EXHIBIT 4.31

                          SECURITIES PURCHASE AGREEMENT

         Securities Purchase Agreement (the "Agreement"),  dated effective as of
March 24, 2000, by and among ValueStar Corporation,  a Colorado corporation (the
"Company"),  and each of the purchasers set forth on the signature  pages hereto
(individually, a "Purchaser" and, collectively, the "Purchasers").

         WHEREAS,  the Company  proposes to issue and sell to the Purchasers for
cash, or in exchange for cancellation or conversion of outstanding indebtedness,
or in lieu of  certain  callable  warrant  proceeds,  an  aggregate  maximum  of
2,500,000 shares (individually,  a "Share" and,  collectively,  the "Shares") of
common stock,  par value $0.00025 per share, of the Company (the "Common Stock")
and warrants to purchase  shares of Common Stock (as further  described  below);
and

         WHEREAS, the Company, among other things, has agreed to provide certain
registration   rights  under  the  Securities  Act  of  1933,  as  amended  (the
"Securities  Act") with  respect to the Shares and the  warrants  that are being
issued to the Purchasers pursuant to this Agreement.

         NOW THEREFORE,  in  consideration  of the above recitals and the mutual
covenants set forth herein, the parties hereto agree as follows:

         1. Sale of Stock and Delivery of Warrants; Closing.

                  (a)  Purchase  and Sale.  Subject to the terms and  conditions
hereof,  the Company  shall issue and sell to each of the  Purchasers,  and each
Purchaser,  severally, shall purchase from the Company, the number of Shares set
forth opposite such Purchaser's name on Schedule 1 hereto at a purchase price of
$5.85 per Share for an aggregate  purchase  price set forth on such  Schedule 1.
The Company shall deliver to each Purchaser warrants to purchase, at an exercise
price of $5.85 per  share,  such  number  of  shares  of Common  Stock set forth
opposite such Purchaser's name on Schedule 1 hereto (the "Warrants"). The shares
of Common Stock issued or issuable upon exercise of the Warrants are hereinafter
referred to as the "Warrant  Shares."  The number of Warrant  Shares shall equal
ten  percent  (10%) of the  Shares  of Common  Stock  purchased  hereunder.  The
Warrants shall be in the form of Exhibit A hereto.

                  (b) First Closing.  The first closing of the purchase and sale
of the Shares and Warrants (the "First Closing") shall take place at the offices
of Bay Venture Counsel, LLP, 1999 Harrison Street, Suite 1300, Oakland, CA 94556
at 10:00 A.M. on March 17, 2000, or such later date on which the  conditions set
forth in Sections  4(a) and 5(a)  hereof  shall have been  satisfied  or waived;
provided,  however,  that the First Closing, in no event, shall occur later than
March 22, 2000. The date of the First Closing shall be  hereinafter  referred to
as the "First Closing Date".

                  (c) Second  Closing.  The Second  Closing of the  purchase and
sale of the Shares and Warrants (the "Second  Closing")  shall take place at the
offices of the  Company,  on or before  April 4, 2000 such earlier date on which
the  conditions  set  forth in  Section  4(b) and 5(b)  hereof  shall  have been
satisfied or waived, provided that:



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Purchasers participating in the Second Closing shall become a party to and agree
to be bound by the  provisions  of this  Agreement  and each  other  Transaction
Documents  (as  defined  below).  The  date  of  the  Second  Closing  shall  be
hereinafter referred to as the "Second Closing Date", the First Closing Date and
the Second  Closing Date are each referred to  individually  as a "Closing Date"
and, collectively as the "Closing Dates".

                  (d) Delivery.  At each  Closing,  the Company shall deliver to
each Purchaser a stock  certificate  representing  the Shares  purchased by such
Purchaser and the Warrants to be delivered to such Purchaser, against payment of
the purchase  price therefor by check,  payable to the order of the Company,  by
wire transfer of immediately  available  funds to the Company in accordance with
the  Company's  wiring  instructions,   or  by  cancellation  or  conversion  of
indebtedness  or  in  lieu  of  certain  callable  warrant  proceeds,   or  some
combination  thereof.  In addition,  the Company shall deliver to each Purchaser
such other agreements, documents and certificates as specified in this Agreement
or as may reasonably be requested by such Purchaser.

         2. Representations and Warranties of Purchasers. Each of the Purchasers
represents and warrants, severally, to the Company as follows:

                  (a)  Authorization.  The  Purchaser  has the  full  power  and
authority to execute and deliver this  Agreement and to perform its  obligations
hereunder.  The  execution  and delivery  of, and the  performance  under,  this
Agreement by the Purchaser will not conflict with any rule, regulation, judgment
or agreement applicable to the Purchaser.

                  (b) Investment Purpose. The Purchaser is purchasing the Shares
and acquiring the Warrants,  and will purchase the Warrant Shares (together with
the Shares and the Warrants, the "Securities"),  for investment purposes and not
with a present view to, or for sale in connection  with, a distribution  thereof
within the meaning of the Securities Act. The Purchaser understands that it must
bear the economic risk of this  investment  indefinitely,  unless the Securities
are  registered  pursuant  to  the  Securities  Act  and  any  applicable  state
securities or blue sky laws or an exemption from such registration is available.

                  (c) Reliance On Exemptions. The Purchaser understands that the
Securities are being offered and sold in reliance upon specific  exemptions from
the registration  requirements of Federal and state securities laws and that the
Company  is  relying  upon the truth and  accuracy  of the  representations  and
warranties  of the  Purchaser  set  forth  herein  in  order  to  determine  the
availability  of such exemptions and the eligibility of the Purchaser to acquire
the Securities.

                  (d)   Information.   The  Purchaser  has  been  furnished  all
documents relating to the business, finances and operations of the Company which
the Purchaser  requested  from the Company.  The Purchaser has been afforded the
opportunity  to ask questions of the Company's  representatives  concerning  the
Company in making the decision to purchase the Shares and acquire the  Warrants,
and such questions have been answered to its satisfaction.  However, neither the
foregoing nor any other due diligence  investigation  conducted by the Purchaser
or on  its  behalf  shall  limit,  modify  or  affect  the  representations  and
warranties  of the  Company in Section 3 of this  Agreement  or the right of the
Purchaser to rely thereon.



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                  (e)  Governmental  Review.  The Purchaser  understands that no
Federal  or state  agency or any other  government  or  governmental  agency has
passed upon or made any recommendation or endorsement of the Securities.

                  (f)   Purchaser's   Qualifications.   The   Purchaser   is  an
"accredited  investor"  as  defined  in  Rule  501  under  Regulation  D of  the
Securities  Act  ("Regulation  D"). The Purchaser is capable of  evaluating  the
merits and risks of an investment in the Securities.

                  (g) Restrictions on Transfer.  The Purchaser  understands that
it may not transfer any of the Securities  unless such Securities are registered
under  the  Securities  Act  or  unless  an  exemption  from   registration  and
qualification requirements are available under the Securities Act and applicable
state securities laws. The Purchaser understands that certificates  representing
the Shares,  the Warrants,  the Warrant Shares and shares of Common Stock issued
pursuant  to  Section  4 of  this  Agreement  shall  bear  the  following,  or a
substantially similar, legend until such time as they have been registered under
the  Securities Act or otherwise may be sold under Rule 144 under the Securities
Act:

         "THE  SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE  HAVE  NOT  BEEN
         REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR QUALIFIED
         UNDER  ANY  STATE  SECURITIES  LAW,  AND MAY NOT BE SOLD,  TRANSFERRED,
         ASSIGNED OR  HYPOTHECATED  UNLESS  THERE IS AN  EFFECTIVE  REGISTRATION
         STATEMENT  UNDER  SUCH ACT  COVERING  SUCH  SECURITIES,  OR THE  HOLDER
         RECEIVES  AN  OPINION  OF  COUNSEL  FOR THE  HOLDER  OF THE  SECURITIES
         SATISFACTORY  TO  THE  COMPANY   STATING  THAT  SUCH  SALE,   TRANSFER,
         ASSIGNMENT  OR  HYPOTHECATION  IS  EXEMPT  FROM  THE  REGISTRATION  AND
         PROSPECTUS  DELIVERY  REQUIREMENTS  OF SUCH  ACT AND THE  QUALIFICATION
         REQUIREMENTS UNDER STATE LAW."

         The Company  shall be entitled  to enter stop  transfer  notices on its
         stock  books with  respect to the Shares  until the  conditions  as set
         forth  in the  legend  above  with  respect  to the  transfer  of  such
         securities have been met.

                  (h) Residence. The Purchaser is a resident of the jurisdiction
set forth under its name on the signature pages hereto.

                  (i) Investment Experience.  The Purchaser has experience as an
investor  in  securities  of  Internet - related and  technology  companies  and
acknowledges  that it is able to fend for itself,  can bear the economic risk of
its  investment,  and has such knowledge and experience in financial or business
matters that it is capable of evaluating  the merits and risks of the investment
in the Securities. If other than an individual, the Purchaser also represents it
has not been organized for the purpose of acquiring the Securities.



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         3.  Representations and Warranties of the Company.  Except as set forth
on  a  Schedule  of  Exceptions  attached  hereto  and  incorporated  herein  by
reference, the Company represents and warrants to each Purchaser as of the First
Closing as follows:

                  (a) Corporate Existence and Authority.

                           (i) The Company (i) is a corporation  duly organized,
validly existing, and in good standing under the laws of Colorado;  (ii) has all
requisite  corporate  power and  authority  to own its  assets  and carry on its
business  as now  conducted;  and  (iii)  is  qualified  to do  business  in all
jurisdictions  in which the  nature of its  business  makes  such  qualification
necessary and where failure to so qualify would have a material  adverse  effect
in the business, assets, financial condition, results of operations,  affairs or
prospects  of  the  Company  of any of its  subsidiaries  (A  "Material  Adverse
Effect"). The Company has the corporate power and authority to execute, deliver,
and  perform  its  obligations  under  this  Agreement  to  which  it is,  or in
connection with the transactions contemplated hereby, may become, a party.

                           (ii)  ValueStar,  Inc., a California  corporation and
wholly owned subsidiary of the Company (the  "Subsidiary")  (i) is a corporation
duly  organized,  validly  existing,  and in good  standing  under  the  laws of
California;  (ii) has all  requisite  corporate  power and  authority to own its
assets and carry on its business as now conducted;  and (iii) is qualified to do
business in all  jurisdictions  in which the nature of its  business  makes such
qualification  necessary  and where  failure to so qualify would have a Material
Adverse Effect.

                  (b) Financial  Statements and Reports.  The Company has timely
filed all required forms, reports, statements and documents with the SEC, all of
which have complied in all material respects with all applicable requirements of
the Exchange Act of 1934, as amended (the  "Exchange  Act"),  and the Securities
Act of 1933, as amended (the "Securities  Act"), as the case may be. The Company
has delivered or made available to each  Purchaser  true and complete  copies of
(i) the  Company's  Annual  Report on Form 10-KSB for the fiscal year ended June
30, 1999, (ii) its proxy statement relating to the Company's annual stockholders
meeting held November 19, 1999, (iii) all other forms,  reports,  statements and
documents  filed by the Company  with the SEC pursuant to the Exchange Act since
June 30, 1999, and (iv) all reports,  statements and other information  provided
by the Company to its stockholders since January 1, 1999 (collectively, the "SEC
Reports").  As of their  respective  dates,  the SEC Reports did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements  therein,  in the light of
the  circumstances  under  which they were  made,  not  misleading.  Each of the
consolidated  financial  statements of the Company  included or  incorporated by
reference in the SEC Reports (including any such SEC Report filed after the date
of this Agreement until the First Closing) were prepared in accordance with GAAP
applied on a  consistent  basis  (except as otherwise  stated in such  financial
statements or, in the case of audited statements,  the related report thereon of
independent  certified  public  accounts),  and  present  fairly  the  financial
position and results of operations,  cash flows and of changes in  stockholders'
equity of the Company and its consolidated  subsidiaries as of the dates and for
the periods  indicated,  subject,  in the case of  unaudited  interim  financial
statements, to normal year-end audit adjustments,  and except that the unaudited
interim financial  statements do not contain all of the disclosures  required by
GAAP. Since June 30, 1999



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there has been no change in any of the  significant  accounting  (including  tax
accounting)  policies,  practices,  or  procedures  of the Company or any of its
consolidated subsidiaries.  The Company is and has been subject to the reporting
requirements  of the Exchange Act and has timely filed with the SEC all periodic
reports  required to be filed by it pursuant thereto and all reports required to
be filed under Sections 13, 14 or 15(d) of the Exchange Act since June 30, 1999.

                  (c) Default. Except as disclosed on Schedule 3(c), neither the
Company nor the  Subsidiary is in default under any loan  agreement,  indenture,
mortgage,  security  agreement,  lease,  franchise,  permit,  license  or  other
agreement or obligation to which it is a party or by which any of its properties
may be bound which default would cause a Material Adverse Effect. The Company is
paying its debts as they become due.

                  (d)  Authorization  and  Compliance  with  Laws  and  Material
Agreements.  Except as set forth on Schedule 3(d),  the execution,  delivery and
performance  by the  Company  of  this  Agreement  have  been  or  prior  to the
consummation  of such  transactions  will be duly  authorized  by all  requisite
action on the part of the  Company  and do not and will not  violate  any of the
Company's   Certificate   of   Designations,   or  the  Company's   Articles  of
Incorporation  or  Bylaws  or any law or any  order of any  court,  governmental
authority or arbitrator,  and do not and will not upon the  consummation  of the
transactions  contemplated  hereby  conflict  with,  result  in a breach  of, or
constitute a default  under,  or result in the  imposition  of any lien upon any
assets  of the  Company  pursuant  to the  provisions  of  any  loan  agreement,
indenture,  mortgage,  security agreement,  franchise,  permit, license or other
instrument or agreement by which the Company or any of its  properties is bound.
Except as set forth on Schedule 3(d), no authorization,  approval or consent of,
and no filing or registration with, any court,  governmental  authority or third
person is or will be necessary for the execution, delivery or performance by the
Company of this Agreement or the validity or  enforceability  thereof.  All such
authorizations,  approvals,  consents,  filings and  registrations  described in
Schedule 3(d) have been obtained. The Company is not in violation of any term of
its Articles of Incorporation or Bylaws or any contract,  agreement, judgment or
decree and is in full compliance with all applicable laws, regulations and rules
where such violation would cause a Material Adverse Effect.  All officers of the
Company  to the  best  of  their  knowledge  have  complied  with  all  material
applicable  laws,  regulations  and  rules  in the  course  and  scope  of their
employment with the Company.

                  (e) Litigation and Judgments.  Except as disclosed on Schedule
3(e), there is no suit, action,  proceeding or investigation  pending or, to the
best  knowledge of the Company,  threatened  against or affecting the Company or
the Subsidiary, the outcome of which, in the reasonable judgment of the Company,
is likely to have a Material Adverse Effect, nor is there any judgment,  decree,
injunction,   ruling  or  order  of  any  court,  governmental,   regulatory  or
administrative department, commission, agency or instrumentality,  arbitrator or
any other person  outstanding  against the Company or the Subsidiary  having, or
which is reasonably likely to have, a Material Adverse Effect.

                  (f)  Rights  in  Properties;  Liens.  Except as  disclosed  on
Schedule 3(f), the Company and the Subsidiary have good and marketable  title to
all properties and



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assets reflected on their balance sheets,  and none of such properties or assets
is subject to any liens.  The  Company and the  Subsidiary  enjoy  peaceful  and
undisturbed  possession  under all leases  necessary  for the operation of their
other  properties,  assets,  and  businesses  and all such  leases are valid and
subsisting  and are in full force and effect.  There exists no default under any
provision of any lease which would permit the lessor thereunder to terminate any
such lease or to exercise  any rights under such lease  which,  individually  or
together with all other such defaults, could have a Material Adverse Effect. The
Company  and the  Subsidiary  have the right to use all of the  patents,  patent
rights,  patent applications,  licenses,  inventions,  trade secrets,  know-how,
proprietary techniques (including processes and substances), trademarks, service
marks,  trade names and copyrights (the  "Intellectual  Property")  necessary to
their business as presently  conducted,  and to the knowledge of the Company and
the  Subsidiary,  the Company's  and the  Subsidiary's  use of the  Intellectual
Property  does not  infringe  on the  rights  of any  other  person  where  such
infringement  would  not  have a  Material  Adverse  Effect.  To the best of the
Company's knowledge,  no other person is infringing the rights of the Company or
the Subsidiary in any of the Intellectual Property.  Neither the Company nor the
Subsidiary owe any  royalties,  honoraria or fees to any person by reason of its
use of the Intellectual Property.

                  (g)  Enforceability.  This Agreement,  when  delivered,  shall
constitute the legal, valid and binding  obligation of the Company,  enforceable
against the Company in accordance with its terms.

                  (h) Taxes.  Except as set forth on Schedule  3(h), the Company
and the Subsidiary have timely filed all tax returns (federal, state, and local)
required to be filed,  including,  without  limitation,  all income,  franchise,
employment,  property,  and sales  taxes,  and have timely paid all of their tax
liabilities, other than immaterial amounts and taxes that are being contested by
the  Company  or  the  Subsidiary  in  good  faith  by  appropriate  actions  or
proceedings  diligently  pursued,  and for which adequate reserves in conformity
with GAAP with respect  thereto have been  established.  Neither the Company nor
the  Subsidiary  know  of  any  pending  investigation  of  the  Company  or the
Subsidiary by any taxing  authority or pending but  unassessed  tax liability of
the Company or the Subsidiary, except as disclosed on Schedule 3(h). The Company
and the  Subsidiary  have made no presently  effective  waiver of any applicable
statute of limitations or request for an extension of time to file a tax return,
and  neither  the  Company  nor the  Subsidiary  are a party to any  tax-sharing
agreement.

                  (i)  Disclosure.  No  representation  or warranty  made by the
Company in this  Agreement  or in any of the  documents,  instruments,  or other
information  furnished  to the  Purchaser  by the  Company,  contains any untrue
statement of a material  fact or omits to state any material  fact  necessary in
order to make any statements  made therein not  misleading.  No  representation,
warranty, or statement made by the Company in this Agreement or in any document,
certificate,  exhibit or schedule  attached  hereto or thereto or  delivered  in
connection herewith or therewith,  contains or will contain any untrue statement
of a material  fact, or omits or will omit to state a material fact necessary to
make any statements made herein or therein not misleading. There is no fact that
materially and adversely affects the condition (financial or otherwise), results
of operations,  business,  properties, or prospects of the Company or any of its
Subsidiaries that has not been disclosed in the documents provided to Purchaser.



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                  (j)  Subsidiaries  and  Capitalization.  The  Company  has  no
Subsidiaries,  other than the Subsidiary.  All the issued and outstanding shares
of capital stock of the Company are duly authorized,  validly issued, fully paid
and  nonassessable.  The capitalization of the Company on the First Closing Date
is set  forth on  Schedule  3(j).  No  violation  of any  preemptive  rights  of
shareholders  of  the  Company  has  occurred  by  virtue  of  the  transactions
contemplated under this Agreement. There are no outstanding contracts,  options,
warrants, instruments, documents or agreements binding upon the Company granting
to any person or group of persons any right to purchase or acquire shares of the
Company's capital stock other than as set forth on Schedule 3(j).

                  (k)  Current  Locations.  Schedule  3(k)  identifies  (a)  the
Company's  principal place of business and chief executive  office,  (b) all the
locations  where the Company  maintains any books or records  relating to any of
its assets,  (c) all other  locations where the Company has a place of business,
and (d) each address  where any of the  Company's  assets are located.  Schedule
3(k) accurately indicates whether each such location is owned or leased, and, if
leased,  identifies the owner of such location. No person other than the Company
has  possession  of any material  amount of the assets of the Company  except as
disclosed on Schedule 3(k).

                  (l)  Investment   Company  Act.   Neither  the  Company,   the
Subsidiary nor any company controlling the Company or the Subsidiary is required
to be registered as an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.

                  (m) Public Utility  Holding  Company Act.  Neither the Company
nor the  Subsidiary  is a  "holding  company"  or a  "subsidiary  company"  of a
"holding company" or an "affiliate" of a "holding company" or a "public utility"
within  the  meaning of the  Public  Utility  Holding  Company  Act of 1935,  as
amended.

                  (n) Securities Laws. Assuming the truthfulness and accuracy of
each  Purchaser's  representations  and warranties in Section 2, the Company has
complied  with  or  is  exempt  from  the  registration   and/or   qualification
requirements of all federal and state  securities or blue sky laws applicable to
the issuance or sale of the Securities.

                  (o) No Labor Disputes.  Neither the Company nor the Subsidiary
is involved in any labor  dispute.  The Company is not a party to any collective
bargaining agreement, and there are no strikes or walkouts or union organization
of any of the Company's or the Subsidiary's employees threatened or in existence
and no labor contract is scheduled to expire during the term of this Agreement.

                  (p) Brokers. Except as described in Schedule 3(p), neither the
Company  nor  any of  its  shareholders  has  dealt  with  any  broker,  finder,
commission agent or other person in connection with the transactions  referenced
in or  contemplated  by  this  Agreement,  nor  is  the  Company  or  any of its
shareholders  under any  obligation  to pay any  broker's fee or  commission  in
connection with such transactions.

                  (q)  Insurance.  The amount and types of insurance  carried by
the



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Company  and  the  Subsidiary,   and  the  terms  and  conditions  thereof,  are
substantially  similar to the  coverage  maintained  by companies in the same or
similar business as the Company and the Subsidiary and similarly situated.

                  (r) Survival of Representations.  All representations  made by
the  Company in or under this  Agreement  shall be true and  accurate  as of the
First  Closing and shall survive the First Closing for a period of two (2) years
thereafter  (except for those changes  contemplated  in and provided for by this
Agreement).

         4. Conditions to Obligations of the Purchasers at the Closings.

                  (a) First Closing. The obligation of each Purchaser purchasing
Shares at the First  Closing to  purchase  such  Shares  shall be subject to the
fulfillment  on or prior to the First Closing Date of the following  conditions,
any of which may be waived by such Purchaser:

                           (i) Certificates. The Company shall have delivered to
each such Purchaser a duly executed certificate  representing the Shares and the
Warrants issuable to such Purchaser.

                           (ii)  Representations and Warranties;  Performance of
Obligations. The representations and warranties of the Company set forth in this
Agreement  shall be true and correct when made, and shall be true and correct on
the First  Closing  Date with the same force and effect as if they had been made
on and as of said date, except for  representations  and warranties made as of a
specific date which shall be true and correct as of such date. The Company shall
have  performed,  satisfied and complied  with all  obligations  and  conditions
required to be performed  or observed by it under this  Agreement on or prior to
the First Closing Date.

                           (iii)  Consents and Waivers.  The Company  shall have
made  all  filings  and  obtained  any  and  all  consents  (including,  without
limitation,   all   governmental   or   regulatory   consents),   approvals   or
authorizations, permits and waivers necessary or appropriate for consummation of
the transactions contemplated by this Agreement.

                           (iv) No Litigation or Legislation.  No statute, rule,
regulation, decree, ruling or injunction shall have been enacted or entered, and
no litigation, proceeding, government inquiry or investigation shall be pending,
which challenges,  prohibits or restricts, or seeks to prohibit or restrict, the
consummation of the transactions contemplated by this Agreement, or restricts or
impairs the ability of the Purchasers to own an equity interest in the Company.

                           (v)  Compliance  Certificate.  The Company shall have
delivered  to the  Purchasers  a  certificate,  executed by the Chief  Executive
Officer of the Company,  dated as of the First Closing  Date,  certifying to the
fulfillment of the conditions set forth in Sections  4(a)(ii),  (iii), (iv), (v)
and (vi) and such other matters as the Purchasers shall reasonably request.

                           (vi) Registration Rights Agreement. The Company shall
have executed and delivered a Registration Rights Agreement with such Purchasers
in form and substance  attached hereto as Exhibit B and  incorporated  herein by
reference.



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                  (b)  Second   Closing.   The   obligation  of  each  Purchaser
purchasing Shares at the Second Closing to purchase such Shares shall be subject
to the  fulfillment  on or prior to the  Second  Closing  Date of the  following
conditions, any of which may be waived by such Purchaser:

                           (i) Certificates. The Company shall have delivered to
each such Purchaser a duly executed certificate  representing the Shares and the
Warrants issuable to such Purchaser.

                           (ii)  Representations and Warranties;  Performance of
Obligations. The representations and warranties of the Company set forth in this
Agreement shall be true and correct when made. The Company shall have performed,
satisfied  and  complied  with all  obligations  and  conditions  required to be
performed  or  observed  by it under  this  Agreement  on or prior to the Second
Closing Date.

                           (iii)  Consents and Waivers.  The Company  shall have
made  all  filings  and  obtained  any  and  all  consents  (including,  without
limitation,   all   governmental   or   regulatory   consents),   approvals   or
authorizations, permits and waivers necessary or appropriate for consummation of
the transactions contemplated by this Agreement.

                           (iv) No Litigation or Legislation.  No statute, rule,
regulation, decree, ruling or injunction shall have been enacted or entered, and
no litigation, proceeding, government inquiry or investigation shall be pending,
which challenges,  prohibits or restricts, or seeks to prohibit or restrict, the
consummation of the transactions contemplated by this Agreement, or restricts or
impairs the ability of the Purchasers to own an equity interest in the Company.

                           (v)  Compliance  Certificate.  The Company shall have
delivered to each such Purchaser a certificate,  executed by the Chief Executive
Officer of the Company,  dated as of the Second Closing Date,  certifying to the
fulfillment of the conditions  set forth in Sections  7(b)(ii),(iii),  (iv), (v)
and (vi) and such other matters as the Purchasers shall reasonably request.

                           (vi) Registration Rights Agreement. The Company shall
have  executed  and  delivered  the  Registration  Rights  Agreement  with  such
Purchasers.

         5. Conditions to Obligation of the Company at the Closings.

                  (a) First  Closing.  The obligation of the Company to sell and
issue the Shares and the Warrants to the  Purchasers  at the First Closing shall
be  subject  to the  fulfillment  on or prior to the First  Closing  Date of the
following conditions, any of which may be waived by the Company:

                           (i) Purchase  Price.  Each such Purchaser  shall have
delivered  the purchase  price for the Shares to be purchased by such  Purchaser
hereunder.



<PAGE>


                           (ii)    Representations    and    Warranties.     The
representations  and warranties  made by such Purchasers in this Agreement shall
be true and  correct  when  made,  and  shall be true and  correct  on the First
Closing  Date with the same  force and effect as if they had been made on and as
of said date.

                           (iii) No Litigation or Legislation. No Federal, State
or local statute, rule, regulation, decree, ruling or injunction shall have been
enacted  or  entered,  and no  litigation,  proceeding,  government  inquiry  or
investigation shall be pending, which challenges, prohibits, restricts, or seeks
to prohibit or restrict,  the consummation of the  transactions  contemplated by
this  Agreement  or the other  agreements  referred to herein,  or  restricts or
impairs the ability of any Purchaser to own an equity interest in the Company.

                  (b) Second Closing.  The obligation of the Company to sell and
issue the Shares and the Warrants to each  Purchaser at the Second Closing shall
be subject to the  fulfillment  on or prior to the  Second  Closing  Date of the
following conditions, any of which may be waived by the Company:

                           (i) Purchase  Price.  Each such Purchaser  shall have
delivered  the purchase  price for the Shares to be purchased by such  Purchaser
hereunder.

                           (ii)    Representations    and    Warranties.     The
representations  and warranties  made by such Purchasers in this Agreement shall
be true and  correct  when  made,  and shall be true and  correct  on the Second
Closing  Date with the same  force and effect as if they had been made on and as
of said date.

                           (iii) No Litigation or Legislation. No Federal, State
or local statute, rule, regulation, decree, ruling or injunction shall have been
enacted  or  entered,  and no  litigation,  proceeding,  government  inquiry  or
investigation shall be pending, which challenges, prohibits, restricts, or seeks
to prohibit or restrict,  the consummation of the  transactions  contemplated by
this  Agreement  or the other  agreements  referred to herein,  or  restricts or
impairs the ability of any Purchaser to own an equity interest in the Company.

         6. Miscellaneous.

                  (a) Remedies. Any person having any rights under any provision
of this  Agreement  will be entitled to enforce  such  rights  specifically,  to
recover damages by reason of any breach of any provision of this Agreement,  and
to exercise  all other  rights  granted by law,  which  rights may be  exercised
cumulatively and not alternatively.

                  (b)  Consent  to  Amendments.  Except as  otherwise  expressly
provided  herein,  the  provisions of this  Agreement  and any exhibit  attached
hereto may be amended and the Company take any action herein prohibited, or omit
to  perform  any act  herein  required  to be  performed  by it,  only if it has
obtained  the  written  consent of  Purchasers  holding at least  sixty-six  and
two-thirds  percent  (66-2/3%) or more of the outstanding  Shares.  No course of
dealing  between the Company and any  Purchaser or any delay in  exercising  any
rights  hereunder  or under the  Corporation's  Articles of  Incorporation  will
operate as a waiver of any rights of any such Purchaser.



<PAGE>


                  (c)  Successors  and Assigns.  Except as  otherwise  expressly
provided herein, all covenants and agreements  contained in this Agreement by or
on behalf of any of the  parties  hereto  shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so expressed
or not.

                  (d)  Severability.  Each provision of this Agreement  shall be
interpreted  in such manner as to be effective and valid under  applicable  law,
but if any  provision of this  Agreement is held to be  prohibited by or invalid
under  applicable law, such provision shall be ineffective only to the extent of
such  prohibition  or  invalidity,  without  invalidating  the remainder of this
Agreement.

                  (e)  Counterparts.  This  Agreement  may be executed in two or
more counterparts, any one of which need not contain the signatures of more than
one party,  but all such  counterparts  when taken together shall constitute one
and the same Agreement.

                  (f) Descriptive  Headings.  The  descriptive  headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.

                  (g) Notices.  Except as otherwise  expressly  provided herein,
all  communications  provided for hereunder shall be in writing and delivered or
mailed by the United States mails, certified mail, return receipt requested, (a)
if to  Purchaser,  addressed  to each  Purchaser  at the  address  specified  on
Schedule I hereto or to such  other  address  as such  Purchaser  may in writing
designate, or (b) if to the Company, addressed to the Company at the address set
forth below or to such other  address as the  Company may in writing  designate.
Notices  shall be deemed to have been validly  served,  given or delivered  (and
"the date of such  notice or words of similar  effect  shall mean the date) five
(5) days after  deposit in the  United  States  mails,  certified  mail,  return
receipt requested,  with proper postage prepaid,  or upon actual receipt thereof
(whether by noncertified mail, telecopy,  telegram,  facsimile, express delivery
or otherwise), whichever is earlier.

                                               If to Purchasers:
                                               To the Addresses set forth on the
                                               Signature Pages

                                               If to the Corporation
                                               Valuestar Corporation
                                               Attn: Jim Stein
                                               360 - 22nd Street, Suite 210
                                               Oakland, CA  94612
                                               FAX: (510) 808-1400


<PAGE>


                                               With a Copy to:
                                               Bay Venture Counsel, LLP
                                               Attn: Donald C. Reinke, Esq.
                                               1999 Harrison Street, Suite 1300
                                               Oakland, CA 94612
                                               FAX: (510) 834-7440


                  (h) Governing  Law. The  validity,  meaning and effect of this
Agreement  shall  be  determined  in  accordance  with  the  laws of  California
applicable to contracts made and to be performed entirely in California as if by
and between California residents.

                  (i) Schedules and Exhibits.  All schedules and exhibits are an
integral part of this Agreement.

                  (j)  Litigation  Costs.  If any legal action,  arbitration  or
other proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default, or misrepresentation in connection with any
of the  provisions of this  Agreement,  the  successful  or prevailing  party or
parties  therein  shall be entitled to recover  reasonable  attorneys'  fees and
other  costs  incurred in that  action or  proceeding,  in addition to any other
relief to which it or they may be entitled.

                  (k) Final  Agreement.  This  Agreement  and the  exhibits  and
schedules   attached  hereto  constitute  the  only  agreement  of  the  parties
concerning the matters herein, and supersedes, merges and renders void all prior
written/oral,  and/or  contemporaneous  agreements  and  understandings  related
thereto.

                  (l)   Confidentiality.   Each   Purchaser   agrees   to   keep
confidential  any  information  delivered by the Company or  Subsidiary  to such
Purchaser under this Agreement that the Company or Subsidiary  clearly indicates
in writing to be confidential  information;  provided,  however, that nothing in
this Section 6(l) will prevent such Purchaser from disclosing  such  information
(a) to any  affiliate of such  Purchaser  or any actual or potential  purchaser,
participant,  assignee,  or transferee of such Purchaser's rights or obligations
hereunder  that agrees to be bound by the terms of this Section  6(l),  (b) upon
order of any court or administrative  agency,  (c) upon the request or demand of
any regulatory agency or authority having jurisdiction over such Purchaser,  (d)
that is in the public domain, (e) that has been obtained from any Person that is
not a party to this  Agreement or an affiliate of any such party without  breach
by such Person of a confidentiality  obligation known to such Purchaser,  (f) if
necessary and only to the extent  necessary for the exercise of any remedy under
this Agreement,  or (g) to the certified public  accountants for such Purchaser.
The  Company  agrees  that  such  Purchaser  will be  presumed  to have  met its
obligations  under this Section  6(l) to the extent that it  exercises  the same
degree of care with  respect  to  information  provided  by the  Corporation  or
Subsidiary  as it  exercises  with  respect  to its own  information  of similar
character.

                  (m) Public  Disclosure.  Except as may be  required  to comply
with  applicable  law,  no  Purchaser  shall  make or cause to be made any press
release or similar public announcement

                        (SIGNATURES FOLLOW ON NEXT PAGE)



<PAGE>


        Signature Page to Securities Purchase Agreement between ValueStar
                    Corporation and the Undersigned Purchaser

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the respective Closing dates.

VALUESTAR CORPORATION

By: /s/ JAMES STEIN
        (Signature)

James Stein, President and CEO
Print Name and Title


<PAGE>


       Signature Page to Securities Purchase Agreement between ValueStar
                   Corporation and the Undersigned Purchaser

 (Individual Pages Differ as to Holder's Name, Personal Information and Amount
                                 of Investment)


PURCHASER


By: ___________________________________
        (Signature)


_______________________________________
Print Name and Title

ADDRESS


_______________________________________

_______________________________________

_______________________________________

_______________________________________


TELEPHONE AND FAX NUMBERS

TEL: __________________________________

FAX: __________________________________


AGGREGATE INVESTMENT AMOUNT

$ _____________________________________