8-K

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


                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 8-K


                                 CURRENT REPORT



                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

        Date of Report (Date of earliest event reported) October 1, 2001

                                 SUSSEX BANCORP
             (Exact name of registrant as specified in its charter)

         New Jersey                    0-29030                  22-3475473
-----------------------------         ---------                ------------
(State or other jurisdiction         (Commission               (IRS Employer
 of incorporation)                    File Number)           Identification No.)


                               399 Route 23
                           Franklin, New Jersey            07416
                ---------------------------------------  ----------
               (Address of principal executive offices)  (Zip Code)



        Registrant's telephone number, including area code (973) 827-2914
                                                           --------------

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





Item 5.  Other events.
         ------------

Effective October 1, 2001, the Registrant completed an acquisition of all of the
outstanding stock of Tri-State Insurance Agency, Inc. ("Tri-State"), a
full-service insurance agency located in Augusta, New Jersey. The Registrant
intends to operate Tri-State as a wholly owned subsidiary of the Registrant's
bank subsidiary, Sussex Bank, a New Jersey chartered commercial bank. The
following is a summary of the terms of the Stock Purchase Agreement, dated as of
September 28, 2001. This summary is qualified in its entirety by reference to
the Stock Purchase Agreement, which is attached as an exhibit hereto.

The purchase price paid by the Registrant for Tri-State is comprised of an
upfront payment of $350,000 at closing, and deferred payments on the first,
second and third anniversaries of the closing.

On each of the first, second, and third anniversaries of the closing, the
shareholders of Tri-State will be entitled to an aggregate payment of $700,000,
to be satisfied through a mix of cash and common stock of the Registrant. The
deferred payments are subject to adjustment based upon the net income of
Tri-State as a subsidiary of Sussex Bank. In Tri-State's first year of operation
after the acquisition, it must produce a minimum net pretax profit of $175,000,
or the shareholders of Tri-State will receive a dollar for dollar reduction in
their deferred payments (i.e., in Year 1, the aggregate payment may be reduced
to $525,000 in the event Tri-State produces no profit). In the second year, the
targeted net pretax profit is $192,500, and in Year 3 it is $210,000.

As part of the acquisition, each of the principals of Tri-State have entered
into an employment agreement providing for their employment by Tri-State for a
period of at least five years. After the initial five-year term, the employment
agreement will automatically renew for additional three-year periods unless
twelve months prior to the end of the initial term either party provides notice
of its intention not to renew.

The Registrant expects that the transaction will be accretive to its basic
earnings per share in the first year.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Certain of the statements contained herein are not historical facts and
are forward-looking statements that are subject to risks and uncertainties that
could cause actual results to differ materially from those set forth in the
forward-looking statements. By making these forward-looking statements, the
Company undertakes no obligation to update these statements for revisions or
changes after this date.

                                       2







Item 7.  Exhibits.
         --------

         The following exhibit is filed with this Current Report on Form 8-K.

         Exhibit No.   Description
         -----------   -----------

         2             Stock Purchase Agreement, dated as of September 28, 2001.
         10(a)         Employment agreement of George Lista.
         10(b)         Employment Agreement of George Harper.
         99            Press release announcing the acquisition of Tri-State
                       Insurance Agency, Inc., dated October 2, 2001.


                                       3




                                   SIGNATURES

               Pursuant to the requirements of the Securities Exchange Act of
1934, Sussex Bancorp, has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

                                                 SUSSEX BANCORP
                                                 ---------------
                                                  (Registrant)


Dated:   October 3, 2001                         By: /s/ Candace A. Leatham
                                                     ----------------------
                                                     CANDACE A. LEATHAM
                                                     Chief Financial Officer


                                       4




                                  EXHIBIT INDEX
                                  -------------

                           CURRENT REPORT ON FORM 8-K
                           --------------------------


Exhibit No.    Description                                           Page No.
-----------    -----------                                           --------

2              Stock Purchase Agreement, dated as of                   6-38
               September 28, 2001.
10(a)          Employment agreement of George Lista.                   39-49
10(b)          Employment agreement of George Harper                   50-60
99             Press release announcing the acquisition of               61
               Tri-State Insurance Agency, Inc.,
               dated October 2, 2001.




                                       5

EX-2

EXHIBIT 2
---------

                            STOCK PURCHASE AGREEMENT
                            ------------------------

               This Agreement is made and entered into as of this 28th day of
September 2001, by and among GEORGE HARPER ("Harper") and GEORGE LISTA ("Lista")
on the one hand (Harper and Lista sometimes collectively referred herein as the
"Shareholders") and SUSSEX BANCORP, New Jersey corporation ("Sussex") and the
Sussex Bank a New Jersey State chartered commercial bank and subsidiary of
Sussex (the "Bank").

                              PRELIMINARY RECITALS
                              --------------------

               Shareholders own all of the issued and outstanding shares of the
common stock (the "Stock") of the Tri-State Insurance Agency, Inc. (the
"Company"), and are the sole stockholders of the Company. The Company operates a
general insurance agency (the "Business"). Pursuant to this Agreement, Sussex
will acquire all the Stock from the Shareholders in a return for the
consideration set forth herein, and cause the Company to be operated as the
subsidiary
               The Schedules (collectively, the "Disclosure Schedules") annexed
hereto have been furnished by the Shareholders prior to the execution of this
Agreement and such Schedules are hereby incorporated herein as a part of this
Agreement.
               NOW, THEREFORE, in consideration of the representations,
warranties, and mutual promises contained herein, the parties do hereby agree as
follows:

1. PURCHASE OF STOCK, PURCHASE PRICE, CONVERSION OF STOCK

     1.1. Purchase of Stock; Aggregate Consideration. Upon the Closing (as
defined herein) Sussex will purchase from the Shareholders and the Shareholders
will sell to Sussex, free and clear of any liens, encumbrances or defects the
Stock (the "Stock Purchase"). In consideration for such purchase, the
Shareholders shall receive the consideration set forth herein, paid in a manner
provided for herein:

         (a) At the closing, the Shareholders shall be paid $350,000 in the
manner set forth herein:


                                       6



               (i.) Sussex shall make a capital contribution to the Company in
          the amount of $200,000 (the "Capital Contribution") which shall be
          used by the Company solely to satisfy those certain notes payable from
          the Company to the Bank, note #103013 and note #5008224 (the "Notes").
          To the extent the amounts payable under such Notes, whether as
          repayment of principal, accrued interest or other fees and costs,
          exceed the Capital Contribution, the Shareholders shall pay off the
          balance of the Notes at the Closing. In addition, the Shareholders
          shall receive an aggregate payment of $150,000, to be divided between
          Harper and Lista in accordance with their interest in the Company (46%
          to Lista and 54% to Harper).

         (b) On each of the first, second and third anniversaries of the
Closing, the Shareholders shall be entitled to an aggregate payment of $700,000,
subject to adjustment pursuant to paragraph (c) hereof and paid in the manner
set forth in this Section (the "Anniversary Payments"). Lista shall be entitled
to a payment equal to 46% of each Anniversary Payment (the "Lista Anniversary
Payments") and Harper shall be entitled to a payment equal to 54% of each of the
Anniversary Payment (the "Harper Anniversary Payments"). The Lista Anniversary
Payments shall be paid 80% in cash and 20% through the issuance of shares of the
Common Stock, at their then current per share fair market value. The Harper
Anniversary Payments shall be paid 50% in cash and 50% through the issuance of
shares of the Common Stock, at their then current per share fair market value.
The stock portion of the Anniversary Payments shall be paid once annually, with
stock issued on each annual anniversary of the Closing. The cash portion of each
annual anniversary payment which is not subject to adjustment pursuant to
Paragraph (c) below (i.e., $141,750, $137,025 and $132,300 in each of Years 1, 2
and 3 for Harper and $193,200, $186,760 and $180,320 in each of Years 1, 2 and 3
for Lista) shall be paid out in equal payments on a monthly basis at each month
end commencing at the end of the first full month after the Closing (i.e., if
the Closing were to occur on September 15, the first payment will be due October
31st).

         (c) Each Anniversary Payment shall be subject to a dollar for dollar
reduction in the event to the Company's actual net income before taxes,
calculated in accordance with generally accepted accounting principles, for each
twelve (12) month period ending on each of the three anniversaries of the
Closing date, is less than the "targeted net income before taxes"



                                       7



("TNIBP"). For purposes of this section, the TNIBP for first twelve (12) month
period after the Closing shall be $175,000; the TNIBP for the twelve (12) month
period beginning on the first anniversary of the Closing and ending on the
second anniversary of the Closing shall be $192,500; and the TNIBP for the
twelve (12) month period commencing on the second anniversary of the Closing and
ending on the third anniversary of the Closing shall be $210,000; provided,
however, that in the event the employment of either Harper or Lista is
terminated without cause as provided for under Section 1(b) of the certain
employment agreements required in Section 7.6 hereof and attached hereto as
Exhibit A in any of the first three twelve month periods after the Closing, the
Company shall be deemed to have met the TNIBP targets set forth above for each
twelve month period ending after the date of such termination, regardless of the
Company's actual TNIBP for such periods.

         (d) For purposes of calculating the fair market value of the Common
Stock in connection with the Anniversary Payments, the fair market value shall
be the average closing price of the Common Stock on the American Stock Exchange
("ASE") for the thirty (30) trading days prior to any anniversary date.

         (e) In addition to the consideration provided for under Subparagraphs
(a) and (b) hereof, Shareholders shall also be entitled to receive the following
additional contingent consideration: the Company is party to that certain
Purchase and Sale Agreement with Evergreen USA Risk Retention Group, Inc.
("Evergreen") dated as of July 28, 2000 (the "Evergreen Agreement"). Under
Section 4 of the Evergreen Agreement, Evergreen may be obligated to make certain
payments to the Company. To the extent the Company actually receives any
payments from Evergreen pursuant to Section 4 of the Evergreen Agreement,
Tri-State shall pay over to the Shareholders an amount equal to such payments,
with such payments allocated among the Shareholders in proportion to their
interests in the Company prior to the Closing, i.e. 54% to Harper and 46% to
Lista. None of the Company, Sussex or the Bank shall have any liability or
obligation to pay monies to the Shareholders under this provision unless the
Company actually receives payments from Evergreen or a successor in interest
under Section 4 of the Evergreen Agreement.

Such payments shall be paid over to the Shareholders within fifteen business
days of their receipt by the Company, without interest, fees or any open markup.

                                       8



     1.2. Restrictions on the Common Stock. Shareholders acknowledge
that the shares of Common Stock issued in satisfaction of the purchase price
hereunder are being issued without registration under Section 5 of the
Securities Act of 1933, as amended (the "Securities Act") pursuant to the
exemption from registration provided under Section 4(2) for sales not involving
a public offering. In connection therewith, the Shareholders hereby make the
following representations to Sussex, and acknowledge that Sussex is relying upon
such representations in claiming the exemption provided under Section 4(2) of
the Securities Act:

         (a) Knowledge and Experience. The Shareholders have such knowledge and
experience in financial and business matters or are represented by an
independent investment representative that has such knowledge and experience in
financial and business matters such that the Shareholders, either alone or with
their independent investment representative, is capable of evaluating the
information provided by Sussex or information to which the Shareholders have
been given access by Sussex and are capable of evaluating the merits and risks
of an investment in the Common Stock.

         (b) Access to Information. By reason of the Shareholders' business or
financial experience, or the business or financial experience of their
independent investment representative who is not an officer, director or
employee of Sussex nor is acting on behalf of Sussex, either directly or
indirectly, the Shareholders have the capacity and have taken all steps
necessary to protect their own interests in connection with the acquisition of
the Common Stock. The Shareholders have had access to sufficient information
concerning Sussex to make an informed decision concerning the acquisition of an
investment in the Common Stock.

         (c) Shareholders' Liquidity. The Shareholders have adequate means of
providing for their current needs and personal contingencies and have no need
for liquidity in connection with the Common Stock. The Shareholders acknowledge
that they may have to bear the economic risk of their investment in the Common
Stock for an indefinite period of time, and the Shareholders can bear a complete
loss in the value of the Common Stock.

         (d) Restrictions on Transfers; Investment Intent. The Shareholders
acknowledge and understand that the Common Stock has not been registered with
the Securities and Exchange Commission or any other federal or state
governmental agency and agree that: (i) the Common Stock is being acquired for
investment, not with any present intention to resell



                                       9


or with a view toward distribution; and (ii) the Common Stock is not freely
tradable for one (1) year after the date the Common Stock is issued.

2. THE CLOSING

     2.1. Time and Place of Closing. Upon five (5) days notice from one party
hereunder to the other that the conditions set forth in this Article 2 and in
Articles 7 and 8 are satisfied or waived, or on such date as the parties may
mutually agree (the "Closing Date"), a closing (the "Closing") shall take place
at the offices of Sussex Bancorp, 399 Highway 23, Franklin, New Jersey 07416, or
at such other place as the parties shall mutually agree.

     2.2. Documents Required at Closing. At the Closing, Shareholders and/or the
Company shall deliver to Sussex the following documents:

         (a) certificate executed by Shareholders, dated the Closing Date,
reasonably satisfactory in form and substance to Sussex, certifying that the
conditions specified in Article 7 hereof have been satisfied in all material
respects;

         (b) a Certificate of Good Standing and certified Certificate of
Incorporation of Company from the Secretary of State of New Jersey, dated no
earlier than fifteen (15) days prior to the Closing Date;

         (c) such consents and waivers of third parties as may be necessary to
consummate the transactions contemplated by this Agreement, including those
required under Section 7.4(b) hereto;

         (d) the written consent of each regulatory authority whose consent the
Shareholders are required to obtain, either on their own behalf or on behalf of
the Company, in connection with consummation of the transactions contemplated by
this Agreement, including those required under Section 7.4(a) hereto;

         (e) cancelled stock certificates representing the Stock; (f) executed
employment agreements between the Company and each of Harper and Lista pursuant
to Section 7.6 hereof;

         (g) each consent and acknowledgement required under Section 7.8 hereof;

         (h) evidence reasonably satisfactory to Sussex that Shareholders have
satisfied the condition set forth in Section 7.9 hereof;

                                       10



         (i) certified copies of the Director and Shareholders resolutions
required under Section 7.10 hereof.

     2.3. Documents Required from Sussex at the Closing. At the Closing, Sussex
shall deliver to Shareholders the following documents:

         (a) Certified copies of the resolutions approved by the Board of
Directors of Sussex in connection with the execution of this Agreement and the
consummation of the transactions contemplated hereby, and a certificate executed
by an officer of Sussex, dated the Closing Date, reasonably satisfactory in form
and substance to Shareholders, certifying that the conditions specified in
Article 8 hereof have been satisfied in all material respects;

         (b) Certificate of Good Standing and certified Certificate of
Incorporation for Sussex from the Secretary of State of New Jersey, dated no
earlier than fifteen (15) days prior to the Closing Date;

         (c) Checks made payable to each of Harper and Lista in the amounts
required under Section 1(a) hereof, or such other evidence of payment of such
amounts pursuant to written instructions of each of Harper and Lista.

3. SHAREHOLDERS' REPRESENTATIONS AND WARRANTIES

               The Shareholders hereby represent and warrant to, and agree with,
Sussex as follows:

     3.1. Binding Effect; Enforceability. This Agreement has been duly and
validly executed and delivered by Shareholders and constitutes the valid and
binding obligation of Shareholders and the Company enforceable against
Shareholders in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally and general principals of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
(regardless of whether considered in a proceeding in equity or at law).

     3.2. No Conflicts. Except as set forth on Schedule 3.2 attached hereto, the
execution, delivery and performance by Shareholders of this Agreement and any
other agreements, instruments and documents to be executed and delivered by the
Shareholders in connection herewith ("Ancillary Documents"), the consummation of
the transactions contemplated hereby or

                                       11


thereby, and compliance with any of the provisions hereof or thereof, will not
(a) with or without the giving of notice or lapse of time or both, violate any
(i) judgment, order, writ or decree applicable to Company or Shareholders and
which violation would have a material adverse effect on the Company, its
business, results of operations or prospects; or (ii) to the knowledge of
Shareholders, any law to which Company or Shareholders is subject, or (b) result
in the breach, conflict, default, or modification of or with any term,
provision, covenant or condition of (or give rise to any right of termination,
cancellation, or acceleration under) the provisions of any material agreement,
note, lien, mortgage, indenture, lease, or other instrument or obligation by
which Company or Shareholders may be bound or to which they may be subject.

     3.3. No Consents. Except as set forth on Schedule 3.3 attached hereto, no
consent, authorization or approval of, or filing with or exemption by any
governmental, public or self-regulatory body or authority or any other person is
required in connection with the execution and delivery by Shareholders of this
Agreement or any Ancillary Document, or the consummation of any of the
transactions contemplated hereby or thereby. The execution, delivery, and
performance by Shareholders and the Company of this Agreement or any Ancillary
Document will not result in the imposition of any lien, mortgage, security
interest, pledge, encumbrance, easement, claim, or other restriction or charge
(each an "Encumbrance") on any of the assets of the Company, and will not alter
or impair any of the assets of the Company nor Sussex's ability to utilize same
in the same manner in which they are currently utilized by Company in connection
with the Business.

     3.4. Title to and Condition of Property

         (a) Except as set forth on Schedule 3.4, the Company does not own any
real property. Except as set forth on Schedule 3.4 (which includes a list of all
mechanics' liens, landlord liens under leases, equipment leases/financings,
security interests and any other specific items affecting the Company's
property), Company has good title to all the assets or properties it owns or
uses in the Business, free and clear of any Encumbrance of any nature
whatsoever.

         (b) All properties and other assets owned by the Company or used by the
Company in the conduct of the Business are in operating condition and repair
(ordinary wear and tear and damage from casualty which is fully covered by
insurance excepted), have been adequately maintained in accordance with
documented procedures, and except as otherwise set


                                       12


forth on Schedule 3.4 annexed hereto, none of such property with an initial
purchase price in excess of $5,000 requires any maintenance or repairs except
for routine maintenance and repairs that are not material in nature or in cost.

     3.5. Material Contracts; Insurance Agreements. Schedule 3.5 attached hereto
contains a complete list of all Contracts (as defined below) of Company (or of
Shareholders in connection with the Business). Each Contract is valid, in full
force and effect and enforceable in accordance with its terms, and Company has
fulfilled, or taken all action reasonably necessary to enable the same to be
fulfilled when due, all of its obligations under each Contract subject to
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors rights generally and general principals of equity,
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing (regardless of whether considered in a proceeding in
equity or at law). There has not occurred any default, or any event which, with
notice or lapse of time or both, would constitute an event of default
thereunder, will become a default by Company, nor to the knowledge of
Shareholders have there occurred any default by others or any event which, with
notice or lapse of time or both, would constitute an event of default under any
Contract. Neither Company nor, to the knowledge of Shareholders, any other party
is in arrears in respect of the performance or satisfaction of the terms or
conditions on its part to be performed or satisfied under any Contract and no
waiver or indulgence has been granted by any of the parties thereto.

     As used in this Agreement, "Contract" means any contracts, orders, leases,
licenses, or agreements or other commitments, whether written or oral, and
specifically includes any contracts or other agreements between the Company
and/or the Shareholders on the one hand and any insurance company on the other
authorizing the Company and/or the Shareholders to place such insurance
company's policies ("Insurance Contracts").

3.6. Litigation. Except as set forth on Schedule 3.6 attached hereto, there are
no actions, suits, proceedings, arbitrations, claims, investigations or
inquiries ("Litigation") pending or, to the knowledge of Shareholders,
threatened, before or by any foreign or United States federal, state, municipal,
or other governmental, administrative or self-regulatory instrumentality or
agency (or any private arbitration tribunal) (collectively, "Governmental
Agencies"), against or relating to the Company or the Business. There is not in
existence any order, judgment or

                                       13


decree of any court or other tribunal or any Governmental Agency enjoining
Company from taking or requiring Company to take action of any kind or to which
Company or the Business or any of the Company's assets or properties is subject
or by which any of them is bound.

3.7. Balance Sheet; No Material Adverse Change

         (a) Shareholders have delivered to Sussex copies of an unaudited
balance sheet and income statement of Company (the "Financial Statement") as of
June 30, 2001 (the "Statement Date"). The Financial Statement has been prepared
in accordance with generally accepted accounting principles, is correct and
complete and fairly presents the financial position of the Company as of the
Statement Date in all material respects.

         (b) Since the Statement Date, except as set forth on Schedule 3.7
attached hereto and except as provided for under Section 7.9 hereof, Company has
not:

          (i) suffered the occurrence of any events which, individually or in
     the aggregate, have had, or might reasonably be expected to have, a
     material adverse effect on the financial condition, results of operations,
     assets, properties, business or prospects of the Company;

          (ii) waived or released any rights pertaining to the Company or any of
     its assets material to the operations or prospects of the Company or
     properties of any material value;

          (iii) transferred or granted any rights with respect to any of its
     assets or properties;

          (iv) except in the ordinary course of business, made or granted any
     general wage or salary increase to persons employed by Company (each and
     all of the foregoing being herein referred to as "Employees");

          (v) except in the ordinary course of business, made any increase in or
     commitment to increase any benefits for Employees or adopted or made any
     commitments to adopt any additional benefit plan for Employees;

          (vi) changed any accounting principle, practice or method used for
     financial reporting purposes by the Company;

          (vii) amended or made any other change to the Certificate of
     Incorporation or Bylaws of the Company;


                                       14


          (viii) declared, set aside or made payment of any dividend or
     distribution (whether in cash, stock, or property) in respect of the
     capital stock of the Company or any direct or indirect redemption, purchase
     or other acquisition of shares of such capital stock or any split,
     combination or reclassification of such capital stock;

               (ix) mortgaged or encumbered any of the assets of the Company;

               (x) issued any shares of capital stock or other equity securities
          or obligations or securities convertible into or exchangeable for
          shares of capital stock or other equity securities;

               (xi) borrowed any funds;

               (xii) made any capital expenditure or execution of any lease or
          incurrence of any liability therefore; and

               (xiii) authorized, approved, agreed or committed to do any of the
          foregoing.

     3.8. Brokers or Finders. Except as disclosed on Schedule 3.8 hereto, no
broker or finder has been retained by or authorized to act on behalf of any
Stockholder or the Company who might be entitled to any fee or commission in
connection with the transactions contemplated by this Agreement.

     3.9. Taxes and Tax Returns.

         (a) The Company has duly filed (and until the Closing Date will so
file) all returns, declarations, reports, information returns and statements
("Returns") required to be filed by it in respect of any Federal, state and
local taxes (including withholding taxes, penalties or other payments required)
and has duly paid (and until the Closing Date will so pay) all such taxes due
and payable, other than taxes or other charges which are being contested in good
faith (and which have been disclosed to Sussex on Schedule 3.9 annexed hereto).
The Returns are accurate and correct in all material respects, and report all of
the Company's income. The Company maintains on its books and records reserves
that are adequate for the payment of all Federal, state and local taxes not yet
due and payable, but which are incurred or will be incurred in respect of the
Company through the Closing Date. There are no audits or other administrative or
court proceedings presently pending nor any other disputes pending, or claims
asserted for, taxes or assessments upon the Company, nor has the Company given
any currently outstanding


                                       15


waivers or comparable consents regarding the application of the statute of
limitations with respect to any taxes or tax Returns. The Shareholders
acknowledge that, subject to the Indemnification Basket provided for under
9.3(i) hereof, they shall be liable for any and all costs, losses, expenses,
payments, fees etc. incurred after the Closing by any of the Company, the Bank
or Sussex in connection with any challenge of any position taken by or on behalf
of the Company on any Return or the adequacy of any payment made in satisfaction
of any taxes due or alleged to be due by any federal, state or local taxing
authority.

         (b) Except as set forth in Schedule 3.9, the Company (i) has not
requested any extension of time within which to file any tax Return which Return
has not since been filed, (ii) is not a party to any agreement providing for the
allocation or sharing of taxes, (iii) is not required to include in income any
adjustment pursuant to Section 481(a) of the Code, by reason of a voluntary
change in accounting method initiated by the Company (nor does the Company have
any knowledge that the Internal Revenue Service has proposed any such adjustment
or change of accounting method) or (iv) has not filed a consent pursuant to
Section 341(f) of the Code or agreed to have Section 341(f) (2) of the Code
apply.

     3.10. Accuracy. No representation or warranty of Shareholders in this
Agreement contains any material misstatement of fact or omits any material fact
necessary to be stated in order to make the statements herein not misleading.

     3.11. Operation of the Business. The business of the Company presently
consists of and has at all times that Shareholders have owned all of the capital
stock of Company consisted of and been limited to acting as a general insurance
agent. Company is not restricted by any agreement or understanding to which it
is a party with any other party from carrying on the Business anywhere in the
world.

     3.12. Insurance. Attached hereto as Schedule 3.12 is a complete list of all
insurance policies of Company or the Shareholders, the coverage of which
policies is applicable, in whole or in part, to the Business. Copies of all
policies listed on Schedule 3.12 have previously been provided to Sussex.
Neither the Company nor the Shareholders have failed to give any notice or
present any claim under any such policy or bond and there are no claims
outstanding under any such policy or bond as to which any insurance company is
denying liability or defending under a reservation of rights clause or
otherwise.

                                       16



     3.13. Compliance with Applicable Laws; Permits.

         (a) To Shareholders' knowledge, neither the use by the Company of any
of its assets or properties nor the conduct of the Business by Company violates
any laws, statutes, ordinances, rules, regulations, decrees or orders of the
United States (federal, state or local) or any other jurisdiction in which the
Company does business, including, by way of example and not limitation, the
regulations of the New Jersey Department of Banking and Insurance (the
Department) and any laws administered by such Department (each and all of the
foregoing being herein referred to as "Laws"). The Company has not received any
notice of any violation of Law by the Company, and to Shareholders' knowledge no
basis for the allegation of any such violation exists.

         (b) The Company holds all necessary Permits from every jurisdiction or
regulatory agency having jurisdiction, whether federal, state, county,
municipal, or foreign necessary for the lawful operation of the Business as
Company currently conducts the Business. "Permit" as used herein means any
licenses, permits, approvals or registrations, authorizations, franchises or
other approvals from any domestic (federal, state or local) governmental, public
or self-regulatory body or authority. Schedule 3.13(b) hereto lists all Permits
held by Company in connection with the Business. All of the Permits listed on
Schedule 3.13(b) are in full force and effect and none of such Permits have been
revoked, and there is no proceeding pending, nor to the Company's knowledge,
threatened by any administrative agency seeking to revoke, terminate or impair
any such licenses, permits or approvals. Company is not in default under, and to
Shareholders' knowledge, no condition exists that with notice or lapse of time,
or both, would constitute a default under any Permit listed on Schedule 3.13(b).
As to any such Permit that has expired or is about to expire, Company has
promptly applied for a renewal of the same and expects the same to be renewed in
the usual course.

         (c) Except as disclosed on Schedule 3.13(c) hereto, no consent of,
approval of, or notification to the authority issuing any Permit is necessary
due to the execution of or the consummation of the transactions contemplated by
this Agreement. Upon consummation of the transactions contemplated by this
Agreement, the Company will continue to be entitled to all authority and
benefits conferred by such Permit and shall be lawfully entitled to use such
Permit in connection with the operation of the Business.

                                       17



     3.14. Books and Records. All books of account and other financial records
of Company are (i) in all material respects complete and correct; (ii)
maintained in compliance with Law, and (iii) accurately reflected on the
Financial Statement.

     3.15. Employees, Labor Relations, Etc.

         (a) Schedule 3.15(a) attached hereto sets forth the name, position and
salary or wages of each Employee of Company as of the date hereof. Except as set
forth on such Schedule, no Employee has delivered written or, to the knowledge
of Shareholders, oral notice of his or her intention to resign or retire.

         (b) To Shareholders' knowledge, Company has withheld all amounts
required by applicable law or contract to be withheld from the wages or salaries
of the Employees and is not liable for any arrears of wages or any taxes or
penalties for failure to comply with any of the foregoing or for payment to any
trust or other fund or to any authority with respect to unemployment
compensation, Social Security or other benefits for such Employees. To the best
of Shareholders' knowledge, Company has not engaged in any unfair labor practice
or discriminated on the basis of race, age, sex or otherwise in its employment
conditions or practices with respect to the Employees. Except as set forth on
Schedule 3.15, there is no pending or, to the knowledge of Shareholders,
threatened collective bargaining representation questions respecting any
Employees.

     3.16. Employee Benefit Plans, Etc.

         (a) Schedule 3.16(a) attached hereto contains a true and complete list
of each plan, contract, program, policy or arrangement, including, but not
limited to, pension, bonus, section 401(k) deferred compensation, incentive
compensation, supplemental retirement, severance or termination pay,
hospitalization, medical, retiree health, life insurance, dental, disability,
salary continuation, vacation, supplemental unemployment benefits,
profit-sharing, or retirement plan, contract, program, policy or arrangement,
maintained, contributed to, or required to be contributed to, by Company or by
any of its affiliates for the benefit of any Employee or former Employee,
whether or not any of the foregoing is funded, whether formal or informal and
whether or not subject to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") (collectively, the "Benefit Plans"). Company has delivered
to Sussex true and complete copies of the Benefit Plans (or policies) listed on
Schedule 3.16(a).

                                       18



         (b) Except as specifically set forth on Schedule 3.16(b), there is no,
nor has there ever been, any multiemployer plan (as defined in ERISA Section
3(37)) covering Employees or a past or present withdrawal therefrom.

         (c) Full payment has been made of all amounts which Company is
required, under applicable law or under any Benefit Plan or any agreement
relating to any Benefit Plan to which Company is a party, to have paid as
contributions thereto as of the last day of the most recent fiscal year of such
Benefit Plan ended prior to the date hereof.

         (d) For purposes of this Section, any reference to the term "Company"
shall be deemed to refer also to any entity which is under common control or
affiliated with Company within the meaning of Section 4001 of ERISA and the
rules and regulations thereunder and/or Section 414 of the Code and the rules
and regulations thereunder.

     3.17. Environmental Matters.

          3.17.1. For the purposes of this Agreement, the following terms shall
be defined as follows:

          "Environmental Laws" shall mean all federal, state and local laws,
statutes, rules, ordinances, regulations, decisional law, governmental,
administrative or judicial orders or decrees or other legal requirements of any
kind governing pollution or contamination of the environment, occupational
health and safety or protection of public health, presently in effect and
hereinafter adopted, including, but not limited to, the Federal Water Pollution
Control Act, 33 U.S.C. ss.ss. 1231-1387; the Resource Conservation and Recovery
Act, 42 U.S.C. ss.ss. 6901-6991 ("RCRA"); the Clean Air Act, 42 U.S.C.
ss.ss.7401-7642; and the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. ss.ss. 9601-9675("CERCLA"); and the rules and
regulations promulgated thereunder.

          "Hazardous Materials" shall mean all chemical, biological, organic,
inorganic or infectious pollutants, contaminants, hazardous, flammable or toxic
substances, materials or wastes of whatever kind or nature, whether liquid,
solid or gaseous, including without limitation, pollutants, contaminants,
substances, materials or wastes regulated under, defined, listed or included in
any Environmental Laws. For the purpose of this Agreement, the term "Hazardous
Materials" shall include without limitation all of the types of "medical wastes"
listed in 42 U.S.C. ss.6992a(a).


                                       19



          3.17.2 Except as set forth on Schedule 3.17,

         (a) Each of the Company and its subsidiaries and each of their
facilities are in compliance with Environmental Laws and with all applicable
decrees, orders and contractual obligations relating to pollution or the
discharge of, or exposure to, Hazardous Materials in the environment or
workplace;

         (b) There is no suit, claim, action, proceeding or investigation
pending or, to the best knowledge of the Shareholders, threatened (or to the
best knowledge of the Shareholders, no past or present actions, activities,
circumstances, conditions, events or incidents that could form the basis of any
such suit, claim, action, proceeding, investigation or notice), before any
Governmental Agency or other forum in which the Company and any of its
subsidiaries has been or, with respect to threatened proceedings, may be, named
as a defendant (x) for alleged noncompliance (including by any predecessor) with
any Environmental Laws, or (y) relating to the release, threatened release or
exposure to or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of any Hazardous
Material whether or not occurring at or on a site owned, leased or operated by
the Company or any of its subsidiaries;

         (c) To the best knowledge of the Shareholders, during the period of the
Company's or any of its subsidiaries' ownership or operation of any of their
respective current or former properties, or there has been no release of
Hazardous Materials in, on, under or affecting any such property. To the best
knowledge of the Shareholders, prior to the period of the Company's or any of
its subsidiaries' ownership or operation of any of their respective current or
former properties, there was no release of Hazardous Materials in, on, under or
affecting any such property.

     3.18. Absence of Undisclosed Liabilities. Company has no liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise,
and whether due or to become due, except (a) as set forth in Schedule 3.18
hereto, (b) as and to the extent disclosed or reserved against in the Financial
Statement, and (c) liabilities and obligations that (i) are incurred by the
Company after the Statement Date in the ordinary course of business consistent
with prior practice and (ii) individually and in the aggregate are not material
to the Business and have not had or resulted in, and cannot be reasonably
expected in the aggregate to have or result in, a material adverse effect.


                                       20



     3.19. Absence of Certain Business Practices. Neither Company, the
Shareholders, nor to the knowledge of Shareholders, any officer, employee or
agent of Company or any other person acting on their respective behalf has,
directly or indirectly, within the past five years, given or agreed to give any
gift or similar benefit to any customer, supplier, governmental employee or
other person who is or may be in a position to help or hinder the Company (or
assist Company in connection with any actual or proposed transaction) which (i)
might subject Company to any damage or penalty in any civil, criminal or
governmental litigation or proceeding, (ii) if not given in the past, might have
had a material adverse effect upon the Company, its operations or financial
condition, (iii) if not continued in the future, might have a material adverse
effect on the Company, its operations and financial condition or subject Company
to suit or penalty in any private or governmental litigation or proceeding, or
(iv) for any of the purposes described in Section 162(c) of the Code.

     3.20. Corporate Existence. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of New Jersey
and has all requisite corporate power and authority to own or lease and operate
its properties and assets and to carry on its business as presently conducted.
The Company is duly qualified as a foreign corporation, and is in good standing,
in each jurisdiction listed on Schedule 3.20 hereto which are the only states
where the failure to be so qualified would have a material adverse effect on the
Business.

     3.21. Certificate of Incorporation and Bylaws. The Shareholders have
heretofore furnished to Sussex complete and correct copies of the Company's
Certificate of Incorporation, as amended to date, certified by the Secretary of
State of the State of New Jersey, and the Company's bylaws, as currently in
effect.

     3.22. Subsidiaries. Except as discussed on Schedule 3.22 hereof the Company
has no subsidiaries, nor does it own, directly or indirectly, any ownership,
equity, profits or voting interest in any corporation, partnership, joint
venture or other person, and has no agreement or commitment to purchase any such
interest.

     3.23. Capitalization. The authorized capital stock of the Company consists
of 1,000 shares of common stock, no par value, of which 102 shares are issued
and outstanding, all of which are owned of record and beneficially by
Shareholders. All such shares have been duly



                                       21


authorized and validly issued, are fully paid and nonassessable, and were not
issued in violation of any preemptive rights. The Shareholders hold the shares
free and clear of any Encumbrance. There is outstanding no security, option,
warrant, right, call, subscription, agreement, commitment or understanding of
any nature whatsoever, fixed or contingent, that directly or indirectly (i)
calls for the issuance, sale, pledge or other disposition of any shares or of
any other capital stock of the Company or any securities convertible into, or
other rights to acquire, any such shares or other capital stock of the Company
or (ii) obligates the Company or Shareholders to grant, offer or enter into any
of the foregoing or (iii) relates to the voting or control of such shares,
capital stock, securities or rights.

     3.24. Accounts/Notes Receivable. Accounts receivable reflected on the
Financial Statement, and all accounts receivable arising since the Statement
Date, and which remain uncollected, represent bona fide claims against debtors
for services performed or other charges arising on or before the date hereof,
and the services which gave rise to said accounts were performed in accordance
with the applicable orders, contracts or customer requirements. Such accounts
receivable are subject to no defenses, rights of setoff or counterclaims, and
have not been compromised by Shareholders or the Company and are fully
collectible within ninety (90) days of the Closing Date in the ordinary course
of business without cost to Sussex in collection efforts therefore.

     3.25 Company's Business

     Except as set forth on Schedule 3.25 hereto, during the past five (5)
years, no complaints have been asserted in writing by any party to any
regulatory agency against the Company or its affiliates in respect of any
transactions involving, and any services provided by, the Company which, if
adversely settled or determined, would have an adverse effect on the ability of
the Company to execute and deliver this Agreement, perform its obligations
hereunder consummate the transactions contemplated hereby or continue to conduct
the Business. Set forth on Schedule 3.25 is a list of the top twenty-five of the
Company's clients based on revenue received (each a "Material Client"). Except
as set forth in Schedule 3.25 hereto, no Material Client has canceled or
otherwise terminated, or threatened or given notice of its intention to cancel
or otherwise terminate, its relationship with the Company, or decreased, or
threatened or given notice of its intention to decrease, the level of
transactions involving, and the level of


                                       22


services provided by the Company. Except as set forth in Schedule 3.25,
Shareholders have no knowledge or information that any Material Client intends
to cancel or otherwise terminate or to substantially reduce its utilization of
the services provided by the Company, either as a result of the transactions
contemplated hereby or otherwise.

4. BUYER'S REPRESENTATIONS AND WARRANTIES

     Sussex hereby represents and warrants to, and agrees with, Shareholders and
the Company as follows:

     4.1. Authority; Binding Effect; Enforceability. Sussex is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of New Jersey. The execution and delivery by Sussex of this Agreement and
all other instruments and documents to be executed and delivered by Sussex in
connection herewith (collectively, the "Ancillary Sussex Documents") and the
consummation by Sussex of the transactions contemplated herein and therein, have
been duly and validly authorized by the Board of Directors of Sussex. This
Agreement has been duly and validly executed and delivered by Sussex, and
constitutes the valid and binding obligation of Sussex, enforceable against
Sussex in accordance with its terms, except to the extent that enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting creditors' rights generally. When duly
and validly executed and delivered by Sussex, the Ancillary Sussex Documents
will constitute the valid and binding obligation of Sussex, enforceable in
accordance with their respective terms, except to the extent that enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting creditors' rights generally. Sussex has
all requisite corporate power and authority to enter into this Agreement and all
Ancillary Sussex Documents, and to perform its obligations hereunder and
thereunder.

     4.2. No Conflicts. The execution and delivery by Sussex of this Agreement
and any Ancillary Sussex Documents, the consummation by Sussex of the
transactions contemplated hereby and thereby, and compliance by Sussex with any
of the provisions hereof and thereof will not (a) conflict with or result in a
breach of any provision of Sussex's Certificate of Incorporation or By-Laws, (b)
with or without the giving of notice or lapse of time or both,


                                       23


     violate any (i) judgment, order, writ or decree of any Court applicable to
Sussex or (ii) any Law to which Sussex is subject, or (c) result in the material
breach, conflict, default, or modification of or with any terms, provisions,
covenant or condition of (or give rise to any right of termination,
cancellation, or acceleration under) the provisions of any agreement, note,
lien, mortgage, indenture, lease, or other instrument or obligation by which
Sussex may be bound.

     4.3. No Consents. Except as set forth on Schedule 4.3, no consent,
authorization or approval of, or filing with or exemption by any governmental,
public or self-regulatory body, authority or any other person is required to be
obtained by Sussex in connection with the execution and delivery by Sussex of
this Agreement or any Ancillary Sussex Document, or the consummation by Sussex
of any of the transactions contemplated hereby or thereby.

     4.4. Brokers or Finders. Except as set forth on Schedule 4.4, no broker or
finder has been involved in this transaction on behalf of Sussex and no party
will be obligated to pay any brokers' or finders' fees in connection with this
transaction as a consequence of any action or inaction on Sussex's part.

     4.5 Capitalization. The capitalization of Sussex, including the authorized
capital stock, the number of shares issued and outstanding, the number of shares
issuable and reserved for issuance pursuant to Sussex's stock option plans, the
number of shares issuable and reserved for issuance pursuant to securities
exercisable or exchangeable for, or convertible into, any shares of capital
stock is set forth on Schedule 4.5 hereto. All of such outstanding shares of
capital stock have been, or upon issuance in accordance with the terms of any
such warrants, options or preferred stock, will be, validly issued, fully paid
and non-assessable. No shares of capital stock of Sussex are subject to
preemptive rights or any other similar rights of the shareholders of Sussex or
any liens or encumbrances. The Company has furnished to the Shareholders true
and correct copies of Sussex's Certificate of Incorporation as in effect on the
date hereof ("Certificate of Incorporation"), Sussex's By-laws as in effect on
the date hereof (the "By-Laws"), and all other instruments and agreements
governing securities convertible into or exercisable or exchangeable for capital
stock of Sussex.

     4.6 Issuance of Shares. The shares of Common Stock are duly authorized and,
upon issuance in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and free from all taxes, liens, claims
and encumbrances created by Sussex and


                                       24


will not be subject to preemptive rights or other similar rights of shareholders
of Sussex and will not impose personal liability on the holders thereof.


5. COVENANTS OF THE PARTIES

     5.1. Communications. Except as may otherwise be required by law, rules and
regulations, Shareholders and the Company, on the one hand, and Sussex, on the
other hand, shall not, without the prior written approval of the other: (i) make
any communication to any person (including, but not limited to, any employees)
regarding the subject matter and contents of this Agreement, or (ii) disclose
the existence of this Agreement or any of the terms hereof to any person.
Shareholders acknowledge that Sussex is a publicly traded reporting company
under the Securities Exchange Act of 1934, as amended, and as such Sussex has a
legal obligation to disclose the terms of this transaction. Sussex agrees to
confer with Shareholders regarding the form and content of such public
announcement.

     5.2. Best Efforts. The parties hereto shall each use their best efforts to
cause the fulfillment of the conditions set forth in Sections 7 and 8 prior to
the Closing.

6. SHAREHOLDERS' COVENANTS TO BE PERFORMED PRIOR TO THE CLOSING

     6.1. Access to Company's Properties, Books and Records; Cooperation.
Between the date of this Agreement and the Closing, Shareholders shall (a) give
Sussex and its authorized representatives reasonable access to all facilities
and properties of Company and to the books and records of Company (and permit
Sussex to make copies thereof), (b) cause Company's employees and its advisors
(including, without limitation, its auditors, attorneys, financial advisors and
other consultants and agents) to furnish Sussex and its authorized
representatives with such financial and operating data and other information
with respect to Company and the Business and to discuss with Sussex and its
authorized representatives the affairs of Company, all as Sussex may from time
to time reasonably request; provided, however that Sussex and its duly
authorized representative shall not improperly disclose the same, (c) allow
Sussex and its authorized representatives to have access to Company's customers,
suppliers and other third parties and (d) will permit Sussex and its authorized
representatives reasonable access to such


                                       25




personnel of the Company during normal business hours as may be necessary or
useful to Sussex in its review of the Company's properties, assets, or any
Company documents relating to any facility, for the purpose of performing an
environmental assessment.

6.2. Updating of Representations and Warranties

         (a) Between the date of this Agreement and the Closing, Shareholders
shall give notice to Sussex promptly upon becoming aware of (a) any material
inaccuracy in a representation or warranty set forth in Section 3 or in any
Schedule or (b) any event or state of facts which, if it had occurred or existed
on or prior to the date of this Agreement, would have caused any such
representation, warranty and/or Schedule to be materially inaccurate. Any such
notice shall describe such inaccuracy, event or state of facts in reasonable
detail. Any information included in any such notice shall constitute a
representation or warranty as though made by Shareholders in Section 3 hereof
but shall not affect the condition to Sussex's obligation contained in Section 7
that the representations and warranties of Shareholders and the Company shall be
true on and as of the date they were made and as of the Closing Date as though
made at such time.

         (b) Upon the occurrence of any event or condition giving rise to the
obligation to give notice pursuant to Section 6.2(a) hereof, Shareholders and
the Company shall have, for the period beginning on such date and ending ten
days after that date upon which the Closing was otherwise to be held, the
opportunity to take any action necessary to cure the event or condition giving
rise to any inaccuracy in any representation or warranty set forth in Section 3
or any Schedule. If, after taking any such curative action during such period,
such representation or warranty shall no longer be inaccurate, the condition to
Sussex's obligation to close which is set forth in Section 7 shall be deemed to
have been fulfilled, and Shareholders shall have no liability for breach of such
representation or warranty under this Agreement.

   6.3 Conduct of the Business Prior to Closing. From the date
hereof to the Closing, except as expressly called for by this Agreement or
otherwise consented to by Sussex in writing, Shareholders will, or cause to the
Company to:

         (a) (i) carry on the Business in the usual and ordinary course in
substantially the same manner as heretofore conducted, (ii) not institute any
changes not in the ordinary course of business and consistent, where applicable,
with past practice, and (iii) use commercially


                                       26


reasonable efforts to preserve intact in all material respects Company's present
business organization, to maintain, preserve and keep in full force and effect
the existence, rights, and franchises of the Company, to maintain the quality of
services provided by Company, to keep available the services of its present
employees, and to preserve good relationships with customers, suppliers,
distributors and others having business dealings with Company, so that they will
be available to Sussex after the Closing;

         (b) continue to maintain in all material respects all of the assets and
properties of the Company in the manner heretofore maintained;

         (c) keep in full force and effect its current insurance policies
covering the Company and the Business;

         (d) continue to fulfill all of Company's obligations under all material
Contracts to which the Company is a party;

         (e) maintain Company's books of account and records in the usual,
regular and ordinary manner including, without limitation, maintaining proper
accounting controls;

         (f) comply with all Laws, ordinances, rules and regulations, the
violation of which would have a material adverse effect on the conduct of the
Business or the Company's assets, results of operations or prospects;

         (g) not (i) grant any increase in the salary of any Employee except
normal wage or salary increases for Employees in the ordinary course of business
and consistent with past practice; (ii) by means of any bonus or pursuant to any
plan or arrangement or otherwise, increase by any amount the benefits or
compensation of any such Employee;

         (h) maintain in full force and effect, by renewal if necessary, all of
the Permits disclosed on Schedule 3.13(b) hereto;


         (i) not take, or permit or suffer to be taken, any action which is
represented and warranted in Section 3.7. hereof not to have been taken since
the Statement Date;

         (j) not take, or permit or suffer to be taken, any action that would
cause or tend to cause the conditions upon the obligations of the parties hereto
to effect the transactions contemplated hereby not to be fulfilled; including,
without limitation, taking, causing to be taken, or permitting or suffering to
be taken or to exist any action, condition or thing that would cause the
representations and warranties made in Section 3 herein not to be true, correct



                                       27


and accurate as of the Closing;


         (k) obtain all requisite approvals, Permits, waivers and consents from
governmental agencies and third parties for consummation of the transactions
contemplated hereby and required for the operation of the Business after the
Closing, and take all action necessary to keep the same in full force and effect
as of and after the Closing;

         (l) not change its certificate of incorporation or bylaws or merge or
consolidate or obligate itself to do so with or into any other entity; or (m)
agree to take any action as set forth in items (a) through (l) of this

Section 6.3

     6.4. Stockholder Matters. Shareholders agree to take all such actions
required of them, as shareholders or directors of the Company, to effectuate the
Stock Purchase.


7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SUSSEX

     The obligations of Sussex under this Agreement are subject to the delivery
of the documents and other items set forth in Section 2.2 and the satisfaction,
at or prior to the Closing Date, of each of the following conditions, and
Shareholders shall exert their best efforts to cause each such condition to be
so fulfilled:

     7.1. Accuracy of Representations and Warranties. The representations and
warranties of Shareholders contained in this Agreement shall be true in all
material respects on the date hereof and on and as of the Closing Date with the
same effect as if they were made on and as of the Closing Date.

     7.2. Performance of Agreements. Shareholders shall have performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants contained in this Agreement or in any Ancillary
Document to be performed and complied with by Shareholders on or before the
Closing Date, unless expressly waived by Sussex in writing.

     7.3. Legal Proceedings. There shall be no law, and no order shall have been
entered and not vacated by a court or administrative agency of competent
jurisdiction in any litigation, which (a) enjoins, restrains, makes illegal or
prohibits consummation of the transactions contemplated hereby or by any
Ancillary Document, (b) requires separation of a significant portion of the
assets of the Company after the Closing or (c) restricts or interferes with, in

                                       28


any material way, the operation of the Business after the Closing or materially
adversely affects the financial condition, results of operations, properties,
assets, business or prospects of the Company; and there shall be no Litigation
pending before a court or administrative agency of competent jurisdiction, or
threatened, seeking to do, or which, if successful, would have the effect of,
any of the foregoing.

     7.4. Consents; There shall have been obtained (a) all Permits required for
the consummation of the transactions contemplated hereunder, and (b) all
consents to the assignment of the Contracts listed on Schedule 3.5(a) hereto,
all of which shall be in full force and effect. Any Encumbrance on any asset or
property of the Company shall have been discharged in full prior to or at the
Closing.

     7.5. Financial Condition. From the Statement Date through the date of the
Closing, there shall not have been any material adverse change in the financial
condition, results of operations or business of the Company, whether or not
arising in the ordinary course of business.

     7.6. Employment Agreements. Each of Harper and Lista will have duly
executed and delivered an employment agreement substantially in the form of
Exhibit A hereto.

     7.7. Approvals. Sussex shall have obtained all necessary governmental or
regulatory approvals to permit Sussex to acquire the Stock and operate the
Company as a subsidiary of the Bank and to conduct the Business. In addition,
Sussex shall have obtained any necessary approvals of all necessary regulatory
authorities to the transfer of ultimate ownership of those Permits listed on
Schedule 3.13(b) hereto, and no such approvals shall contain conditions which
would materially affect value of the Company to the Sussex or materially affect
the operation of the Business after consummation of the transactions
contemplated herein.

     7.8. Consent of the Insurance Companies. Each of the insurance companies
which is a party to the Insurance Contracts listed on Schedule 3.5 hereto shall
have consented in writing to the transactions contemplated by this agreement and
acknowledged that such company will continue to do business with the Company
pursuant to its respective Insurance Contract.

     7.9 Balance Sheet. At or prior to the Closing, those certain assets
designated on Schedule 7.9 hereto shall have been distributed to the
Shareholders, in whatever fashion they shall determine, provided that such
distribution shall not create any liability or obligation of the Company. The
Company shall be relieved from those certain liabilities listed on Schedule 7.9


                                       29


hereto, whether through assumption by the Shareholders, discharge or otherwise,
provided that such relief shall not create any liability or obligation (by way
of tax liability or otherwise) in or to the Company. As of the Closing Date, the
Company shall be "in trust" with regard to its insurance business, i.e. the
amount of the Company's accounts payable to the insurance company's for whom it
places policies shall be equal to or less than the Company's cash on hand and
accounts receivable with regard to such policies.

     7.10 Increasing the Board of Directors. Shareholders, as the sole
shareholders and sole directors of the Company, shall take all steps necessary
so that, effective upon the Closing, the Board of Directors of the Company shall
be increased to consist of five (5) directors and three individuals designated
by Sussex, in addition to the Shareholders, shall be appointed to the Board of
Directors of the Company effective upon the Closing.


8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SHAREHOLDERS

     The obligations of the Shareholders under this Agreement are subject to the
delivery of the documents and other items set forth in Section 2.3 and the
satisfaction, at or prior to the Closing, of each of the following conditions,
and Sussex shall exert its best efforts to cause each such condition to be so
fulfilled:

     8.1. Accuracy of Representations and Warranties. The representations and
warranties of Sussex contained in this Agreement or in any Ancillary Sussex
Document shall be true in all material respects on and as of the Closing Date
with the same effect as if they were made on and as of the Closing Date, except
(i) as affected by the transactions contemplated hereby, and (ii) that any such
representation and warranty made as of a specified date (other than the Closing
Date) shall be true and correct in all material respects when made and as of the
Closing Date.

     8.2. Performance of Agreements. Sussex shall have performed in all material
respects all obligations and agreements and complied in all material respects
with all covenants contained in this Agreement or in any Ancillary Sussex
Document to be performed and complied with by it on or before the Closing Date,
unless waived by Shareholders and the Company.

     8.3. Legal Proceedings. There shall be no Law and no order shall have been
entered and not vacated by a court or administrative agency of competent
jurisdiction in any Litigation,


                                       30


which enjoins, restrains, makes illegal or prohibits consummation of the
transactions contemplated hereby or by any Ancillary Document; and there shall
be no Litigation pending before a court or administrative agency of competent
jurisdiction, or threatened, seeking to do, or which, if successful, would have
the effect of, any of the foregoing. Such payments shall be paid over to the
Shareholders within fifteen business days of their receipt by the Company,
without interest, fees or any open markup.


9. INDEMNIFICATION

     9.1. Losses. For purposes of this Agreement, the terms "Loss" or "Losses"
shall mean each and all of the following items, namely, claims, losses,
liabilities, damages, fines, penalties, costs and expenses (including, without
limitation, interest which may be imposed in connection therewith), reasonable
fees and disbursements of counsel and other experts, and the cost to the person
seeking indemnification (the "Indemnity") of any funds expended by reason of the
occurrence of any of the events enumerated in Section 9.2 hereof or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof or in enforcing the provisions of this Agreement or any Ancillary
Document.

     9.2. Indemnification.

     (a) Subject to the limitations set forth in Section 9.3 below, and in
accordance with the procedures set forth in Section 9.4 (if applicable),
Shareholders shall jointly and severally indemnify Sussex against and hold it
harmless from, and shall not assert any claim of liability against Sussex for,
any and all actual Losses resulting from or arising out of: (i) any inaccuracy
in or breach of any representation or warranty made by Shareholders in this
Agreement or in any Ancillary Document, (ii) any non-fulfillment or breach or
default in the performance by Shareholders of any of the covenants or agreements
made by Shareholders herein or in any Ancillary Document; (iii) any liability
(including, without limitation, Environmental Liabilities of the Business) of
Company or Shareholders, including any liability arising out of the ownership of
the Company or conduct of the Business prior to the Closing; and (iv) any
failure by Shareholders to deliver the Stock to Sussex free and clear of all
Encumbrances.

     (b) Subject to the limitations set forth in Section 9.3 below, and in
accordance with the procedures set forth in Section 9.4 (if applicable), Sussex
shall indemnify Shareholders


                                       31


against any and all Losses resulting from or arising out of: (i) any inaccuracy
in or breach of any representation or warranty made by Sussex in this Agreement
or in any Ancillary Document, and (ii) any non-fulfillment or breach or default
in the performance by Sussex of any of the covenants or agreements made by
Sussex herein or in any Ancillary Document.

         9.3 Limitations. The indemnification for breaches of representations or
warranties provided for in subsections 9.2(a)(i) and 9.2(b)(i) shall be limited
as follows:

          (i) Shareholders shall not be required to indemnify Sussex under this
     Section 9, and Sussex shall not be required to indemnify Shareholders under
     this Section 9, unless the aggregate amount for which indemnity would
     otherwise be required hereunder exceeds $25,000 (the "Indemnification
     Basket") , in which case Shareholders or Sussex, as the case may be, shall
     be responsible for all such indemnifiable amounts due pursuant to this
     Section 9 in excess of the Indemnification Basket.

          (ii) Any indemnifiable liability or reimbursement under this Section 9
     shall be limited to the amount of actual damages (of any nature) subject to
     indemnification actually sustained by a party hereto, net of any applicable
     insurance payments actually received, other reimbursement or tax benefit
     actually realized by such party.

          (iii) If an Indemnifying Party (as such term is defined in Section 9.4
     hereof) has indemnified an Indemnified Party(as such term is defined in
     Section 9.4 hereof) pursuant to this Agreement, the Indemnifying Party
     shall be subrogated to the rights of the Indemnified Party in respect of
     the matter as to which the indemnity related and may pursue the same at the
     Indemnifying Party's expense. If an Indemnified Party obtains a recovery of
     all or any part of any amount that an Indemnifying Party has paid to such
     Indemnified Party or which an Indemnifying Party has reimbursed an
     Indemnified Party, such Indemnified Party shall promptly pay or cause to be
     paid to the Indemnifying Party an amount equal to such recovery.

9.4. Procedure.

     If a claim by a third party is made against a party hereto (an "Indemnified
Party"), and if an Indemnified Party intends to seek indemnity with respect
thereto under this Section 9, the Indemnified Party shall promptly notify the
party required to indemnify the Indemnified Party pursuant to this Section 9 (an
"Indemnifying Party") of such claim (the "Indemnity Notice"); provided, however,
that failure by an Indemnified Party to notify an Indemnifying Party of such

                                       32


claim shall not effect the Indemnified Party's right to seek indemnification so
long as the Indemnifying Party is not materially prejudiced by such failure to
have been notified of such claim. The Indemnifying Party shall have ten (10)
days after receipt of the Indemnity Notice to undertake, conduct and control,
through counsel of its own choosing and at its expense, but reasonably
acceptable to the Indemnified Party, the settlement or defense thereof, and the
Indemnified Party shall cooperate with it in connection therewith; provided,
however, that with respect to settlements entered into by the Indemnifying
Party, the Indemnifying Party shall obtain the release of the claiming party in
favor of the Indemnified Party. If the Indemnifying Party undertakes, conducts
and controls the settlement or defense of such claim, the Indemnifying Party
shall permit the Indemnified Party to participate in such settlement or defense
through counsel chosen by the Indemnified Party, providing that the fees and
expenses of such counsel shall be borne by the Indemnified Party. With respect
to indemnification provided for hereunder, the Indemnified Party shall not pay
or settle any such claim so long as the Indemnifying Party is reasonably
contesting any such claim in good faith. Notwithstanding the immediately
preceding sentence, the Indemnified Party shall have the right to pay or settle
any such claims, provided that in such event it shall waive any right to
indemnity therefore by the Indemnifying Party. (b) Subject to the limitations
set forth in Section 9.3 hereof, if the Indemnifying Party does not notify the
Indemnified Party within fifteen (15) days after the receipt of the Indemnified
Party's notice of a claim of indemnity hereunder that it elects to undertake the
defense thereof, the Indemnified Party shall have the right to contest, settle
or compromise the claim in the exercise of its good faith reasonable judgment at
the expense of the Indemnifying Party subject to the other terms and provisions
of this Section 9.

10. TERMINATION

         10.1. In General. This Agreement may be terminated at any time prior to
the Closing Date:

              (1) by either Shareholders or Sussex by written notice to the
other party if the Closing shall not have occurred by 5:00 P.M. eastern time on
March 31, 2002, unless such date shall be extended by the mutual written consent
of Shareholders and Sussex and further provided that the party seeking to
terminate the Agreement shall not be in default of any covenant,


                                       33


agreement or condition hereunder;

              (2) by Sussex by written notice to Shareholders, if (i) the
representations and warranties of Shareholders shall not have been true and
correct in all material respects (in the case of any representation or warranty
containing any materiality qualification) or in all respects (in the case of any
representation or warranty without any materiality qualification) as of the date
when made or (ii) if any of the conditions set forth in Section 7 shall not have
been, or if it becomes apparent that any of such conditions will not be
fulfilled or waived by 5:00 P.M., eastern time on March 31, 2002, unless such
failure shall be due to the failure of Sussex to perform or comply with any of
the covenants, agreements or conditions hereof to be performed or complied with
by it prior to the Closing; or

              (3) by Shareholders by written notice to Sussex if (i) the
representations and warranties of Sussex shall not have been true and correct in
all material respects (in the case of any representation or warranty containing
any materiality qualification) or in all respects (in the case of any
representation or warranty without any materiality qualification) as of the date
when made or (ii) if any of the conditions set forth in Section 8 shall not have
been, or if it becomes apparent that any of such conditions will not be,
fulfilled or waived by 5:00 P.M. eastern time on March 31, 2002, unless such
failure shall be due to the failure of any Company to perform or comply with any
of the covenants, agreements or conditions hereof to be performed or complied
with by it prior to the Closing.

     10.2. Effect of Termination. In the event of the termination of this
Agreement pursuant to the provisions of Section 10.1, this Agreement, other than
Section 9, shall become null and void and have no force and effect, without any
liability to any party in respect hereof or of the transactions contemplated
hereby on the part of any party hereto, or any of its directors, officers,
employees, agents, consultants, representatives, advisers, stockholders or
affiliates, except for any liability resulting from such party's breach of this
Agreement provided that if such termination shall result from the (i) failure to
perform a covenant of this Agreement or (ii) breach by any party hereto of any
representation or warranty or agreement contained herein, such party shall be
fully liable for any and all actual Losses incurred or suffered by any other
party as a result of such failure or breach.

                                       34


11. MISCELLANEOUS

     11.1. Survival of Representations and Warranties. The parties hereto agree
that the representations and warranties contained in this Agreement or in any
Ancillary Document shall survive the Closing for a period of three (3) years.
Anything to the contrary in this Section 11.1 notwithstanding, (i) any
representation or warranty which survives the Closing pursuant hereto shall
survive the time it would otherwise terminate pursuant to this Section 11.1 if
notice of the breach or violation or possible breach or violation thereof giving
rise to a right or a possible right to indemnification shall have been given to
the other party, prior to such time; and (ii) each party's right to
indemnification for the other party's fraudulent misrepresentations or breaches
of warranty shall survive without limitation as to time. All such
representations and warranties shall be binding regardless of any investigation
made at any time by the parties.

     11.2. Further Assurances. The parties hereto agree that each will execute
and deliver to the other any and all documents in addition to those expressly
provided for herein that may be necessary or appropriate to (a) vest in Sussex
title to and possession of the Stock, and (b) otherwise carry out the provisions
of this Agreement and each of the Ancillary Documents, whether before, at, or
after the Closing. Shareholders further agree that at any time and from time to
time after the Closing, it will execute and deliver to Sussex such further
conveyances, assignments, or other written assurances as Sussex may reasonably
request.

     11.3 Notices. Any and all notices, demands or requests required or
permitted to be given under this Agreement shall be given in writing and sent,
(i) by registered or certified U.S. mail, return receipt requested, (ii) by
hand, (iii) by overnight courier or (iv) by telecopier, addressed to the parties
hereto at their addresses set forth above or such other addresses as they may
from time-to-time designate by written notice, given in accordance with the
terms of this Section, together with copies thereof as follows:

                             If to Sussex, to:

                             Sussex Bancorp
                             399 Route 23
                             Franklin, New Jersey 07416
                             Attention: Chairman
                             Fax: 973-827-2926
                             With a copy to:

                                       35


                             Windels Marx Lane & Mittendorf, LLP
                             120 Albany Street, 6th Floor
                             New Brunswick, New Jersey 08901
                             Attention:  Robert A. Schwartz, Esq.
                             Fax:  (732) 846-8877

                             If to Shareholders, to:

                             ---------------------
                             ---------------------
                             ---------------------
                             ---------------------
                             Fax: [number]

                             ---------------------
                             ---------------------
                             ---------------------
                             ---------------------
                             Fax: [number]

                             With a copy to:

                             ---------------------
                             ---------------------
                             ---------------------
                             ---------------------


               Notices given as provided in this Section shall be deemed
effective: (i) on the date hand delivered, (ii) on the first business day
following the sending thereof by overnight courier, (iii) on the seventh
calendar day (or, if it is not a business day, then the next succeeding business
day thereafter) after the depositing thereof into the exclusive custody of the
U.S. Postal Service and (iv) on the date telecopied, provided that a copy of the
notice is also sent by overnight courier or U.S. mail.

     11.4. Expenses. Each party shall bear and be solely responsible for all
expenses incurred by it in connection with and incident to the negotiation and
preparation of this Agreement and the Ancillary Documents and the consummation
of the transactions contemplated herein and therein, whether or not such
transactions are consummated as contemplated herein.


     11.5. Entire Agreement; Modification and Waiver. This Agreement (including
the Exhibits attached hereto, the Schedules, and the Ancillary Documents) sets
forth the entire



                                       36


agreement between the parties relating to the subject matter hereof and
supersedes all prior negotiations and writings between the parties. This
Agreement and each Ancillary Document may be modified or amended only by a
writing executed by all the parties affected by such modification or amendment;
and compliance with the terms and conditions hereof or thereof may be waived
only by a writing signed by the party or parties entitled to the benefit of such
term or condition.

     11.7. Binding Effect. This Agreement and each Ancillary Document shall be
binding upon and shall inure to the benefit of each corporate party hereto, its
successors and assigns, and each individual party hereto and his heirs, personal
representatives, successors and assigns.

     11.8. Schedules; Exhibits. The Schedules and the Exhibits attached hereto
are an integral part of this Agreement as if fully re-written herein. In the
event that any matter might properly be disclosed on more than one Schedule,
such matter, if adequately disclosed on any applicable Schedule, shall be deemed
to have been disclosed for purposes of all other applicable Schedules if each
such applicable Schedule contains a specific cross-reference to the matter.

     11.9. Headings. The section and paragraph headings in this Agreement and in
each Ancillary Document have been inserted solely for convenience of reference
and do not themselves constitute a part of this Agreement or such Ancillary
Document.

     11.10. Counterparts. This Agreement and each Ancillary Document may be
executed in two or more counterparts, all of which when taken together shall
constitute one and the same instrument.

     11.11. Governing Law. This Agreement and each Ancillary Document shall be
governed by and construed in accordance with the laws of the State of New Jersey
applicable to contracts made and to be wholly performed within such state.

     11.12. Assignment. No assignment by any party of this Agreement or any
Ancillary Document or any right or obligation hereunder or thereunder may be
made without the prior written consent of the other party; provided, however,
that Sussex may assign its rights and obligations hereunder or thereunder to any
corporation, one hundred percent of the issued and outstanding stock of which is
owned, directly or indirectly, by Sussex.

     11.13. No Third Party Beneficiaries Nothing contained in this Agreement or
in any Ancillary Document shall create or


                                       37





be deemed to create any rights or benefits in any third parties.


               IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first written above.


                                 SHAREHOLDERS:


                                 -----------------------------------------------
                                 GEORGE HARPER


                                 -----------------------------------------------
                                 GEORGE LISTA



                                 SUSSEX BANCORP


                                 By:
                                    --------------------------------------------
                                    Name:   DONALD L. KOVACH
                                    Title:  Chairman and Chief Executive Officer

                                 THE SUSSEX BANK


                                 By:
                                    --------------------------------------------
                                    Name:   DONALD L. KOVACH
                                    Title:  Chairman and Chief Executive Officer




                                       38

EX-10.A

EXHIBIT 10(a)

                              EMPLOYMENT AGREEMENT


               EMPLOYMENT AGREEMENT (this "Agreement") made as of this 28th day
of September 2001 by and between TRI-STATE INSURANCE AGENCY, INC., a New Jersey
corporation ("Employer"), and George Lista, an individual residing at
________________________(the "Executive").

                              W I T N E S S E T H:

               WHEREAS, pursuant to that certain Stock Purchase Agreement (the
"Stock Purchase Agreement") by and among Sussex Bancorp ("Sussex"), Executive
and George Lista, Sussex is acquiring from Executive and George Lista all of the
common stock of Employer, to operate as a wholly-owned subsidiary of the Sussex
County State Bank (the "Bank");

               WHEREAS, Executive is the Executive Vice President of the
Employer, and his continued services are crucial to the continued success of the
Employer's operation as a subsidiary of the Bank;

               WHEREAS, Sussex desires to retain the Executive's services for
Employer, and Executive wishes to continue his employment with the Employer on
the terms and conditions contained herein;

               NOW, THEREFORE, in consideration of the mutual promises and
undertakings herein contained, the parties hereto, intending to be legally
bound, agree as follows:

     1. Employment and Term.

         (a) Employer hereby employs the Executive as the Chief Operating
Officer of the Employer (the "Position") and the Executive agrees to serve in
the Position, for a term of five


                                        39


(5) years (the "Term"), which shall commence on the date hereof (the "Effective
Date"), and which, subject to paragraphs 1(b), and (c), hereof, shall terminate
on the fifth anniversary of the Effective Date, unless extended pursuant to the
terms hereof. Unless either Executive or Employer give written notice at least
twelve (12) months prior to the end of the Term of their intention not to have
this Agreement renew, this Agreement shall automatically renew for an additional
three (3) year term (the "Additional Term") at the expiration of the Term. For
purposes of this Agreement, the Additional Term shall be considered to be a part
of the Term hereof.

         (b) Employer shall have the right to terminate the Executive's
employment hereunder prior to the fifth anniversary of the Effective Date;
provided, however, that unless such termination is for "cause", as defined
below, Executive shall be entitled to receive his Base Salary (as defined
herein) and all insurance benefits provided on the date of such termination for
the remaining term of this Agreement. In addition, for the remaining term of
this Agreement, Executive shall be entitled to an annual payment equal to the
commissions earned by Executive under Section 3(b) hereof for the proceeding
fiscal year. Such payments shall be made in accordance with Employer's normal
payroll practices. If such termination is for "cause", Executive shall not be
entitled to receive any compensation from and after the date of such
termination; provided, however, that Executive shall be entitled to payments for
periods, or partial periods, that occurred prior to the date of termination and
for which Executive has not yet been paid. For purposes of this Agreement,
"cause" means (i) the Executive's willful and continued failure substantially to
perform the duties of the Position, (ii) fraud, misappropriation or other
deliberate dishonesty of Executive with respect to Employer's business or
property, (iii) the Executive's plea of guilty to or conviction of, or plea of
nolo contendere to, any felony that,


                                        40


in the reasonable judgment of the Board of Directors of Employer (the "Board"),
adversely affects Employer's reputation or the Executive's ability to perform
his duties hereunder; or (iv) Executive's willful violation of (A) any law, rule
or regulation relating to the business of Employer , Sussex or the Bank, or (B)
final cease-and-desist order issued by or regulatory consent agreement with any
regulatory agency having jurisdiction over the Company, the Bank or Sussex.

         (c) This Agreement shall terminate upon Executive's death or his
disability, as defined herein. Upon Executive's death or his disability, the
obligation of Employer hereunder to pay Executive the compensation called for
under Section 3 hereof shall terminate, and Employer's only obligation shall be
to pay Executive any and all benefits to which Executive was entitled at the
time of such death or disability under any benefit plans of Employer then in
place. For purposes of this Agreement, the term "disability" shall mean
Executive's inability to substantially perform his material duties as prescribed
in this Agreement due to his incapacity or disability, physical or mental, for a
period of six (6) consecutive months.

     2. Duties.

         (a) Subject to the ultimate reasonable control and discretion of the
Board of Directors of Employer, the Executive shall serve in the Position and
perform all duties and services as Chief Operating Officer of the Employer. In
such capacity, Executive shall have full authority over the day to day business
operations of the Employer, subject to the ultimate authority of the Board of
Directors, shall have the authority to retain and terminate personnel, set
compensation, determine the product lines offered by the Employer and insurance
companies with whom Employer conducts business and generally have the authority
to manage the operations of the Employer as its Chief Operating Officer.

                                        41



         (b) The Executive shall devote all of the Executive's professional time
and attention to the performance of the Executive's duties hereunder and, during
the term of the Executive's employment hereunder, shall not engage in any other
business enterprise which, in the reasonable, good faith opinion of the Board,
interferes with Executive's performance of the duties set forth in subparagraph
(a) above. The foregoing shall not prevent the Executive's purchase, ownership
or sale of investment securities or of any interest in, any business which
competes with the business of Employer, provided that such ownership or
investment constitutes not more than five percent of the outstanding shares of a
corporation whose stock is listed on a National Securities Exchange or on the
National Association of Securities Dealers Automated Quotation System, or the
Executive's involvement in charitable or community activities, provided that the
time and attention which the Executive devotes to such activities does not
materially interfere with the performance of the Executive's duties hereunder.

3. Compensation.

     (a) For all services to be rendered by the Executive under this Agreement,
Employer agrees to pay the Executive a salary of $120,000 annually, to be paid
in equal monthly installments (the "Base Salary");

     (b) In addition to the compensation provided for under subparagraph (a)
hereof, Executive shall be entitled to receive personal commissions on the sale
of insurance products actually placed by Executive as the agent of record of 40%
of the gross commissions earned by Employer on such sales.

     (c) In addition to the compensation provided for under subsections (a) and
(b) hereof, Executive shall be entitled to a bonus (the "Bonus") to be paid
annually equal to 25% of the amount by which the net before tax net income of
the Employer as a subsidiary of the Bank


                                       42


for each twelve (12) month period of this Agreement exceeds the following:

          (i)   In the first twelve (12) month period after the Closing (as
                defined under the Stock Purchase Agreement), $175,000;

          (ii)  For the second twelve (12) month period after the Closing,
                $192,500;

          (iii) For the third twelve (12) month period after the Closing,
                $210,000;

          (iv)  For the fourth twelve (12) month period after the Closing,
                $227,500; provided, however, that in the event Employer's net
                before tax income exceeds $227,500, Executive shall be entitled
                to a bonus equal to 25% of the amount by which the net before
                tax income of the Employer as a subsidiary of the Bank exceeds
                $210,000;

          (v)   For the fifth twelve (12) month period after the Closing,
                $245,000; provided, however, that in the event the Employer's
                net before tax income for the fifth twelve (12) month period
                after the Closing exceeds $245,000, Executive's bonus shall
                equal 25% of the amount by which the net before tax income of
                the Employer as a subsidiary of the Bank exceeds $210,000.

     All Bonuses due hereunder shall be paid through the issuance of the common
stock, no par value (the "Common Stock") of Sussex. In determining the number of
shares to be issued in satisfaction of any Bonus due hereunder, the shares shall
be valued at their then current fair market value at the time of issuance, based
upon the average closing price of the Common Stock in the fifteen (15) trading
days prior to the day before issuance. The shares of Common Stock shall be
issued pursuant to an exemption from registration under the Securities Act of
1933, and shall be subject to restrictions on transfer necessary for the Company
to claim such exemption. In addition, the certificates representing such shares
of Common Stock shall be legended to indicate that they are so restricted.

     The net income of the Employer for purposes of determining whether a Bonus
is earned and how much the Bonus shall be shall be determined in accordance with
generally accepted


                                       43



accounting principals consistently applied.


     (d) In addition to the compensation provided for under subsections (a), (b)
and (c), Executive shall be entitled to participate in those employee benefit
plans generally made available to executive officers of Sussex and the Bank.

4. Additional Covenants.

     (a) Confidential Information. Except as required in the performance of his
duties hereunder, the Executive shall not use or disclose to any third party any
Confidential Information (as hereinafter defined) or any know-how or experience
related thereto without the express prior written authorization of the Bank,
either during the term of this Agreement or thereafter. Upon termination of his
employment, the Executive shall leave with Employer all documents and other
items in his possession which contain Confidential Information, and shall be
prohibited from disclosing to any third party any Confidential Information. For
purposes of this paragraph 5(a), the term "Confidential Information" shall mean
all information about Employer, Sussex and/or the Bank or relating to any of
their respective services or any phase of their respective operations not
generally known to any of their competitors and which is treated by Employer,
Sussex and/or the Bank as confidential information, and shall specifically
include all customer lists of Employer, Sussex and/or the Bank.

     The term "Confidential Information" shall not include any of the foregoing
which (i) is in the public domain, (ii) is in Executive's lawful possession
prior to a disclosure thereof and not subject to a confidentiality agreement or
(iii) is hereafter lawfully disclosed to Executive by a third party who or which
did not acquire the information under an obligation of confidentiality to
Employer.

     (b) Non-Compete. Executive hereby agrees that for the Covenant Term (as

                                        44


defined below), he will not work for any entity which is engaged in competition
with Employer, Sussex or the Bank as of the Term of this Agreement and as of the
date of its termination nor himself so engage during such Covenant Term,
directly or indirectly, as principal, agent, partner, shareholder, consultant,
or employee, in any such business in competition with Employer, Sussex or the
Bank as of the Term of this Agreement and as of the date of its termination;
provided, however, that the parties agree that those positions listed on
Schedule 4(b) hereto shall not be deemed to be in competition with Employer,
Sussex or the Bank and shall not be prohibited hereunder. For purposes of this
provision, the "Covenant Term" shall mean the Term of this Agreement and, in the
event that Executive has not provided the required notice under Section 1(a)
hereto of his intention not to renew this Agreement, for such additional period
of months as Executive was required to give notice under Section 1(a) and failed
to provide such notice (i.e., should Executive provide notice three (3) months
before the end of the Term that he does not intend for this Agreement to renew
for the Additional Term, the Covenant Term shall be a period of nine (9) months
after the termination of this Agreement); further provided, however, that in the
event Executive's employment is terminated pursuant to Section 1(b) hereof, the
Covenant Term shall be extended to run contemporaneously with the period during
which Executive receives payments under Section 1(b ).

                                        45



     (c) Non-Solicitation.

          (i)   Executive agrees that for a period of six (6) months following
                the termination of this Agreement, he will not recruit for
                employment or induce to terminate his or her employment with
                Employer, Sussex or the Bank any person who is, at the time of
                such solicitation, or who was within thirty (30) days of such
                solicitation, an employee of Employer, Sussex or the Bank.

          (ii)  Executive agrees that for a period of six (6) months following
                the termination of this Agreement, he will not directly or
                indirectly solicit, cause any other person to solicit, or assist
                any other person with soliciting any customer, depositor or
                borrower of Employer, Sussex or the Bank to become a customer,
                depositor or borrower of another financial institution.


     (d) Modification. If a court of competent jurisdiction determines that the
scope, time duration or other limitations of any of the restrictive ovenants
contained in this Section 4 are not reasonably necessary to protect the
legitimate business interests of Employer, Sussex or the Bank, then such scope,
time duration or other limitations will be deemed to become and thereafter will
be the maximum time period or scope which such court deems reasonable and
enforceable.

     (e) Definitions. For purposes of this Section 4, to act "directly or
indirectly" means to act personally or through an associate, affiliate, amily
member or otherwise, as proprietor, partner, shareholder, director, officer,
employee, agent, consultant or in any other capacity or manner whatsoever.

     (f) Specific Performance. Employer and the Executive agree that in the
event of a breach of the provisions of this Section 4, the injury which would be
suffered by Employer, Sussex or the Bank would be of a character which could not
be fully compensated for solely by a recovery of monetary damages. Accordingly,
Executive agrees that in the event of a breach of the terms of this Section 4,
in addition to and not in lieu of any other remedies which Employer may pursue,
Employer shall have the right to equitable relief, including issuance of a
temporary


                                       46


or permanent injunction by any court of competent jurisdiction against the
commission or continuance of any breach of this Section 4.

     5. Notices. Any and all notices, demands or requests required or permitted
to be given under this Agreement shall be given in writing and sent, (i) by
registered or certified U.S. mail, return receipt requested, (ii) by hand, (iii)
by overnight courier or (iv) by telecopier addressed to the parties hereto at
their addresses set forth above or such other addresses as they may from
time-to-time designate by written notice, given in accordance with the terms of
this Section, together with copies thereof as follows: In the case of Executive,
with a copy to:


                             In the case of Employer, with a copy to:

                             Windels Marx Lane & Mittendorf, LLP
                             120 Albany Street, 6th Floor
                             New Brunswick, New Jersey 08901
                             Telecopier No. (732) 846-8877
                             Attention: Robert A. Schwartz

     Notice given as provided in this Section shall be deemed effective: (i) on
the date hand delivered, (ii) on the first business day following the sending
thereof by overnight courier, (iii) on the seventh calendar day (or, if it is
not a business day, then the next succeeding business day thereafter) after the
depositing thereof into the exclusive custody of the U.S. Postal Service or (iv)
on the date telecopied.

     6. Assignability. The services of the Executive hereunder are personal in
nature, and neither this Agreement nor the rights or obligations of Executive
hereunder may be assigned, whether by operation of law or otherwise. This
Agreement shall be binding upon, and inure to


                                       47


the benefit of, Employer and its Successors and assigns. This Agreement shall
inure to the benefit of the Executive's heirs, executors, administrators and
other legal representatives.

     7. Waiver. The waiver by Employer or the Executive of a breach of any
provision of this Agreement by the other shall not operate or be construed as a
waiver of any subsequent or other breach hereof.

     8. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey without giving effect to
principles of conflict of laws.

     9. Entire Agreement. This Agreement contains the entire agreement of the
parties hereto with respect to the subject matter hereof and may not be amended,
waived, changed, modified or discharged, except by an agreement in writing
signed by the parties hereto.

     10. Counterparts. This Employment Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.

     11. Amendment. This Employment Agreement may be modified or amended only by
an amendment in writing signed by both parties.

     12. Severability. If any provision of this Employment Agreement shall be
held invalid or unenforceable, such invalidity or unenforceability shall attach
only to such provision, only to the extent it is invalid or unenforceable, and
shall not in any manner affect or render invalid or unenforceable any other
severable provision of this Agreement, and this Agreement shall be carried out
as if any such invalid or unenforceable provision were not contained herein.

     13. Section Headings. The headings contained in this Agreement are solely
for convenience of reference and shall be given no effect in the construction or
interpretation of this Employment Agreement.

                                       48



     14. Fees and Expenses. If any party to this Employment Agreement institutes
any action or proceeding to enforce this Employment Agreement, the prevailing
party in such action or proceeding shall be entitled to recover from the
non-prevailing party all legal costs and expenses incurred by the prevailing
party in such action, including, but not limited to, reasonable attorneys' fees
and other reasonable legal costs and expenses. IN WITNESS WHEREOF, the parties
hereto have executed this Agreement under their respective hands and seals as of
the day and year first above written.



ATTEST:                                     TRI-STATE INSURANCE AGENCY, INC.


___________________________                 By:_________________________________




WITNESS:                                    EXECUTIVE:

                                            /s/ George Lista
---------------------------                 ------------------------------------
                                            George Lista


                                       49

EX-10.B

EXHIBIT 10(b)


                              EMPLOYMENT AGREEMENT


               EMPLOYMENT AGREEMENT (this "Agreement") made as of this 28th day
of September 2001 by and between TRI-STATE INSURANCE AGENCY, INC., a New Jersey
corporation ("Employer"), and George B. Harper, an individual residing at P.O
Box 3 Layton, NJ 07851 (the "Executive").

                              W I T N E S S E T H:

               WHEREAS, pursuant to that certain Stock Purchase Agreement (the
"Stock Purchase Agreement") by and among Sussex Bancorp ("Sussex"), Executive
and George Lista, Sussex is acquiring from Executive and George Lista all of the
common stock of Employer, to operate as a wholly-owned subsidiary of the Sussex
County State Bank (the "Bank");

               WHEREAS, Executive is the President of the Employer, and his
continued services are crucial to the continued success of the Employer's
operation as a subsidiary of the Bank;

               WHEREAS, Sussex desires to retain the Executive's services for
Employer, and Executive wishes to continue his employment with the Employer on
the terms and conditions contained herein;


               NOW, THEREFORE, in consideration of the mutual promises and
undertakings herein contained, the parties hereto, intending to be legally
bound, agree as follows:

1. Employment and Term.

     (a) Employer hereby employs the Executive as the President of the Employer
(the "Position") and the Executive agrees to serve in the Position, for a term
of five (5) years (the


                                       50


"Term"), which shall commence on the date hereof (the "Effective Date"), and
which, subject to paragraphs 1(b), and (c), hereof, shall terminate on the fifth
anniversary of the Effective Date, unless extended pursuant to the terms hereof.
Unless either Executive or Employer give written notice at least twelve (12)
months prior to the end of the Term of their intention not to have this
Agreement be considered to be a part of the Term hereof.

     (b) Employer shall have the right to terminate the Executive's employment
hereunder prior to the fifth anniversary of the Effective Date; provided,
however, that unless such termination is for "cause", as defined below,
Executive renew, this Agreement shall automatically renew for an additional
three (3) year term (the "Additional Term") at the expiration of the Term. For
purposes of this Agreement, the Additional Term shall shall be entitled to
receive his Base Salary (as defined herein) and all insurance benefits provided
on the date of such termination for the remaining term of this Agreement. In
addition, for the remaining term of this Agreement, Executive shall be entitled
to an annual payment equal to the commissions earned by Executive under Section
3(b) hereof for the proceeding fiscal year. Such payments shall be made in
accordance with Employer's normal payroll practices. If such termination is for
"cause", Executive shall not be entitled to receive any compensation from and
after the date of such termination; provided, however, that Executive shall be
entitled to payments for periods, or partial periods, that occurred prior to the
date of termination and for which Executive has not yet been paid. For purposes
of this Agreement, "cause" means (i) the Executive's willful and continued
failure substantially to perform the duties of the Position, (ii) fraud,
misappropriation or other deliberate dishonesty of Executive with respect to
Employer's business or property, (iii) the Executive's plea of guilty to or
conviction of, or plea of nolo contendere to, any felony that, in the reasonable
judgment of the Board of Directors of Employer


                                       51


(the "Board"), adversely affects Employer's reputation or the Executive's
ability to perform his duties hereunder; or (iv) Executive's willful violation
of (A) any law, rule or regulation relating to the business of Employer , Sussex
or the Bank, or (B) final cease-and-desist order issued by or regulatory consent
agreement with any regulatory agency having jurisdiction over the Company, the
Bank or Sussex.

     (c) This Agreement shall terminate upon Executive's death or his
disability, as defined herein. Upon Executive's death or his disability, the
obligation of Employer hereunder to pay Executive the compensation called for
under Section 3 hereof shall terminate, and Employer's only obligation shall be
to pay Executive any and all benefits to which Executive was entitled at the
time of such death or disability under any benefit plans of Employer then in
place. For purposes of this Agreement, the term "disability" shall mean
Executive's inability to substantially perform his material duties as prescribed
in this Agreement due to his incapacity or disability, physical or mental, for a
period of six (6) consecutive months.


2. Duties.

     (a) Subject to the ultimate reasonable control and discretion of the Board
of Directors of Employer, the Executive shall serve in the Position and perform
all duties and services as President the Employer. In such capacity, Executive
shall have full authority over the day to day business operations of the
Employer, subject to the ultimate authority of the Board of Directors, shall
have the authority to retain and terminate personnel, set compensation,
determine the product lines offered by the Employer and insurance companies with
whom Employer conducts business and generally have the authority to manage the
operations of the Employer as its President.

     (b) The Executive shall devote all of the Executive's professional time and

                                       52


attention to the performance of the Executive's duties hereunder and, during the
term of the Executive's employment hereunder, shall not engage in any other
business enterprise which, in the reasonable, good faith opinion of the Board,
interferes with Executive's performance of the duties set forth in subparagraph
(a) above. The foregoing shall not prevent the Executive's purchase, ownership
or sale of investment securities or of any interest in, any business which
competes with the business of Employer, provided that such ownership or
investment constitutes not more than five percent of the outstanding shares of a
corporation whose stock is listed on a National Securities Exchange or on the
National Association of Securities Dealers Automated Quotation System, or the
Executive's involvement in charitable or community activities, provided that the
time and attention which the Executive devotes to such activities does not
materially interfere with the performance of the Executive's duties hereunder.

3. Compensation.

     (a) For all services to be rendered by the Executive under this Agreement,
Employer agrees to pay the Executive a salary of $50,000 annually, to be paid in
equal monthly installments (the "Base Salary");

     (b) In addition to the compensation provided for under subparagraph (a)
hereof, Executive shall be entitled to receive personal commissions on the sale
of insurance products actually placed by Executive as the agent of record of 40%
of the gross commissions earned by Employer on such sales.

     (c) In addition to the compensation provided for under subsections (a) and
(b) hereof, Executive shall be entitled to a bonus (the "Bonus") to be paid
annually equal to 25% of the amount by which the net before tax net income of
the Employer as a subsidiary of the Bank for each twelve (12) month period of
this Agreement exceeds the following:

                                       53



          (ii)  In the first twelve (12) month period after the Closing (as
                defined under the Stock Purchase Agreement), $175,000;

          (vi)  For the second twelve (12) month period after the Closing,
                $192,500;

          (vii) For the third twelve (12) month period after the Closing,
                $210,000;

          (viii) For the fourth twelve (12) month period after the Closing,
                $227,500; provided, however, that in the event Employer's net
                before tax income exceeds $227,500, Executive shall be entitled
                to a bonus equal to 25% of the amount by which the net before
                tax income of the Employer as a subsidiary of the Bank exceeds
                $210,000;

          (ix)  For the fifth twelve (12) month period after the Closing,
                $245,000; provided, however, that in the event the Employer's
                net before tax income for the fifth twelve (12) month period
                after the Closing exceeds $245,000, Executive's bonus shall
                equal 25% of the amount by which the net before tax income of
                the Employer as a subsidiary of the Bank exceeds $210,000.

     All Bonuses due hereunder shall be paid through the issuance of the common
stock, no par value (the "Common Stock") of Sussex. In determining the number of
shares to be issued in satisfaction of any Bonus due hereunder, the shares shall
be valued at their then current fair market value at the time of issuance, based
upon the average closing price of the Common Stock in the fifteen (15) trading
days prior to the day before issuance. The shares of Common Stock shall be
issued pursuant to an exemption from registration under the Securities Act of
1933, and shall be subject to restrictions on transfer necessary for the Company
to claim such exemption. In addition, the certificates representing such shares
of Common Stock shall be legended to indicate that they are so restricted.

     The net income of the Employer for purposes of determining whether a Bonus
is earned and how much the Bonus shall be shall be determined in accordance with
generally accepted accounting principals consistently applied.


                                       54



     (d) In addition to the compensation provided for under subsections (a), (b)
and (c), Executive shall be entitled to participate in those employee benefit
plans generally made available to executive officers of Sussex and the Bank.


4. Additional Covenants.

     (a) Confidential Information. Except as required in the performance of his
duties hereunder, the Executive shall not use or disclose to any third arty any
Confidential Information (as hereinafter defined) or any know-how or experience
related thereto without the express prior written authorization of the Bank,
either during the term of this Agreement or thereafter. Upon termination of his
employment, the Executive shall leave with Employer all documents and other
items in his possession which contain Confidential Information, and shall be
prohibited from disclosing to any third party any Confidential Information. For
purposes of this paragraph 5(a), the term "Confidential Information" shall mean
all information about Employer, Sussex and/or the Bank or relating to any of
their respective services or any phase of their respective operations not
generally known to any of their competitors and which is treated by Employer,
Sussex and/or the Bank as confidential information, and shall specifically
include all customer lists of Employer, Sussex and/or the Bank.

     The term "Confidential Information" shall not include any of the foregoing
which (i) is in the public domain, (ii) is in Executive's lawful possession
prior to a disclosure thereof and not subject to a confidentiality agreement or
(iii) is hereafter lawfully disclosed to Executive by a third party who or which
did not acquire the information under an obligation of confidentiality to
Employer.

     (b) Non-Compete. Executive hereby agrees that for the Covenant Term (as
defined below), he will not work for any entity which is engaged in competition
with Employer,

                                       55


Sussex or the Bank as of the Term of this Agreement and as of the date of its
termination nor himself so engage during such Covenant Term, directly or
indirectly, as principal, agent, partner, shareholder, consultant, or employee,
in any such business in competition with Employer, Sussex or the Bank as of the
Term of this Agreement and as of the date of its termination; provided, however,
that the parties agree that those positions listed on Schedule 4(b) hereto shall
not be deemed to be in competition with Employer, Sussex or the Bank and shall
not be prohibited hereunder. For purposes of this provision, the "Covenant Term"
shall mean the Term of this Agreement and, in the event that Executive has not
provided the required notice under Section 1(a) hereto of his intention not to
renew this Agreement, for such additional period of months as Executive was
required to give notice under Section 1(a) and failed to provide such notice
(i.e., should Executive provide notice three (3) months before the end of the
Term that he does not intend for this Agreement to renew for the Additional
Term, the Covenant Term shall be a period of nine (9) months after the
termination of this Agreement); further provided, however, that in the event
Executive's employment is terminated pursuant to Section 1(b) hereof, the
Covenant Term shall be extended to run contemporaneously with the period during
which Executive receives payments under Section 1(b ).


                                       56


     (c) Non-Solicitation.

          (i)   Executive agrees that for a period of six (6) months following
                the termination of this Agreement, he will not recruit for
                employment or induce to terminate his or her employment with
                Employer, Sussex or the Bank any person who is, at the time of
                such solicitation, or who was within thirty (30) days of such
                solicitation, an employee of Employer, Sussex or the Bank.

          (ii)  Executive agrees that for a period of six (6) months following
                the termination of this Agreement, he will not directly or
                indirectly solicit, cause any other person to solicit, or assist
                any other person with soliciting any customer, depositor or
                borrower of Employer, Sussex or the Bank to become a customer,
                depositor or borrower of another financial institution.

     (d) Modification. If a court of competent jurisdiction determines that the
scope, time duration or other limitations of any of the restrictive covenants
contained in this Section 4 are not reasonably necessary to protect the
legitimate business interests of Employer, Sussex or the Bank, then such scope,
time duration or other limitations will be deemed to become and thereafter will
be the maximum time period or scope which such court deems reasonable and
enforceable.

     (e) Definitions. For purposes of this Section 4, to act "directly or
indirectly" means to act personally or through an associate, affiliate, family
member or otherwise, as proprietor, partner, shareholder, director, officer,
employee, agent, consultant or in any other capacity or manner whatsoever.

     (f) Specific Performance. Employer and the Executive agree that in the
event of a breach of the provisions of this Section 4, the injury which would be
suffered by Employer, Sussex or the Bank would be of a character which could not
be fully compensated for solely by a recovery of monetary damages. Accordingly,
Executive agrees that in the event of a breach of the terms of this Section 4,
in addition to and not in lieu of any other remedies which Employer may pursue,
Employer shall have the right to equitable relief, including issuance of a
temporary


                                       57


or permanent injunction by any court of competent jurisdiction against the
commission or continuance of any breach of this Section 4.

     5. Notices. Any and all notices, demands or requests required or permitted
to be given under this Agreement shall be given in writing and sent, (i) by
registered or certified U.S. mail, return receipt requested, (ii) by hand, (iii)
by overnight courier or (iv) by telecopier addressed to the parties hereto at
their addresses set forth above or such other addresses as they may from
time-to-time designate by written notice, given in accordance with the terms of
this Section, together with copies thereof as follows:

                             In the case of Executive, with a copy to:



                             In the case of Employer, with a copy to:

                                Windels Marx Lane & Mittendorf, LLP
                                120 Albany Street, 6th Floor
                                New Brunswick, New Jersey 08901
                                Telecopier No. (732) 846-8877
                                Attention: Robert A. Schwartz


     Notice given as provided in this Section shall be deemed effective: (i) on
the date hand delivered, (ii) on the first business day following the sending
thereof by overnight courier, (iii) on the seventh calendar day (or, if it is
not a business day, then the next succeeding business day thereafter) after the
depositing thereof into the exclusive custody of the U.S. Postal Service or (iv)
on the date telecopied.

     6. Assignability. The services of the Executive hereunder are personal in
nature, and neither this Agreement nor the rights or obligations of Executive
hereunder may be assigned, whether by operation of law or otherwise. This
Agreement shall be binding upon, and inure to


                                       58


the benefit of, Employer and its Successors and assigns. This Agreement shall
inure to the benefit of the Executive's heirs, executors, administrators and
other legal representatives.


     7. Waiver. The waiver by Employer or the Executive of a breach of any
provision of this Agreement by the other shall not operate or be construed as a
waiver of any subsequent or other breach hereof.


     8. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey without giving effect to
principles of conflict of laws.


     9. Entire Agreement. This Agreement contains the entire agreement of the
parties hereto with respect to the subject matter hereof and may not be amended,
waived, changed, modified or discharged, except by an agreement in writing
signed by the parties hereto.

     10. Counterparts. This Employment Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.

     11. Amendment. This Employment Agreement may be modified or amended only by
an amendment in writing signed by both parties.

     12. Severability. If any provision of this Employment Agreement shall be
held invalid or unenforceable, such invalidity or unenforceability shall attach
only to such provision, only to the extent it is invalid or unenforceable, and
shall not in any manner affect or render invalid or unenforceable any other
severable provision of this Agreement, and this Agreement shall be carried out
as if any such invalid or unenforceable provision were not contained herein.

     13. Section Headings. The headings contained in this Agreement are solely
for convenience of reference and shall be given no effect in the construction or
interpretation of this Employment Agreement.

                                       59


     14. Fees and Expenses. If any party to this Employment Agreement institutes
any action or proceeding to enforce this Employment Agreement, the prevailing
party in such action or proceeding shall be entitled to recover from the
non-prevailing party all legal costs and expenses incurred by the prevailing
party in such action, including, but not limited to, reasonable attorneys' fees
and other reasonable legal costs and expenses.


IN WITNESS WHEREOF, the parties hereto
               have executed this Agreement under their
respective hands and seals as of the day and year first above written.


ATTEST:                                     TRI-STATE INSURANCE AGENCY, INC.


___________________________                 By:_________________________________




WITNESS:                                    EXECUTIVE:

                                            /s/ George B. Harper
---------------------------                 ------------------------------------
                                            George B. Harper





                                       60

EX-99

EXHIBIT 99
Sussex Bancorp
399 Route 23                                         Contact:  Donald L. Kovach
Franklin, NJ  07416                                  President/CEO
                                                     (973) 827-2914



                     SUSSEX BANCORP EXPANDS INTO INSURANCE;
                    ACQUIRES TRI-STATE INSURANCE AGENCY, INC.

Franklin, New Jersey - Sussex Bancorp (AMEX: "SBB") announced today that it had
entered the insurance business through the acquisition of Tri-State Insurance
Agency, Inc., an Augusta, New Jersey based insurance agency. Tri-State, which
has been servicing the Sussex, New Jersey market for over 45 years, is a full
service insurance agency, offering property, casualty, life and health insurance
for a variety of insurance companies. The principals of Tri-State, George B.
Harper and George Lista, will remain with the Agency, and have executed
employment agreements to serve as officers of Tri-State for at least five years.

Donald L. Kovach, Chairman, President and CEO of Sussex, stated: "This
transaction will greatly expand our product offerings to our customers, and will
permit us to truly offer one stop financial shopping in our local markets.
Tri-State Insurance has served the Sussex market for a long time, and we believe
the reputation of the principals in our market will provide significant cross
selling opportunities. We expect that the transaction will be accretive to our
basic per share earnings in the first year and will greatly enhance our
non-interest income."

Sussex Bancorp is the holding company for Sussex Bank, a New Jersey chartered
commercial bank serving the Sussex County, New Jersey market through its eight
offices located in Franklin, Augusta, Andover, Montague, Newton, Sparta, Vernon,
and Wantage, New Jersey. Sussex Bank recently changed its name from the Sussex
County State Bank, to reflect its broader target market and product offerings.
At June 30, 2001, Sussex Bancorp had total assets of $185,286,000, total loans
of $100,566,000, and total deposits of $162,461,000, and had earned $0.28 per
share for the six month ended June 30, 2001.

This press release contains "forward-looking statements" as defined in 21E of
the Securities Exchange Act of 1934. These forward-looking statements describe
future plans, strategies and beliefs and include the Company's expectation of
future financial results. The Company's ability to predict results on future
plans and strategies of qualitative or quantitative changes based on market risk
exposure is inherently uncertain. There are many factors that could effect
future performance beyond the Company's control, which include, but are not
limited to (i) changes in general market interest rates (ii) changes in the
insurance market, either through regulatory or legal changes or business changes
effecting the insurance industry (iii) general economic conditions in the United
States generally and specifically in the Company's market area (iv) changes to
monetary and fiscal policies with the United States government and the Federal
Reserve and (v) world or national events which may impact consumer confidence,
the economy in general or the insurance or banking industries. These factors
should be considered in evaluating the forward-looking statements included
herein, and undue reliance should not be placed on such statements.


                                       61