FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT
                               September 20, 1999

         This First  Amendment to Note Purchase  Agreement  (this  "Amendment"),
dated as of September  20, 1999, is by and among  VALueStar,  INC., a California
corporation (the "Company"),  VALUESTAR CORPORATION, a Colorado corporation (the
"Corporation"),  SEACOAST  CAPITAL  PARTNERS  LIMITED  PARTNERSHIP,  a  Delaware
limited partnership ("Seacoast"), and PACIFIC MEZZANINE FUND, L.P., a California
limited  partnership,  ("Pacific")  and Tangent GROWTH FUND,  L.P., a California
limited  partnership  ("Tangent").  Seacoast,  Pacific and Tangent are sometimes
individually ("Purchaser") or collectively referred to as the ("Purchasers").


                                    RECITALS

         A. On March 31, 1999,  the Purchasers  entered into various  agreements
with the Company,  Corporation  and others  including  but not limited to a Note
Purchase  Agreement  (the  "Note  Purchase  Agreement")  and a Warrant  Purchase
Agreement (the "Warrant Purchase Agreement") or collectively the Agreements.

         B. The Purchasers desire to amend certain  provisions and waive certain
rights from the provisions of the Agreements.

         C.  Capitalized  terms  not  defined  herein  shall  have the  meanings
established  in  the  underlying  Agreements  and  are  incorporated  herein  by
reference.


                                    AGREEMENT

Note Purchase Agreement Amendments and Restatements

         The following sections of the Note Purchase Agreement (7.8 and 7.9) are
hereby amended and restated in their entirety as follows:

                  7.8  Capital  Expenditures.  The  Company  will  not  make any
         Capital  Expenditures if, as a result thereof, the Capital Expenditures
         of the  Company  exceed  $300,000  for the fiscal  quarter  ending June
         30,1999. For each fiscal year following 1999, the Company will not make
         any  Capital   Expenditures  if,  as  a  result  thereof,  the  Capital
         Expenditures  of the Company exceed  $250,000  (except that the Company
         may also make Capital Expenditures in fiscal year 2000 in an additional
         amount  equal to any  unutilized  portion of the  $300,000 of permitted
         Capital Expenditures for the fiscal quarter ending June 30, 1999).

                  7.9      Financial Covenants.

                  (a)  Minimum  Net Worth.  At all times  during the periods set
         forth below,  the Company shall not permit the Parent's Net Worth to be
         less than the  amounts set forth below (with the amount set forth below
         increased by the amount of any adjustment to Net Worth from the sale of
         securities  of the Company or the Parent) for the period  corresponding
         thereto:

                     Period                            Amount
                     ------                            ------
            April 1, 1999 - June 30, 1999              ($4,500,000)
            July 1, 1999 - September 30, 1999          ($6,300,000)
            October 1, 1999 - December 31, 1999        ($8,500,000)
            January 1, 2000 - March 31, 2000           ($9,600,000)
            April 1, 2000 - June 30, 2000              ($10,300,000)
            July 1, 2000 and thereafter                Net Worth Covenant Amount

                  (b) Minimum EBITDA.  The Company shall not permit the Parent's
         EBITDA for any fiscal quarter  (determined on a consolidated  basis) to
         be less than the amounts set forth during the periods  specified below,
         measured as of the last day of each fiscal quarter:

                                                             EBITDA for
                      Period                                 Each Fiscal Quarter
                     -------                                 -------------------
            April 1, 1999 - June 30, 1999                    Waived
            July 1, 1999 - September 30, 1999                ($2,200,000)

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<PAGE>


            October 1, 1999 - December 31, 1999              ($2,100,000)
            January 1, 2000 - March 31, 2000                 ($1,050,000)
            April 1, 2000 - June 30, 2000                    ($600,000)
            July 1, 2000 - June 30, 2001                     $150,000
            Thereafter                                       $300,000

<TABLE>
                  (c) Minimum Net Income.  The Company shall not permit Parent's
         Minimum  Net Income for any fiscal  quarter to be less than the amounts
         set forth during the periods  specified below,  measured as of the last
         day of each fiscal quarter:

<CAPTION>
                                                                                Net Income
                           Period                                               Per Fiscal Quarter
                           ---------                                            ------------------
<S>                                                                             <C>
                  April 1, 1999 - June 30, 1999                                 Waived
                  July 1, 1999 - September 30, 1999                             ($2,400,000)
                  October 1, 1999 - December 31, 1999                           ($2,300,000)
                  January 1, 2000 - March 31, 2000                              ($1,300,000)
                  April 1, 2000 - June 30, 2000                                 ($800,000)
                  July 1, 2000 - June 30, 2001                                  $-0-
                  July 1, 2001 - June 30, 2002 and thereafter                   $150,000
</TABLE>

                  (d) Maximum  Indebtedness.  The  Company  shall not permit its
         Indebtedness  at any time to exceed  $5,350,000,  reduced by  scheduled
         payments of principal  and without  giving  effect to any  reborrowing,
         other than  reborrowing  under a revolving  line of credit as permitted
         hereunder and increased by any Permitted  Future Debt to the extent the
         Company is permitted to incur such Permitted Future Debt hereunder.

                  (e)  Operating  Leases.  The  Company  will not enter into any
         lease  (other  than a capital  lease for fixed  assets) if, as a result
         thereof,  the  liability of such Persons under all such leases to which
         such Persons are a party would exceed $450,000 per annum.


                              (end of restatement)


Other Amendments and Waivers

         The definition of Net Worth Covenant Amount in Section 11.1 of the Note
Purchase   Agreement   is  amended  by   inserting   $(10,300,000)   to  replace
$(5,500,000).

         The requirement for an independent accountant's certificate referred to
in Section 6.1 (a) (ii) of the Note Purcchase Agreement is waived for the fiscal
year ended June 30, 1999. The Purchasers have been previously  provided with the
officer certificate provided by Section 6.2 (a) of the agreement. Purchasers are
also in receipt of the budget  provided  by Section  6.1 (d) and this  amendment
confirms  prior  consents  allowing late delivery and adoption of the budget for
fiscal 2000.

         The  Purchasers  have been  advised  that the Board of Directors of the
Corporation  has approved an increase in the  authorized  shares of common stock
from 20,000,000 to 50,000,000 and the directors have scheduled an annual meeting
of the shareholders to approve such amendment to the articles of  incorporation.
Purchasers consent to the increase in authorized common stock.

         The Board of Directors of the Corporation has also approved an increase
in the authorized  shares  available for grant pursuant to the 1997 stock option
plan from 500,000 shares to 1,250,000 shares, subject to shareholder approval at
the annual meeting.  Purchasers  hereby agree that the number of shares issuable
under the 1997 stock  option  plan,  as  amended,  shall be  Permitted  Stock as
defined in Article I of the Warrant Purchase Agreement.

         Purchasers hereby waive any notices required pursuant to the documents,
including  but not limited to the notices  required  under  Section  4.08 of the
Warrant Purchase  Agreement,  in connection with the  transactions  described in
this Amendment.

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<PAGE>


         The Company and Corporation hereby agree with the foregoing  provisions
and agrees and acknowledges that the foregoing amendments,  waivers and consents
(a) shall in no event be construed or be deemed to obligate  Purchasers to agree
to any  subsequent  waiver or consent;  (b) shall in no event be construed or be
deemed as a waiver of any of the other terms and  conditions  of the  Agreements
described  herein;  and (c) shall in no event be  construed  or be deemed to (i)
impair, prejudice or otherwise adversely affect Purchaser's right at any time to
exercise any right, privilege, or remedy in connection with the Agreements, (ii)
amend or alter any provision of the Agreements,  or (iii)  constitute any course
of  dealing  or  other  basis or  altering  any  obligation  of the  Company  or
Corporation  or  any  right,   privilege  or  remedy  of  Purchasers  under  the
Agreements.

         IN WITNESS  WHEREOF,  the Company,  the Corporation and Purchasers have
caused this Amendment to be executed and delivered by their respective  officers
thereunto  duly   authorized.   This  Amendment  may  be  executed  in  multiple
counterparts and by facsimile signature.

                                         COMPANY:
                                         VALUESTAR, INC.

                                         By:   /s/ JAMES A. BARNES
                                         Name:  James A. Barnes
                                         Its:     Chief Financial Officer

                                         CORPORATION:
                                         VALUESTAR CORPORATION

                                         By:   /s/ JAMES A. BARNES
                                         Name:  James A. Barnes
                                         Its:     Secretary and Treasurer

                                         PURCHASER:
                                         SEACOAST CAPITAL PARTNERS LIMITED
                                         PARTNERSHIP
                                         By:      Seacoast Capital Corporation,
                                                  its general partner

                                         By: /s/ JEFFREY J. HOLLAND
                                         Name:  Jeffrey J. Holland
                                         Title:    Vice President

                                         PACIFIC MEZZANINE fund, L.P., a limited
                                         partnership
                                         By:      Pacific Private Capital
                                                  its general partner

                                         By: /s/ DAVID WOODWARD
                                         Name:  David Woodward
                                         Title:    General Partner

                                         TANGENT GROWTH FUND, L.P.
                                         By:      Tangent Fund Management LLC
                                                  its general partner

                                         By: /s/ MARK P. GILLES
                                         Name:  Mark P. Gilles
                                         Title:    Vice President

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