DISTRIBUTION PLAN PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940 NORTHERN LIGHTS FUND TRUST III On behalf of its series SWAN DEFINED RISK FUND

DISTRIBUTION PLAN

PURSUANT TO RULE 12B-1

UNDER THE INVESTMENT COMPANY ACT OF 1940

NORTHERN LIGHTS FUND TRUST III

On behalf of its series

SWAN DEFINED RISK FUND

DISTRIBUTION PLAN made as of May 30, 2012, by and between Northern Lights Fund Trust III (the "Trust") on behalf of its separate series, Swan Defined Risk Fund (the “Fund”) and the distributor for the Fund, Northern Lights Distributors, LLC (the “DISTRIBUTOR”).

WHEREAS, the Trust is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company which offers for public sale separate series of shares of beneficial interest, each corresponding to the distinct series/Funds which may be further divided into separate classes of shares (the "Shares"); and

WHEREAS, the Trust has entered into an Underwriting Agreement (the "Underwriting Agreement") with DISTRIBUTOR pursuant to which DISTRIBUTOR has agreed to serve as the distributor of the Shares of the Fund; and

WHEREAS, the Trust desires to adopt this Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan") on behalf of the Fund by the Trust's Board of Trustees (the "Board") pursuant to which the Trust, with respect to the Fund, will pay a distribution fee to DISTRIBUTOR in connection with the distribution of Fund Shares; and

WHEREAS, DISTRIBUTOR desires to serve as distributor of the Shares and to provide, or arrange for the provision of distribution services pursuant to the Plan;

NOW THEREFORE, the parties agree as follows:

1.  A. The Fund is authorized to pay to DISTRIBUTOR, as compensation for DISTRIBUTOR's account maintenance services under this Plan, an account maintenance fee at the rate of 0.25%, and, as compensation for DISTRIBUTOR's sales and promotional activities and services under this Plan, a distribution fee at the rate of 0.75%, on an annualized basis of the average net assets attributable to Class C shares of the Fund. The Fund is authorized to pay to DISTRIBUTOR, as compensation for DISTRIBUTOR's account maintenance services under this Plan, and as compensation for DISTRIBUTOR's sales and promotional activities and services under this Plan, a combined account maintenance and distribution fee at the rate of 0.25% on an annualized basis of the average net assets attributable to Class A and No-Load Class shares of the Fund.  Such fees are to be paid by the Fund monthly, or at such other intervals as the Board shall determine. Such fees shall be based upon the Fund’s average daily net assets during the preceding month, and shall be calculated and accrued daily. DISTRIBUTOR shall use such fee, among other things, to make the payments contemplated by Paragraph 2(B) below and to pay interest and principal where such payments have been financed.

B. The Funds may pay fees to DISTRIBUTOR at a lesser rate than the fees specified in Section 1.A. of this Plan and Agreement as agreed upon by the Board and DISTRIBUTOR and as approved in the manner specified in subsections (A) and (B) of Paragraph 2 of this Plan.

2.  A. The Trust hereby authorizes DISTRIBUTOR to enter into Sub-Agreements with certain securities dealers or brokers, administrators and others ("Recipients") to provide compensation to such Recipients based on the net asset value of shares of the Funds held by clients or customers of that Recipient, for activities and services of the type referred to in Paragraph (B) of this Paragraph 2.  

B. DISTRIBUTOR shall provide, or arrange for Recipients with which DISTRIBUTOR has entered into Sub-Agreements to provide, distribution services. The distribution services shall include assistance in the offering and sale of shares of the Funds and in other aspects of the marketing of the shares to clients or prospective clients of the respective Recipients including any advertising or marketing services provided by or arranged by DISTRIBUTOR with respect to the Funds.

3.  This Plan shall not take effect with respect to the Funds unless it has been approved, together with any related agreements, by a majority vote, cast in person at a meeting (or meetings) called for the purpose of voting on such approval, of: (a) the Board; and (b) those Trustees of the Trust who are not "interested person" of the Trust and have no direct or indirect financial interest in the operation of this Plan or any agreements related thereto (the "Independent Trustees").

4.  This Plan may continue in full force and effect with respect to the Funds for so long as such continuance is specifically approved at least annually in the manner provided for approval of this Plan in subsections (A) and (B) of paragraph 2.   

5.  DISTRIBUTOR shall provide to the Board and the Board shall review, at least quarterly, a written report of the amounts expended with respect to the Funds by DISTRIBUTOR under this Plan and the purposes for which such expenditures were made and the payees including the Advisor.

6.  The Trust or the Fund may terminate this Plan at any time, without the payment of any penalty, by vote of the Board, by vote of a majority of the Independent Trustees, or by vote of a majority of the outstanding voting securities of the Funds. DISTRIBUTOR may terminate this Plan with respect to the Trust or the Funds, without payment of penalty, upon sixty (60) days written notice to the Trust or the Funds. Notwithstanding the foregoing, this Plan shall terminate automatically in the event of its assignment.

7.  This Plan may not be amended to increase materially the amount of fees to be paid by the Funds unless such amendment is approved by a vote of a majority of the outstanding shares of the Funds, and no material amendment to the other provisions of this Plan shall be made unless approved in the manner provided for approval and annual renewal in subsections (A) and (B) of Paragraph 2 hereof.

8.  The amount of distribution fees payable by the Funds to DISTRIBUTOR under this Plan and the amounts received by DISTRIBUTOR under the Underwriting Agreement may be greater or lesser than the expenses actually incurred by DISTRIBUTOR on behalf of the Funds in serving as Distributor of the Shares. The distribution and account maintenance fees with respect to the Funds will be payable by the Fund to DISTRIBUTOR until either this Plan or the Underwriting Agreement is terminated or not renewed with respect to the Shares of the Funds.

9.  While this Plan is in effect, the selection and nomination of the Independent Trustees shall be made solely at the discretion of the Independent Trustees.

10. As used in this Plan, the terms "majority of the outstanding voting securities," "assignment" and "interested person" shall have the same meanings as those terms have in the 1940 Act.

11. The Trust shall preserve copies of this Plan (including any amendments thereto) and any related agreements and all reports made pursuant to Paragraph 5 hereof for a period of not less than six years from the date thereof, the first two years in an easily accessible place.

12. The Trustees of the Trust and the shareholders of the Funds shall not be liable for any obligations of the Trust or the Funds under this Plan, and DISTRIBUTOR or any other person, in asserting any rights or claims under this Plan, shall look only to the assets and property of the Trust or the Funds in settlement of any such right or claim, and not to such Trustees or shareholders.

IN WITNESS WHEREOF, the Trust and DISTRIBUTOR have executed this Plan as of the date first set forth above.

NORTHERN LIGHTS FUND TRUST III

On behalf of its separate series

SWAN DEFINED RISK FUND

Attest: /s/ Xxxxx X. Xxx		By: /s/ Xxxxxx Xxxxxx
Xxxxx X. Xxx		Xxxxxx Xxxxxx
Secretary		President

NORTHERN LIGHTS DISTRIBUTORS, LLC

As Distributor

Attest: /s/ Xxxx Xxxxxxx		By: /s/ Xxxxx Xxxxxxx
Xxxx Xxxxxxx		Xxxxx Xxxxxxx
Chief Compliance Officer		President