Document:

<PAGE>   1

                                                                    Exhibit 10.7

                       OPERATING AND MANAGEMENT AGREEMENT

         THIS OPERATING AND MANAGEMENT AGREEMENT (this "Agreement") is entered
into as of the ___ day of October, 2000, by and between STAR SERVICES GROUP,
INC., a Florida corporation, whose address is 2075 North Powerline Road, Pompano
Beach, Florida 33069, herein referred to as ("STAR") and PEERLESS DADE, INC,
("DADE"), PEERLESS BIG APPLE, INC., ("BIG APPLE"), and PEERLESS MIAMI AVENUE,
INC., ("MIAMI AVENUE") Florida corporations, whose address is 9471 Baymeadows
Road, Suite 106, Jacksonville, Florida 32256, (herein collectively referred to
as "PEERLESS").

                                    RECITALS

         WHEREAS, PEERLESS is the owner and operator of several construction and
demolition debris transfer stations and material recovery facilities located in
Dade County, Florida (the "FACILITIES") and the Rolloff Container Business and a
Portable Toilet Business (the "BUSINESSES"); and

         WHEREAS, PEERLESS and STAR have this day entered into three (3) Asset
Purchase Agreements for the purchase and sale of certain Assets, as defined in
the Asset Purchase Agreements which include the Facilities and the assets
required to operate the Businesses; and

         WHEREAS, PEERLESS at the present time no longer wishes to continue the
operation of the Facilities and the Businesses; and

         WHEREAS, STAR has agreed to operate the Facilities and the Businesses
from the date of execution of this Agreement ("Interim Operating Period") until
the delivery of the Audited Financial Statements required pursuant to the Letter
Agreement between the parties dated September 26, 2000 (a copy of which is
attached hereto); and

         WHEREAS, PEERLESS has all business, occupation and operating permits
and licenses and/or authorizations necessary for operation of the Facilities and
the Business ("Permits"); and

         WHEREAS, STAR has agreed to operate the Facilities and the Businesses;
and

         WHEREAS, STAR has experience in the management and operation of
construction and demolition debris Facilities, Rolloff Business and the Portable
Toilet Business; and

         WHEREAS, PEERLESS desires that STAR operate the Facilities and
Businesses pursuant to the terms and conditions specifically set forth herein;
and

                                       1
<PAGE>   2

         STAR desires to operate the Facilities and Businesses pursuant to the
terms and conditions specifically set forth herein;

         NOW THEREFORE, in consideration of the mutual agreements between the
parties and other good and valuable consideration, the parties hereto agree as
follows:

         1.       RECITALS. The above recitals are true and correct and are
                  incorporated herein by reference.

         2.       COMMENCEMENT DATE. STAR agrees to commence management and
                  operation of the Facilities and Businesses on October 30, 2000
                  (the "Commencement Date").

         3.       DAY TO DAY OPERATIONS. STAR shall operate the Facilities and
                  Businesses on a day to day basis using commercially reasonable
                  efforts and in compliance with all applicable federal, state
                  and local laws and regulations. STAR may in its sole
                  discretion change the prices charged at the Facilities and by
                  the Businesses for the services provided. STAR may also
                  increase the volume of material collected and received.
                  PEERLESS will allow STAR to use all of the Assets and
                  equipment which will be sold under the Asset Purchase
                  Agreements. In connection with its duties hereunder, STAR will
                  provide any other equipment it deems necessary to operate the
                  Facilities and Businesses to the extent allowed under the
                  currently existing or modified permits and agreements.
                  PEERLESS shall have the right to observe the day to day
                  operations of the Facilities and Businesses. STAR shall have
                  the right, without any input, or consent of PEERLESS, to
                  create a budget, hire and fire (with notification to PEERLESS)
                  employees, collect accounts receivables, establish operating
                  hours and contract for services with third parties as STAR may
                  deem necessary in its sole discretion. STAR shall be
                  responsible for all expenses incurred in the operation of the
                  Facilities and Businesses and shall be entitled to retain all
                  revenues generated from the Facilities and Businesses
                  operation during the term of this Agreement. PEERLESS will
                  provide STAR with all of its customer lists, books and records
                  ("business records") required to operate the Facilities and
                  Businesses; any confidential business records provided to STAR
                  shall be maintained as confidential. PEERLESS shall provide
                  STAR with copies of all correspondence to and from any
                  regulatory agency related to the permitting of the Facilities
                  and Businesses and provide STAR with weekly reports of the
                  status of permitting.

         4.       EMPLOYEES. STAR shall be responsible for hiring and firing all
                  employees necessary to operate the Facilities and Businesses.
                  The employees shall be employees of PEERLESS, or an employee
                  leasing company, but the compensation shall be the
                  responsibility of STAR. STAR shall be responsible for the
                  payment of local, state and federal taxes required for such
                  employees from the commencement date.

                                       2
<PAGE>   3

         5.       PERMITS AND PERFORMANCE BOND. Unless this Agreement is
                  terminated as provided in SECTION 8 hereof, PEERLESS shall be
                  responsible for maintaining existing Permits for the
                  Facilities and Businesses. STAR agrees to operate the
                  Facilities and Businesses in compliance with terms of the
                  Permits as they are currently in effect and all applicable
                  federal, state and local laws, rules and regulations. PEERLESS
                  shall be responsible for obtaining the modification to Dade's
                  Material Recovery Facility ("MRF") permit for tract 55 to
                  allow for the construction and operation of the MRF utilizing
                  a "Simplicity" picking line system and modifying the financial
                  assurance calculation to delete the existing stock pile of RSM
                  and reduce the volume of construction and demolition debris
                  stored on site.

         6.       DISTRIBUTION OF REVENUE. As the operator of the Facilities and
                  Businesses, STAR shall receive all fees generated from the
                  operation of the Facilities and Businesses after the
                  Commencement Date.

         7.       OPERATING EXPENSES AND INSURANCE. STAR is responsible, after
                  the Commencement Date, for paying all expenses associated with
                  the day to day operations of the Facilities and Businesses
                  which shall include but not be limited to rent payments,
                  utility charges such as electricity, water, phone service,
                  maintenance of the equipment, maintenance of the property,
                  employee costs and expenses, advertising, accounting and
                  bookkeeping fees. The rent payments shall include, but not be
                  limited to, $9,000.00 per month for the DADE MRF. PEERLESS
                  will at STAR'S expense continue its General Liability and
                  Property Damage insurance on the Facilities and Businesses
                  property in the amount of One Million Dollars ($1,000,000) per
                  occurrence. STAR shall be named as an additional insured.
                  PEERLESS will pay directly its equipment notes for the
                  equipment used in the operation of the business and STAR will
                  advance PEERLESS such amounts.

         8.       TERM. The term of this Agreement shall be for the Period
                  commencing upon the Commencement Date and extending to the
                  earlier of (i) the termination of the Letter Agreement; (ii)
                  the termination of the Asset Purchase Agreement; or (iii) the
                  Closing; The term "Closing" shall have the meaning accorded to
                  it under the Asset Purchase Agreements and the Letter
                  Agreement, the terms of which are incorporated herein by this
                  reference.

                  Upon the expiration of the term of this Agreement, STAR shall
                  immediately surrender the Facilities and the assets relating
                  to the Businesses in good order and in the same condition as
                  at the commencement of this Agreement. In the event STAR does
                  not purchase the Assets pursuant to the Asset Purchase
                  Agreement, STAR agrees that it shall deliver to PEERLESS all
                  surveys, reports, permits (or applications for permits), tests
                  or monitoring information and all other documents relating to
                  the Facilities and the assets relating to the Businesses and
                  any permits necessary for the Facilities and the assets
                  relating to the Businesses, in the

                                       3
<PAGE>   4

                  possession of STAR or third parties retained or employed by
                  STAR. STAR agrees to fully cooperate with PEERLESS to obtain
                  any of the foregoing from such third parties (including
                  providing written authorization to such third parties to
                  release any and all such information). STAR agrees to
                  indemnify and hold PEERLESS harmless against any injury or
                  damage by reason of its management, operation or inspection of
                  the Facilities and Businesses (as contemplated under the Asset
                  Purchase Agreement) as well as any liens placed on the
                  Facilities and the assets relating to the Businesses for
                  failure of STAR to pay any third parties. Notwithstanding the
                  foregoing, STAR shall have no indemnification obligation or
                  liability for any occurrence, act or omission of PEERLESS, its
                  shareholders, directors, officers, employees or agents, which
                  occurrence, act or omission occurred prior to the Commencement
                  Date by reason of PEERLESS'S ownership, management and
                  operation of the Facilities and Businesses.

         9.       INDEMNIFICATION, WAIVER AND RELEASE.

                  A. STAR'S INDEMNIFICATION. STAR will indemnify PEERLESS, its
                  shareholders, officers, directors, employees and agents,
                  against and hold PEERLESS, its shareholders, officers,
                  director, agents and employees harmless from any and all
                  demands, claims, causes of action, fines and penalties,
                  damages (including consequential damages), losses,
                  liabilities, judgments and expenses (including, without
                  limitation, attorney's fees and court costs) incurred in
                  connection with or arising from or related to STAR'S actions,
                  representations and warranties under this Agreement or
                  incurred as a result of STAR'S operation of the Facilities and
                  Businesses after the effective date of this Agreement or in
                  connection with other events or conditions which occur after
                  the effective date of this Agreement and which relate to acts
                  or omissions of STAR, its agents, employees, guests and
                  invitees, excluding therefrom only such loss as is proximately
                  caused by the act, omission or negligence of PEERLESS. If any
                  action or proceeding is brought against PEERLESS, its
                  employees or agents, by reason of any such claims, STAR, upon
                  notice from PEERLESS, will defend the claim at STAR'S expense
                  with counsel reasonably satisfactory to PEERLESS. This
                  paragraph shall survive the expiration or earlier termination
                  of this Agreement.

                  B. PEERLESS' INDEMNIFICATION. PEERLESS will indemnify STAR,
                  its shareholders, officers, directors, employees and agents,
                  against and hold STAR, its shareholders, officers, directors,
                  agents and employees harmless from any and all demands,
                  claims, causes of action, fines and penalties, damages
                  (including consequential damages), losses, liabilities,
                  judgments and expenses (including, without limitation,
                  attorney's fees and court costs) incurred in connection with
                  or arising from or related to PEERLESS' actions,
                  representations and warranties under this Agreement or
                  incurred as a result of PEERLESS' operation of the Facilities
                  and Businesses prior to the effective date of this Agreement
                  or in connection with other events or conditions which occur

                                       4
<PAGE>   5

                  before the effective date of this Agreement and which relate
                  to acts or omissions of PEERLESS, its agents, employees,
                  guests and invitees, excluding therefrom only such loss as is
                  proximately caused by the act, omission or negligence of STAR
                  during the Agreement Term. If any action or proceeding is
                  brought against STAR, its employees or agents, by reason of
                  any such claims, PEERLESS, upon notice from STAR, will defend
                  the claim at PEERLESS' expense with counsel reasonably
                  satisfactory to STAR. This paragraph shall survive the
                  expiration or earlier termination of this Agreement.

         10.      GOVERNING LAW/VENUE. This Agreement shall be governed by and
                  construed in accordance of the laws of the State of Florida.
                  The forum for any legal action arising hereunder shall be in
                  Dade County, Florida.

         11.      ATTORNEY FEES AND COSTS. In the event a dispute arises
                  hereunder, the prevailing party shall have the right to
                  collect its reasonable attorney's fees and costs incurred in
                  connection with such dispute, whether in pretrial, trial, on
                  appeal or in bankruptcy, from the non-prevailing party.

         12.      FORCE MAJEURE. In the event an act of God, a strike,
                  governmental action or other significant work stoppage, beyond
                  the control of STAR, occurs which prevents STAR from
                  performing its duties hereunder, STAR shall be excused from
                  performing its duties herein for as long as practically
                  possible after the occurrence of the same or until the end of
                  the same unless such happening shall be directly caused by
                  STAR'S failure to comply with the Permits or its obligations
                  under this agreement. STAR shall notify PEERLESS as soon as
                  practically possible of a force majeure event.

         13.      AGREEMENT BINDING. The terms and conditions of this Agreement
                  shall be binding upon the successors and assigns of the
                  parties hereto.

         14.      SURVIVAL. Termination of this Agreement shall not affect the
                  rights or obligations of the parties which arose prior to the
                  termination.

         15.      NOTICES. All notices required hereunder shall be delivered to
                  each of the parties hereto at the address first written above
                  by certified, U.S. Mail, return receipt requested, by a
                  recognized overnight courier service, or by confirmed
                  facsimile delivery. A copy of all notices sent to PEERLESS
                  shall also be sent to G. Stephen Manning, Esq., 9428
                  Baymeadows Road, Suite 625, Jacksonville, Florida 32256, and a
                  copy of all notices sent to STAR shall also be sent to Samuel
                  G. Weiss, Esq., Weiss & Federici LLP., 30 Main Street, Port
                  Washington, New York 11050.

         16.      NO JOINT VENTURE OR PARTNERSHIP. Notwithstanding anything
                  contained herein to the contrary, neither this Agreement nor
                  the operations required hereby shall be

                                       5
<PAGE>   6

                  deemed to create any joint venture, partnership or any other
                  business enterprises between STAR and PEERLESS.

         17.      ASSIGNMENT. Neither STAR nor PEERLESS may assign this
                  Agreement in whole or in part to any other person or entity,
                  except that STAR shall have the right to assign its
                  performance obligations under this Agreement to one or more of
                  its wholly owned subsidiaries. Not withstanding any such
                  assignment STAR shall remain responsible for its performance
                  obligations under this agreement.

         18.      CONSTRUCTION. This Agreement shall not be construed more
                  strictly against one party or the other, it being recognized
                  that both STAR and PEERLESS have contributed substantially and
                  materially in preparing this Agreement.

         19.      COUNTERPARTS. This Agreement may be executed in several
                  counterparts and all so executed shall constitute one
                  Agreement, binding on all the parties hereto even though all
                  the parties are not signatories to the original or the same
                  counterpart.

         IN WITNESS WHEREOF, the parties hereto have set their hands and seals
the day and year first written above.

         The undersigned, STAR SERVICES GROUP, INC., a Florida corporation,
joins in this Agreement to guarantee the full performance of STAR in any and all
obligations of STAR under this Agreement.

                                                STAR SERVICES GROUP, INC.

                                                By:
                                                   -----------------------------
                                                Its:
                                                    ----------------------------

                                                PEERLESS DADE, INC.
                                                PEERLESS BIG APPLE, INC.
                                                PEERLESS MIAMI AVENUE, INC.

                                                By:
                                                   -----------------------------
                                                Its:
                                                    ----------------------------

                                       6<PAGE>   1

                                                                   Exhibit  10.8

                        RIGHT OF FIRST REFUSAL AGREEMENT

THIS RIGHT OF FIRST REFUSAL AGREEMENT ("Agreement") made this _____ day of
__________, 2000 by and between STAR SERVICES GROUP, INC., a Florida
corporation, or its assigns ("Star Services" or "Buyer") and NAMCO METALS
MANAGEMENT, INC., a Florida corporation ("NAMCO" or "Seller").

                               W I T N E S S E T H

         WHEREAS, NAMCO Metals Management, Inc. ("NAMCO") is engaged in the
metal recycling business in and around the Miami-Dade County, Florida area and
operates a metals shredder located at 6990 N.W. 97th Avenue, Miami, Florida
("Business"); and

         WHEREAS, Star Services desires a right of first refusal to purchase
NAMCO and its Business and NAMCO desires to provide Star Services a right of
first refusal to purchase upon the terms and conditions hereinafter set forth.

         NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties and covenants set forth herein, the parties
intending to be legally bound, agree as follows:

         SECTION 1. RIGHT OF FIRST REFUSAL. Subject to the negotiation of a
mutually acceptable stock purchase agreement, Star Services shall, for a period
of forty eight (48) months from the date of execution of this Agreement, have a
right of first refusal to purchase all of the common stock and assets of NAMCO.
Should NAMCO receive a bona fide and good faith offer from a third party to
purchase substantially all of its assets and/or common stock ("Offer") it shall
communicate, in writing, the purchase offer to Star Services which shall have
fifteen (15) days from its receipt of the Offer to exercise its right of first
refusal to purchase NAMCO's assets and/or stock upon the same terms and
conditions as the Offer. The terms and conditions of the Offer must not be
designed so as to defeat the intent of the right of first refusal. In the event
that Star Services does not notify NAMCO, in writing, of its intent to exercise
said right of first refusal, then NAMCO may proceed to sell its assets and/or
stock to the third party at the price and upon the terms and conditions of the
Offer.

         SECTION 2. CONSIDERATION FOR RIGHT OF FIRST REFUSAL. The consideration
for the NAMCO right of first refusal shall be as follows:

         2.1 STOCK CONSIDERATION. Star Services shall, upon the closing of its
other related asset purchase transactions with Peerless Dade, Inc., Peerless Big
Apple, Inc. and Peerless Miami Avenue, Inc. ("Related Transactions"), transfer
Five Thousand (5,000) shares of fully paid, registered and nonassessable common
shares of Star Services Group, Inc. stock ("Stock Consideration") to the
individual shareholders of NAMCO in accordance with their ownership interest as
designated by the President of NAMCO at the closing of the Related Transactions.
The Stock Consideration shall be delivered

<PAGE>   2

within fifteen (15) business days of the closing of the Related Transactions to
Derek Parrish of Blount, Parrish & Company of Montgomery, Alabama ("Parrish") as
authorized agent for the NAMCO shareholders for the receipt of the Stock
Consideration from the Buyer's transfer agent. The shares of stock will be
freely tradeable as of January 2, 2001. It is understood and agreed by the
parties hereto that the sale or transfer of the Stock Consideration by the
individual shareholders of NAMCO will be restricted only as set forth above (the
"Restricted Stock"). The share certificates received for the Restricted Stock
shall bear a restrictive legend making said shares subject to the terms and
conditions of this Section.

         SECTION 3. DEFAULT BY STAR SERVICES. If Star Services fails to perform
any of the terms, covenants, conditions or obligations of this Agreement or in
the event of any breach or default by Star Services under this Agreement, or any
other documents executed or delivered in connection with the transactions
contemplated by this Agreement, NAMCO shall have all rights and remedies that
may be available to NAMCO at law or in equity. No waiver by NAMCO of any such
breach or default, whether intentional or not, shall be deemed to extend to any
prior or subsequent breach or affect in any way any rights arising by virtue of
any prior or subsequent breach or default. Star Services shall not be deemed in
breach or default under this Agreement until written notice of the breach or
default has been given to Star Services and Star Services has failed to remedy
the breach or default within ten (10) days of the receipt of said notice from
NAMCO or its designated representative or counsel.

         SECTION 4. GENERAL.

         (a) This Agreement embodies the entire agreement of the parties in
relation to the subject matter hereof, and all prior agreements have been merged
into this Agreement. There are no understandings or agreements, verbal or
otherwise, in relation thereto, existing or that are enforceable between the
parties except as hereinabove expressly set forth. No change or modification of
this Agreement shall be valid unless the same shall be in writing, signed by
both of the parties hereto, and incorporated by reference herein;

         (b) Nothing in this Agreement, whether expressed or implied, is
intended to confer any rights or remedies under or by reason of this Agreement
on any persons other than the parties to it and their respective heirs,
executors, administrators, successors and assigns, nor is anything in this
Agreement intended to relieve or discharge the obligation or liability of any
third persons to any party to this Agreement, nor shall any provision give any
third persons any right of subrogation over, or action against any party to this
Agreement.

         (c) The rights and remedies to the parties to this Agreement in the
event of default are cumulative, and the exercise of any right or remedy shall
be without prejudice to the enforcement of any other right authorized by law, in
equity or this Agreement. The pursuit of any remedy provided in this Agreement
shall not constitute a forfeiture or waiver of any amount due for a defaulting
party or the right to maintain an action for any damages accruing for breach.
Forbearance to enforce one or more of the remedies provided by this Agreement,
on an event of default, shall not be deemed or construed to constitute a waiver
of the right to any remedy for that default.

                                     Page 2
<PAGE>   3

         (d) The subject headings of the Sections of this Agreement are included
for purposes of convenience only, and shall not affect the construction or
interpretation of any of its provisions.

         (e) Each party to this Agreement agrees to pay its respective attorney,
accounting or other fees, plus all costs arising out of the negotiation and
preparation of this Agreement.

         (f) The validity and interpretation of this Agreement and of each and
every clause, term and part hereof shall be governed by and construed in
accordance with the laws of the State of Florida, without giving effect to
conflict of laws.

         (g) The parties represent to each other that no broker or finder has
been employed by any of them in connection with this transaction. Each party
agrees to indemnify the other against all loss, cost, damage or expense arising
out of claims for fees or commission of brokers or finders employed or alleged
to have been employed by such party.

         (h) All notices, requests, demands or other communications required or
permitted under this Agreement shall be sent by overnight mail, next day
delivery and fax, to Seller or Owner at their respective addresses appearing on
the signature page hereof and to Buyer at the addresses set forth below, and
notice shall be deemed given as of the date the notice is posted:

         Seller:                            Kevin R. Kohn
                                            President
                                            NAMCO Metals Management, Inc.
                                            9471 Baymeadows Road, Suite 106
                                            Jacksonville, Florida 32256
                                            FAX: (904) 739-0306

         Buyer:                             Patrick F. Marzano
                                            President
                                            Star Services Group, Inc.
                                            2075 North Powerline Road
                                            Pompano Beach, FL 33069
                                            FAX: (954) 970-0557

         with a copy to:                    Samuel G. Weiss, Esq.
                                            c/o Weiss & Federici LLP
                                            30 Main Street
                                            Port Washington, NY 11050
                                            FAX: (516) 944-7630

         (i) If any provision hereof is held or finally determined to be invalid
or unenforceable to any extent for any reason, to the extent that such provision
is valid and enforceable, the arbiters or court of competent jurisdiction, as
the case may be, shall construe and interpret said provision to provide for
maximum validity and enforceability. If any provision of this Agreement is
invalid, illegal or unenforceable, the balance of this Agreement shall remain in
effect.

                                     Page 3
<PAGE>   4

         (j) In connection with any action or dispute or dispute arising under
this Agreement the prevailing party shall be entitled to an award of its
expenses including reasonable attorney fees and disbursements incurred or paid
before and at trial of any appellate proceedings.

         (k) This Agreement shall not be assigned by either party without the
prior written consent of the other party. Notwithstanding the foregoing, it is
agreed that Buyer may assign this Agreement to a subsidiary. However, no such
assignment shall release Buyer from its obligations hereunder without the
specific release thereof by Seller.

         (l) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.

         SECTION 5. BENEFIT AND DURATION. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
administrators, executors, successors and assigns. However, any assignment by
Seller must be agreed to in writing by Buyer. This Agreement shall continue in
effect until all the obligations, duties and warranties as specified herein,
shall be fully performed and satisfied.

IN WITNESS WHEREOF, the parties hereto have set their hands on the day and year
first above written.

Attest:                                           BUYER:
                                                  STAR SERVICES GROUP, INC.

BY:                                               BY:
   ----------------------------------                ---------------------------
   Corporate Secretary:                              Patrick F. Marzano
                                                     Its President

Attest:                                           SELLER:
                                                  NAMCO METALS MANAGEMENT, INC.

BY:                                               BY:
   ----------------------------------                ---------------------------
   Corporate Secretary:                              Kevin R. Kohn
                                                     Its President

                                     Page 4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}]]