ACKNOWLEDGMENT AND WAIVER AGREEMENT

Exhibit 10.1

ACKNOWLEDGMENT AND WAIVER AGREEMENT

     This Agreement (“Agreement”), dated December ___, 2005, is entered into by and between Prentiss Properties Trust, a Maryland real estate investment trust (the “Company”) and ___(“Key Employee”).

     (a) In the event it shall be determined that the payment of the amounts listed on Exhibit A to this Agreement in 2005 (the “2005 Payments”) is or will be subject to the excise tax imposed by Section 409A of the Code or any interest or penalties with respect to such payment or excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excise Tax”), then Key Employee shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by Key Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including but not limited to, any income tax, employment tax or Excise tax, imposed upon the Gross Up Payment, Key Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments. For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation in the calendar year in which the Gross-Up Payment is to be made and state and local income taxes at the highest marginal rate of

taxation in the state and locality of Executive’s residence (or, if greater, the state and locality in which Executive is required to file a nonresident income tax return with respect to the Payment) on the date of termination, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes.

     (b) If it is finally determined that any of the Total Payments are subject to Excise Tax any determinations as to the amount of the Gross-Up Payment shall be made by an independent accounting firm selected by the Company (the “Accounting Firm”), which shall provide its determination (the “Determination”), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter, both to the Company and Key Employee by no later than ten (10) days following such final determination, or such earlier time as is requested by the Company or Key Employee (if Key Employee reasonably believes that any of the Total Payments may be subject to the Excise Tax). If a Gross-Up Payment is determined to be payable, it shall be paid to Key Employee within twenty (20) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Company by the Accounting Firm. Any determination by the Accounting Firm shall be binding upon the Company and Key Employee, absent manifest error.

     (c) If a claim by a federal, state or local taxing authority is made against Key Employee, and if Key Employee intends to seek a Gross-Up Payment with respect thereto under this Section, Key Employee shall promptly notify (i) the Company in writing of such claims, setting forth such claims in reasonable detail and providing copies of any written documentation provided by the taxing authority in connection with its claims. The Company shall have fifteen (15) days after receipt of such notice to undertake, conduct and control, through counsel of its own choosing and at its own expense, the settlement or defense thereof, and Key Employee shall cooperate with it in connection therewith; provided, that Key Employee may participate in such settlement or defense through counsel chosen by Key Employee and paid at his own expense. So long as the Company is reasonably contesting any such claim in good faith, Key Employee shall not pay or settle any such claim without the consent of the Company, which consent shall not be unreasonably withheld. If the Company does not notify Key Employee in writing within fifteen (15) days after receipt of the Company’s written notice of a claim to a Gross-Up Payment hereunder that it elects to undertake the defense thereof, Key Employee shall have the right to undertake, at the Company’s cost, risk and expense, the defense, compromise or settlement of the claim, but shall not thereby waive any right to a Gross-Up Payment therefore pursuant to this Agreement. The Company shall pay Key Employee’s expenses as and when incurred.