**DISTRIBUTION AGREEMENT**

This Distribution Agreement is made as of the 22nd day  of June, 2005, by and between SATURNA INVESTMENT TRUST, a Washington Business  Trust (the “Trust)  and SATURNA CAPITAL CORPORATION (“Saturna”).

**WHEREAS**, the Trust  is an open-end management investment company and is so registered under the  Investment Company Act of 1940, as amended (the "1940 Act");  and

**WHEREAS**, the Trust currently has a Distribution Agreement  with Saturna Brokerage Services (“SBS”) (formerly Investors National  Corporation), a wholly-owned subsidiary of Saturna dated September 20, 2004;

**WHEREAS**,  Saturna proposes to merge SBS into Saturna (the “Merger”),  and the Trust desires, effective as of the time and date of the Merger, to  retain Saturna as Distributor (“Distributor”) for the Trust’s  shares of beneficial interest representing interests in the Trust's separate  Funds (the "Funds"),  to provide for the sale and distribution of shares of the Funds (the "Shares"),  and Distributor is willing to render such services; 

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

**I. DELIVERY OF DOCUMENTS**

The Trust has delivered to Distributor copies of each  of the following documents and will deliver to it all future amendments and  supplements thereto, if any:

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(a) Resolutions of the Trust’s Board of Trustees    authorizing the execution and delivery of this Agreement;

(b) The Trust’s    Articles of in corporation;

(c) The Trust’s by-laws;

(d) The Trust’s Notification of Registration    on Form N-8A under the 1940 Act as filed with the Securities and Exchange    Commission ("SEC");

(e) The Trust’s Registration Statement    on Form N-1A (the "Registration    Statement") under the Securities Act of 1933 (the "1933 Act")    and the 1940 Act, as filed with the SEC and all amendments thereto; and

(f)    The Trust’s most recent Prospectus and Statement of Additional Information    and all amendments and supplements thereto (collectively, the "Prospectus").

**II.  DISTRIBUTION**

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**1. Appointment of Distributor**. 

The Trust hereby appoints  Distributor as Distributor of the Funds’ Shares and Distributor hereby  accepts such appointment and agrees to render the services and duties set forth  in this  Section II.  In the  event that the Trust establishes additional Funds or classes of shares other  than the Funds and the Shares with respect to which it decides to retain Distributor  to act as distributor hereunder, the Tust shall notify Distributor in writing.  If Distributor is willing to render such services, it shall so notify the Trust  in writing whereupon such Fund and such shares shall become a Fund and Shares  hereunder and shall be subject to the provisions of this Agreement, except  to the extent that said provision is modified with respect to such Fund or  shares  in writing by the Trust and Distributor at the time.

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**2. Services and Duties.**

(a) The Trust agrees to sell through Distributor, as  agent, from time to time during the term of this Agreement, Shares (whether  authorized but unissued  or treasury shares, in the Trust’s sole discretion) upon the terms and  at the current offering price as described in the applicable Prospectus. Distributor  will act only in its own behalf as principal in making agreements with selected  dealers or others for the sale and redemption of Shares, and shall sell Shares  only at the offering price thereof as set forth in the applicable Prospectus.  Distributor shall devote appropriate efforts to effect sales of Shares of each  of the Funds, but shall not be obligated to sell any certain number of Shares.

(b)  In all matters relating to the sale and redemption of Shares, Distributor will  act in conformity with the Trust’s Articles of Incorporation, by-laws  and applicable Fund Prospectuses and with the instructions and directions of  the Board of Trustees of the Trust and will conform to and comply with the  requirements of the 1933 Act, the 1940 Act, the regulations of the National  Association of  Securities Dealers, Inc. and all other applicable Federal or state laws and  regulations.

(c) Distributor will bear the cost of printing and distributing  any Prospectus (including any supplement or amendment thereto), provided, however,  that Distributor  shall not be obligated to bear the expenses incurred by the Trust in connection  with (i) the preparation and printing of any supplement or amendment to a Registration  Statement or Prospectus necessary for the continued effective registration  of the Shares under the 1933 Act or state securities laws; and (ii) the printing  and distribution of any Prospectus, supplement or amendment thereto for existing  shareholders of the class ("Class") of Shares described therein.

(d)  All Shares of the Funds offered for sale by Distributor shall be offered for  sale to the public at a price per share (the "offering price")  equal to (i) their net asset value (determined in the manner set forth in the  applicable Prospectuses) plus, except to those classes of persons or Shares  set forth in the applicable Prospectuses, (ii) any sales charge which may be  applicable  shall be the percentage of the offering price of such Shares as set forth in  the applicable Prospectuses. The offering price, if not an exact multiple of  one cent, shall be adjusted to the nearest cent. Concessions paid by Distributor  to broker-dealers and other persons shall be set forth in either the selling  agreements between Distributor and such broker-dealers and persons or, if such  concessions are described in the applicable Prospectuses, shall be as so set  forth. No broker-dealer or other person who enters into a selling or distribution  and servicing agreement with Distributor shall be authorized to act as agent  for the Funds in connection with the offering or sale of Shares to the public  or otherwise.

(e) If any Shares sold by Distributor under the terms of this  Agreement are redeemed or repurchased by the Trust or by Distributor as agent  or are tendered  for redemption  within seven business days after the date of confirmation of the original purchase  of said Shares, Distributor shall forfeit the amount above the net asset value,  if any, received by it with respect to such Shares, provided that the portion,  if any, of such amount re-allowed by Distributor to broker-dealers or other  persons shall be repayable to the Trust only to the extent recovered by Distributor  from  the broker-dealer or other persons concerned. Distributor shall include in  the form of agreement with such broker-dealers and other persons a corresponding  provision for the forfeiture by them of their concession with respect to Shares  sold by them or their principals and redeemed or repurchased by the Trust or  by Distributor as agent (or tendered for redemption) within seven business  days  after the date of confirmation of such initial purchases.

(f) Distributor may  be reimbursed for all or a portion of the expenses described above to the extent  permitted by one or more distribution plans adopted by  the Trust on behalf of a Fund pursuant to Rule 12b-1 under the 1940 Act. No  provision  of this Agreement may be deemed to prohibit any payments by a Fund to Distributor  or by a Fund or Distributor to investment dealers, banks or other financial  institutions through whom shares of the Funds are sold where such payments  are made under  a distribution plan adopted by the Funds on behalf of such Fund pursuant to  Rule 12b-1 under the Act (the "Plan"). The Funds agree that they  shall provide notice to Distributor at least 30 days prior to the effective  date of the elimination  of or the decrease in the amount of expenses reimbursable under such a distribution  plan.  (g) With respect to such classes of shares, if any, that are sold with a contingent  deferred sales charge ("CDSC"), Distributor shall impose a CDSC in  connection with the redemption of the Shares of such classes, not to exceed  a specified percentage of the original purchase price of the Shares, as from  time  to time set forth in the applicable Prospectuses. Distributor may retain (or  receive from the Funds, as the case may be) all of any CDSC. Distributor may  pay to broker-dealers or other persons through whom such Shares are sold a  commission or other payment to the extent consistent with the current Prospectuses  and applicable  rules and regulations.

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**3. Sales and Redemptions.**

(a) The Funds shall pay all costs and expenses in  connection with the registration of the Shares under the 1933 Act, and all  expenses in connection with maintaining  facilities for the issue and transfer of the Shares and for supplying information,  prices and other data to be furnished by the Funds hereunder, and all expenses  in connection with preparing, printing and distributing the Prospectuses except  as set forth in subsection 2(c) of Section II hereof.

(b) The Funds shall execute  all documents, furnish all information and otherwise take all actions which  may be reasonably necessary in the discretion of the  Funds’ officers  in connection with the qualification of the Shares for sale in such states  as Distributor may designate to the Funds and the Funds may approve, and the  Fund  shall pay all filing fees which may be incurred in connection with such qualification.  Distributor shall pay all other expenses incurred by Distributor in connection  with the sale of the Shares, except as otherwise specifically provided in this  Agreement.

(c) The Funds shall have the right to suspend the sale of Shares  at any time in response to conditions in the securities markets or otherwise,  and to suspend  the redemption of Shares of any Fund at any time permitted by the 1940 Act  or the rules of the SEC ("Rules"). 

(d) the case of any purchase or  redemption order received by Distributor on any business day prior to the time  the net asset values of Shares are determined  (the “cut off time,” ordinarily the close of regular trading on  the New York Stock Exchange at 4:00 p.m. Eastern time), the order shall be  accorded  a trade date on the Funds’ accounting system that is the date of receipt  of the order by Distributor. In the case of any such purchase or redemption  order is received by Distributor on any business day after the cut off time,  the order  shall be accorded a trade date on the Funds’ accounting system that is  the next business day that the New York Stock Exchange is open for trading.  The Funds use the close of regular trading on the New York Stock Exchange ordinarily  4:00 p.m. eastern time as order cut off time.  (e) Distributor certifies that it has established and will maintain policies  and procedures reasonably designed to ensure that transactions in Funds’ shares  are effected in accordance with applicable contract provisions and law, including,  but not limited to, procedures designed to prevent same-day execution of orders  received after the cut off time.  (f) The Funds reserve the right to reject any order for Shares but will not  do so arbitrarily or without reasonable cause.

**III. LIMITATIONS OF LIABILITY**

Distributor shall not be liable for any error  of judgment or mistake of law or for any loss suffered by the Trust or any  Fund in connection with the matters  to which this Agreement relates, except a loss resulting from willful misfeasance,  bad faith or gross negligence on its part in the performance of its duties  or  from reckless disregard by it of its obligations and duties under this Agreement.

**IV.  CONFIDENTIALITY**

Distributor will treat confidentially and as proprietary  information of the Funds, all records and other information relative to the  Funds, to the Funds’ prior  or current shareholders and to those persons or entities who respond to Distributor's  inquiries concerning investment in the Funds, and, except as provided below,  will not use such records and information for any purpose other than the performance  of its responsibilities and duties hereunder. Any other use by Distributor  of the information and records referred to above may be made only after prior  notification  to and approval in writing by the Funds. Such approval shall not be unreasonably  withheld and may not be withheld where: (i) Distributor may be exposed to civil  or criminal contempt proceedings for failure to divulge such information; (ii)  Distributor is requested to divulge such information by duly constituted Authorities;  or (iii) Distributor is so requested by the Funds.

**V. INDEMNIFICATION**

**1. Trust’s Representation.** The Trust  represents and warrants to Distributor that at all times the Registration Statement  and Prospectuses will in all material  respects conform to the applicable requirements of the 1933 Act and the Rules  thereunder and will not include any untrue statement of a material fact or  omit to state any material fact required to be stated therein or necessary  to make  the statements therein, in light of the circumstances under which they are  made, not misleading, except that no representation or warranty in this subsection  shall apply to statements or omissions made in reliance upon and in conformity  with written information furnished to the Trust by or on behalf of and with  respect  to Distributor expressly for use in the Registration Statement or Prospectuses.

**2.  Distributor Representation.** Distributor represents and warrants to  the Trust that it is duly organized as a Washington State corporation and is  and at all  times will remain duly authorized and licensed to carry out its services as  contemplated herein.

**3. Trust Indemnification.** The Trust, on behalf of each  Fund, agrees that each Fund will indemnify, defend and hold harmless Distributor,  its several officers  and directors, and any person who controls Distributor within the meaning of  Section 15 of the 1933 Act, from and against any losses, claims, damages or  liabilities, joint or several, to which any of them may become subject under  the 1933 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 or alleged untrue statement of a material fact contained in the Registration  Statement, the Prospectuses or in any application or other document executed  by or on behalf of a Fund, or arise out of or based upon, information furnished  by or on behalf of a Fund, filed in any state in order to qualify the Shares  under the securities or blue sky laws thereof ("Blue Sky Application"),  or arise out of, or are based upon, the omission or alleged omission to state  therein a material fact required to be stated therein or necessary to make  the statements therein not misleading, and will reimburse Distributor, its  several  officers and directors, and any person who controls Distributor within the  meaning of Section 15 of the 1933 Act, for any legal or other expenses reasonably  incurred  by any of them in investigating, defending or preparing to defend any such  action, proceeding or claim; provided, however, that neither the Trust nor  any Fund shall  be liable in any case to the extent that such loss, claim, damage or liability  arises out of, or is based upon, any untrue statement, alleged untrue statement,  or omission or alleged omission made in the Registration Statement, the Prospectuses,  any Blue Sky Application or any application or other document executed by or  on behalf of the Trust in reliance upon and in conformity with written information  furnished to the Funds by or on behalf of Distributor specifically for inclusion  therein.

A Fund shall not indemnify any person pursuant to this subsection 3  unless the court or other body before which the proceeding was brought has  rendered  a final  decision on the merits that such person was not liable by reason of his willful  misfeasance, bad faith or gross negligence in the performance of his duties,  or his reckless disregard of his obligations and duties, under this Agreement  ("disabling conduct") or, in the absence of such a decision, a reasonable  determination (based upon a review of the facts) that such person was not liable  by reason of disabling conduct has been made by the vote of a majority of a  quorum of trustees of the Trust who are neither "interested parties" of  the Trust (as defined in the 1940 Act) nor parties to the proceeding, or by  an independent  legal counsel in a written opinion.

Each Fund shall advance attorneys' fees    and other expenses incurred by any person in defending any claim, demand,  action or suit which is the subject    of a claim    for indemnification pursuant to this subsection 3, so long as: (i) such person    shall undertake to repay all such advances unless it is ultimately determined    that he or she is entitled to indemnification hereunder; and (ii) such person    shall provide security for such undertaking, or the Fund shall be insured  against losses arising by reason of any lawful advances, or a majority of a  quorum    of the disinterested, non-party trustees of the Trust (or an independent  legal counsel    in a written opinion) shall determine based on a review of readily available    facts (as opposed to a full trial-type inquiry) that there is reason to believe  that such person ultimately will be found entitled to indemnification hereunder.

The    obligations of each Fund under this subsection 3 shall be the several (and    not joint or joint and several) obligation of each Fund.

**4. Distributor Indemnification.**  Distributor will indemnify,  defend and hold harmless the Trust, each Fund, the Trust’s several officers  and trustees and any person who controls the Trust or any Fund within the meaning  of Section 15  of the 1933 Act, from and against any losses, claims, damages or liabilities,  joint  or several, to which any of them may become subject under the 1933 Act or otherwise,  insofar as such losses, claims, damages or liabilities (or actions or proceedings  in respect hereof) arise out of, or are based upon, any breach of its representations,  warranties and agreements herein, or which arise out of, or are based upon,  any untrue statement or alleged untrue statement of a material fact contained  in  the Registration Statement, the Prospectuses, any Blue Sky Application or any  application or other documents executed by or on behalf of the Trust or the  omission or alleged omission to state therein a material fact required to be  stated therein  or necessary to make the statements therein not misleading, which statement  or omission was made in reliance upon and in conformity with information furnished  in writing to the Trust or any of its several officers and trustees by or on  behalf of Distributor specifically for inclusion therein, and will reimburse  the Trust, each Fund, the Trust’s several officers and trustees, and  any person who controls the Trust or any Fund within the meaning of Section  15 of  the 1933 Act, for any legal or other expenses reasonably incurred by any of  them in investigating, defending or preparing to defend any such action, proceeding  or claim.

**5. General Indemnity Provision.** No indemnifying party shall  be liable under its indemnity agreement contained in subsection 3 or 4 hereof  with respect  to any  claim made against such indemnifying party unless the indemnified party shall  have notified the indemnifying party in writing within a reasonable time after  the summons or other first legal process giving information of the nature of  the claim shall have been served upon the indemnified party (or after the indemnified  party shall have received notice of such service on any designated agent),  but failure to notify the indemnifying party of any such claim shall not relieve  it from any liability which it may otherwise have to the indemnified party.  The  indemnifying party will be entitled to participate at its own expense in the  defense or, if it so elects, to assume the defense of any suit brought to enforce  any such liability, and if the indemnifying party elects to assume the defense,  such defense shall be conducted by counsel chosen by it and reasonably satisfactory  to the indemnified party. In the event the indemnifying party elects to assume  the defense of any such suit and retain such counsel, the indemnified party  shall bear the fees and expenses of any additional counsel retained by the  indemnified  party.

**VI. DURATION AND TERMINATION**

This Agreement shall become effective as of the  date of the Merger, and, unless sooner terminated as provided herein, shall  continue for two years from the  date of the Merger. Thereafter, if not terminated, this Agreement shall continue  automatically  for successive terms of one year, provided that such continuance is specifically  approved at least annually by a vote of the majority of the Board of Trustees  of the Trust, including a majority of the trustees who are not "interested  persons” of the Trust and have no direct or indirect financial interest  in the operation of the Plan, this Agreement, or in any agreement relating  to the Plan (the “Plan Trustees”) by vote cast in person at a meeting  called for the purpose of voting on such approval; provided, however, that  this Agreement may be terminated with respect to any Fund by the Trust at any  time,  without the payment of any penalty, by vote of a majority of the Plan Trustees  or by a vote of a "majority of the outstanding voting securities" of  such Fund on 60 days' written notice to Distributor, or by Distributor at any  time, without the payment of any penalty, on 60 days' written notice to the  Trust. This Agreement will automatically and immediately terminate in the event  of its "assignment." (As  used in this Agreement, the terms "majority of the outstanding voting  securities," "interested  person” and "assignment" shall have the same meanings as such  terms have in the 1940 Act.)

**VII. AMENDMENT OF THIS AGREEMENT**

No provision of this Agreement may be changed,  waived, discharged or terminated except by an instrument in writing signed  by the party against which an enforcement  of the change, waiver, discharge or termination is sought.

**VIII. NOTICES**

Notices of any kind to be given to the Trust hereunder by Distributor  shall be in writing and shall be duly given if mailed or delivered to the Trust  at  1300  N. State Street, Bellingham WA 99225, Attention: Nicholas Kaiser, or at such  other address or to such individual as shall be so specified by the Trust to  Distributor. Notices of any kind to be given to Distributor hereunder by the  Trust shall be in writing and shall be duly given if mailed or delivered to  Distributor at 1300 N. State Street, Bellingham WA 98225, Attention: Nicholas  Kaiser or at  such other address or to such individual as shall be so specified by Distributor  to the Trust.

**IX. MISCELLANEOUS**

The captions in this Agreement are included  for convenience of reference only and in no way define or delimit any of the  provisions hereof or otherwise affect  their construction or effect. If any provision of this Agreement shall be held  or made invalid by a court decision, statute, rule or otherwise, the remainder  of this Agreement shall not be affected thereby. Subject to the provisions  of Section VI hereof, this Agreement shall be binding upon and shall inure  to the  benefit of the parties hereto and their respective successors and shall be  governed by Washington State law; provided, however, that nothing herein shall  be construed  in a manner inconsistent with the 1940 Act or any rule or regulation of the  SEC thereunder.

**IN WITNESS WHEREOF**, the parties hereto have caused this instrument  to be executed by their officers designated below as of the day and year first  above written. 

  

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SATURNA INVESTMENT TRUST(“TRUST”) 

By:___________________________________         Name:	Nicholas Kaiser        Title:	President

Attest: 

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 SATURNA CAPITAL CORPORATION (“DISTRIBUTOR”) 

By____________________________________        Name:	Nicholas Kaiser        Title:	President

Attest: