EXHIBIT 10.19

         CO-SALE AGREEMENT


DATE:    May 10, 1996

PARTIES: Harry W. Spell                                             ("H. Spell")
                  William H. Spell                                  ("W. Spell")
                  Spell Family Foundation                         ("Foundation")
                  Bruce A. Richard                                   ("Richard")
                  Richard W. Perkins                                 ("Perkins")
                  William Blair Mezzanine Capital Fund, L.P.           ("Blair")

RECITALS:

         A.       As of the date hereof the parties hereto are the owners of the
                  shares of capital stock of Eagle Pacific Industries, Inc.
                  ("EPII") and the options, warrants and other rights to acquire
                  shares of common stock of EPII as set forth on Exhibit A
                  attached hereto.

         B.       The parties hereto desire to provide for certain co-sale
                  rights in the event of certain significant sales by other
                  parties hereto.

AGREEMENT:

         1.       For the purposes of this Agreement the following terms shall
                  have the meanings indicated below:

         (a) "Management Group" shall refer to H. Spell, W. Spell, Foundation,
         Richard and Perkins or any two or more of them acting together.

         (b) "Shares" shall mean the shares of capital stock of EPII listed on
         Exhibit A hereto and any shares of common stock of EPII acquired by a
         party hereto pursuant to the exercise of any option, warrant or other
         right to acquire shares of common stock of EPII listed on Exhibit A
         hereto.

         (c) "Selling Transaction" shall mean the sale, assignment, transfer or
         other disposition of more than 500,000 Shares in a single transaction
         or series of related transactions that is not otherwise exempted from
         the provisions of this Agreement by Section 4 below.

         2.       During the term hereof, the Management Group shall not enter
                  into a Selling Transaction without permitting Blair to
                  participate as a seller in such transaction(s) on a pro rata
                  basis according to the common share holdings of EPII listed on
                  Exhibit A assuming all options, warrants and other rights to
                  acquire shares of common stock of EPII have been exercised.

         3.       The Management Group shall give prompt written notice to Blair
                  in the event that it has the present intention to enter into a
                  Selling Transaction. Such notice shall disclose the terms and
                  conditions of such Selling Transaction. Blair shall advise the
                  Management Group in writing within thirty days of receipt of
                  such notice whether or not it desires to be a seller in such
                  Selling Transaction on the terms and conditions set forth in
                  the notice from the Management Group and pursuant to Section 2
                  above. If Blair does not provide such written response to the
                  notice from the Management Group within such time period,
                  Blair shall be deemed to have waived its rights hereunder with
                  respect to such Selling Transaction and the Management Group
                  may proceed with such Selling Transaction on substantially the
                  terms set forth in the notice to Blair.

         4.       The following sales, assignments, transfers or other
                  dispositions by the Management Group shall not be considered
                  Selling Transactions and shall be exempt from the provisions
                  of this Agreement:

         (a) sales of Shares by the Management Group in a bona fide underwritten
         public offering pursuant to a registration statement filed by EPII
         pursuant to the Securities Act of 1933, as now or hereafter amended
         (the "Act");

         (b) sales of Shares by the Management Group in a market transaction in
         a bona fide public market, pursuant to a registration statement,
         pursuant to Rule 144 promulgated under the Act or pursuant to some
         other exemption from registration under the Act; and

         (c) any transfer of Shares by gift or testamentary disposition to any
         person.

         5.       This Agreement shall terminate on May 31, 1999 or upon such
                  earlier date as Blair shall dispose of any Shares such that
                  after all such dispositions Blair owns less than 25% of the
                  Shares shown on Exhibit A as being owned by Blair.

         6.       All notices and other communications required or permitted
                  hereunder shall be in writing and shall be delivered in
                  person, by facsimile transmission, by a recognized courier
                  service or by the United States Postal Service to party at
                  its/his address or facsimile number listed on Exhibit A
                  hereto, or at such other address or facsimile number as such
                  party may specify by written notice to the other parties
                  hereto. All such notices shall be deemed to be effective when
                  received at such address or facsimile number.

         7.       This Agreement and the rights of the parties hereunder shall
                  be construed and governed by the laws of the State of
                  Minnesota.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
                  date first above written.


                                    __________________________________________
                                    Harry W. Spell


                                    __________________________________________
                                    William H. Spell


                                    SPELL FAMILY FOUNDATION


                                    By:_______________________________________
                                         Its:_________________________________


                                    __________________________________________
                                    Bruce A. Richard


                                    __________________________________________
                                    Richard W. Perkins


                                    WILLIAM BLAIR MEZZANINE CAPITAL FUND, L.P.


                                    By:_______________________________________
                                         Its:_________________________________




         EXHIBIT A
         EAGLE PACIFIC INDUSTRIES, INC.
         CO-SALE AGREEMENT

Harry W. Spell                                    26,384 shares of Common Stock
2430 Metropolitan Centre                       50,000 shares of Preferred Stock
Minneapolis, MN 55402                Options for 220,000 shares of Common Stock
(612) 371-9651

William H. Spell                                  33,864 shares of Common Stock
2430 Metropolitan Centre                       25,000 shares of Preferred Stock
Minneapolis, MN 55402                Options for 285,000 shares of Common Stock
(612) 371-9651

Spell Family Foundation                           22,500 shares of Common Stock
2430 Metropolitan Centre
Minneapolis, MN 55402
(612) 371-9651

Bruce A. Richard                               25,000 shares of Preferred Stock
2458 Farrington Circle                Options for 70,000 shares of Common Stock
Roseville, MN 55113
(612) 483-1359

Richard W. Perkins                                72,727 shares of Common Stock
730 East Lake Street                           22,500 shares of Preferred Stock
Wayzata, MN 55391                     Options for 70,000 shares of Common Stock
(612) 473-4701

William Blair Mezzanine                          435,000 shares of Common Stock
  Capital Fund, L.P.                 Options for 315,000 shares of Common Stock
222 West Adams Street
Chicago, IL 60606
Attention: Terrence M. Shipp
(312) 236-8075