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The link should work as you write it. Does the "Chapter10.html" file exist inside the .epub file? Is it in the same folder as the file where the link appears? Is "Chapter10.html" included in the manifest and in the spine? Try validating the .epub with epubcheck or FlightCrew.
As for the extension, you can use any one in principle. I haven't seen any problem with .html or .xhtml. But whatever you use the "media-type" (and the content) must be XHTML (sort of)
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