<PAGE>

                                                                   EXHIBIT 10.36

                          PURCHASE AND SALE AGREEMENT
                            AND ESCROW INSTRUCTIONS

     This PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS ("Agreement"),
effective as of September 29, 2000 ("Effective Date"), by and between TECH
BUSINESS CENTER, LLC, a California limited liability company ("Seller"), and
APPLIED MICRO CIRCUITS CORPORATION, a Delaware corporation ("Buyer"),
constitutes (1) an agreement of purchase and sale between the parties and (2)
joint escrow instructions to the Escrow Agent identified herein.

     NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
and for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Buyer agree as follows:

                                   ARTICLE 1
                         AGREEMENT OF PURCHASE AND SALE
                         ------------------------------

     1.1    Description of Property.  Seller owns real property ("Property")
            -----------------------
located in the City of Poway, County of San Diego, California, more particularly
described on Exhibit A attached hereto.  The Property consists of approximately
             ---------
31.66 gross acres.  The Property is located within a business and industrial
park known as Poway Corporate Center, Phase IV ("Corporate Center") and is
commonly described as "Phase IV" of the Corporate Center.

     1.2    Purchase and Sale; Effective Date.  Execution of this Agreement by
            ---------------------------------
both parties creates a binding agreement, whereby Seller agrees to sell the
Property to Buyer and Buyer agrees to purchase the Property from Seller, on the
terms and conditions stated herein.  This Agreement shall be effective on the
Effective Date set forth above, which shall be the date of execution by the last
party to sign.

     1.3    Deposit.
            -------

            (a)  Payment by Buyer. Buyer shall deliver to Escrow, concurrently
                 ----------------
with delivery of this Agreement, a deposit ("Deposit") of One Hundred Thousand
Dollars ($100,000.00), in the form of a cashier's or certified check drawn on a
California bank account or funds by federal wire ("Good Funds"), payable to
Escrow Agent.

            (b)  Return/Release of Deposit. The Deposit, together with all
                 -------------------------
interest earned thereon prior to release of the Deposit to Seller as described
below, shall be returned to Buyer if the Agreement and the Escrow are terminated
for nonsatisfaction of any Due Diligence Condition or Closing Condition pursuant
to Section 5.5. If this Agreement and the Escrow are not terminated for
nonsatisfaction of a Due Diligence Condition prior to expiration of the Due
Diligence Period defined in Section 5.2(a), then Escrow Agent shall release the
Deposit of One Hundred Thousand Dollars ($100,000.00) to Seller, without further
instructions from the parties. The Deposit shall be nonrefundable to Buyer after
such release unless the Escrow fails to close due to nonsatisfaction of the
Closing Condition described in Section 5.3 or a default by Seller.
<PAGE>

          (c)  Credit of Deposit. The Deposit shall be credited to Buyer and
               -----------------
applied against the Purchase Price at the Closing.

          (d)  Interest on Deposit. Escrow Agent shall invest the Deposit in a
               -------------------
federally-insured, interest-bearing account approved by Buyer, provided that
such investment shall not delay release of the Deposit to Seller as provided
above. All interest earned on the Deposit prior to release to Seller shall be
Buyer's. No interest for the period commencing upon release of the Deposit to
Seller shall be payable to Buyer or credited against the Purchase Price.

     1.4  LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE AND AGREE THAT SELLER WILL
          ------------------
SUFFER SUBSTANTIAL DAMAGES IF BUYER FAILS TO COMPLETE THE PURCHASE OF THE
PROPERTY BY THE CLOSING DATE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT FOR
ANY REASON, OTHER THAN NONSATISFACTION OF THE CONDITIONS SET FORTH IN SECTIONS
5.2 AND 5.3 (TIMELY RAISED) OR A DEFAULT BY SELLER. GIVEN FLUCTUATIONS IN LAND
VALUES, THE UNPREDICTABLE STATE OF THE ECONOMY AND OF GOVERNMENTAL REGULATIONS,
THE FLUCTUATING MONEY MARKET FOR REAL ESTATE LOANS AND OTHER FACTORS WHICH
DIRECTLY AFFECT THE VALUE AND MARKETABILITY OF THE PROPERTY, THE PARTIES REALIZE
THAT IT WILL BE EXTREMELY DIFFICULT AND IMPRACTICAL, IF NOT IMPOSSIBLE, TO
ASCERTAIN WITH ANY DEGREE OF CERTAINTY THE ACTUAL AMOUNT OF SELLER'S DAMAGES IN
THE EVENT OF SUCH FAILURE TO PERFORM BY BUYER. THEREFORE, THE PARTIES HEREBY
AGREE THAT THE $100,000.00 DEPOSIT PLUS INTEREST EARNED THEREON REPRESENTS A
REASONABLE ESTIMATE OF SUCH DAMAGES, CONSIDERING ALL THE CIRCUMSTANCES EXISTING
ON THE DATE OF EXECUTION OF THIS AGREEMENT, AND THAT SELLER SHALL HAVE THE RIGHT
TO RETAIN THE FULL AMOUNT OF THE DEPOSIT [PLUS INTEREST EARNED THEREON] AS
LIQUIDATED DAMAGES PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671, AS SELLER'S
SOLE RIGHT TO DAMAGES AS A RESULT OF BUYER'S DEFAULT. SELLER WAIVES ALL RIGHTS
SELLER OTHERWISE MAY HAVE PURSUANT TO CALIFORNIA CIVIL CODE SECTION 3389 TO
SPECIFICALLY ENFORCE THIS AGREEMENT. NOTWITHSTANDING THE FOREGOING, THIS SECTION
SHALL NOT LIMIT OR LIQUIDATE ANY OBLIGATIONS OR LIABILITIES OF BUYER PURSUANT TO
SECTION 7.1. BY SIGNING THEIR INITIALS BELOW, EACH PARTY CONFIRMS ITS CONSENT TO
AND AGREEMENT WITH THE PROVISIONS OF THIS PARAGRAPH:

                 ______________________   ______________________
                      Seller's Initials   Buyer's Initials


                                   ARTICLE 2
                                 PURCHASE PRICE
                                 --------------

     2.1  Purchase Price. The total purchase price ("Purchase Price") which
          --------------
Buyer agrees to pay and Seller agrees to accept for the Property is the sum of
Seventeen Million Two Hundred Fifty Thousand Dollars ($17,250,000.00), payable
through Escrow as follows:

                                      -2-
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     (a)  The Deposit of One Hundred Thousand Dollars ($100,000.00) shall be
delivered to Escrow Agent, as provided in Section 1.3; and

     (b)  The balance of Seventeen Million One Hundred Fifty Thousand Dollars
($17,150,000.00) shall be delivered to Escrow Agent in cash, in the form of Good
Funds, a sufficient time in advance of the Closing to permit disbursement of
such funds to Seller on the Closing Date under applicable law and Escrow Agent's
standard practice.

                                   ARTICLE 3
                                    ESCROW
                                    ------

     3.1  Escrow Agent.  First American Title Insurance Company, Attn:  Lynn
          ------------
Graham, Escrow Officer, 411 Ivy Street, San Diego, California 92101 ("Escrow
Agent"), Tel. 619/231-4687, Fax 619/238-1029 is designated, authorized and
instructed to act as Escrow Agent pursuant to the terms of this Agreement.  The
escrow for this transaction ("Escrow") is identified as Escrow No. 00-1887LG.
Escrow Agent shall acknowledge the Opening of Escrow and its agreement to act as
the escrow agent hereunder by:  (a) executing the Consent of Escrow Agent
attached hereto; and (b) promptly delivering a copy of the executed Consent to
Seller and Buyer.

     3.2  Escrow Instructions.  This Agreement shall constitute initial escrow
          -------------------
instructions to Escrow Agent.  Escrow Agent's general conditions are attached
hereto as Exhibit B and made a part hereof, to the extent they are consistent
          ---------
with the provisions of this Agreement.  The parties shall execute any additional
escrow instructions reasonably required by Escrow Agent to consummate the
transaction provided for herein; provided, however, such additional escrow
instructions shall not modify the provisions of this Agreement, unless such
instructions (a) state the modification in full, and (b) are signed by both
parties.

     3.3  Opening of Escrow.  Within two (2) business days after execution by
          -----------------
both parties, the parties shall deliver a fully executed copy of this Agreement
and Buyer shall deliver the Deposit to Escrow Agent.  Opening of Escrow shall be
the date Escrow Agent executes the Consent described in Section 3.1.

     3.4  Close of Escrow.
          ---------------

          (a)  Closing Date. "Close of Escrow" or "Closing" means the date
               ------------
Escrow Agent records the Grant Deed in favor of Buyer and delivers the Purchase
Price to Seller. The "Closing Date" means the date the Closing actually occurs.
Provided the Conditions described in Article 5 have been satisfied or waived as
provided therein, the Closing shall occur on a date designated by Buyer and
reasonably approved by Seller but in no event later than the Closing Deadline.
The "Closing Deadline" means the date that is the later of: (1) one hundred
twenty (120) days after the date of the Opening of Escrow, or (2) the City's
approval of the Tentative Map revisions described in Section 5.3 as long as such
approval remains a condition to the Closing pursuant to Section 5.3; provided,
however, in no event shall the Closing occur prior to January 1, 2001.

          (b)  Material Term. BUYER ACKNOWLEDGES THAT A TIMELY CLOSING ON OR
               -------------
BEFORE THE SPECIFIED CLOSING DATE IS A MATERIAL TERM OF
                                       --------

                                      -3-
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THIS AGREEMENT, AND THE CLOSING DATE MAY NOT BE EXTENDED EXCEPT BY A WRITTEN
ESCROW INSTRUCTION SIGNED BY BUYER AND SELLER. If the Closing does not occur on
or before the Closing Deadline, for any reason other than nonsatisfaction of a
Condition or a default by Seller, and if the Closing Deadline has not been
extended by written instructions signed by Buyer and Seller, then Buyer shall be
in material default hereunder and Seller shall have the unilateral right to
terminate this Agreement and the Escrow by delivering written notice to Escrow
Agent (with a copy to Buyer). In the event of termination pursuant to this
Section, Seller shall have no further obligations hereunder. Such termination:
(1) shall not release Buyer's liability for such default; (2) shall not release
any other liabilities or obligations of Buyer hereunder which arise prior to the
termination date or pursuant to those provisions which survive termination of
this Agreement under the express terms of this Agreement; and (3) shall not
affect Seller's rights and remedies as a result of such default, subject to the
limitation on Seller's remedies set forth in Section 1.4. If Seller does not
elect to exercise its right to terminate this Agreement and the Escrow as set
forth above, Escrow Agent shall proceed to complete the Closing as soon as
possible.

     3.5  Deliveries to Escrow.  Prior to the Closing Date, each party shall
          --------------------
timely deliver to Escrow all funds and documents required to complete the
Closing under the terms of this Agreement, including, but not limited to,
prorated amounts and other payments required under Section 3.7.  Failure to make
any such delivery shall constitute a material default hereunder.

     3.6  Completion of Documents.  Escrow Agent is authorized to collate
          -----------------------
counterparts of documents deposited in Escrow, to insert the Closing Date as the
effective date where appropriate, and to otherwise complete such documents in
accordance with instructions received by both parties, where appropriate and
consistent with this Agreement.

     3.7  Prorations, Escrow Fees and Costs.
          ---------------------------------

          (a)  Prorations. The following items shall be prorated in Escrow, as
               ----------
of the date of Close of Escrow: (1) County, City and special district (if any)
taxes and assessments, based upon the most recent official information available
in the office of the taxing entity; and (2) assessments payable pursuant to the
CC&Rs defined in Section 4.1(b)(4). All prorations shall be made on the basis of
a 30-day month and a 360-day year, unless the parties otherwise agree in
writing. If the latest tax information applies to a tax parcel which includes
other property in addition to the Property, Escrow Agent shall prorate the
amount applicable to the Property based upon gross acreage figures verified by
Seller's engineer. If any taxes or assessments for the Property have been bonded
or prepaid by Seller as a condition to recordation of any subdivision map,
parcel map or lot line adjustment, Buyer shall pay the amount of such taxes and
assessments to Seller through Escrow. If either party receives, after Close of
Escrow, a supplemental tax assessment based upon new construction or a change in
ownership occurring prior to the Closing Date, then, within thirty (30) days
after receipt, the parties shall prorate said supplemental assessment outside of
Escrow (but as of the Closing Date) and make any appropriate payments.

          (b)  Seller's Payments. Seller will pay: (1) the County Documentary
               -----------------
Transfer Tax, in the amount Escrow Agent determines to be required by law; (2)
the cost of the CLTA Title Policy described in Section 4.2; (3) one-half of
Escrow Agent's escrow fee or escrow

                                      -4-
<PAGE>

cancellation charge; and (4) other Seller's charges and expenses, in accordance
with the customary practices of Escrow Agent.

          (c)  Buyer's Payments. Buyer will pay: (1) one-half of Escrow Agent's
               ----------------
escrow fee or escrow cancellation charge; (2) the additional cost of ALTA
extended title insurance coverage, if requested by Buyer as described in Section
4.3; (3) the cost of recording the Grant Deed; (4) all costs, fees and expenses
incidental to Buyer's financing; and (5) other Buyer's charges and expenses, in
accordance with the customary practices of Escrow Agent.

          (d)  Default. Notwithstanding the foregoing, in the event of a default
               -------
by Buyer or Seller hereunder, all cancellation and other escrow charges shall be
paid by the defaulting party.

     3.8  Closing Statement. Escrow Agent shall prepare a preliminary Closing
          -----------------
Statement for review and approval by Seller and Buyer prior to the Closing. As
soon as reasonably possible after the Closing, Escrow Agent shall prepare a
final accounting and Closing Statement and send a copy to Seller and Buyer.

     3.9  Existing Encumbrances.  Escrow Agent is authorized to obtain
          ---------------------
beneficiary demands and requests for reconveyance (in a form approved by Seller)
for any existing Deeds of Trust affecting the Property, which shall be partially
reconveyed at Close of Escrow.  Seller has the right to approve all demands and
requests for reconveyance described in this Section, but each party's approval
shall not be unreasonably withheld or delayed.

     3.10 Distribution of Funds and Documents.  At the Close of Escrow, Escrow
          -----------------------------------
Agent shall do each of the following:

          (a)  Payment of Encumbrances. Pay the amount of those monetary liens
               -----------------------
described in Section 3.9 to the obligees thereof, in accordance with the demands
approved by Seller, utilizing funds to which Seller shall be entitled upon Close
of Escrow and funds (if any) deposited in Escrow by Seller.

          (b)  Recordation of Documents. Submit to the County Recorder of San
               ------------------------
Diego County the Grant Deed for the Property and each other document to be
recorded in the Official Records under the terms of this Agreement or by general
usage, and, after recordation, cause the County Recorder to mail the Grant Deed
to Buyer and each other such document to the grantee, beneficiary or person
acquiring rights thereunder or for whose benefit said document was recorded. At
Seller's request, the County Documentary Transfer Tax shall be set forth in a
statement separate from the Grant Deed and shall not be reflected in any
recorded document.

          (c)  Non-Recorded Documents. Deliver by United States mail (or hold
               ----------------------
for personal pickup, if requested): (1) the Title Policy to Buyer; and (2) each
other non-recorded document received hereunder to the payee or person acquiring
rights thereunder or for whose benefit said document was acquired.

          (d)  Distribution of Funds. Deliver by United States mail (or comply
               ---------------------
with other unilateral instructions given by the applicable party): (1) to
Seller, or order, the cash portion of the Purchase Price, adjusted for
prorations, charges and other credits and debits provided for

                                      -5-
<PAGE>

herein, including the funds to be withheld pursuant to Section 7.2(d) below; and
(2) to Buyer, or order, any excess funds delivered to Escrow Agent by Buyer.

          (e)  Conformed Copies. Upon Close of Escrow, Escrow Agent shall
               ----------------
deliver to Seller copies of all fully executed documents and escrow
instructions. Each recorded document shall be conformed to show the recording
date and file number.

                                   ARTICLE 4
                                 TITLE MATTERS
                                 -------------

     4.1  Preliminary Title Report.
          ------------------------

          (a)  Delivery to Buyer. As soon as reasonably possible after Opening
               -----------------
of Escrow, Escrow Agent shall provide to Buyer, at Seller's expense, a
preliminary report ("PR") issued by First American Title Insurance Company
("Title Insurer"), identified as Order No. 1249556-11, reflecting the status of
title to the Property, together with copies of all recorded documents referred
to therein. The PR will be deemed received by Buyer on the date of personal
delivery or three (3) days after mailing by Escrow Agent.

          (b)  Permitted Exceptions. The following matters shall be deemed
               --------------------
permitted exceptions to title to the Property ("Permitted Exceptions"), and
Buyer shall take title to the Property subject thereto:

               (1)  The lien of current, non-delinquent real estate taxes and
assessments;

               (2)  The lien of any supplemental taxes assessed pursuant to
Chapter 3.5 commencing with Section 75 of the California Revenue and Taxation
Code;

               (3)  The exceptions set forth in the PR or any supplement thereto
(including any supplement resulting from a survey or inspection required to
issue ALTA coverage, if Buyer elects such coverage as described in Section 4.3),
to the extent they are either approved by Buyer or disapproved by Buyer but
cured by Seller pursuant to Sections 4.1(c) through (f) below;

               (4)  Exceptions reasonably necessary to develop the Property or
required under the terms of any governmental conditions of approval for the
Corporate Center, provided they do not materially impair development and use of
the Property and do not include monetary liens against the Property; and

               (5)  Any other matters requested, solely caused or approved in
writing by Buyer.

          (c)  Approval of PR. Buyer shall have until the date which is fifteen
               --------------
(15) days prior to expiration of the Due Diligence Period ("PR Approval
Deadline") to notify Escrow Agent (with a copy to Seller), in writing, of its
objection to any exceptions identified in the PR. If the Title Insurer issues
any supplement to the PR which identifies any additional exceptions which are
not Permitted Exceptions, Buyer shall have the right to deliver written notice
of its

                                      -6-
<PAGE>

objection to the same, in writing, to Escrow Agent (with a copy to Seller): (1)
prior to the PR Approval Deadline, with respect to any new exceptions resulting
from the ALTA survey and inspection (if Buyer elects ALTA coverage, as further
described in Section 4.3); or (2) prior to the PR Approval Deadline, with
respect to any exceptions identified in a supplement received by Buyer at least
three (3) business days prior to the PR Approval Deadline; or (3) five (5)
business days after receipt, with respect to exceptions identified in any all
other supplements. All exceptions which are approved by Buyer shall be deemed
Permitted Exceptions.

          (d)  No Objection. If Buyer's written objection is not received by
               ------------
Escrow Agent within the applicable time period set forth in (c) above, Buyer
shall be deemed to have disapproved the PR or supplement thereto.

          (e)  Cure of Disapproved Exceptions. If Buyer timely disapproves one
               ------------------------------
or more exceptions indicated in the PR pursuant to (c) above or is deemed to
have disapproved the PR or supplement thereto pursuant to (d) above, Seller may,
at its option, cure such disapproval by delivering written notice to Escrow
Agent (with a copy to Buyer) within ten (10) days after Seller's receipt of
Buyer's objection, or, if Buyer has failed to respond, within ten (10) days
after expiration of the applicable time period given Buyer to respond in (c)
above, indicating that Seller will either eliminate or cause the Title Insurer
to insure over such exception(s) by the Closing Date. If Seller delivers such
written election to cure disapproved exceptions, Seller shall have until the
Closing Date to complete the cure. If Seller fails to deliver such written
notice, Seller shall be deemed to have elected not to cure the disapproved
exceptions. All disapproved exceptions which are cured by Seller pursuant to
this Section shall be deemed Permitted Exceptions.

          (f)  Right to Cancel or Perform. If Seller does not elect to cure each
               --------------------------
exception to which Buyer has objected, Buyer shall elect one of the following,
by delivering written notice to Escrow Agent (with a copy to Seller) within five
(5) days after receipt of notice of Seller's election or expiration of the 10-
day period described in (d) above (whichever occurs first): (1) to waive its
objections, take title subject to such exceptions, which shall be deemed
Permitted Exceptions, and proceed with Close of Escrow; or (2) to terminate this
Agreement and the Escrow, in which event neither party shall have any further
obligation hereunder (except for any liabilities or obligations which survive
termination under the express provisions of this Agreement) and Buyer's Deposit
shall be returned. If Buyer fails to deliver notice of its election within said
5-day period, Buyer will be deemed to have waived its objection and to have
agreed to take title subject to such exception(s).

     4.2  Title Policy. As of the Closing, Title Insurer shall issue, or be
          ------------
committed to issue, a standard form CLTA Owner's Title Insurance Policy ("Title
Policy") insuring Buyer's title to the Property in the amount of the Purchase
Price. The Title Policy shall be subject only to: (a) the Permitted Exceptions;
and (b) matters excepted or excluded from coverage by the printed terms of the
Title Policy's standard form.

     4.3  ALTA Title Coverage. Buyer may obtain ALTA title insurance coverage,
          -------------------
rather than the CLTA Title Policy described in Section 4.2, subject to the
following conditions:

          (a)  Provision of such coverage shall not delay the Close of Escrow;

                                      -7-
<PAGE>

          (b)  Buyer shall pay all additional costs of obtaining such coverage,
including the costs of any required survey;

          (c)  Buyer shall obtain and deliver to the Title Insurer any required
survey and order the Title Insurer's inspection of the Property a sufficient
time in advance so that any additional exceptions resulting from the Title
Insurer's review of the survey and inspection will be reviewed and approved or
disapproved by Buyer in the manner and prior to the PR Approval Deadline set
forth in Section 4.1(c); and

          (d)  Seller shall have the option (but not the obligation) to cure any
such disapproved exceptions as described in Section 4.1(e) and (f).

     4.4  Grant Deed.  Prior to Close of Escrow, Seller and Buyer shall each
          ----------
execute, acknowledge and deliver to Escrow a counterpart original of the Grant
Deed, in the form attached hereto as Exhibit C, conveying the Property to Buyer
                                     ---------
subject to covenants, conditions and restrictions and other exceptions set forth
therein.

                                   ARTICLE 5
                         CONDITIONS TO CLOSE OF ESCROW
                         -----------------------------

     5.1  Property Documents.  Buyer acknowledges receipt of copies of the
          ------------------
documents relating to the Property identified on Exhibit D attached hereto
                                                 ---------
("Property Documents").

   5.2    Due Diligence Period; Conditions.
          --------------------------------

          (a)  Due Diligence Period. The "Due Diligence Period" means a period
               --------------------
beginning on the Effective Date of this Agreement and terminating ninety (90)
days thereafter on December 28, 2000.

          (b)  Due Diligence Conditions. Close of Escrow shall be contingent
               ------------------------
upon satisfaction or waiver of each of the following conditions ("Due Diligence
Conditions") prior to expiration of the Due Diligence Period:

               (1)  Title Matters. Pursuant to and within the time deadlines
                    -------------
specified in Sections 4.1 and 4.3, as applicable: (A) Buyer's approval of the PR
and any supplements thereto which are required to be approved or disapproved
prior to the PR Approval Deadline, and the survey and inspection (if ALTA title
insurance coverage is requested by Buyer pursuant to Section 4.3); or (B)
Seller's election to cure all exceptions disapproved by Buyer; or (C) Buyer's
waiver of any remaining disapproved exception(s).

               (2)  Due Diligence Review. Buyer's approval, in its sole
                    --------------------
discretion, of all aspects of the Property and the feasibility of Buyer
developing the Property for Buyer's use, after such examination, inspection,
investigation and review during the Due Diligence Period as Buyer considers it
appropriate to undertake, including, but not limited to, review of the
following:

                    (A) The Property Documents described in Section 5.1 and
Exhibit D;
---------

                                      -8-
<PAGE>

                    (B) All applicable zoning, subdivision, development, land
use, environmental, building and other governmental laws, ordinances, rules,
regulations and requirements, the terms and conditions of all governmental
permits and approvals affecting the Property, and the Property's compliance with
the foregoing;

                    (C) The physical conditions of the Property, including
soils, subsurface, geotechnical, seismic, hydrological and environmental
conditions;

                    (D) All other matters relating to the condition, value,
fitness, suitability, development, improvement or use of the Property, including
all matters described in Section 6.2, and all matters Buyer may deem necessary
or appropriate.

          All costs incurred by Buyer in conducting the due diligence review
described above shall be paid by Buyer.

     5.3  Closing Condition.  Close of Escrow shall be contingent upon approval
          -----------------
by the City of Poway ("City"), prior to the Closing Date, of certain revisions
to the existing Tentative Map (TM 97-01) for the Property, as outlined in
Exhibit F attached hereto or as otherwise approved in writing by Buyer and
----------
Seller ("Closing Condition").  Seller shall use commercially reasonable efforts
and diligence to apply for and process such approval, at Seller's cost.
Provided, however, that if Buyer's development plans result in a delay in the
processing or approval of such revisions, then Seller shall have the right and
obligation to complete the same after Close of Escrow and satisfaction of this
Section 5.3 shall not be a condition to the Closing.

     5.4  Satisfaction, Waiver of Due Diligence Conditions.  If Buyer fails to
          ------------------------------------------------
deliver written approval or notice of satisfaction of the Due Diligence
Condition set forth in Section 5.2(b)(2) above to Escrow Agent prior to
expiration of the Due Diligence Period, the condition shall be deemed not
satisfied.  Buyer may unilaterally waive any of the Due Diligence Conditions
described in Section 5.2(a) and (b), which are for the benefit of Buyer.  Both
parties may agree to waive the Closing Condition described in Section 5.3.  All
waivers shall be delivered in writing to Escrow Agent prior to the date for
satisfying the applicable condition.

     5.5  Failure of Conditions.  If any Due Diligence Condition or Closing
          ---------------------
Condition is neither satisfied nor waived by the specified time deadline, either
party (provided such party is not in default hereunder) may unilaterally
terminate this Agreement and the Escrow by giving written notice of termination
to the other party and Escrow Agent.  In the event of such termination, Buyer's
Deposit (plus any interest earned thereon) shall immediately be returned and
neither party shall have any further obligation hereunder, except for any
liabilities or obligations which survive termination under the express terms of
this Agreement.

     5.6  Delivery of Documents.  If this Agreement is terminated for
          ---------------------
nonsatisfaction of a Condition or as a result of Buyer's default, Buyer shall
deliver to Seller, within ten (10) days after such termination, all Property
Documents and documents and information relating to the Property which were
prepared by or on behalf of Buyer during the Escrow period.

                                      -9-
<PAGE>

                                   ARTICLE 6
                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

     6.1  Definitions.  For purposes of this Article 6, the following terms
          -----------
shall have the meanings set forth below.

          (a)  Laws. "Laws" means all governmental laws, statutes, ordinances,
               ----
resolutions, rules, regulations, restrictions and requirements applicable to the
Property, whether now or hereafter in effect, and as amended or supplemented
from time to time.

          (b)  Environmental Laws. "Environmental Laws" means all Laws
               ------------------
applicable to the physical condition of the Property or the presence of any
substance thereon, including without limitation the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. Sections 9601 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.), the
Clean Water Act (33 U.S.C. Sections 466 et seq.), the Safe Drinking Water Act
(14 U.S.C. Sections 300f et seq.), the Hazardous Materials Transportation Act
(49 U.S.C. Sections 5101 et seq.), the Toxic Substances Control Act (15 U.S.C.
Sections 2601 et seq.), the California Hazardous Waste Control Act (California
Health and Safety Code Sections 25100 et seq.), the California Hazardous
Substances Account Act (California Health and Safety Code Sections 25300 et
seq.), the Safe Drinking Water and Toxic Enforcement Act ("Proposition 65n)
(California Health and Safety Code Sections 25249.5 et seq.), and the Porter-
Cologne Water Quality Control Act (California Health and Safety Code Sections
13000 et seq.), and any similar federal, state or local Laws, all regulations
and publications implementing or promulgated pursuant to the foregoing, as any
of the foregoing may be amended or supplemented from time to time.

          (c)  Hazardous Materials. "Hazardous Materials" shall include, but are
               -------------------
not limited to, substances which are flammable; explosive; corrosive;
radioactive; toxic; asbestos or those asbestos-containing materials; and any
substances defined or regulated as hazardous substances, hazardous materials,
toxic substances or hazardous wastes in any of the Environmental Laws.

          (d)  Seller's Knowledge. References to "Seller's knowledge," matters
               ------------------
"known to Seller", or words of like import shall mean, and be limited to, the
actual, current knowledge of Theodore Tchang and Neville Bothwell, or such
employees of Seller as may be reasonably expected to have knowledge of the
matter at issue, and shall not include any imputed or constructive knowledge,
and no duty of inquiry or investigation by Seller is implied or required.

     6.2  Condition of Property.
          ---------------------

          (a)  Disclaimer. Buyer acknowledges that: (1) except for the Seller's
               ----------
Improvements described in Section 7.2, Seller has no obligation to complete any
improvements located on or relating to the Property, either before or after the
Closing; (2) except as expressly provided in Section 6.4, Seller makes no
representations or warranties, express or implied, an to the physical conditions
of the Property or in connection with any matter relating to its condition,
economic value, marketability, merchantability, feasibility, fitness,
suitability or use; (3) Seller makes no representation or warranty as to any
operative or proposed Laws or Environmental

                                      -10-
<PAGE>

Laws which may now or hereafter apply to the Property; and (4) except as
expressly provided in Section 6.4, no representations or warranties of any kind
have been made by Seller or its representatives.

          (b)  Buyer's Investigation. Buyer acknowledges that the purchase of
               ---------------------
the Property will be on the basis of Buyer's own investigation of: (1) the
physical conditions of the Property, including the soils, subsurface,
geotechnical, seismic and environmental conditions thereof; (2) the Property
Documents; (3) the operative or proposed governmental laws, ordinances, rules,
regulations and requirements affecting or applicable to the Property and the
terms and conditions of all applicable governmental permits and approvals; (4)
the costs and fees associated with development and improvement of, or
construction on, the Property; and (5) the economic value, marketability,
merchantability, feasibility, suitability or use of the Property.

          (c)  "AS-IS" Purchase. Except for (1) the Seller's Improvements to be
                -----
completed by Seller as described in Section 7.2 and (2) matters arising from or
attributable to a breach by Seller of the representations and warranties set
forth in Section 6.4, and subject to satisfaction or waiver of the conditions to
Close of Escrow, Buyer will acquire the Property in an "AS IS" condition, based
upon its own investigation as described above. Buyer expressly waives and
negates the right to any express or implied warranties from Seller, including,
but not limited to, all implied warranties of merchantability, condition,
suitability or fitness for any particular purpose, and all warranties with
respect to quality, capacity, workmanship and latent defects. Buyer assumes the
risk that adverse physical conditions or the applicability and effect of
governmental laws, ordinances, rules, regulations and requirements may not have
been revealed by Buyer's investigation. Seller shall have no obligation to
correct any conditions or alleged defects discovered by Buyer during the course
of its investigation or thereafter.

          (d)  Waiver and Release. Buyer waives any and all rights to recover
               ------------------
from Seller and its partners and affiliates, and their respective shareholders,
directors, officers, employees, agents, successors and assigns, for any and all
liabilities, liens, claims, damages, costs, expenses, suits or judgments
(including attorneys' fees and court costs), whether direct or indirect, known
or unknown, foreseen or unforeseen (collectively, "Claims"), which may arise
from or are in any way connected with [the physical conditions of the Property
or any Laws or] Environmental Laws now or hereafter applicable thereto,
including, but not limited to, Claims arising from or related to soils,
subsurface, geotechnical, seismic, hydrological or environmental conditions of
the Property or defects in the design, engineering or construction of
improvements now or hereafter located on the Property; provided, however, that
the foregoing shall not limit Buyer's remedies in the event of (1) Seller's
failure to complete Seller's Improvements pursuant to Section 7.2, or (2)
Seller's breach of any express representation or warranty set forth in Section
6.4. Buyer expressly waives the benefits of Section 1542 of the California Civil
Code, which provides as follows:

          "A general release does not extend to claims which the creditor does
          not know or expect to exist in his favor at the time of executing the
          release, which if known to him must have materially affected the
          settlement with the debtor."

                                      -11-
<PAGE>

          (e)  Hazardous Materials. If Buyer should discover during its
               -------------------
investigation of the Property any Hazardous Material or other environmental
condition subject to legal requirements for corrective or remedial action, Buyer
shall, within a reasonable time, notify Seller in writing of the same. If such
discovery is made after the Close of Escrow, Seller shall have no liability to
Buyer arising out of such discovery except to the extent that Buyer can
establish that Seller has breached the representation set forth in Section
6.4(c).

          (f)  Indemnification. Subject to and effective upon Close of Escrow,
               ---------------
Buyer shall indemnify, protect, hold harmless and defend (by counsel reasonably
acceptable to Seller) Seller and its partners and affiliates, and their
respective shareholders, directors, officers, employees, agents, successors and
assigns, from and against any and all Claims as defined in Section 6.2(d) above,
including, but not limited to, Claims by third parties arising from or in any
way connected with: (1) the deposit, disposal, use, release or other generation
of Hazardous Materials on the Property on or after the Closing Date, including
but not limited to investigatory expenses, clean-up and other remedial costs, of
whatever kind or nature, or (2) other physical conditions of the Property,
including but not limited to Claims relating to soils, subsurface, geotechnical,
seismic, hydrological or environmental conditions of the Property or defects in
the design, engineering or construction of improvements now or hereafter located
on the Property; provided, however, that the foregoing shall not limit Seller's
liability in the event of (A) Seller's failure to complete Seller's Improvements
pursuant to Section 7.2, or (B) Seller's breach of any express representation or
warranty set forth in Section 6.4. The obligations set forth in this Section
6.2(f) shall survive the Close of Escrow and shall not be merged with the Grant
Deed.

          (g)  Property Documents. Buyer acknowledges that all engineering
               ------------------
studies and reports, surveys, soils/geotechnical reports, maps and other
information which Buyer may receive from Seller or its agents in connection with
this sale transaction, including, but not limited to, the Property Documents
described in Section 5.1, are provided without any warranty (whether oral or
written, express or implied) by Seller as to their accuracy, sufficiency or lack
of defects; and the foregoing are provided on the express condition that Buyer
shall make its own independent verification of such information. Buyer agrees
not to assert any liability of Seller arising out of Seller's providing of such
information.

          (h)  No Rights to Owner Participation Agreement. Seller has previously
               ------------------------------------------
entered into an Owner Participation Agreement ("OPA") with the redevelopment
agency for the City of Poway, pursuant to which Seller has constructed certain
improvements and is entitled to certain reimbursements. Buyer acknowledges and
agrees that the Property specifically excludes, and this Agreement is not
intended to transfer, any rights and obligations of Seller under the OPA which
are retained by Seller.

     6.3  Buyer's Representations.  Buyer agrees, represents and warrants, as of
          -----------------------
the date of execution of this Agreement and as of Close of Escrow, as follows:
(a) Buyer is a corporation, duly formed, existing and in good standing under the
laws of the State of Delaware; (b) Buyer has full legal right, power and
authority to execute and fully perform its obligations under this Agreement
pursuant to its governing instruments, without the need for any further
corporate action; and (c) the persons executing this Agreement and other
documents required hereunder on behalf of Buyer are the duly designated agents
of Buyer and are authorized to do so.

                                      -12-
<PAGE>

     6.4  Seller's Representations and Warranties.  Seller agrees, represents
          ---------------------------------------
and warrants, as of the date of execution of this Agreement and as of Close of
Escrow, as follows:

          (a)  Authority.  Seller is a limited liability company, duly formed,
               ---------
existing and in good standing under the laws of the State of California; Seller
has full legal right, power and authority to execute and fully perform its
obligations under this Agreement pursuant to its governing instruments, without
the need for any further corporate action; and the persons executing this
Agreement and other documents required hereunder on behalf of Seller are the
duly designated agents of Seller and are authorized to do so.

          (b)  Non-Foreign Affidavit. Seller represents and warrants to Buyer
               ---------------------
that it is not a foreign person and is a United States person as defined in
Section 7701(a)(30) of the Internal Revenue Code, as amended ("Code"). Prior to
Close of Escrow, Seller shall deliver to Escrow (with a copy to Buyer) an
affidavit, executed and sworn to under penalty of perjury, substantially in the
form attached hereto as Exhibit E.
                        ---------

          (c)  Hazardous Materials. Seller has no knowledge, except as otherwise
               -------------------
disclosed to Buyer in the Property Documents or in a writing delivered prior to
expiration of the Due Diligence Period, of the existence or prior existence on
the Property of any Hazardous Material. To Seller's knowledge, no summons,
citation, directive, order or other communication has been issued to Seller
arising out of or relating to the presence of Hazardous Material on the
Property. Buyer shall have the right to perform an independent environmental
assessment of the physical conditions of the Property, including the soils and
subsurface thereof, pursuant to Section 7.1.

          (d)  Actions; Proceedings. Seller has not received written notice of,
               --------------------
and has no knowledge of, any pending or threatened action or proceeding against
Seller and relating to the Property.

          (e)  Condemnation; Rezoning. Seller has not received written notice of
               ----------------------
any pending or threatened proceeding to condemn all or any portion of the
Property or to rezone the Property.

          (f)  Notice of Violation. Seller has not received written notice of
               -------------------
any uncured violation of law or governmental regulation affecting the Property.

          (g)  True Copies. The Property Documents delivered to Buyer pursuant
               -----------
to this Agreement are complete and true copies of such documents in Seller's
possession.

          (h)  Change in Representation. The representations of Seller set forth
               ------------------------
above in this Section 6.4 are made as of the date of execution of this Agreement
by Seller and are intended to be true and correct as of the Close of Escrow. If,
subsequent to the date of execution of this Agreement and prior to the Close of
Escrow, Seller determines that, as a result of facts or subsequent events
discovered or arising after execution of this Agreement, any of such
representations are no longer true and correct as of such subsequent date,
Seller shall not be in breach of this Agreement, provided that Seller shall
promptly notify Buyer in writing ("Change Notice") of such facts or subsequent
events and the effect on the applicable representation. Seller shall have the
option, but not the obligation, to take steps to cure or correct the situation
so

                                      -13-
<PAGE>

that the affected representation will be true and correct as of the Close of
Escrow, and, if Seller exercises such option, Seller shall identify the
corrective action in the Change Notice. If Seller elects to undertake corrective
action such that the affected representation will be true and correct as of the
Close of Escrow, the parties shall proceed with performance under this Agreement
and the Closing, provided Seller completes such corrective action, and the
Closing Date shall be extended for the time reasonably required by Seller to
complete such cure, but not to exceed a maximum extension of thirty (30) days.
If Seller does not elect to undertake such corrective action, then, within ten
(10) days after Buyer's receipt of the Change Notice, but in no event later than
the Closing Date, Buyer shall elect, by delivering written notice to Escrow
Agent (with a copy to Seller) either to: (1) proceed with performance of this
Agreement and the Closing; or (2) terminate this Agreement and the Escrow for
non-satisfaction of a condition. In the event of termination pursuant to this
Section, Buyer's Deposit shall be returned to Buyer and neither party shall have
any further obligations hereunder, except for any liability or obligation of
Buyer pursuant to those provisions which survive termination of this Agreement
under the express terms of this Agreement.

     6.5  Real Estate Commissions.  Subject to and upon Close of Escrow, Seller
          -----------------------
shall pay a real estate commission of $597,977.47 (i.e., $690,000.00 less
$92,022.53 for reimbursement of pre-paid sewer fees, as provided in Section 7.6
below), which shall be divided equally between CB Richard Ellis of San Diego,
California and The Irving Hughes Group also of San Diego, California.  Escrow
Agent is directed to pay said commission upon Close of Escrow out of funds
deposited in Escrow and credited to Seller.  Each party represents and warrants
to the other party that no other brokers or finders have been employed or are
entitled to a commission or compensation in connection with this transaction as
a result of the action or agreement of the indemnifying party.  Each party shall
indemnify, protect, hold harmless and defend the other party (and its officers,
directors, shareholders, employees, agents, successors and assigns) from and
against any obligation or liability to pay any such commission or compensation
arising from the act or agreement of the indemnifying party.

     6.6  Interstate Land Sales Full Disclosure Act.  Seller and Buyer intend
          -----------------------------------------
that the sale of the Property will comply with the exception requirements of the
Interstate Land Sales Full Disclosure Act, as stated in 15 U.S. Code Section
1702(a)(8), and Seller and Buyer confirm that the conditions set forth in such
Section are met.

     6.7  Survival of Warranties and Obligations.  The representations and
          --------------------------------------
warranties given by Buyer and Seller in this Article 6, and all obligations
under this Agreement to be performed after Close of Escrow, shall survive the
Close of Escrow and delivery of the Grant Deed to Buyer; provided, however, that
all representations and warranties by Seller shall terminate two (2) years after
the Closing Date, except for any representation or warranty which Buyer claims
to have been breached, as long as:  (a) Buyer has notified Seller in writing of
a claim of breach (identifying such breach in reasonable detail) within such two
(2)-year period, and (b) Buyer files a lawsuit for breach of such representation
or warranty and gives written notice thereof to Seller within two (2) years
after the expiration of such one-year period.

                                      -14-
<PAGE>

                                   ARTICLE 7

                            ADDITIONAL OBLIGATIONS
                            ----------------------

     7.1  Access to Property.  Between the date of Opening of Escrow and the
          ------------------
Close or earlier termination of Escrow, Seller shall allow Buyer and its agents
reasonable access to the Property during normal business hours, upon reasonable
notice to Seller, for the purpose of inspecting, surveying and testing the same,
at Buyer's sole expense.  Provided, however, in connection with any such entry,
Buyer:  (a) shall perform all work in a safe manner; (b) shall not permit any
hazardous condition to remain on the Property; (c) shall repair any damage or
disturbance to the Property; and (d) shall procure (or have all work performed
by contractors who maintain) general liability and property damage insurance,
evidence of which shall be delivered to Seller prior to Buyer's first entry.
Buyer further agrees to indemnify, hold harmless, protect and defend Seller (and
its officers, directors, shareholders, employees, agents, successors and
assigns) and Seller's property from and against any and all liabilities, liens,
claims, damages, costs, expenses, suits or judgments (including attorneys' fees
and court costs) for labor or services performed or materials furnished to or
for Buyer, or for personal injury or death or property damage, arising out of
entry upon the Property or any adjacent land of Seller by Buyer or its
employees, agents or independent contractors.  Seller's damages as a result of
Buyer's breach of its obligations under this Section shall not be limited or
liquidated by the provisions of Section 1.4.  Notwithstanding any provision of
this Agreement to the contrary, Buyer's obligations under this Section shall
survive termination of this Agreement and Close of Escrow.

     7.2  Seller's Improvements.
          ---------------------

          (a)  Description.  Seller shall complete or cause to be completed, at
               -----------
Seller's sole cost and free from all liens and claims, the following work
(collectively, "Seller's Improvements"):  completion of Kirkham Way,
construction of a storm drain outfall for the Property, signalization and median
reconstruction at the intersection of Scripps Poway Parkway and Tech Center
Drive, and, only if required by the City, construction of a sidewalk along
Scripps Poway Parkway.

          (b)  Time for Completion. Subject to extension, to the extent
               -------------------
reasonably required, as a result of delays described in Section 8.7, Seller
shall cause Seller's Improvements to be completed within a commercially
reasonable period after the Close of Escrow, subject to extension to accommodate
any actions required to be taken by the City and/or any delays caused by the
City. For purposes of this Section, Seller's Improvements shall be deemed
completed upon Seller's delivery of a written verification executed by Seller's
engineer indicating that Seller's Improvements have been substantially completed
in accordance with the Plans. Seller shall also be responsible for obtaining
formal acceptance of all public improvements by the City of Poway or other
applicable government agencies.

          (c)  Seller's Access. After the Closing Date, Seller shall have the
               ---------------
right to enter upon the Property to the extent necessary to complete Seller's
Improvements described in Section 7.2(a). Seller shall repair any damage or
disturbance to the Property resulting from such entry. Seller further agrees to
indemnify, hold harmless and defend Buyer and Buyer's property from and against
all liabilities, liens, claims, damages, costs, expenses, suits or judgments
(including attorneys' fees and court costs) for labor or services performed or
materials furnished

                                      -15-
<PAGE>

to or for Buyer, or for personal injury or property damage arising out of entry
upon the Property by Seller or its employees, agents or independent contractors.

          (d)  At Closing, Escrow Agent shall withhold, from proceeds otherwise
payable to Seller, Two Hundred Fifty Thousand Dollars ($250,000) ("Withheld
Funds").  Escrow Agent shall invest the Withheld Funds in an account approved by
Seller, and all interest earned thereon shall be Seller's.  Escrow Agent shall
disburse the Withheld Funds to Seller upon completion of the Seller's
Improvements as provided in Section 7.2(b) above.

     7.3  Government Approvals.  Nothing in this Agreement shall be construed as
          --------------------
authorizing Buyer, prior to the Closing, to apply for any zone change, variance,
waiver, exception or other governmental act, approval or permit with respect to
the Property, and Buyer shall not submit any such application without Seller's
prior written approval.  Seller's approval may be withheld if, in Seller's
judgment, approval of the matter proposed by Buyer would have an adverse impact
on the Property or any other portion of the Corporate Center.  After Close of
Escrow, Buyer's right to process governmental permits and approvals shall be
subject to the provisions of the CC&Rs.

     7.4  Damage or Destruction.  If any part of the Property is damaged or
          ---------------------
destroyed by fire or other casualty prior to the Closing, Seller shall promptly
give notice thereof to Buyer. Buyer may elect, by delivering written notice to
Seller within five (5) days after receipt of Seller's notice, to terminate this
Agreement and the Escrow; and, in such event, unless Seller agrees within five
(5) days after receipt of such notice to cure the damage on or before the
Closing, this Agreement and the Escrow shall terminate and neither party shall
have any further rights or obligations hereunder (except for any liability or
obligation of Buyer pursuant to provisions which survive termination of this
Agreement under the express terms of this Agreement).  If Buyer does not deliver
written notice of termination within said 5-day period, then:  (a) the parties
shall continue performance under this Agreement and the Escrow, without
modification of any of its terms and without any reduction in the Purchase
Price; and (b) Seller shall have no obligation to repair or restore the Property
and no liabilities or obligations to Buyer, and Buyer shall have no claims for
damages or other remedies against Seller, as a result of such damage or
destruction of the Property.

     7.5  Condemnation.  If Seller receives actual notice that a condemnation or
          ------------
eminent domain action is filed against the Property or any part thereof (or that
a taking is pending or contemplated) prior to the Closing, Seller shall promptly
give notice thereof to Buyer.  Buyer may elect, by delivering written notice to
Seller within five (5) days after receipt of Seller's notice, to terminate this
Agreement and the Escrow.  In the event of such termination, neither party shall
have any further rights or obligations hereunder (except for any liability or
obligation of Buyer pursuant to provisions which survive termination of this
Agreement under the express terms of this Agreement).  If Buyer does not deliver
written notice of termination within said 5-day period, then:  (a) the parties
shall continue performance under this Agreement and the Escrow, without
modification of any of its terms and without any reduction in the Purchase
Price; and (b) Seller shall assign and deliver to Buyer, subject to and
effective upon the Closing for the affected Lot, all of Seller's interest in the
award for such taking.  Buyer shall have no other remedies against Seller as a
result of such condemnation except as set forth in this Section.

                                      -16-
<PAGE>

     7.6  Reimbursement of Pre-Paid Sewer Fees.  Seller has pre-paid one-half of
          ------------------------------------
the sewer fees (which one-half portion equals $92,022.53), in order to reserve
the availability of sewer service for 78.1 EDUs for the Property.  The real
estate brokers specified in Section 6.5 above shall reimburse Seller, pursuant
to a separate agreement, for the amount of such prepaid sewer fees.

     7.7  Possession.  Possession of the Property shall be delivered by Seller
          ----------
to Buyer on the Closing Date after recordation of the Grant Deed.  All risk of
loss and damage to the Property from whatever source shall be the sole
responsibility of Buyer after the Close of Escrow.

                                   ARTICLE 8

                              GENERAL PROVISIONS
                              ------------------

     8.1  Assignment.
          ----------

          (a)  By Seller. Seller shall have the right to convey the Property and
               ---------
to assign its rights hereunder with the prior written consent of Buyer, which
consent shall not be unreasonably withheld or delayed, provided that the
assignee concurrently acquires real property included in the Corporate Center
(consisting of all or any portion of the real property currently owned by
Seller). To the extent Seller is permitted to assign its obligations hereunder,
the assignee shall assume such obligations in writing, in a form reasonably
approved by Buyer. In no event shall Seller be released from its obligations
under this Agreement as a result of such assignment.

          (b)  By Buyer.
               --------

               (1)  Buyer shall have the right, without Seller's consent, to
assign this Agreement, or any of its rights or obligations hereunder, to: (i)
any affiliated entity which controls, is controlled by, or is under common
control with Buyer; or (ii) an entity in which Buyer owns a substantial
ownership interest and in which Buyer is the managing general partner (if a
partnership) or the managing member (if a limited liability company).
Notwithstanding the foregoing, no assignment by Buyer pursuant to this Section
8.1(b)(1) shall be binding on Seller unless and until written notice of such
assignment, evidencing satisfaction of the circumstances described in (i) or
(ii) above, has been delivered by Buyer to Seller and Escrow Agent. Except as
permitted above in this Section 8.1(b)(1), Buyer's rights and obligations
hereunder shall be assignable only with the prior written consent of Seller,
which consent shall not be unreasonably withheld.

               (2)  The following conditions shall apply to any permitted
assignment, whether or not Seller's consent is required: (i) no such assignment
shall release Buyer from its obligations hereunder; (ii) for the benefit of
Seller, the assignee shall specifically assume the obligations, representations
and warranties of Buyer under this Agreement and under any additional escrow
instructions executed pursuant hereto, shall be bound by all approvals
previously given (or deemed given) by Buyer hereunder, and shall provide a
warranty of authority comparable to Section 6.3; and (iii) such assignment shall
not be binding on Seller unless and until written notice of such assignment and
a copy of the assumption agreement described above have been delivered by Buyer
to Seller and Escrow Agent.

                                      -17-
<PAGE>

     8.2  Attorneys' Fees.  If either party commences legal proceedings for any
          ---------------
relief against the other party arising out of this Agreement, the losing party
shall pay the prevailing party's legal costs and expenses, including, but not
limited to, reasonable attorneys' fees and costs as determined by the court.
The prevailing party shall be that party receiving substantially the relief
sought in the proceeding, whether brought to final judgment or not.

     8.3  Confidentiality.  The terms and conditions of the purchase and sale
          ---------------
Transaction described in this Agreement shall remain confidential between the
parties unless and until the Due Diligence Conditions have been satisfied or
waived and the Due Diligence Period has expired without termination of this
Agreement and the Escrow.

     8.4  Counterparts.  This Agreement or any escrow instructions pursuant to
          ------------
this Agreement may be executed in multiple copies, each of which shall be deemed
an original, but all of which shall constitute one Agreement after each party
has signed such a counterpart.

     8.5  Entire Agreement.  This Agreement, together with all exhibits attached
          ----------------
hereto and other agreements expressly referred to herein, constitutes the entire
agreement between the parties with respect to the purchase and sale of the
Property.  All prior or contemporaneous agreements, understandings,
representations, warranties and statements, oral or written, are superseded.

     8.6  Exhibits.  All exhibits referred to herein are attached hereto and
          --------
incorporated herein by reference.

     8.7  Force Majeure.  Except as otherwise specifically provided herein, if
          -------------
either party is delayed, hindered in or prevented from performing any act
required hereunder by reason of strikes, lock-outs, labor problems, inability to
procure materials, failure of power or other utilities, restrictive governmental
laws or regulations, prolonged rain or other unusual or unseasonable weather
conditions, riots, insurrection, war or other reason of a like nature (excluding
economic conditions or financial inability), not the fault of the party so
affected, then performance of such act shall be excused to the extent necessary
as a result of such event.  Provided, however, this Section shall not excuse
Buyer's obligation to pay each portion of the Purchase Price or any other
amounts payable hereunder in the manner and by the time deadlines specified
herein.

     8.8  Further Assurances.  The parties agree to perform such further acts
          ------------------
and to execute and deliver such additional documents and instruments as may be
reasonably required in order to carry out the provisions of this Agreement and
the intentions of the parties.

     8.9  Gender, Number.  As used herein, the singular shall include the plural
          --------------
and the masculine shall include the feminine, wherever the context so requires.

     8.10 Governing Law.  This Agreement shall be governed, interpreted,
          -------------
construed and enforced in accordance with the laws of the State of California.

     8.11 Headings.  The captions and paragraph headings used in this Agreement
          --------
are inserted for convenience of reference only and are not intended to define,
limit or affect the construction or interpretation of any term or provision
hereof.

                                      -18-
<PAGE>

     8.12 Joint and Several Liability.  If Buyer consists of more than one
          ---------------------------
person or entity, the liability of each such person or entity signing this
Agreement as Buyer shall be joint and several.

     8.13 Modification, Waiver.  No modification, waiver, amendment or discharge
          --------------------
of this Agreement shall be valid unless the same is in writing and signed by
both Buyer and Seller.  The escrow instructions shall be considered a part of
this Agreement, and no provision in said escrow instructions shall supersede or
contradict the provisions of this Agreement, unless the parties agree in writing
to such change.

     8.14 No Other Inducement. The making, execution and delivery of this
          -------------------
Agreement by the parties hereto has been induced by no representations,
statements, warranties or agreements other than those expressed herein.

     8.15 Notice. Notice to either party shall be in writing and either
          ------
personally delivered or sent by certified mail, postage prepaid, return receipt
requested, addressed to the party to be notified at the address specified
herein. Any such notice shall be deemed received on the date of personal
delivery to the party (or such party's authorized representative) or three (3)
business days after deposit in the U.S. Mail, as the case may be.

     Seller's Address for Notice:       TECH BUSINESS CENTER
                                        Attn:  Paul Tchang or Neville Bothwell
                                        3575 Kenyon Street
                                        San Diego, California 92110
                                        Tel.:  619/223-1663
                                        Fax:   619/223-2865

     With a copy to:                    Ellen B. Spellman, Esq.
                                        Allen Matkins Leck Gamble & Mallory LLP
                                        501 West Broadway, 9th Floor
                                        San Diego, California 92101
                                        Tel.:  619/235-1533
                                        Fax:   619/233-1158

     Buyer's Address for Notice:        APPLIED MICRO CIRCUITS CORPORATION
                                        Attn:  David Mersten, Esq.
                                        6290 Sequence Drive
                                        San Diego, California 92121
                                        Tel.:  858/597-7311
                                        Fax:   858/535-6800
     With a copy to:                    David E. Watson, Esq.
                                        Gray Cary Ware & Freidenrich LLP
                                        401 B Street, Suite 1700
                                        San Diego, California 92101-4297
                                        Tel.:  619/699-3608
                                        Fax:   619/699-1048

                                      -19-
<PAGE>

     Either party may change its address for notice by delivering written notice
to the other party as provided herein.

     8.16 Severability.  If any term, provision, covenant or condition of this
          ------------
Agreement is held to be invalid, void or otherwise unenforceable, to any extent,
by any court of competent jurisdiction, the remainder of this Agreement shall
not be affected thereby, and each term, provision, covenant or condition of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.

     8.17 Successors.  Subject to the restriction on assignment contained
          ----------
herein, all terms of this Agreement shall be binding upon, inure to the benefit
of, and be enforceable by the parties hereto and their respective heirs, legal
representatives, successors, and assigns.

     8.18 Survival.  Notwithstanding any provision of this Agreement to the
          --------
contrary, Sections 1.4, 3.4(b), 5.6, 6.5, 7.1, 8.2 and 8.3 shall survive
termination of this Agreement and Close of Escrow.  In addition, Sections
3.7(a), 6.2, 6.3, 6.4 (to the extent provided in Section 6.7), 6.5, 6.6, 7.1,
7.2, 7.6 and 8.2 shall survive the Closing and conveyance of the Property to
Buyer.

     8.19 Time.  Time is of the essence of each provision of this Agreement,
          ----
including without limitation all time deadlines for satisfying conditions and
Close of Escrow.

     8.20 Time Period Computation.  All periods of time referred to in this
          -----------------------
Agreement shall include all Saturdays, Sundays and state or national holidays,
unless the period of time specifies business days, provided that if the date or
last date to perform any act or give any notice or approval shall fall on a
Saturday, Sunday or state or national holiday, such act or notice may be timely
performed or given on the next succeeding day which is not a Saturday, Sunday or
state or national holiday.

          THE SUBMISSION OF THIS AGREEMENT FOR EXAMINATION OR THE NEGOTIATION OF
          THE TRANSACTION DESCRIBED HEREIN DOES NOT CONSTITUTE AN OFFER TO SELL
          BY SELLER, AND THIS AGREEMENT DOES NOT CONSTITUTE A BINDING CONTRACT
          UNTIL EXECUTED BY SELLER.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -20-
<PAGE>

      [Signature Page of Seller to Purchase and Sale Agreement and Escrow
                                 Instructions]

     IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
date first written above.

     "BUYER"                                 APPLIED MICRO CIRCUITS CORPORATION,
                                             a Delaware corporation

                                             By:________________________________

                                             Title:_____________________________



                                             By:________________________________

                                             Title:_____________________________

                                      -21-
<PAGE>

      [Signature Page of Seller to Purchase and Sale Agreement and Escrow
                                 Instructions]

     "SELLER"                      TECH BUSINESS CENTER, LLC,
                                   a California limited liability company

                                   By:  TECHBILT CONSTRUCTION CORP., a
                                        California corporation, as Managing
                                        Member

                                        By:_____________________________________
                                             Paul K. Tchang, President

                                      -22-
<PAGE>

                            CONSENT OF ESCROW AGENT
                            -----------------------

SELLER:        TECH BUSINESS CENTER, LLC

BUYER:         APPLIED MICRO CIRCUITS CORPORATION

PROPERTY:      31.66 Acres at Phase IV of Poway Corporate Center

ESCROW NO.:    00-1887LG


================================================================================

     The undersigned ("Escrow Agent") hereby:  (1) acknowledges delivery of a
Purchase and Sale Agreement and Escrow Instructions ("Agreement") dated
September 29, 2000 between the Seller and Buyer identified above, and delivery
of Buyer's $100,000.00 Deposit described in Section 1.3(a) of the Agreement; and
(2) agrees to act as the Escrow Agent in accordance with the provisions of the
Agreement.

     This Consent is executed on _____________ __, 2000 which shall constitute
the "Opening of Escrow" pursuant to Section 3.3 of the Agreement.

"ESCROW AGENT"                           FIRST AMERICAN TITLE INSURANCE
                                         COMPANY

                                         By:____________________________________
                                            Lynn Graham




                                  CONSENT OF
                                 ESCROW AGENT
                                      -1-
<PAGE>

                           ACKNOWLEDGMENT OF BROKERS
                           -------------------------

     Each of the undersigned (each, a "Broker") acknowledges and agrees as
follows:

     (1) It has read and reviewed the foregoing Purchase and Sale Agreement and
Escrow Instructions ("Agreement") dated September 29, 2000, by and between TECH
BUSINESS CENTER, LLC, a California limited liability company (as "Seller"), and
APPLIED MICRO CIRCUITS CORPORATION, a Delaware corporation (as "Buyer").

     (2) Payment, subject to and upon Close of Escrow, of a real estate
commission of $597,977.47 ($690,000.00 less $92,022.53 for reimbursement by
Brokers to Seller of pre-paid sewer fees, as provided in Section 7.6 of the
Agreement), divided equally between the two Brokers in accordance with Section
6.5 of the Agreement, shall discharge in full its right to receive a commission
or other compensation in connection with the transaction described therein.

     (3) If the Close of Escrow does not occur, for any reason (including as a
result of a default by either Buyer or Seller, termination of this Agreement as
permitted therein, or a rescission or termination by mutual agreement of Buyer
and Seller), then, in any such event:  (a) no commission shall be paid to or
deemed earned by Broker, (b) Broker shall have no interest in any liquidated
damages recovered by Seller, if any, (c) Broker shall have no claim or action
against Seller or Buyer, and (d) neither Seller nor Buyer shall have any
liability to Broker.

     "BROKER"                 CB RICHARD ELLIS

                              By:________________________________

                              Title:_____________________________

                              Date:______________________________



     "BROKER"                 THE IRVING HUGHES GROUP

                              By:________________________________

                              Title:_____________________________

                              Date:______________________________




                                ACKNOWLEDGMENT
                                  OF BROKERS
                                      -1-
<PAGE>

                               LIST OF EXHIBITS
                               ----------------


          A  Legal Description of Property

          B  General Escrow Instructions

          C  Form of Grant Deed

          D  Property Documents

          E  Non-Foreign Affidavit

          F  Tentative Map Revisions




                               LIST OF EXHIBITS
                                      -1-
<PAGE>

                                   EXHIBIT A
                                   ---------

                         LEGAL DESCRIPTION OF PROPERTY

THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
SAN DIEGO, AND IS DESCRIBED AS FOLLOWS:

ALL OF PARCEL 2 OF PARCEL MAP NO. 17607, FILED IN THE OFFICE OF THE COUNTY
RECORDER, OCTOBER 20, 1995 AS FILE NO. 1995-0473968 OF OFFICIAL RECORDS, THAT
PORTION OF LOT 4 OF SECTION 19, TOWNSHIP 14 SOUTH, RANGE 1 WEST, SAN BERNARDINO
MERIDIAN AND THAT PORTION OF THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER OF
SECTION 24, TOWNSHIP 14 SOUTH, RANGE 2 WEST, SAN BERNARDINO MERIDIAN, TN THE
CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, MORE PARTICULARLY
DESCRLBED AS FOLLOWS:


BEGINNING AT THE SOUTHWESTERLY CORNER OF SAID SECTION 19; THENCE ALONG THE MOST
SOUTHERLY LINE OF SAID PARCEL 2, NORTH 87"21'18" WEST, 6.01 FEET; THENCE NORTH
OO"28'46" WEST, 32.55 FEET TO A POINT ON THE NORTHERLY RIGHT-OF-WAY LINE OF
KJRKHAM WAY AS DEDICATED PER SAID PARCEL MAP NO. 17607; THENCE WESTERLY ALONG
SAID RIGHT-OF-WAY LINE, NORTH 87"21'18" WEST, 653.83 FEET; THENCE NORTH
02"38'42" EAST, 385.00 FEET; THENCE NORTH 87"21'18" WEST 688.64 FEET TO A POINT
ON THE EASTERLY RIGHT-OF-WAY LINE OF TECH CENTER DRIVE AS DEDICATED PER DEED
RECORDED MARCH 22, 1993 AS DOC. NO. 1993-0174230 OF OFFICIAL, RECORDS; THENCE
NORTHERLY ALONG SAID RIGHT-OF-WAY LINE, NORTH OO"O8'03" WEST (RECORD NORTH
OO"O7'57" WEST PER SAID DEED) 792.99 FEET TO THE BEGINNING A TANGENT 34.50 FOOT
RADIUS CURVE CONCAVE SOUTHEASTERLY; THENCE NORTHEASTERLY ALONG THE ARC OF SAID
CURVE THROUGH A CENTRAL ANGLE OF 86"37'17" (RECORD 86"38'18" PER SAID DEED) A
DISTANCE OF 52.16 FEET (RECORD 52.17' PER SAID DEED) TO A POINT ON THE SOUTHERLY
RIGHT-OF-WAY LINE OF SCRIPPS POWAY PARKWAY AS DEDICATED PER DEED RECORDED AUGUST
25, 1993 AS DOC. NO. 1993-0554187 OF OFFICIAL RECORDS; THENCE EASTERLY ALONG
SAID RIGHT-OF-WAY LINE AND TANGENT TO SAID CURVE, NORTH 86"29'14" EAST 84.33
FEET (RECORD 84.36' PER SALD DEED) TO THE BEGINNING OF A TANGENT 299.50 FOOT
RADIUS CURVE CONCAVE SOUTHERLY; THENCE EASTERLY ALONG THE ARC OF SAID CURVE
THROUGH A CENTRAL ANGLE OF 05"51'45" A DISTANCE OF 30.64 FEET (RECORD 30.65' PER
DEED); THENCE TANGENT TO SAID CURVE AND CONTINUTNG ALONG SAID RIGHT-OF-WAY LINE,
SOUTH 87"39'01" EAST; TO THE NORTHEAST CORNER OF PARCEL 2 OF SAID PARCEL MAP NO.
17607; THENCE LEAVING SAID RIGHT-OF-WAY LINE NORTH OO"28'46" EAST TO THE
SOUTHERLY LINE OF CITY OF POWAY TRACT 87-13 UNIT 1, ACCORDING TO MAP THEREOF NO.
12556; THENCE ALONG SAID SOUTHERLY LINE SOUTH 87"39'01" EAST TO A POINT ON THE
EAST LINE OF SAID SECTION 24; THENCE SOUTH 88"19'17" EAST 8.33 FEET; THENCE
LEAVING SAID SOUTHERLY LINE SOUTH OO"28'46" EAST TO A POINT ON THE SOUTHERLY
LINE OF SAID SECTION 19, DISTANT THEREON SOUTH 88"15'43" EAST 6.00 FEET FROM THE
SOUTHWEST CORNER THEREOF; THENCE NORTH 88"15'43" WEST 6.00 FEET TO THE POINT OF
BEGINNING.

NOTE: SAID LAND IS ALSO DESCRIBED AS PARCEL A IN CERTIFICATE OF COMPLIANCE
RECORDED SEPTEMBER 20, 1996 AS FILE NO. 1996-0480626 OF OFFICIAL RECORDS.

                                   EXHIBIT A
                                      -1-
<PAGE>

                                   EXHIBIT B
                                   ---------

                          GENERAL ESCROW INSTRUCTIONS

                           ESCROW GENERAL PROVISIONS


1.  Deposit of Funds & Disbursements

All funds shall be deposited in general escrow accounts in a federally insured
financial institution including those affiliated with Escrow Holder
("depositories") . All disbursements shall be made by Escrow Holder's check or
by wire transfer unless otherwise instructed in writing.  The Good Funds Law
requires that Escrow Holder have confirmation of receipt of funds prior to
disbursement.  Escrow Holder may receive certain financial benefits from the
depository institutions as a result of maintaining the general escrow accounts
and its on-going banking relationship with that institution and such benefits
will belong solely to Escrow Holder.

2.  Disclosure of Possible Benefits to Escrow Holder

The parties acknowledge that as a result of Escrow Holder maintaining its
general escrow accounts with the depositories, Escrow Holder may receive certain
financial benefits such as an array of bank services, accommodations, loans or
other business transactions from the depositories ("collateral benefits").  All
collateral benefits shall accrue to the sole benefit of Escrow Holder and Escrow
Holder shall have no obligation to account to the parties to this escrow for the
value of any such collateral benefits.

3.  Prorations & Adjustments

The term "close of escrow" means the date on which documents are recorded. All
prorations and/or adjustments shall be made to the close of escrow based on a
30-day month, unless otherwise instructed in writing.

4.  Recordation of Documents

Escrow Holder is authorized to record documents delivered through this escrow
which are necessary or proper for the issuance of the requested title insurance
policy(ies).

5.  Authorization to Furnish Copies

Escrow Holder may furnish copies of any and all documents to the lender(s), real
estate broker(s), attorney(s) and/or accountant(s) involved in this transaction
upon their request.

6.  Personal Property Taxes

No examination, UCC search, insurance as to personal property and/or the payment
of personal property taxes is required unless otherwise instructed in writing.

7.  Cancellation of Escrow

Any party desiring to cancel this escrow shall deliver written notice of
cancellation to Escrow Holder. Within a reasonable time after receipt of such
notice, Escrow Holder shall send  by regular mail to the address on the escrow
instructions, one copy of said notice to the other party(ies). Unless written
objection to cancellation is delivered to Escrow Holder by a party within 10
days after date of mailing, Escrow Holder is authorized at its option to comply
with the notice and terminate the escrow.  If a written objection is received by
Escrow Holder, Escrow Holder is authorized at its option to hold all funds and
documents in escrow (subject to the funds held fee) and to take no other action
until otherwise directed by either the parties' mutual written instructions or a
final order of a court of competent jurisdiction. If no action is taken on this
escrow within 6 months after the closing date specified in the escrow
instructions, Escrow Holder's obligations shall, at its option, terminate. Upon
termination of this escrow, the parties shall pay all fees, charges and
reimbursements due to Escrow Holder and all documents and funds held in escrow
shall be returned to the parties depositing same.

8.  Conflicting Instructions & Disputes

If Escrow Holder becomes aware of any conflicting demands or claims concerning
this escrow, Escrow Holder shall have the right to discontinue all further acts
on Escrow Holder's part until the conflict is resolved to Escrow Holder's
satisfaction. Escrow Holder has the right at its option to file an action in
interpleader requiring the parties to litigate their claims/rights.  If such an
action is filed, the parties jointly and severally agree (a) to pay Escrow
Holder's cancellation charges, costs (including the funds held fees) and
reasonable attorney's fees, and (b) that Escrow Holder is fully released and
discharged from all further obligations under the escrow.  If an action is
brought involving this escrow and/or Escrow Holder, the parties agree to
indemnify and hold the Escrow Holder harmless against liabilities, damages and
costs incurred by Escrow Holder (including reasonable attorney's fees and costs)
except to the extent that such liabilities, damages and costs were caused by the
gross negligence or willful misconduct of Escrow Holder.

9.   Usury

Escrow Holder is not to be concerned with usury as to any loans or encumbrances
in this escrow and is hereby released of any responsibility and/or liability
therefor.

10.  Amendments to Escrow Instructions

Any amendment to the escrow instructions must be in writing, executed by all
parties and accepted by Escrow Holder.  Escrow Holder may, at its sole option,
elect to accept and act upon oral instructions from the parties. If requested by
Escrow Holder the parties covenant to confirm said instructions in writing as
soon as practicable. The escrow instructions as may be amended shall constitute
the entire escrow agreement between the Escrow Holder and the parties hereto
with respect to the subject matter of the escrow and shall supersede all prior
agreements with respect thereto.

11.  Supplemental Real Property Taxes

Supplemental  taxes may be assessed as a result of a change in ownership or
completion of construction. Adjustments due either party based on a supplemental
tax bill will be made by the parties outside of escrow and Escrow Holder is
released of any liability in connection with same.

12.  Change of Ownership Forms

Buyer will provide a completed Preliminary Change of Ownership Report form
("PCOR").  If Buyer fails to provide the PCOR, Escrow Holder shall close escrow
and charge Buyer any additional fee incurred for recording the
<PAGE>

documents without the PCOR. Escrow Holder is released from any liability in
connection with same.

13.  Insurance Policies

In all matters relating to insurance, Escrow Holder may assume that each policy
is in force and that the necessary premium has been paid.  Escrow Holder is not
responsible for obtaining fire, hazard or liability insurance, unless Escrow
Holder has received specific written instructions to obtain such insurance prior
to close of escrow from the parties or their respective lenders.

14.  Facsimile Instructions

The parties agree to accept and instruct the Escrow Holder to rely upon
facsimile transmitted documents as if they had original signatures.  Within 72
hours of transmission, the party transmitting documents by facsimile shall
deliver the originals of such documents to Escrow Holder. Escrow Holder may
withhold documents and/or funds due to the party until such originals are
delivered.  Documents to be recorded MUST contain original signatures.

15.  Execution in Counterpart

The escrow instructions and any amendments may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute the same instruction.

16.  Tax Reporting, Withholding & Disclosure

The parties are advised to seek independent advice concerning the tax
consequences of this transaction, including but not limited to, their
withholding, reporting and disclosure obligations.  Escrow Holder does not
provide tax or legal advice and the parties agree to hold Escrow Holder harmless
from any loss or damage that the parties may incur as a result of their failure
to comply with federal and/or state tax laws.  WITHHOLDING OBLIGATIONS ARE THE
EXCLUSIVE OBLIGATIONS OF THE PARTIES. ESCROW HOLDER IS NOT RESPONSIBLE TO
PERFORM THESE OBLIGATIONS UNLESS ESCROW HOLDER AGREES IN WRITING.

     A.  Taxpayer Identification Number Reporting

Federal law requires Escrow Holder to report Seller's social security number
and/or tax identification number, forwarding address, and the gross sales price
to the Internal Revenue Service ("IRS").  Escrow can not be closed nor any
documents recorded until the information is provided and  Seller certifies its
accuracy to Escrow Holder.

     B.  State & Federal Withholding & Reporting

A buyer may be required to withhold and deliver to the Franchise Tax Board an
amount equal to 3.33% of the sales price of a California real property interest
by either: 1) a seller who is an individual with either a last known street
address outside of California or when the seller's disbursement instructions
direct the proceeds to be sent to a financial intermediary of the seller; OR 2)
a corporate seller which has no permanent place of business in California.  The
buyer may become subject to a penalty in an amount equal to the greater of 10%
of the amount required to be withheld or $500. However, the buyer is not
required to withhold any amount and will not be subject to penalty for failure
to withhold if: a) the sales price of the California real property interest
conveyed does not exceed $100,000; b) the seller executes a written certificate,
under the penalty of perjury, certifying that the seller is a resident of
California, or if a corporation, has a permanent place of business in
California; OR c) the seller, who is an individual, executes a written
certificate, under the penalty of perjury, that the California real property
being conveyed is the seller's principal residence.  The California Franchise
Tax Board may grant reduced withholding or waivers. To obtain additional
information regarding California withholding, contact the Franchise Tax Board,
Withhold at Source Unit, P. O. Box 651, Sacramento, CA 95812-0651 (916/845-
4900).

Certain federal reporting and withholding requirements exist for real estate
transactions where the seller (transferor) is a non-resident alien, a non-
domestic corporation or partnership, a domestic corporation or partnership
controlled by non-residents or non-resident corporations or partnerships.

     C.  Taxpayer Identification Disclosure

Parties to a residential real estate transaction involving seller-provided
financing are required to furnish, disclose, and include taxpayer identification
numbers in their tax returns.   Escrow Holder is not obligated to transmit the
taxpayer identification numbers to the IRS or to the parties. Escrow Holder is
authorized to release any party's taxpayer identification numbers to any other
party upon receipt of a written request. The parties hereto waive all rights of
confidentiality regarding their respective taxpayer identification numbers and
agree to hold Escrow Holder harmless against any fees, costs, or judgments
incurred and/or awarded because of the release of taxpayer identification
numbers.


                    THIS COMPANY CONDUCTS ESCROW BUSINESS
                   UNDER CERTIFICATE OF AUTHORITY
          ISSUED BY THE STATE OF CALIFORNIA DEPARTMENT OF INSURANCE.
                            DEPARTMENT OF INSURANCE


                                      -3-
<PAGE>

                                   EXHIBIT C
                                   ---------

                              FORM OF GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

__________________________

__________________________

__________________________

__________________________

MAIL TAX STATEMENTS TO:

SAME AS ABOVE

================================================================================
                                                (Space Above For Recorder's Use)

     A Portion of Tax Assessor's Parcel No. ___________________

     Amount of Documentary Transfer Tax shown on attached paper -- not for
public record.

                                  GRANT DEED

     FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, TECH
BUSINESS CENTER, LLC, a California limited liability company ("Grantor"), hereby
grants to APPLIED MICRO CIRCUITS CORPORATION, a Delaware corporation
("Grantee"), the real property located in the City of Poway, County of San
Diego, State of California, described as follows and hereinafter referred to as
the "Property":

     [Insert legal description of Property]

SUBJECT TO:

     (1) All general and special real property taxes and assessments, not
delinquent;

     (2) Easements, liens, charges, covenants, restrictions, reservations and
other terms and provisions set forth in that certain Declaration of Covenants,
Conditions and Restrictions for Poway Corporate Center, executed by Grantor (as
"Declarant") and recorded on March 24, 2000 as Document No. 2000-0149044 of the
Official Records of San Diego County, California, as amended as of the date
hereof ("Declaration"), which Declaration is by this reference incorporated
herein and made a part hereof.  The Property is conveyed to Grantee together
with all easements set forth in the Declaration which are appurtenant to the
Property. By acceptance of this Grant Deed, Grantee accepts and agrees to be
bound by the covenants, conditions, restrictions, rights and liabilities set
forth in the Declaration, which shall bind successor owners of the Property
conveyed to Grantee as covenants running with the land.

                                   EXHIBIT C
                                      -1-
<PAGE>

     (3) All other conditions, covenants, liens, restrictions and other
encumbrances and matters of record in the Official Records of San Diego County,
California.

     (4) Matters that can be ascertained by a reasonable inspection and/or
survey of the Property.

     [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                   EXHIBIT C
                                      -2-
<PAGE>

                         [Signature Page to Grant Deed]

     IN WITNESS WHEREOF, Grantor has executed this Grant Deed on _____________
__, 20__ .


     "GRANTOR"                 TECH BUSINESS CENTER, LLC,
                               a California limited liability company

                               By:  TECHBILT CONSTRUCTION CORP., a
                                    California corporation, as Managing Member

                               By:______________________________________
                                    Paul K. Tchang, President

                               By:  BOTHWELL INTERNATIONAL, LTD., a
                                    California limited partnership, Member

                               By:_______________________________________
                                    Neville F. Bothwell, General Partner





STATE OF CALIFORNIA           )
                              ) ss.
COUNTY OF SAN DIEGO           )

     On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared______________________________
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 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, or the entity upon
behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.

                                             __________________________________
                                             Notary Public in and for said State
(SEAL)

                                   EXHIBIT C

                                      -3-
<PAGE>

STATE OF CALIFORNIA      )
                         ) ss.
COUNTY OF SAN DIEGO      )


     On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared______________________________
__________, 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 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, or the entity upon
behalf of which the person acted, executed the instrument.

     WITNESS my hand and official seal.


                                            ____________________________________
                                            Notary Public in and for said State
(SEAL)

                                   EXHIBIT C

                                      -4-
<PAGE>

                         [Signature Page to Grant Deed]

     IN WITNESS WHEREOF, Grantor has executed this Grant Deed on _____________
__, 20__ .

     "GRANTEE"                APPLIED MICRO CIRCUITS CORPORATION,

                              a Delaware corporation

                              By:_____________________________________

                              Title:__________________________________





STATE OF CALIFORNIA           )
                              ) ss.
COUNTY OF SAN DIEGO           )


     On ______________________, before me, ______________________, a Notary
Public in and for said state, personally appeared ____________________________
____________, 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 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, or the entity upon behalf of which the person acted,
executed the instrument.

     WITNESS my hand and official seal.

                                        _______________________________________
                                        Notary Public in and for said State
(SEAL)

                                   EXHIBIT C

                                      -5-
<PAGE>

                                   EXHIBIT D
                                   ---------

                               PROPERTY DOCUMENTS


1.   Preliminary Report for the Property [Order No. 1249556-11, dated as of
     August 10, 2000,] prepared by First American Title Insurance Company, with
     underlying documents.

2.   Tech Center West Tentative Map No. 97-01.

3.   Tech Center West Cut - Fill Map dated January 7, 1999, and Tech Center West
     Grading and Erosion Control Plans consisting of six sheets, W.O. #97-017

4.   Improvement Plans for Offsite Sewer Main for Parkway Business Center III
     Sheets 1 through 4

5.   Amended and Restated Owner Participation Agreement By and Between the Poway
     Redevelopment Agency and Tech Business Center LLC dated June 22, 1999.

6.   City of Poway letter dated November 17, 1998, acknowledging Planning
     Resolution No. P-98-65 approving Tentative Tract Map 97-01, together with
     related acceptance documents by Tech Business Center

7.   Preliminary Geotechnical Investigation for the Proposed Tech Business
     Center dated April 10, 1990, prepared by Woodward-Clyde Consultants

8.   Final Report of Testing and Observation Services During Site Grading,
     Watkins Trucking Depot Site, Tech Business Center, dated October 27, 1995,
     prepared by Geocon Incorporated

9.   Final Report of Testing and Observation Services during Site Grading, Tech
     Business Center West, dated February 11, 1999, prepared by Geocon
     Incorporated

                                   EXHIBIT D

                                      -1-
<PAGE>

                                   EXHIBIT E
                                   ---------

                             NON-FOREIGN AFFIDAVIT

                    Non-Foreign Affidavit Pursuant to FIRPTA

SELLER:        TECH BUSINESS CENTER, LLC, a California limited liability company

BUYER:         APPLIED MICRO CIRCUITS CORPORATION, a Delaware corporation

PROPERTY:      31.66 Acres at Phase IV of Poway Corporate Center

ESCROW NO:     00-1887 LG

================================================================================

     TECH BUSINESS CENTER, LLC, a California limited liability company
("Seller"), hereby certifies the following:

     1.   Seller is the owner of the Property identified above.  No other person
or entity has an ownership interest in the Property.

     2.   Seller is not a foreign person and is a "United States Person" as such
term is defined in Section 7701(a)(30) of the Internal Revenue Code, as amended
(the "Code").

     3.   Seller's U.S. Tax Identification Number is:  33-0443611.  Seller's
business address is:  3575 Kenyon Street, San Diego, CA  92110.

     4.   This Affidavit is provided pursuant to Section 1445 of the Code which
requires a transferor of a U.S. real property interest to withhold tax if the
transferee is a foreign person.  Seller understands that the purchaser of the
Property intends to rely on this Affidavit in connection with the United States
Foreign Investment and Real Property Tax Act (FIRPTA).

     The undersigned, the general partners of Seller, hereby declare under
penalty of perjury that the foregoing is true and correct.

Dated: ______________, 20__           SELLER:

                                      TECH BUSINESS CENTER, LLC,
                                      a California limited liability company

                                      By:  TECHBILT CONSTRUCTION CORP., a
                                           California corporation, as Managing
                                           Member

                                           By:__________________________________
                                               Theodore Tchang, Vice-President

                                   EXHIBIT E

                                      -1-
<PAGE>

                                   EXHIBIT F
                                   ---------

                            TENTATIVE MAP REVISIONS
                            -----------------------

1.   Eliminate planned Lot 6 (mini-park) and the detention basin thereon,
     resulting in increases in sizes of lots 5 and 7.

2.   Add note on lots 5 and 7 that reads: "driveway access may be provided
     across lot 5 or lot 7 from Kirkham Way to provide secondary access to
     consolidated Lots 4, 8, 9, and 10."

3.   Add note on westerly end of Gregg Street that reads: "Gregg Street may be
     located within the region shown to provide access to consolidated lots 3,
     4, 8, 9, 10 and 11 or combinations thereof, the location to be subject to
     the approval of the City Engineer having regarding to turning movements on
     Tech Center Drive."

4.   Change zoning notes to include South Poway Commercial Zone on Lots 12, 13,
     and 14.

5.   Revise table of gross acres to include all of land owned by Seller.

6.   Add 36" diameter storm drain on Kirkham Way.

7.   Add note that site can be regraded to eliminate the grade differentials of
     Lots 5, 7, 12, 13 and 14 from adjoining lots.

8.   Adjust corner lot lines at South Poway Place and Tech Center Drive to
     reflect traffic signal plans.


                                  EXHBIT F

                                    -1-

<PAGE>

                          PURCHASE AND SALE AGREEMENT
                            AND ESCROW INSTRUCTIONS

     SELLER:   TECH BUSINESS CENTER, LLC,
               a California limited liability company

     BUYER:    APPLIED MICRO CIRCUITS CORPORATION,
               a Delaware corporation

     PROPERTY: Phase IV of Poway Corporate Center

     ESCROW:   First American Title Insurance Company
               Attn:  Lynn Graham

     ESCROW NO.:  00-1887LG



                             POWAY CORPORATE CENTER

                                    PHASE IV


<PAGE>

<TABLE>
                                                             Page
                                                             ----
<S>                                                          <C>
ARTICLE 1  AGREEMENT OF PURCHASE AND SALE                       1
      1.1  Description of Property...........................   1
      1.2  Purchase and Sale; Effective Date.................   1
      1.3  Deposit...........................................   1
      1.4  LIQUIDATED DAMAGES................................   2

ARTICLE 2  PURCHASE PRICE....................................   2
      2.1  Purchase Price....................................   2

ARTICLE 3  ESCROW............................................   3
     3.1   Escrow Agent......................................   3
     3.2   Escrow Instructions...............................   3
     3.3   Opening of Escrow.................................   3
     3.4   Close of Escrow...................................   3
     3.5   Deliveries to Escrow..............................   4
     3.6   Completion of Documents...........................   4
     3.7   Prorations, Escrow Fees and Costs.................   4
     3.8   Closing Statement.................................   5
     3.9   Existing Encumbrances.............................   5
     3.10  Distribution of Funds and Documents...............   5

ARTICLE 4  TITLE MATTERS.....................................   6
      4.1  Preliminary Title Report..........................   6
      4.2  Title Policy......................................   7
      4.3  ALTA Title Coverage...............................   7
      4.4  Grant Deed........................................   8

ARTICLE 5  CONDITIONS TO CLOSE OF ESCROW.....................   8
      5.1  Property Documents................................   8
      5.2  Due Diligence Period; Conditions..................   8
      5.3  Closing Condition.................................   9
      5.4  Satisfaction, Waiver of Due Diligence Conditions..   9
      5.5  Failure of Conditions.............................   9
      5.6  Delivery of Documents.............................   9

ARTICLE 6  REPRESENTATIONS AND WARRANTIES....................  10
      6.1  Definitions.......................................  10
      6.2  Condition of Property.............................  10
      6.3  Buyer's Representations...........................  12
      6.4  Seller's Representations and Warranties...........  13
      6.5  Real Estate Commissions...........................  14
      6.6  Interstate Land Sales Full Disclosure Act.........  14
      6.7  Survival of Warranties and Obligations............  14
</TABLE>

                                      (i)
<PAGE>

<TABLE>
<CAPTION>                                                     Page
                                                              ----
<S>                                                           <C>
ARTICLE 7  ADDITIONAL OBLIGATIONS............................  15
     7.1   Access to Property................................  15
     7.2   Seller's Improvements.............................  15
     7.3   Government Approvals..............................  16
     7.4   Damage or Destruction.............................  16
     7.5   Condemnation......................................  16
     7.6   Reimbursement of Pre-Paid Sewer Fees..............  17
     7.7   Possession........................................  17

ARTICLE 8  GENERAL PROVISIONS................................  17
     8.1   Assignment........................................  17
     8.2   Attorneys' Fees...................................  18
     8.3   Confidentiality...................................  18
     8.4   Counterparts......................................  18
     8.5   Entire Agreement..................................  18
     8.6   Exhibits..........................................  18
     8.7   Force Majeure.....................................  18
     8.8   Further Assurances................................  18
     8.9   Gender, Number....................................  18
     8.10  Governing Law.....................................  18
     8.11  Headings..........................................  18
     8.12  Joint and Several Liability.......................  19
     8.13  Modification, Waiver..............................  19
     8.14  No Other Inducement...............................  19
     8.15  Notice............................................  19
     8.16  Severability......................................  20
     8.17  Successors........................................  20
     8.18  Survival..........................................  20
     8.19  Time                                                20
     8.20  Time Period Computation...........................  20
</TABLE>



     LIST OF EXHIBITS
     ----------------

     EXHIBIT A - Legal Description of Property
     EXHIBIT B - General Escrow Instructions
     EXHIBIT C - Form of Grant Deed
     EXHIBIT D - Property Documents
     EXHIBIT E - Non-Foreign Affidavit
     EXHIBIT F - Tentative Map Revisions

                                     (ii)
<PAGE>

                    SECOND AMENDMENT TO ESCROW INSTRUCTIONS
                    ---------------------------------------


          TO ESCROW OFFICER:   First American Title Insurance Company
                               Attn: Lynn Graham, Escrow Officer

          ESCROW NO:           00-1887 LG

          SELLER:              TECH BUSINESS CENTER, LLC,
                               a California limited liability company

          BUYER:               APPLIED MICRO CIRCUITS CORPORATION, a Delaware
                               corporation

          DATE:                January 10, 2001
________________________________________________________________________________

     This Second Amendment to Escrow Instructions ("Amendment") effective upon
Escrow Agent's receipt of a copy or copies executed by Seller and Buyer,
constitutes part of, amends and supersedes any contrary provisions in the
Purchase and Sale Agreement and Escrow Instructions between Seller and Buyer
effective as of September 29, 2000, as modified by the [First] Amended Escrow
Instructions dated December 26, 2000 (collectively, "Agreement") as follows:

     1.   Seller's Improvements.  Section 7.2(b) of the Agreement is revised to
          ---------------------
delete the first sentence and to substitute therefor the following:

          "Seller shall cause Seller's Improvements to be completed within one
     (1) year after the Close of Escrow, which completion date shall be subject
     to extension, to the extent reasonably required, (a) to accommodate any
     actions required to be taken by the City, and/or (b) as a result of delays
     described in Section 8.7 of the Agreement or delays caused by the City or
     Buyer."

The following new provisions are added at the end of Section 7.2(b):

          "If Seller fails to complete any of Seller's Improvements within the
     time specified above, and if such failure is not cured within thirty (30)
     days after Seller's receipt of written notice from Buyer that Buyer intends
     to assume responsibility for completion of such improvements, Buyer shall
     have the right to complete the improvements in accordance with the Plans
     and all other applicable requirements of the City and other governmental
     agencies. In such event, Buyer shall have the right to recover from Seller
     the reasonable, actual costs of completing such improvements."
<PAGE>

     2.   Development Obligations.  New Section 7.8 is added to the Agreement,
          -----------------------
as follows:

          "7.8  Development Obligations.  A copy of pages 13-14 of Resolution
                -----------------------
     P98-65, which sets forth the conditions of approval of the Tentative Map
     (TM 97-01), is attached to this Amendment and incorporated into the
     Agreement as Exhibit G. Buyer shall be responsible for paying, when due,
                  ---------
     all development fees described in Item No. 1 set forth on page 13 attached
     as Exhibit G. Seller shall pay, prior to approval of the Final Map based on
        ---------
     the Tentative Map (TM 97-01), the fees described in Item No. 2 set forth on
     page 13 attached as Exhibit G, to the extent that such fees are normal and
                         ---------
     customary fees calculated based upon the grading and improvement plans
     prepared by Seller, including any modifications which are required to make
     such plans consistent with the revisions to the Tentative Map outlined on
     Exhibit F to the Agreement.  Buyer shall pay any amounts charged pursuant
     ---------
     to Item No. 2 which are not allocated to Seller as set forth above or which
     result from Buyer's site development plan or the City's development review
     process.  Seller shall also pay the assessments described in Item No. 3.A
     and B on pages 13-14 attached as Exhibit G and the prorata share payment
                                      ---------
     described in Item No. 4 on the top of page 14 attached as Exhibit G.
                                                               ---------
     Seller shall promptly deliver to Buyer copies of all Construction Covenants
     delivered by the City to Seller pursuant to the Amended and Restated Owner
     Participation Agreement.  Seller represents that no such Construction
     Covenants have been delivered as of the date of this Amendment."

     3.   Satisfaction of Due Diligence Conditions.  Seller and Buyer
          ----------------------------------------
acknowledge that the Due Diligence Conditions described in Section 5.2(b) of the
Agreement have been satisfied and the Due Diligence Period has expired. Escrow
Agent is authorized to immediately release the Buyer's $100,000 Deposit to
Seller upon receipt of a copy of this Amendment executed by Seller and Buyer,
pursuant to Section 1.3(b) of the Agreement.

     4.   Closing Date.  Section 3.4(a) is amended to delete the last sentence
          ------------
and substitute therefor the following:

     "The 'Closing Deadline' means the date that is the later of:  (1) February
     2, 2001, or (2) two (2) business days after the City's approval of the
     Tentative Map revisions described in Section 5.3 as long as such approval
     remains a condition to the Closing pursuant to Section 5.3."

     5.   No Further Changes.  In all other respects, the Agreement shall remain
          ------------------
unchanged and in full force and effect.

                 [Buyer's Signature Appears on Following Page]

                                      -2-
<PAGE>

      [Buyer's Signature Page to Second Amendment to Escrow Instructions]
      -------------------------------------------------------------------

     BUYER:                   APPLIED MICRO CIRCUITS CORPORATION,
                              a Delaware corporation

                              By: _____________________________________
                                  Title: ______________________________

                              By: _____________________________________
                                  Title: ______________________________

                [Seller's Signature Appears on Following Page]

                                      -3-
<PAGE>

     [Seller's Signature Page to Second Amendment to Escrow Instructions]
     --------------------------------------------------------------------

     SELLER:                  TECH BUSINESS CENTER, LLC,
                              a California limited liability company

                              By: TECHBILT CONSTRUCTION CORP., a
                                  California corporation, as Managing Member

                                  By: _______________________________________
                                      Paul K. Tchang, President

                              [End of Signatures]

                                      -4-
<PAGE>

                                   EXHIBIT G
                                   ---------

                       CERTAIN TENTATIVE MAP CONDITIONS
                       --------------------------------

                                   EXHIBIT G

                                      -1-