

         WITNESS my hand and official seal.

                                            ------------------------------------
                                            Signature of Notary Public

STATE OF                                    )
         -----------------------------------)
                                            )  ss.
COUNTY OF                                   )
          ----------------------------------)

         On March __, 2005, before me, __________________________________,
Notary Public, personally appeared ____________________________________, who is
personally known to me or proved to me on the basis of satisfactory evidence to
be the person whose name is subscribed to the within instrument as
_________________ of Barclay Hospitality Services Inc., a North Carolina
corporation, and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.

         WITNESS my hand and official seal.

                                            ------------------------------------
                                            Signature of Notary Public

                                       18
<PAGE>

                                    EXHIBIT A

                          Legal Description of the Land

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