Document:

EXHIBIT 4.34

                              VALUESTAR CORPORATION
                          REGISTRATION RIGHTS AGREEMENT

         THIS  REGISTRATION   RIGHTS  AGREEMENT  (this   "Agreement")  is  dated
effective as of September 14, 2000 (the  "Effective  Date") by and among (i) the
purchasers  of certain  Series C  Convertible  Preferred  Stock and  warrants to
purchase  common stock of the Company  (defined  below)  listed on the signature
pages hereto and each other Person  (defined  below) who becomes a party to this
Agreement  simultaneously  with  becoming a party  pursuant to and in accordance
with the  terms and  conditions  set forth in that  certain  Purchase  Agreement
(defined  below)  on,  or  before,  December  31,  2000  (each a  "Holder"  and,
collectively,   the  "Holders")  and  (ii)  ValueStar  Corporation,  a  Colorado
corporation (the "Company").
                                    RECITALS

         The  Holders  are  parties to a Series C  Preferred  Stock and  Warrant
Purchase  Agreement dated for reference purposes as of even date herewith by and
between the Company and the Holders (the "Purchase Agreement") pursuant to which
the Company is obligated to enter into this Agreement. All capitalized terms not
defined herein shall have the meaning established in the Purchase Agreement.

                                    AGREEMENT

         NOW, THEREFORE,  in consideration of the mutual agreements,  covenants,
representations and warranties  contained in this Agreement,  the parties hereto
hereby agree as follows:

1.       Definitions.

         "Commission" means the Securities and Exchange  Commission or any other
Federal agency at the time administering the Securities Act.

         "Common Stock" means any and all (i) common stock of the Company issued
or issuable  upon  conversion of the  Company's  Series C Convertible  Preferred
Stock;  (ii) common stock of the Company issued or issuable upon exercise of the
Warrants  (collectively,  (i) and (ii) the  "Stock");  (iii) common stock of the
Company  issued  as a  dividend  or other  distribution  with  respect  to or in
replacement of the Stock, and (iv) any common stock issued in any combination or
subdivision of the Stock.  In determining the amount of Common Stock held by any
Person, the sum of (i), (ii), (iii) and (iv) shall be used and a Person shall be
deemed to "hold" all Common Stock then held by and/or issuable to such Person.

         "Exchange Act" means the  Securities  Exchange Act of 1934, as amended,
or any similar  Federal  statue and the rules and  regulations of the Commission
thereunder all as the same shall be in effect at the time.

         "Person"  means  any  individual,   corporation,   trust,  partnership,
association, or other entity.

         "Registrable Shares" means the Common Stock.

          "Registration  Statement"  means the  registration  statement  and any
additional  registration statements filed with the Commission as contemplated by
Section 2, including (in each case) any

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prospectus,  amendments  and  supplements  to  such  registration  statement  or
Prospectus, including pre- and post- effective amendments, all exhibits thereto,
and all material  incorporated  by reference in such  registration  statement or
statements.

         "Securities  Act" means the Securities Act of 1933, as amended,  or any
similar  Federal  statute  and  the  rules  and  regulations  of the  Commission
thereunder, all as the same shall be in effect at the time.

         "Untrue Statement" shall include any untrue statement or alleged untrue
statement in the Registration  Statement, or any omission or alleged omission to
state in the  Registration  Statement  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.

         "Warrants" shall include those warrants issued to the Holders under the
Purchase  Agreement  and any  warrants  issued to finders of  purchasers  of the
Company's  Series C  Convertible  Preferred  Stock  as  contemplated  under  the
Purchase Agreement.

2.1      Registration  Procedures  and Expenses.  The Company is obligated to do
         the following:

         The Company shall  (subject to the Company's  eligibility to use a Form
S-3  Registration  Statement  which the Company  believes it will be eligible to
use),

         (a)  within  120 days  following  the  Initial  Closing  , use its best
efforts to prepare and file with the Commission a Registration Statement on Form
S-3 (provided  that at such time the Company is eligible to use S-3 and, if not,
use its best  efforts to prepare  and file with the  Commission  a  Registration
Statement on Form S-3 at such later date as the Company is so eligible) in order
to register with the  Commission  under the Securities Act a sale by the Holders
in accordance with the method or methods of  distribution  thereof as reasonably
specified by the Holders on a delayed or continuous  basis  pursuant to Rule 415
under the Securities Act all of the Registrable Shares (notwithstanding anything
to the contrary expressed or implied herein, if a registration  statement on any
substitute form becomes  available for  registration of the Registrable  Shares,
the  Company  may in its sole  discretion  instead  prepare  and  file  with the
Commission a registration statement on such substitute form at any time in order
to  register  the   Registrable   Shares  under  the  Securities  Act  and  such
registration  statement will be a  "Registration  Statement" for the purposes of
this Agreement);

         (b) use its reasonable efforts after such filing, subject to receipt of
necessary information from the Holders, to cause such Registration  Statement to
become effective as soon as reasonably practicable thereafter;

         (c) promptly notify each Holder, at any time when a prospectus relating
to such Registration  Statement is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus  included
in or relating to such Registration Statement contains an Untrue Statement;

         (d) promptly prepare and file with the Commission,  and deliver to each
Holder,  such amendments and supplements to such Registration  Statement and the
prospectus  used in  connection  therewith  as may be  necessary  to  keep  such
Registration  Statement  effective  and to  comply  with the

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provisions of the Securities  Act with respect to the sale or other  disposition
of all  Registrable  Shares until  termination of such obligation as provided in
Section 2.6 below;

         (e) furnish to each  Purchaser  such number of copies of  prospectuses,
including preliminary  prospectuses,  in conformity with the requirements of the
Securities  Act, in order to facilitate the public sale or other  disposition of
all or any of the Registrable Shares by the Holders;

         (f) file such  documents  as may be  required of the Company for normal
securities law clearance for the resale of the  Registrable  Shares in any state
reasonably  requested by the Holders provided,  however,  that the Company shall
not be  required  in  connection  with this  paragraph  (f) to (i)  qualify as a
foreign  corporation to do business under the laws of any  jurisdiction in which
it shall not then be  qualified  or  execute a general  consent  to  service  of
process in any  jurisdiction  or (ii) undertake any filing  obligations in those
states where the Company does not currently meet such filing requirements;

         (g) use its best efforts to cause all  Registrable  Shares to be listed
on each  securities  exchange,  quotation  system,  market  or  over-the-counter
bulletin  board,  if any,  on which  equity  securities  by the Company are then
listed or traded;

         (h) bear all expenses in  connection  with this  Agreement,  including,
without  limitation,  all  registration  and filing fees (including all expenses
incident to filing with the NASD), printing expenses,  fees and disbursements of
counsel for company,  expenses of any special audits  incident to or required by
any such  registration and expenses of complying with the securities or blue sky
laws of any jurisdiction,  other than (i) fees and expenses,  if any, of counsel
or other advisors to the Holders and (ii) brokers commissions, discounts or fees
and transfer taxes; and

         (i) take all  reasonable  actions  required to prevent the entry of any
stop  order  issued or  threatened  by the  Commission  or any state  regulatory
authority  with  respect  to any  Registration  Statement  covering  Registrable
Shares, and take all reasonable actions to remove it if entered.

2.2      Indemnification.

         (a) The Company agrees to indemnify and hold harmless each Holder, such
Holder's directors,  officers,  partners, agents, each underwriter of Registered
Shares, and each Person who controls any of the foregoing (within the meaning of
Section 15 of the Securities Act) (each an "Indemnified Party") from and against
any losses,  claims,  damages or liabilities to which such Indemnified Party may
become subject  (under the Securities Act or otherwise)  insofar as such losses,
claims,  damages or liabilities  (or actions or proceedings in respect  thereof)
arise  out of, or are based  upon,  any  Untrue  Statement  in the  Registration
Statement, or arise out of any failure by the Company to fulfill any undertaking
included in the Registration  Statement or arise under the Securities Act or any
other statute or at common law and the Company will reimburse  such  Indemnified
Party  for any  reasonable  legal  or  other  expenses  reasonably  incurred  in
investigating,  defending or preparing to defend any such action,  proceeding or
claim; provided,  however, that the Company shall not be liable in any such case
to the extent that such loss,  claim,  damage or liability  arises out of, or is
based upon, an Untrue Statement made in such Registration  Statement in reliance
upon and in conformity with written  information  furnished to

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the Company by or on behalf of such  Indemnified  Party  specifically for use in
preparation  of the  Registration  Statement  or the  failure of such  Holder to
comply  with the  covenants  and  agreements  contained  in  Section  2.3 hereof
respecting  the sale of the  Registrable  Shares or any Untrue  Statement in any
prospectus that is corrected in any subsequent  prospectus that was delivered to
the Holder prior to the pertinent sale or sales by the Holder.

         (b) Each Holder,  severally  and not jointly,  agrees to indemnify  and
hold  harmless the Company  (and each  person,  if any, who controls the Company
within the  meaning of Section 15 of the  Securities  Act,  each  officer of the
Company who signs the  Registration  Statement and each director of the Company)
from and against any losses, claims, damages or liabilities to which the Company
(or any such officer,  director or controlling person) may become subject (under
the  Securities Act or otherwise),  insofar as such losses,  claims,  damages or
liabilities (or actions or proceedings in respect  thereof) arise out of, or are
based upon, any failure to comply with the covenants and agreements contained in
Section 2.3 hereof  respecting  sale of the  Registrable  Shares,  or any Untrue
Statement  contained in the Registration  Statement if, but only if, such Untrue
Statement was made in reliance upon and in conformity  with written  information
furnished by or on behalf of such Holder  specifically for use in preparation of
the  Registration  Statement and such Holder will reimburse the Company (or such
officer,  director or controlling  person), as the case may be, for any legal or
other expenses reasonably  incurred in investigating,  defending or preparing to
defend any such action, proceeding or claim; provided that in no event shall any
indemnity by a Holder under this Section 2.2 exceed the net proceeds received by
such Holder from the sale of the Registrable Shares covered by such Registration
Statement.

         (c) Promptly after receipt by any  indemnified  person of a notice of a
claim or the  beginning  of any action in respect  of which  indemnity  is to be
sought  against an  indemnifying  person  pursuant  to this  Section  2.2,  such
indemnified person shall notify the indemnifying person in writing of such claim
or  of  the  commencement  of  such  action,  and,  subject  to  the  provisions
hereinafter  stated,  in case  any  such  action  shall be  brought  against  an
indemnified  person  and such  indemnifying  person  shall  have  been  notified
thereof, such indemnifying person shall be entitled to participate therein, and,
to the  extent it shall  wish,  to assume  the  defense  thereof,  with  counsel
reasonably  satisfactory  to such  indemnified  person.  After  notice  from the
indemnifying  person to such  indemnified  person of its  election to assume the
defense  thereof,   such  indemnifying  person  shall  not  be  liable  to  such
indemnified  person  for  any  legal  expenses  subsequently  incurred  by  such
indemnified  person in connection with the defense thereof;  provided,  however,
that if there  exists or shall exist a conflict  of interest  that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof,  the indemnified person shall be entitled to
retain its own counsel at the  expense of such  indemnifying  person;  provided,
however,  that no  indemnifying  person  shall be  responsible  for the fees and
expenses of more than one  separate  counsel  for all  indemnified  parties.  No
indemnifying party in the defense of any such claim or litigation shall,  except
with the consent of each indemnified party,  consent to entry of any judgment or

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enter into any settlement that does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such  indemnified  party of a release
from all liability in respect of such claim or  litigation,  and no  indemnified
party shall  consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the indemnifying party.

         (d) If the indemnification  provided for in this Section 2.2 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss,  liability,  claim, damage, or expense referred to therein,
then the  indemnifying  party, in lieu of indemnifying  such  indemnified  party
hereunder,  shall  contribute to the amount paid or payable by such  indemnified
party as a result of such loss,  liability,  claim,  damage,  or expense in such
proportion as is appropriate  to reflect the relative fault of the  indemnifying
party on the one hand and of the  indemnified  party on the other in  connection
with the statements or omissions that resulted in such loss,  liability,  claim,
damage, or expense as well as any other relevant equitable  considerations.  The
relative fault of the indemnifying  party and of the indemnified  party shall be
determined by reference  to, among other  things,  whether the untrue or alleged
untrue  statement  of material  fact or the  omission  to state a material  fact
relates to information  supplied by the indemnifying party or by the indemnified
party and the parties' relative intent,  knowledge,  access to information,  and
opportunity to correct or prevent such  statement or omission.  No Person guilty
of  fraudulent  misrepresentation  (within the  meaning of Section  11(f) of the
Securities  Act) shall be entitled to  contribution  from any Person who was not
guilty of such  fraudulent  misrepresentation.  Notwithstanding  anything to the
contrary  contained  herein,  any  contribution by a Holder  hereunder shall not
exceed the net  proceeds  received  by such  Holder  from the sale of the Shares
covered  by  the   Registration   Statement.

2.3      Transfer of Shares After Registration; Notice.

         The Holder  hereby  covenants  with the Company not to make any sale of
the  Registrable  Shares  after  registration  without  effectively  causing the
prospectus  delivery  requirement under the Securities Act to be satisfied.  The
Holder  acknowledges  that there may be times when the Company  must suspend the
use of the prospectus  forming a part of the  Registration  Statement until such
time as an amendment to the Registration Statement has been filed by the Company
and declared effective by the Commission,  or until such time as the Company has
filed an appropriate  report with the  Commission  pursuant to the Exchange Act.
The  Holder  hereby  covenants  that it will  not sell  any  Registrable  Shares
pursuant to said  prospectus  during the period  commencing at the time at which
the  Company  gives  the  Holder  notice  of the  suspension  of the use of said
prospectus  and ending at the time the Company  gives the Holder notice that the
Holder may  thereafter  effect  sales  pursuant  to said  prospectus;  provided,
however,  that no such  postponement  shall be permitted  for more than 120 days
during any 12 month period.  The foregoing  provisions of this Section 2.3 shall
in no manner  diminish  or  otherwise  impair the  Company's  obligations  under
Section 2.1

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2.4      Reporting Requirements.

         (a) The Company agrees to use its best efforts to:

             (i) make and keep public information available,  as those terms are
understood and defined in Rule 144 under the Securities Act;

             (ii) file with the  Commission  in a timely  manner all reports and
other  documents  required  of the  Company  under  the  Securities  Act and the
Exchange Act; and

             (iii) so long as any of the Holders own at least 250,000  shares of
Registrable Shares  (appropriately  adjusted for stock splits and combinations),
to furnish to the Holders  forthwith upon written  request until the termination
of the  Company's  obligations  under  Sections  2.1  through  2.4 (1) a written
statement  by  the  Company  as  to  whether  it  complies  with  the  reporting
requirements  of said Rule 144,  the  Securities  Act and the  Exchange  Act, or
whether it qualifies as a registrant  whose securities may be resold pursuant to
Commission Form S-3, (2) a copy of the most recent annual or quarterly report of
the Company and such other  reports and  documents so filed by the Company,  and
(3) such other  information  as may be  reasonably  requested  in  availing  the
Holders  of any rule or  regulation  of the  Commission  that  would  permit the
selling of the Registrable Shares without registration.

2.5      Termination of Obligations.

         The  obligations  of the Company  pursuant to Sections  2.1 through 2.4
hereof shall cease and  terminate  upon the earlier to occur of (i) such time as
all of the  Registrable  Shares have been resold or (ii) such time as all of the
Registrable  Shares may be sold during any 3 month period  pursuant to Rule 144,
including Rule 144 (k) or (iii) upon the third anniversary date of the Effective
Date of this Agreement.

2.6      Assignability of Registration Rights.

         The Registration rights set forth in this Section 2 are assignable only
to  assignees  acquiring  no  less  than  250,000  or  more  Registrable  Shares
(appropriately  adjusted  for stock  splits and  combinations).  Notwithstanding
anything to the contrary  herein,  in no event shall a Holder  assign any rights
herein after 30 days following the Effective Date and prior to the effectiveness
of the  Registration  Statement.  Provided further that the Company shall not be
obligated to file any  post-effective  amendment to the  Registration  Statement
solely for the purpose of adding such assignee(s) to the Registration  Statement
more than once during any consecutive six month period.

 3.      Lock-Up.

         In  connection   with  any  public   registration   of  this  Company's
securities,  the Holder (and any transferee of Holder) agrees,  upon the request
of the Company or the underwriter(s)  managing such underwritten offering of the
Company's  securities,  not to sell,  make any short  sale of,  loan,  grant any
option for the  purchase  of, or  otherwise  dispose of any  Registrable  Shares
(other  than those  included  in the  registration)  without  the prior  written
consent of the Company and, if applicable, such underwriter(s),  as the case may
be,  for a period of time not to exceed 30 days  before and one  hundred  eighty
(180) days after the effective date of the registration; provided, however, that
Jim Stein and each person that is an officer,  director,  or beneficial owner of
five  percent  (5%) or more of the  outstanding  shares of any class of

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capital stock of the Company enters into such an agreement.  Upon request by the
Company,  Holder (and any transferee of Holder) agrees to enter into any further
agreement in writing in a form  reasonably  satisfactory to the Company and such
underwriter(s).  The Company may impose stop-transfer  instructions with respect
to the securities  subject to the foregoing  restrictions  until the end of said
180-day  period.  All  Registrable  Shares  shall  bear  an  appropriate  legend
referencing this lock-up provision.

4.       Miscellaneous.

         (a)  Consent to  Amendments.  Except as  otherwise  expressly  provided
herein,  the  provisions of this  Agreement may be amended and/or the provisions
hereof  waived,  only with the  written  consent of the  Company  and of Holders
holding fifty percent (50%) or more of the  Registrable  Shares at the time held
by all Holders. Notwithstanding the foregoing, no amendment or waiver may affect
any Holder in any manner  differently  from any other Holder without the written
consent of such first mentioned Holder. No course of dealing between the Company
and any  Holder or any delay in  exercising  any rights  hereunder  or under the
Company's Certificate of Incorporation will operate as a waiver of any rights of
any such Holder.

         (b) Successors and Assigns.  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.

         (c) 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.

         (d)  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.

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

         (f) Notices.  All notices,  demands,  consents or other  communications
required or permitted  hereunder shall be in writing and shall be deemed to have
been given (i) when personally delivered, (ii) three (3) business days following
mailing  thereof,  if  sent  by  first  class  certified  mail,  return  receipt
requested,  or (iii) the next business day following transmission or mailing, if
sent  by  facsimile  (receipt  confirmed  and  followed  up by one of the  other
delivery  methods  discussed herein as well),  Express Mail,  Federal Express or
similar service, addressed as follows:

         If to any Holder: To the applicable addresses set forth in the Purchase
Agreement

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                  If to the Company:        Valuestar Corporation
                                            Attn: Jim Stein
                                            360 - 22nd Street, Suite 210
                                            Oakland, CA  94612
                                            Fax No.: (510) 808-1400

                  With a Copy to:           Bay Venture Counsel, LLP
                                            1999 Harrison Street, Suite 1300
                                            Oakland, CA 94612
                                            Attn:  Donald C. Reinke, Esq.
                                            Fax No.:  (510) 834-7440

Any party  may  change  its  address  for  purposes  hereof  by notice  given in
accordance with this Section 3.f to each of the other parties hereto.

         (a) Governing Law. The validity,  meaning and effect of this Agreement,
and  all  amendments  and  supplements  hereto  and  all  waivers  and  consents
hereunder,  shall be  determined  in  accordance  with  the laws of  California,
applicable to contracts  made and to be performed  entirely  within the State of
California.  Each of the parties hereby submits to personal  jurisdiction in the
County of Alameda, State of California solely for purposes of this Agreement and
waives any objection as to venue in the County of Alameda, State of California.

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

         (c)  Litigation  Costs.  Subject to Section 2.2, if any legal action or
any  arbitration  or other  proceeding  is brought for the  enforcement  of this
Agreement,  or because of a dispute,  breach,  default, or  misrepresentation in
connection  with any of the  provisions  of this  Agreement,  the  successful or
prevailing party or parties 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, if and only to the extent that
the  applicable  arbitrator or court shall so direct and such direction is final
and not subject to appeal or review.

         (d)  Integration.  This instrument  constitutes the entire agreement of
the parties hereto respecting the registration of the Registrable  Shares by the
Holders and correctly  sets forth the rights,  duties,  and  obligations of each
party  hereto  to the  others in  relation  thereto  as of its  date.  Any prior
agreements,  promises,  negotiations or  representations  concerning its subject
matter which are not expressly set forth in this Agreement.

                                  CORPORATION:

                                  VALUESTAR CORPORATION

                                  By: /s/ James Stein
                                      ---------------
                                  Name:   James Stein
                                  Its:    President and Chief Executive Officer

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              Signature Pages to the Registration Rights Agreement

     (Individual Pages Differ as to Holder's Name and Personal Information)

                                        PURCHASER:

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

                                        By:
                                           -------------------------------------
                                           (Signature)

                                        ----------------------------------------
                                        (Print Name and Title)

                                        ADDRESS:

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

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

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

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

                                        TELEPHONE AND FAX NUMBERS:

                                        Tel:
                                             -----------------------------------
                                        Fax:
                                            ------------------------------------
                                        Email Contact:
                                                      --------------------------

                                        AGGREGATE INVESTMENT AMOUNT

                                        $
                                         ---------------------------------------EXHIBIT 4.35

                                                                    Warrant C-XX

THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED  (THE  "ACT"),  OR UNDER ANY STATE  SECURITIES  LAWS,  AND MAY NOT BE
OFFERED,  SOLD,  TRANSFERRED,  PLEDGED  OR  HYPOTHECATED  IN THE  ABSENCE  OF AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR AN OPINION
OF COUNSEL  SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE.

THE  SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE  ARE  SUBJECT  TO  CERTAIN
RESTRICTIONS  ON  TRANSFER  SET  FORTH  HEREIN  AND IN THAT  CERTAIN  SECURITIES
PURCHASE AGREEMENT THEREFOR BETWEEN THE COMPANY AND THE ORIGINAL HOLDER HEREOF.

                              VALUESTAR CORPORATION

                             STOCK PURCHASE WARRANT

         THIS  CERTIFIES  THAT, for value  received,  VALUESTAR  CORPORATION,  a
Colorado corporation (the "Company"),  hereby grants to ________________________
("Holder")  the right to purchase from the Company up to  ______________________
(_____)  shares of the  Common  Stock of the  Company  (the  "Warrant  Shares"),
subject to the following terms and conditions:

         1. Series.  This Warrant is one of a duly authorized series of warrants
of the Company  (which are  identical  except for the  variations  necessary  to
express the identification numbers, names of the holder, number of common shares
issuable  upon exercise  thereof and warrant  issue dates)  designated as its "C
Warrants."

         2. Term.  This Warrant may be exercised in whole at any time during the
period  from the date of issuance of this  Warrant  until 5:00 p.m.,  California
time, on September 14, 2003 (the "Exercise Period").

         3.  Purchase   Price.   The  purchase  price  for  each  Warrant  Share
purchasable  hereunder shall be Two Dollars and Twenty-Five  Cents (U.S.  $2.25)
(the "Warrant Exercise Price").

         4. Exercise of Warrant. The purchase rights represented by this Warrant
may be exercised by the Holder,  in whole or in part,  at any time and from time
to time before the end of the  Exercise  Period by  surrender of this Warrant at
the principal office of the Company in Oakland, California (or such other office
or agency of the Company as may be designated by notice in writing to the Holder
at the address of the Holder  appearing on the books of the  Company),  together
with the Notice of Exercise annexed hereto duly completed and executed on behalf
of the Holder  accompanied  by  payment  in full of the amount of the  aggregate
Warrant  Exercise Price. The Warrant Exercise Price shall be made, at the option
of the Holder,  (i) in immediately  available  funds in United States Dollars or
(ii) if the primary  market for the Warrant  Shares  during the ten (10) Trading
Days (as defined in Section 6 below) immediately  preceding the date of exercise
is the National  Association of Securities

                                      -1-
<PAGE>

Dealers  Automated  Quotation  System -  National  Market  System or a  national
securities  exchange  registered  under the  Exchange  Act of 1934,  as amended,
cancellation  of  Warrant  Shares,  valued at the  average  "Closing  Price" (as
defined  in  Section 6 below)  of the  Company's  Common  Stock for the ten (10)
consecutive   Trading  Days   immediately   preceding   the  date  of  exercise.
Certificates  for shares  purchased  hereunder  shall be delivered to the Holder
within thirty (30) business days after the date on which this Warrant shall have
been exercised as aforesaid, but Holder shall be deemed the record owner of such
Warrant  Shares as of and from the close of  business  on the date on which this
Warrant shall be surrendered.

         5. Fractional Interest.  The Company shall not be required to issue any
fractional shares on the exercise of this Warrant.

         6. Redemption of Warrants.  The Company may elect, by written notice as
provided herein (the "Company Notice"), to redeem, pro rata among all holders of
C Warrants,  all outstanding C Warrants  including this Warrant,  in whole or in
part, on a date (the "Redemption  Date") fixed by the Company and which shall be
a Trading Day (as defined below) during which a registration statement under the
Securities Act of 1933, as amended,  covering the Warrant Shares is effective at
a price of $.01 per Warrant  Share then  exercisable  under such  outstanding  C
Warrants (the "Redemption  Price") at such time as the average Closing Price (as
defined  below)  of the  Company's  Common  Stock  for the ten (10)  consecutive
Trading Days (as defined  below)  immediately  preceding the date of the Company
Notice  equals or exceeds Six Dollars  ($6.00),  (adjusted  for stock splits and
combinations); provided, however, that this Warrant may be exercised at any time
prior to 5:00 p.m.,  California time, on the business day immediately  preceding
the Redemption Date. Thereafter, all rights to acquire such Warrant Shares shall
terminate.

         For purposes  hereof,  (i) the term "Trading Day" shall mean any day on
which  securities  are traded on the  applicable  securities  exchange or in the
applicable  securities market; and (ii) the term "Closing Price" in respect of a
Trading Day shall mean the reported closing bid prices on the principal national
securities  exchange  on which  the  Common  Stock of the  Company  is listed or
admitted to trading  or, if not listed or  admitted  to trading on any  national
securities exchange, on the National Association of Securities Dealers Automated
Quotation System - National Market System .

         7. Warrant Confers No Rights of Shareholder.  Holder shall not have any
rights as a shareholder  of the Company with regard to the Warrant  Shares prior
to actual exercise resulting in the purchase of the Warrant Shares.

         8.  Investment  Representation.  Neither  this  Warrant nor the Warrant
Shares issuable upon the exercise of this Warrant have been registered under the
Securities  Act of 1933,  as  amended  (the  "Securities  Act"),  or  under  any
applicable  state  securities  laws.  Holder  acknowledges by acceptance of this
Warrant that (a) it has acquired this Warrant for investment and not with a view
toward distribution; (b) it has a pre-existing personal or business relationship
with the Company,  or its  executive  officers,  or by reason of its business or
financial  experience  it has the  capacity  to  protect  its own  interests  in
connection with the transaction; and (c) except as so notified to the Company in
writing,  it is an  accredited  investor as that term is defined in Regulation D
promulgated  under the  Securities  Act.  Holder agrees that any Warrant  Shares
issuable upon exercise of this Warrant will be acquired for  investment  and not
with a view  toward  distribution;  and  acknowledges  that to the  extent  such
Warrant  Shares will not be registered  under the  Securities Act and applicable
state securities laws, that such Warrant Shares may have to be held indefinitely
unless they are  subsequently  registered or qualified  under the Securities Act
and  applicable  state  securities  laws;  or,  based on an  opinion  of

                                      -2-
<PAGE>

counsel  reasonably   satisfactory  to  the  Company,  an  exemption  from  such
registration  and  qualification  is available.  Holder,  by acceptance  hereof,
consents to the  placement  of the  following  restrictive  legends,  or similar
legends, on each certificate to be issued to Holder by the Company in connection
with the issuance of such Warrant Shares:

         "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 SECURITIES  REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
         RESTRICTIONS ON TRANSFER SET FORTH IN THAT CERTAIN  PURCHASE  AGREEMENT
         THEREFOR BETWEEN THE CORPORATION AND THE ORIGINAL HOLDER HEREOF."

         9.  Reservation  of Shares.  The Company agrees at all times during the
Exercise  Period to have authorized and reserved,  for the exclusive  purpose of
issuance and delivery  upon  exercise of this  Warrant,  a sufficient  number of
shares of its Common Stock to provide for the exercise of the rights represented
hereby.

         10. Adjustment for  Re-Classification  of Capital Stock. If the Company
at any time during the Exercise  Period shall,  by  subdivision,  combination or
re-classification of securities,  change any of the securities to which purchase
rights under this Warrant exist under the same or different number of securities
of any class or classes,  this Warrant  shall  thereafter  entitle the Holder to
acquire  such  number and kind of  securities  as would have been  issuable as a
result of such change with respect to the Warrant  Shares  immediately  prior to
such subdivision,  combination or re-classification.  If shares of the Company's
common stock are subdivided into a greater number of shares of common stock, the
purchase  price for the Warrant  Shares upon  exercise of this Warrant  shall be
proportionately   reduced  and  the  Warrant  Shares  shall  be  proportionately
increased; and conversely,  if shares of the Company's common stock are combined
into a smaller number of common stock shares, the price shall be proportionately
increased, and the Warrant Shares shall be proportionately decreased.

         11. Public Offering Lock-Up. In connection with any public registration
of this Company's securities,  the Holder (and any transferee of Holder) agrees,
upon the request of the Company or the underwriter(s) managing such underwritten
offering of the Company's securities, not to sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of this Warrant,  any
of the shares of Common  Stock  issuable  upon  exercise of this  Warrant or any
other  securities  of the Company  heretofore  or  hereafter  acquired by Holder
(other  than those  included  in the  registration)  without  the prior  written
consent of the Company and such underwriter(s), as the case may be, for a period
of time not to exceed 30 days before and one hundred eighty (180) days after the
effective date of the registration;  provided,  however, that Jim Stein and each
person that is an officer, director, or beneficial owner of five percent (5%) or
more of the  outstanding  shares of any class of

                                      -3-
<PAGE>

capital stock of the Company enters into such an agreement.  Upon request by the
Company,  Holder (and any transferee of Holder) agrees to enter into any further
agreement in writing in a form  reasonably  satisfactory to the Company and such
underwriter(s).  The Company may impose stop-transfer  instructions with respect
to the securities  subject to the foregoing  restrictions  until the end of said
180-day  period.  Any shares  issued upon exercise of this Warrant shall bear an
appropriate legend referencing this lock-up provision.

         12. Assignment. With respect to any offer, sale or other disposition of
this Warrant or any underlying  securities,  the Holder will give written notice
to the Company prior thereto,  describing  briefly the manner thereof,  together
with a written opinion of such Holder's counsel,  to the effect that such offer,
sale or other distribution may be effected without registration or qualification
(under any applicable federal or state law then in effect). Furthermore, no such
transfer shall be made unless the transferee meets the same investor suitability
standards set forth in Section 8 of this Warrant.  Promptly upon  receiving such
written  notice  and  reasonably  satisfactory  opinion,  if so  requested,  the
Company,  as promptly as practicable,  shall notify such Holder that such Holder
may sell or otherwise dispose of this Warrant or the underlying  securities,  as
the  case  may be,  all in  accordance  with the  terms  of the  written  notice
delivered  to the Company.  If a  determination  has been made  pursuant to this
Section  12 that  the  opinion  of  counsel  for the  Holder  is not  reasonably
satisfactory  to the Company,  the Company  shall so notify the Holder  promptly
after such determination has been made. Each Warrant thus transferred shall bear
the same legends  appearing on this  Warrant,  and  underlying  securities  thus
transferred shall bear the legends required by Section 8. The Company may impose
stop-transfer instructions in connection with such restrictions.  Subject to any
restrictions on transfer described  elsewhere herein, the rights and obligations
of the Company and the Holder of this Warrant  shall be binding upon and benefit
the successors,  assigns,  heirs,  administrators and transferees of the parties
hereto.

         13.  Notice.  Any  notice,   demand,  consent  or  other  communication
hereunder  shall be in writing  addressed  to the other  party at its  principal
office or, in respect  of  Holder,  as its  address as shown on the books of the
Company, or to such other address as such party shall have theretofore furnished
by like notice,  and either served  personally,  sent by express,  registered or
certified first class mail, postage prepaid, sent by facsimile transmission,  or
delivered by reputable commercial courier. Such notice shall be deemed given (i)
when so  personally  delivered,  or (ii) if mailed as  aforesaid,  five (5) days
after  the  same  shall  have  been  posted,  or  (iii)  if  sent  by  facsimile
transmission, as soon as sender receives written or telephonic confirmation that
the message has been  received  and such  facsimile  is followed the same day by
mailing by prepaid first class mail, or (iv) if delivered by commercial courier,
upon receipt.

         14.  Governing  Law. This Warrant shall be governed by and construed in
accordance  with the laws of the State of  California,  applicable  to contracts
between  California  residents entered into and to be performed  entirely within
the State of California.

         15.  Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Warrant,  the  prevailing  party shall be
entitled to reasonable  attorneys' fees, costs and  disbursements in addition to
any other relief to which such party may be entitled.

         16. Descriptive Headings. The headings used herein are descriptive only
and for the convenience of identifying provisions,  and are not determinative of
the meaning or effect of any such provisions.

                                      -4-
<PAGE>

         IN WITNESS WHEREOF,  the Company has caused this Warrant to be executed
by its duly authorized officer this 14th day of September, 2000.

                                            VALUESTAR CORPORATION

                                            /s/ James Stein
                                            James Stein, Chief Executive Officer

                                      -5-

<PAGE>

                               NOTICE OF EXERCISE
                          COMMON STOCK PURCHASE WARRANT

To:      VALUESTAR CORPORATION

         (1) The  undersigned  hereby elects to purchase ______ shares of Common
Stock of ValueStar  Corporation,  pursuant to the terms of the attached Warrant,
and tenders herewith payment in full of the purchase price for such shares.

         (2) In exercising  this Warrant,  the  undersigned  hereby confirms and
acknowledges  that the shares of Common Stock are being acquired  solely for the
account  of the  undersigned  and not as a  nominee  for any  other  party,  for
investment,  and that the undersigned will not offer,  sell or otherwise dispose
of any such shares of Common  Stock  except  under  circumstances  that will not
result in a violation of the  Securities  Act of 1933, as amended,  or any state
securities laws.

         (3) Please issue a certificate representing said shares of Common Stock
in the name of the undersigned.

         (4)  Please  issue a new  Warrant  for the  unexercised  portion of the
attached Warrant in the name of the undersigned.

         Date: _________________ , 2000
                                             ___________________________________
                                             (Name)

                                             ___________________________________
                                             (Signature)

                                             ADDRESS:
                                             ___________________________________

                                             ___________________________________

                                             ___________________________________

                                             ___________________________________

                                             TELEPHONE AND FAX NUMBERS:

                                             Tel: ______________________________

                                             Fax: ______________________________

                                             Email Contact: ____________________

                                      -6-

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