**DISTRIBUTION AGREEMENT**

ThisDistribution Agreement is made as of June 28, 2006, by and between SATURNAINVESTMENT TRUST, a Washington Business Trust (the “Trust) and SATURNACAPITAL CORPORATION (“Saturna”).

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

**WHEREAS**, the Trust currently has a DistributionAgreement with Saturna Brokerage Services (“SBS”) (formerlyInvestors National Corporation), a wholly-owned subsidiary of Saturna datedSeptember 20, 2004;

**WHEREAS**, the Trust’s Board isrecommending to shareholders the adoption of a plan of distribution under Rule12b-1 under the 1940 Act, and wishes to amend the Distribution Agreementcurrently in effect to provide for such a plan of distribution, should one beadopted by the shareholders; 

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

**I. DELIVERY OF DOCUMENTS**

The Trust hasdelivered to Distributor copies of each of the following documents and willdeliver to it all future amendments and supplements thereto, if any:

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

(b) TheTrust’s Articles of in corporation;

(c) The Trust’sby-laws;

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

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

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

**II. DISTRIBUTION**

**1. Appointmentof Distributor.** The Trust hereby appoints Distributor as Distributor ofthe Funds’ Shares and Distributor hereby accepts such appointment andagrees to render the services and duties set forth in this Section II. In theevent that the Trust establishes additional Funds or classes of shares otherthan the Funds and the Shares with respect to which it decides to retainDistributor to act as distributor hereunder, the Trust shall notify Distributorin writing. If Distributor is willing to render such services, it shall sonotify the Trust in writing whereupon such Fund and such shares shall become aFund and Shares hereunder and shall be subject to the provisions of thisAgreement, except to the extent that said provision is modified with respect tosuch Fund or shares in writing by the Trust and Distributor at the time.

**2. Services and Duties.**

(a) The Trust agrees to sellthrough Distributor, as agent, from time to time during the term of thisAgreement, Shares (whether authorized but unissued or treasury shares, in theTrust’s sole discretion) upon the terms and at the current offering priceas described in the applicable Prospectus. Distributor will act only in its ownbehalf as principal in making agreements with selected dealers or others for thesale and redemption of Shares, and shall sell Shares only at the offering pricethereof as set forth in the applicable Prospectus. Distributor shall devoteappropriate efforts to effect sales of Shares of each of the Funds, but shallnot be obligated to sell any certain number of Shares.

(b) In all mattersrelating to the sale and redemption of Shares, Distributor will act inconformity with the Trust’s Articles of Incorporation, by-laws andapplicable Fund Prospectuses and with the instructions and directions of theBoard of Trustees of the Trust and will conform to and comply with therequirements of the 1933 Act, the 1940 Act, the regulations of the NationalAssociation of Securities Dealers, Inc. and all other applicable Federal orstate laws and regulations.

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

(d) All Shares of the Funds offered for sale by Distributor shall be offeredfor 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 theapplicable Prospectuses) plus, except to those classes of persons or Shares setforth in the applicable Prospectuses, (ii) any sales charge which may beapplicable shall be the percentage of the offering price of such Shares as setforth in the applicable Prospectuses. The offering price, if not an exactmultiple of one cent, shall be adjusted to the nearest cent. Concessions paid byDistributor to broker-dealers and other persons shall be set forth in either theselling agreements between Distributor and such broker-dealers and persons or,if such concessions are described in the applicable Prospectuses, shall be as soset forth. No broker-dealer or other person who enters into a selling ordistribution and servicing agreement with Distributor shall be authorized to actas agent for the Funds in connection with the offering or sale of Shares to thepublic or otherwise.

(e) If any Shares sold by Distributor under theterms of this Agreement are redeemed or repurchased by the Trust or byDistributor as agent or are tendered for redemption within seven business daysafter the date of confirmation of the original purchase of said Shares,Distributor shall forfeit the amount above the net asset value, if any, receivedby it with respect to such Shares, provided that the portion, if any, of suchamount re-allowed by Distributor to broker-dealers or other persons shall berepayable to the Trust only to the extent recovered by Distributor from thebroker-dealer or other persons concerned. Distributor shall include in the formof agreement with such broker-dealers and other persons a correspondingprovision for the forfeiture by them of their concession with respect to Sharessold by them or their principals and redeemed or repurchased by the Trust or byDistributor as agent (or tendered for redemption) within seven business daysafter the date of confirmation of such initial purchases.

(f) Should theTrust, on behalf of one or more series of the Trust, adopt one or more plans ofdistribution pursuant to Rule 12b-1 under the 1940 Act (“Rule 12b-1Plan”), Distributor shall be paid compensation for its services, (and/orreimbursed for expenses), to the extent permitted by any such Rule 12b-1 Plan.No provision of this Agreement may be deemed to prohibit any payments by a Fundto Distributor or by a Fund or Distributor to investment dealers, banks or otherfinancial institutions through which shares of the Funds are sold where suchpayments are made under such Rule 12b-1 Plan. The Funds agree that they shallprovide notice to Distributor at least 30 days prior to the effective date ofthe elimination of or the decrease in the amount of expenses reimbursable underany such Rule 12b-1 Plan.

(g) With respect to such classes of shares, ifany, that are sold with a contingent deferred sales charge ("CDSC"),Distributor shall impose a CDSC in connection with the redemption of the Sharesof such classes, not to exceed a specified percentage of the original purchaseprice of the Shares, as from time to time set forth in the applicableProspectuses. Distributor may retain (or receive from the Funds, as the case maybe) all of any CDSC. Distributor may pay to broker-dealers or other personsthrough whom such Shares are sold a commission or other payment to the extentconsistent with the current Prospectuses and applicable rules andregulations.

**3. Sales and Redemptions.**

(a) TheFunds shall pay all costs and expenses in connection with the registration ofthe Shares under the 1933 Act, and all expenses in connection with maintainingfacilities for the issue and transfer of the Shares and for supplyinginformation, prices and other data to be furnished by the Funds hereunder, andall expenses in connection with preparing, printing and distributing theProspectuses except as set forth in subsection 2(c) of Section II hereof.

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

(c) The Funds shallhave the right to suspend the sale of Shares at any time in response toconditions in the securities markets or otherwise, and to suspend the redemptionof Shares of any Fund at any time permitted by the 1940 Act or the rules of theSEC ("Rules"). 

(d) the case of any purchase or redemptionorder received by Distributor on any business day prior to the time the netasset values of Shares are determined (the “cut off time,”ordinarily the close of regular trading on the New York Stock Exchange at 4:00p.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. Inthe case of any such purchase or redemption order is received by Distributor onany business day after the cut off time, the order shall be accorded a tradedate on the Funds’ accounting system that is the next business day thatthe New York Stock Exchange is open for trading. The Funds use the close ofregular trading on the New York Stock Exchange ordinarily 4:00 p.m. eastern timeas order cut off time.

(e) Distributor certifies that it has establishedand will maintain policies and procedures reasonably designed to ensure thattransactions in Funds’ shares are effected in accordance with applicablecontract provisions and law, including, but not limited to, procedures designedto 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 notdo so arbitrarily or without reasonable cause.

**III. LIMITATIONS OF LIABILITY**

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

**IV. CONFIDENTIALITY**

Distributor willtreat confidentially and as proprietary information of the Funds, all recordsand other information relative to the Funds, to the Funds’ prior orcurrent shareholders and to those persons or entities who respond toDistributor's inquiries concerning investment in the Funds, and, except asprovided below, will not use such records and information for any purpose otherthan the performance of its responsibilities and duties hereunder. Any other useby Distributor of the information and records referred to above may be made onlyafter prior notification to and approval in writing by the Funds. Such approvalshall not be unreasonably withheld and may not be withheld where: (i)Distributor may be exposed to civil or criminal contempt proceedings for failureto divulge such information; (ii) Distributor is requested to divulge suchinformation by duly constituted Authorities; or (iii) Distributor is sorequested by the Funds.

**V.INDEMNIFICATION**

**1. Trust’sRepresentation.** The Trust represents and warrants to Distributor thatat all times the Registration Statement and Prospectuses will in all materialrespects conform to the applicable requirements of the 1933 Act and the Rulesthereunder and will not include any untrue statement of a material fact or omitto state any material fact required to be stated therein or necessary to makethe statements therein, in light of the circumstances under which they are made,not misleading, except that no representation or warranty in this subsectionshall apply to statements or omissions made in reliance upon and in conformitywith written information furnished to the Trust by or on behalf of and withrespect to Distributor expressly for use in the Registration Statement orProspectuses.

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

**3.Trust Indemnification.** The Trust, on behalf of each Fund, agrees thateach Fund will indemnify, defend and hold harmless Distributor, its severalofficers and directors, and any person who controls Distributor within themeaning 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 becomesubject under the 1933 Act or otherwise, insofar as such losses, claims, damagesor liabilities (or actions or proceedings in respect thereof) arise out of, orare based upon, any untrue statement or alleged untrue statement of a materialfact contained in the Registration Statement, the Prospectuses or in anyapplication or other document executed by or on behalf of a Fund, or arise outof or based upon, information furnished by or on behalf of a Fund, filed in anystate in order to qualify the Shares under the securities or blue sky lawsthereof ("Blue Sky Application"), or arise out of, or are based upon,the omission or alleged omission to state therein a material fact required to bestated therein or necessary to make the statements therein not misleading, andwill reimburse Distributor, its several officers and directors, and any personwho controls Distributor within the meaning of Section 15 of the 1933 Act, forany 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 theextent that such loss, claim, damage or liability arises out of, or is basedupon, any untrue statement, alleged untrue statement, or omission or allegedomission made in the Registration Statement, the Prospectuses, any Blue SkyApplication or any application or other document executed by or on behalf of theTrust in reliance upon and in conformity with written information furnished tothe Funds by or on behalf of Distributor specifically for inclusion therein.

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

EachFund shall advance attorneys' fees and other expenses incurred by any person indefending any claim, demand, action or suit which is the subject of a claim forindemnification pursuant to this subsection 3, so long as: (i) such person shallundertake to repay all such advances unless it is ultimately determined that heor she is entitled to indemnification hereunder; and (ii) such person shallprovide security for such undertaking, or the Fund shall be insured againstlosses arising by reason of any lawful advances, or a majority of a quorum ofthe disinterested, non-party trustees of the Trust (or an independent legalcounsel in a written opinion) shall determine based on a review of readilyavailable facts (as opposed to a full trial-type inquiry) that there is reasonto believe that such person ultimately will be found entitled to indemnificationhereunder.

The obligations of each Fund under this subsection 3 shall bethe 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 severalofficers and trustees and any person who controls the Trust or any Fund withinthe 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 becomesubject under the 1933 Act or otherwise, insofar as such losses, claims, damagesor liabilities (or actions or proceedings in respect hereof) arise out of, orare based upon, any breach of its representations, warranties and agreementsherein, or which arise out of, or are based upon, any untrue statement oralleged untrue statement of a material fact contained in the RegistrationStatement, the Prospectuses, any Blue Sky Application or any application orother documents executed by or on behalf of the Trust or the omission or allegedomission to state therein a material fact required to be stated therein ornecessary to make the statements therein not misleading, which statement oromission was made in reliance upon and in conformity with information furnishedin writing to the Trust or any of its several officers and trustees by or onbehalf of Distributor specifically for inclusion therein, and will reimburse theTrust, each Fund, the Trust’s several officers and trustees, and anyperson who controls the Trust or any Fund within the meaning of Section 15 ofthe 1933 Act, for any legal or other expenses reasonably incurred by any of themin investigating, defending or preparing to defend any such action, proceedingor claim.

**5. General Indemnity Provision.** Noindemnifying party shall be liable under its indemnity agreement contained insubsection 3 or 4 hereof with respect to any claim made against suchindemnifying party unless the indemnified party shall have notified theindemnifying party in writing within a reasonable time after the summons orother first legal process giving information of the nature of the claim shallhave been served upon the indemnified party (or after the indemnified partyshall have received notice of such service on any designated agent), but failureto notify the indemnifying party of any such claim shall not relieve it from anyliability which it may otherwise have to the indemnified party. The indemnifyingparty will be entitled to participate at its own expense in the defense or, ifit so elects, to assume the defense of any suit brought to enforce any suchliability, and if the indemnifying party elects to assume the defense, suchdefense shall be conducted by counsel chosen by it and reasonably satisfactoryto the indemnified party. In the event the indemnifying party elects to assumethe defense of any such suit and retain such counsel, the indemnified partyshall bear the fees and expenses of any additional counsel retained by theindemnified party.

**VI. DURATION ANDTERMINATION**

This Agreement shall become effective as of the dateof the effectiveness of any Rule 12b-1 Plan adopted by the shareholders, and,unless sooner terminated as provided herein, shall continue for two years fromthe date of such effectiveness. Thereafter, if not terminated, this Agreementshall continue automatically for successive terms of one year, provided thatsuch continuance is specifically approved at least annually by a vote of themajority of the Board of Trustees of the Trust, including a majority of thetrustees who are not "interested persons” of the Trust and have nodirect or indirect financial interest in the operation of the Plan, thisAgreement, or in any agreement relating to the Plan (the “PlanTrustees”) by vote cast in person at a meeting called for the purpose ofvoting on such approval; provided, however, that this Agreement may beterminated with respect to any Fund by the Trust at any time, without thepayment of any penalty, by vote of a majority of the Plan Trustees or by a voteof a "majority of the outstanding voting securities" of such Fund on60 days' written notice to Distributor, or by Distributor at any time, withoutthe payment of any penalty, on 60 days' written notice to the Trust. ThisAgreement will automatically and immediately terminate in the event of its"assignment." (As used in this Agreement, the terms "majority ofthe outstanding voting securities," "interested person” and"assignment" shall have the same meanings as such terms have in the1940 Act.)

**VII. AMENDMENT OF THISAGREEMENT**

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

**VIII. NOTICES**

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

**IX.MISCELLANEOUS**

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

IN WITNESS WHEREOF, the parties hereto have caused thisinstrument to be executed by their officers designated below as of the day andyear first above written.  

SATURNA INVESTMENT TRUST(“TRUST”)	

By:___________________________________ Name:	Nicholas Kaiser Title: President

Attest: 

SATURNACAPITAL CORPORATION (“DISTRIBUTOR”)  

By:____________________________________ Name:	Nicholas KaiserTitle:	PresidentAttest: