(1)

CHINA HOUSING AND LAND DEVELOPMENT, INC., a corporation established under the laws of the State of Nevada, the United States of America, with its registered address at 1000 E William ST., Suite 204 Carson City, NV 89701-3108, the United States of America (the “Guarantor”).

(2)

SUCCESS HILL INVESTMENTS LIMITED, a company incorporated under the laws of the Hong Kong Special Administrative Region (“Hong Kong”), with its registered address at Flat/RM 1508, 15/F, Hing Yip Commercial Centre, 272-284 Des Voeux Road Central, Hong Kong (the “HK SPV”); and

(3)

Prax Capital Real Estate Holding Limited, a company established under the laws of Hong Kong, with its registered address at Flat/RM 1508, 15/F, Hing Yip Commercial Centre, 272-284 Des Voeux Road Central, Hong Kong (“Prax”, together with the HK SPV, the “Beneficiaries”, and each a “Beneficiary”).

1.

INTERPRETATION

1.1

Definitions

In this Deed, except where the context otherwise requires:

“Aggregate Development Cost” means any and all costs and expenses incurred to cause the Project to be Completed including all Construction Costs and any other costs and expenses incurred or otherwise payable by or on behalf of the Project Company in connection with (i) the due diligence for, and the bidding and acquisition of, the Target Land, (ii)the design and engineering of the Project, (iii) any and all permits, licenses, authorizations and other governmental approvals obtained by or on behalf of the Company in connection with the acquisition of the Target Land and the development and construction of the Target Land, (iv) the construction of the project on the Target Land and any related on-site and off-site improvements and infrastructure (including all amounts payable to the general contractor, subcontractors, suppliers and other persons providing work, services, material of equipment for the Project), and (v) interest on any of the amounts described in this definition payable under the Onshore Financing or other financing obtained by the Project Company for the development and construction of the Project.

“CHL SPV” means Assets Management Limited, a company established or to be established under the laws of the British Virgin Islands.

“Class A Shareholders” shall have the meaning ascribed to it in the Shareholders Agreement.

“Class B Shareholders” shall have the meaning ascribed to it in the Shareholders Agreement.

“Construction Cost” means the aggregate of (i) any amount incurred or paid to any contractor or sub-contractor in respect of site preparation, foundation, substructure, finishings, infrastructure and other miscellaneous works of the Project, or to any supplier for or in respect of work done, or materials or goods supplied, in connection with the construction of the Project and in connection with making the Project fit for occupation and (ii) any other amounts (including professional fees and other expenses in connection with the Project) which, in the opinion of the Beneficiaries, need to be incurred by the Project Company in order to finally Complete the construction of the Project and cause the Project to receive a duly issued and approved Project Completion Filing Form from the applicable PRC government authorities.

“Discharge Event” means the completion of the Class B Shareholders’ purchase of Class A Shares pursuant to Section 6.1 of the Shareholders Agreement (as evidenced by the Class A Shareholders’ receipt in full of the Exit Price).

“Exit Price” shall have the meaning ascribed to it in the Shareholders Agreement.

“Final Plans and Specifications” means those final plans and specifications for the construction and development of the Project, in the form approved by applicable PRC governmental authorities and approved in writing by Prax.

“Framework Agreement” means that certain Framework Agreement entered into by and among the Guarantor, New Land and Prax on the even date hereof.

“Guaranteed Obligations” shall have the meaning ascribed to it in Clause 2.1 of this Deed.

“New Land Share Purchase” shall have the meaning ascribed to it in the Shareholders Agreement.

“Obligors” means, collectively, New Land (and any third party succeeding to New Land’s interest in the Project Company) and the CHL SPV (and any Class B Shareholders succeeding to CHL SPV’s interest in the HK SPV); and “Obligor” shall mean one of the Obligors.

“Project” means the real estate development project, predominantly including residential buildings but also including a commercial area component, that the Project Company will own, develop, construct, manage and operate on the Target Land.

“Put Option” shall have the meaning ascribed to it in the Shareholders Agreement.

1.2

Construction

(a)

Initially capitalised terms in this Deed have, unless expressly defined otherwise in this Deed, the same meaning attributed to such terms in the Framework Agreement.

(b)

For the purposes of this Deed, the construction works of the Project shall be deemed to have been “Completed” upon, and the terms “Complete” and “Completion” shall mean, (i) the issuance of a Project Completion Filing Form (Chinese characters) with respect to all of the units for the Project duly completed and approved by all relevant government authorities in PRC, (ii)the production of satisfactory evidence to Prax confirming that the Construction Costs have been fully settled, and (iii) the issuance of written confirmation from Prax that the Project’s improvements conform to the Final Plans and Specifications.

(c)

A “person” shall be construed as a reference to any person, firm, company, corporation, government, state or agency of a state or any association or partnership (whether or not having separate legal personality), or two (2) or more of the foregoing.

(d)

The terms “include” and “including” shall be construed as if followed by the phrase “without limitation”.

2.

GUARANTEE

2.1

Guaranteed Obligations

The Guarantor hereby irrevocably and unconditionally covenants and undertakes to cause the parties named in this Clause 2.1 to fully and timely perform the following obligations (collectively, the “Guaranteed Obligations”):

(a)

the Project Company shall develop, construct and sell (including effecting pre-sales), or cause to be developed, constructed and sold, the Project and its residential units in accordance with the relevant milestones and time periods set forth in the Approved Budget and Business Plan;

(b)

New Land shall fund or otherwise provide the Funded Pre-Construction Costs to the Project Company in accordance with the Framework Agreement, the Approved Budget and Business Plan and the Joint Venture Agreement;

(c)

the Project Company shall cause the Project to be Completed for an Aggregate Development Cost that does not exceed the equivalent amount or amounts specified in the Approved Budget and Business Plan (as adjusted or otherwise amended by the respective board of directors of the HK SPV and the Project Company pursuant to the Shareholders’ Agreement and/or the Joint Venture Agreement, as applicable, the “Budgeted Development Costs”);

(d)

if the Class A Shareholders exercise the Put Option under the Shareholders Agreement, CHL SPV (or any Class B Shareholders succeeding to CHL SPV’s interest in the HK SPV) shall timely purchase, or cause another affiliate of the Guarantor to purchase, from the Class A Shareholders all of the Class A Shares for the Exit Price, pay the Exit Price and timely perform its other covenants and obligations under the Shareholders Agreement in connection with such purchase;

(e)

the Project Company shall, and the CHL SPV (or any Class B Shareholders succeeding to the CHL SPV’s interest in the HK SPV) shall cause the Project Company to, distribute the profits of the Project Company to the HK SPV strictly in accordance with the provisions of the Joint Venture Agreement and the Project Company Articles of Association;

(f)

The HK SPV shall, and the CHL SPV (or any Class B Shareholders succeeding to the CHL SPV’s interest in the HK SPV) shall cause the HK SPV to, distribute the profits of the HK SPV to the Class A Shareholders strictly in accordance with the provisions of the Shareholders Agreement; and

(g)

the CHL SPV (or any Class B Shareholders succeeding to the CHL SPV’s interest in the HK SPV) shall cause the officers and directors of the HK SPV and the Project Company appointed by, or appointed in the direction of, the CHL SPV (or any Class B Shareholders succeeding to the CHL SPV’s interest in the HK SPV) to take such actions and execution such documents and instruments to effect the distributions referred to in sub-sections (e) and (f) above.

2.2

Remedies

(a)

The Guarantor acknowledges that if the Guaranteed Obligations are not fully performed as provided in Clause 2.1 by the Obligors, then the Guarantor personally shall perform the Guaranteed Obligations, or cause the Guaranteed Obligations to be performed. If the Guarantor fails to timely and fully perform its obligations under this Deed within the time period designated by any Beneficiary in its sole discretion after such Beneficiary delivers a written notice to the Guarantor, then the following shall apply:

(i)

Any Beneficiary shall be at liberty to apply to an arbitration panel in accordance with Clause 20.1 below for a mandatory order declaring the Guarantor to be liable as aforesaid and ordering it to specifically perform its contractual obligations hereunder.

(ii)

If the Aggregate Development Costs exceed the Budgeted Development Costs, such excess shall be paid by the Guarantor or its subsidiaries to the HK SPV or the Project Company (at the direction of Prax in its sole discretion) upon demand by any Beneficiary.

(iii)

If by reason of the Guarantor’s failure, neglect or refusal to perform, or cause to be performed, the Guaranteed Obligations and its other obligations under this Deed, any Beneficiary elects to incur expenses

whether by making payment to the Project Company, the HK SPV or to any other parties to ensure Completion of the Project following a breach by the Guarantor of its obligations hereunder, such expenses shall forthwith be recoverable from the Guarantor as damages.

(iv)

The Beneficiaries shall be at liberty to claim damages from the Guarantor either by way of primary remedy (without seeking a mandatory order as aforesaid) or (in case any Beneficiary does seek a mandatory order as aforesaid but the courts shall decline to make such order) as an alternative to a mandatory order.

3.

REINSTATEMENT

3.1

Reinstatement

If any payment by any Obligor is avoided or reduced (the “Reduced Amount”) for any reason including, without limitation, as a result of insolvency, bankruptcy, breach of fiduciary or statutory duties or any similar event with respect to any person:

(a)

the liability of the Guarantor shall continue and/or be reinstated, as applicable, as if the payment, discharge, avoidance or reduction of the Reduced Amount had not occurred; and

(b)

the Beneficiaries shall be entitled to recover the value or amount of that payment from the applicable Obligor and the Guarantor, if the payment is a payment the Guarantor is required to tender hereunder, as if the payment, discharge, avoidance or reduction of the Reduced Amount had not occurred.

4.

NATURE OF GUARANTEE AND WAIVER OF DEFENCES

4.1

Continuing Guarantee

This Deed shall be, and will at all time hereafter, be a continuing guarantee. It shall not be revoked by the Guarantor and, subject to the provisions of Clauses 3.2 and 3.3 above, shall remain effective until a Discharge Event has occurred, as reasonably determined by the Beneficiaries. The fact that at any time or from time to time the obligations under this Deed may be increased or reduced shall not release or discharge the obligations of the Guarantor hereunder to the Beneficiaries.

4.2

Additional Security

The obligations of the Guarantor hereunder are in addition to, and are independent of and shall not be in any way prejudiced by, any other indemnity, guarantee or security now or subsequently held by any Beneficiaries in respect of the transactions contemplated under the Framework Agreement and the other Transaction Documents.

4.3

Protective Provisions

This Deed is an independent, irrevocable, absolute and continuing guarantee against non-payment and non-performance and not a guaranty of collection. Neither the liability of the Guarantor nor the validity or enforce ability of this Deed shall be prejudiced, affected or discharged by, and the Guarantor hereby irrevocably waives any defences it may now or hereafter have in any way relating to, any of the following:

(a)

the granting of any time, indulgence, concession, compromise, waiver or consent whatsoever at any time given to any Obligor or any other person;

(b)

any amendment, modification or variation of any Transaction Document or any other agreement;

(c)

any change in the time, manner or place of payment of, or in any other term of, the Transaction Document or any other amendment or waiver of or consent to any departure from any Transaction Document (other than this Deed);

(d)

the illegality, invalidity or unenforceability of any obligation or liability of any Obligor or any other person;

(e)

the invalidity or irregularity in the execution of any Transaction Document or any other agreement;

(f)

any lack of or deficiency in the powers of any Obligor or any other person to enter into or perform any of its obligations or liabilities under any Transaction Document or any other agreement or any irregularity in the exercise thereof or any lack of or deficiency in authority by any person purporting to act on behalf of any Obligor or any other person;

(g)

the insolvency, liquidation, incapacity, disability, limitation, change of constitution or status, death, or bankruptcy of any Obligor or any other person;

(h)

any other Transaction Document, indemnity, guarantee or other security or right or remedy being or becoming held by or available to the Beneficiaries, or by any of the same being or becoming wholly or partly void, voidable, unenforceable or impaired, or by the Beneficiaries at any time exercising or failing to exercise, releasing, refraining from enforcing, varying or in any other way dealing with any of the same, or any power, right, remedy or security the Beneficiaries may now or hereafter have from or against any Obligor or any other person;

(i)

any release, waiver, exercise, omission to exercise or renewal of any rights against any Obligor or any other person or any compromise, arrangement or settlement with any of the same;

(j)

any change, restructuring or termination of the company or corporate structure or existence of any Obligor or any other person;

(k)

any defence based on applicable statutes of limitations, or any existence or reliance on any representation by the Beneficiaries, or any other circumstance that might otherwise constitute a defence available to, or a discharge of any Obligor or any other person;

(1)

any failure of the Beneficiaries to disclose to the Guarantor or any other person any information relating to the financial condition, operations, properties or prospects of any Obligor or any person now or in the future known to the Beneficiaries (the Guarantor waiving any duty on the part of any Beneficiary to disclose such information); and/or

(m)

any act, omission, matter, circumstance or event which would or may, but for the provisions of this Clause 4.3, operate to impair, prejudice, discharge or otherwise affect this Deed or the obligations or liabilities of the Guarantor hereunder.

4.4

Additional Waivers of Defences

(a)

The Guarantor further waives for the benefit of the Beneficiaries:

(i)

any right to require the Beneficiaries to proceed against any Obligor or to pursue any other remedy in its powers;

(ii)

any defence based on any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in any other aspects more burdensome than that of a principal;

(iii)

demands, presentments, protests and notices of any kind (except for notices expressly required to be given under this Deed), including, without limiting the generality of the foregoing, notice of the existence, creation or incurring of new or additional indebtedness or of any action or non-action on the part of any Obligor under the Transaction Documents or any other instrument, or any other person whosoever, in connection with any obligation or evidence of indebtedness held by the Beneficiaries under the Transaction Documents;

(iv)

any right of subrogation and any right to enforce any remedy which any Beneficiary now has or may hereafter have against any Obligor and any benefit of, and any right to participate in, any security now or hereafter held by the Beneficiaries; provided, however, the Guarantor’s right of subrogation against the Obligors shall be re-instated after the Guaranteed Obligations have been fully performed and the Guarantor’s obligations under this Deed have been fully performed; and

(v)

to the fullest extent permitted by applicable Laws, any defences or benefits that may be derived from or afforded by any principles or provisions of law, statutory or otherwis