ASPEN GROUP — Proxy Solicitation & Information Statement 2013

Aug 4, 2013

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Aspen Group Limited
ABN 50 004 160 927
Aspen Property Trust
ARSN 104 807 767
Level 3, Newspaper House
129 St Georges Terrace, Perth
Western Australia, 6000
Telephone: 08 9220 8400
Facsimile: 08 9220 8401
Email: homemail@aspengroup.com.au
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ASX ANNOUNCEMENT 5 August 2013

Dispatch of Notice of Meeting / Proxy Form

Aspen Group announces that a general meeting will be held on 6 September 2013 at Level 3, 129 St Georges Terrace, Perth, Western Australia commencing at 11am (WST).

The Notice of Meeting and Proxy Form will be mailed to securityholders today. These documents will be available on the Aspen Group website: www.aspengroup.com.au

End

Aspen Group ASX Announcement – general meeting 2013

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NOTICE OF MEETING

Notice is hereby given that a Meeting of Aspen Group Limited ACN 004 160 927 (the " Company ") and Aspen Property Trust ARSN 104 807 767 (the " Trust ") (together " Aspen Group ") will be held at Level 3, Newspaper House, 129 St Georges Terrace, Perth, Western Australia at 11am (WST) on Friday, 6 September 2013

A proxy form is enclosed

Please read the Notice and Explanatory Memorandum carefully. If you are unable to attend the meeting please complete and return the enclosed proxy form in accordance with the specified instructions.

AGENDA

SPECIAL BUSINESS

1. Issue of Performance Rights under the Performance Rights Plan (PRP) to Mr Clement Salwin

To consider and, if thought fit, pass the following resolution as an ordinary resolution of the Company and the Trust:

Resolution 1

" That approval is given for the purposes of ASX Listing Rule 10.14 and section 200E of the Corporations Act 2001 (Cth) and for all other purposes for the grant of 5,280,172 Performance Rights to Mr Clement Salwin on the terms described in the Explanatory Statement. "

2. Placement of Securities to Mr Clement Salwin

To consider and, if thought fit, pass the following resolution as an ordinary resolution of the Company and the Trust:

Resolution 2

" That approval is given for the purposes of ASX Listing Rule 10.11, section 200E of the Corporations Act 2001 (Cth) and for all other purposes for the issue of 5,764,706 Stapled Securities at the price of $0.17 per security to Mr Clement Salwin or his nominee on the terms described in the Explanatory Statement. "

3. Grant of Options to Mr Clement Salwin

To consider and, if thought fit, pass the following resolution as an ordinary resolution of the Company and the Trust:

Resolution 3

" That approval is given for the purposes of ASX Listing Rule 10.11, section 200E of the Corporations Act 2001 (Cth) and for all other purposes for the grant of 17,294,118 Options to Mr Clement Salwin or his nominee on the terms described in the Explanatory Statement. "

4. Issue of STI Right to Mr Clement Salwin

To consider and, if thought fit, pass the following resolution as an ordinary resolution of the Company and Trust:

Resolution 4

That approval is given for the purposes of ASX Listing Rule 10.11, section 200E of the Corporations Act 2001 (Cth) and for all other purposes, for the grant of the STI Right to Mr Clement Salwin on the terms described in the Explanatory Statement.

Voting exclusion statement – ASX Listing Rules and Corporations Act

The Company and Trust will disregard any votes cast by Mr Salwin and any of his associates on all of the Resolutions unless the vote is cast by:

• a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• the Chairman of the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

In addition, any member of the Key Management Personnel ( KMP ), and their closely related parties, are not permitted to cast a vote as a proxy for a person unless:

• that person is permitted to vote and has directed the proxy how to vote on all Resolutions in the proxy form; or

• the vote is cast as proxy by the Chairman of the meeting as proxy for a person entitled to vote and the Chairman has received express authority to vote undirected proxies as the Chairman sees fit.

By order of the Board

Eric Lee

Company Secretary

Dated: 2 August 2013

Aspen Group - Notice of Meeting 2013

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HOW TO VOTE

You may vote by attending the Meeting in person or by proxy or a body corporate can appoint a corporate representative.

VOTING IN PERSON

To vote in person, you must attend the Meeting on 6 September 2013 at Level 3, Newspaper House, 129 St Georges Terrace, Perth. The Meeting will commence at 11:00am (WST) with registrations from 10:30am (WST).

VOTING BY PROXY

A securityholder entitled to attend and vote has a right to appoint a proxy to attend and vote instead of the securityholder. A proxy need not be a securityholder.

As a member of the Company’s KMP, the Chairman of the meeting is not permitted to vote undirected proxies on all Resolutions, unless he is expressly authorised to exercise the proxy even though it is connected with the remuneration of the Company’s KMP. If you intend to appoint the Chairman of the meeting as your proxy, or the Chairman of the meeting becomes your proxy by default, you can direct the Chairman how to vote by either marking the boxes for each of all Resolutions (for example, if you wish to vote ‘for’, ‘against’ or to ‘abstain’ from voting), or you can expressly authorise the Chairman to vote as he sees fit on those Resolutions by marking the Chairman’s box on the proxy form. The Chairman intends to vote all available proxies in favour of all Resolutions.

A securityholder that is entitled to cast two (2) or more votes may appoint up to two (2) proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If no proportion or number is specified, each proxy may exercise half of the securityholder’s votes.

To be effective, proxies must be lodged by 11:00am (WST) on Wednesday, 4 September 2013. Proxies lodged after this time will be invalid.

Proxies may be lodged using any of the following methods:

• by post to Aspen Group C/- Link Market Services Limited, Locked Bag A14, Sydney South NSW 1235;

• in person to 1A Homebush Bay Drive, Rhodes, NSW 2138;

• by faxing a completed proxy form to +61 2 9287 0309; or

• online – www.linkmarketservices.com.au

Select ‘Investor Login’ and enter the holding details as shown on the proxy form. Select the ‘Voting’ tab and then follow the prompts. You will be taken to have signed your Proxy Form if you lodge it in accordance with the instructions given on the website.

The proxy form must be signed by the securityholder or the securityholder's attorney. Proxies given by corporations must be executed in accordance with the Corporations Act. Securityholders can download and fill out the 'Appointment of Corporate Representation' form from the website of the security registry of the Company – http://www.linkmarketservices.com.au/corporate/InvestorServices/Forms.html. Where the appointment of a proxy is signed by the appointer's attorney, an originally certified copy of the power of attorney, or the power itself, must be received by the Company at the above address by 11:00am (WST) on Wednesday, 4 September 2013.

VOTING ENTITLEMENTS

The Directors have determined that for the purposes of Regulation 7.11.37 of the Corporations Regulations, the persons eligible to vote at the meeting will be those persons who are registered as securityholders at 5:00pm (WST) on Wednesday, 4 September 2013. Accordingly, security transfers registered after that time will be disregarded in determining entitlements to attend and vote at the meeting.

Aspen Group - Notice of Meeting 2013

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EXPLANATORY STATEMENT

This Explanatory Statement forms part of the Notice of Meeting and contains information about the resolutions contained in the Notice of Meeting. You should read both the Notice of Meeting and this Explanatory Statement.

Appointment and Remuneration of Mr Clement Salwin

Mr Salwin was appointed as Chief Executive Officer and Managing Director of Aspen Group with effect from 1 July 2013.

Mr Salwin comes to Aspen with over 25 years’ experience across real estate funds management, investment banking, property investment and corporate management.

Most recently Mr Salwin was the acting Chief Executive Officer at Valad Property Group. Prior to this, he held senior roles in real estate investment banking at UBS and property funds management at Bankers Trust Australia.

The remuneration package for Mr Salwin was designed to ensure a strong alignment of his financial rewards with the creation of value for Aspen securityholders. Accordingly, Mr Salwin will receive a combination of fixed remuneration, together with short term and long term incentives. The components of his remuneration are the subject of the Resolutions.

PROPOSED RESOLUTIONS

Resolution 1 – Grant of Performance Rights to Clement Salwin

The Board proposes to invite Mr Clement Salwin, Chief Executive Officer and Managing Director of the Company, to participate in the performance rights plan ( PRP ) and to grant Mr Salwin 5,280,172 performance rights ( Performance Rights ) for the 2014 financial year, subject to vesting conditions. The terms and conditions of the PRP were approved at the 2010 Annual General Meeting. A copy of the PRP can be found on Aspen Group’s website.

Each Performance Right, subject to satisfaction of the vesting conditions, will entitle Mr Salwin to one fully paid Stapled Security in Aspen Group which will rank equally with those traded on the ASX at the time of issue. Performance rights do not carry dividend or voting rights.

The proposed grant to be made to Mr Salwin under the PRP is in accordance with his contract of employment and is consistent with Aspen Group’s remuneration structure as set by the Remuneration Committee.

The Remuneration Committee has obtained independent advice on the appropriate size of grants to be made under the PRP, given trends in comparative companies and the objectives of Aspen Group’s compensation strategy.

In accordance with the terms of the PRP, the Performance Rights will be granted at no cost to Mr Salwin and no amount will be payable by Mr Salwin for the acquisition of Stapled Securities on vesting of the Performance Rights if the vesting conditions are met.

Vesting conditions

The vesting conditions imposed on the Performance Rights under the PRP and Mr Salwin’s employment contract are:

• (i) continued employment throughout the vesting period;

• (ii) a minimum internal performance rating throughout the three year vesting period; and

• (iii) total securityholder return ( TSR ) and earnings per security ( EPS ).

TSR Hurdle

TSR is a measure of the return to securityholders (over the vesting period) provided by security price appreciation, plus reinvested distributions expressed as a % of investment. The S&P ASX 300 Property Sector index will be used as a Competitor Group as it represents the Company’s listed property peers who compete for capital and talent.

Aspen Group - Notice of Meeting 2013

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The TSR hurdle will be tested at the end of the performance period (three years from grant) by calculating the TSR growth performance of each company in the comparator group. The performance of each company is then ranked, using percentiles. Aspen Group’s performance will then be calculated at the end of the performance period and compared to the percentile rankings. The vesting of Performance Rights will be determined using the matrix in the table below.

EPS Hurdle

EPS growth is a measure of the Aspen Group’s financial performance. EPS is calculated using operating earnings per security adjusted for significant items and other items determined by the Board, as disclosed in the Director’s Report and is set at the start of each financial year by the Board.

EPS growth will be measured as the percentage increase in EPS (with respect to the previous financial year) in each of the three consecutive financial years commencing with the year in which the Performance Rights are granted. The aggregate of actual EPS growth rates over the three year performance period is then compared to the aggregate of the individual target EPS growth rates as determined by the Board for the corresponding financial years.

The following vesting schedule applies to the award of the Performance Rights to Mr Salwin:

Relative TSR over three years	Aggregate EPS Growth over three years	Proportion of TSR/EPS related rights vested
At or below the 50thpercentile	Less than or equal to EPS Target	0%
At the 51stpercentile	Greater than EPS Target	50%
Between the 51stpercentile and the 75thpercentile	Significantly greater than EPS Target	Straight-line between 50% and 100%
75thpercentile or above	EPS Stretch Target achieved	100%

Each of the TSR hurdle and EPS hurdle must be satisfied to gain the proportion of Performance Rights referred to in the last column (assuming the other vesting conditions have been satisfied).

Lapse of Performance Rights

The Performance Rights will lapse if:

• (i) Mr Salwin’s employment is terminated for cause;

• (ii) Mr Salwin transfers his Performance Rights without the prior written consent of the Board;

• (iii) a vesting condition attaching to the Performance Rights is not satisfied; or

• (iv) the Performance Rights are not exercised within the specified period.

Impact of Mr Salwin leaving the Aspen Group before the vesting of the Performance Rights

If Mr Salwin leaves the Aspen Group, the Performance Rights that have not yet vested are to be treated as follows if Mr Salwin:

• (i) is terminated for cause, the Performance Rights automatically lapse;

• (ii) ceases employment for ill health or death, the Performance Rights automatically lapse unless the Board determines otherwise; or

• (iii) ceases employment by consent, the Performance Rights automatically lapse unless the Board determines otherwise.

When exercising its discretion the Board may determine that some or all of the Performance Rights vest.

Aspen Group - Notice of Meeting 2013

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Early vesting of Performance Rights

The Performance Rights issued to Mr Salwin will be subject to the terms of the PRP, including those that relate to a change in the employment status of Mr Salwin and the potential acceleration of those rights in certain circumstances.

In addition, Mr Salwin’s employment contract provides for the automatic early vesting of the Performance Rights on the occurrence of any of the following events (each an Automatic Vesting Event ):

• (i) a change of control;

• (ii) the Company passing a resolution for voluntary winding up;

• (iii) an order is made for the compulsory winding up of the Company; or

• (iv) 80% of the non-cash assets, as set out on the balance sheet as at 30 June 2013 of the audited accounts, have been realised (for cash or otherwise).

Valuation

The following table sets out the estimated value (based on the valuation methodology described below) provided to Mr Salwin if Resolution 1 is approved:

Performance Rights Issued	Estimated Value of Potential Awards
5,280,172	$612,500

The Board has engaged a qualified independent consultant to advise on the estimated fair value of the Performance Rights under the PRP. This valuation was conducted as at 1 July 2013 and took into account the initial performance conditions set by the Board.

The independent consultant used a Monte Carlo simulation based model to determine the fair value of each performance right. In arriving at a valuation of $0.1160 for each Performance Right the independent consultant utilised the following assumptions:

• the market price of a Stapled Security of $0.18 (being the closing price of Stapled Securities traded on ASX on 1 July 2013);

• simulated risk free interest rate starting with the cash rate of 2.57% at 1 July 2013;

• simulated dividend yield of the Stapled Securities over the vesting period of 8.62% per annum;

• volatility over the expected life of the instrument and of the relevant index are a reasonable proxy for prospective volatility measures over the performance rights' vesting period; and

• correlation over the last three years between the Stapled Security price and the relevant index is a reasonable proxy for prospective correlation over the performance rights' vesting period.

During the last twelve months the highest closing price of a Stapled Security was 42.5 cents on 25 July 2012 and the lowest price was 16.5 cents on 24 June 2013.

Approval sought

Securityholder approval of Resolution 1 is sought for the following purposes:

ASX Listing Rule 10.14

Securityholder approval is sought under ASX Listing Rule 10.14 for the grant of 5,280,172 Performance Rights to Mr Salwin in accordance with the PRP.

Under ASX Listing Rule 10.14, securityholder approval is required before Aspen Group can grant Performance Rights to Directors or associates of Directors under an incentive scheme such as the PRP.

The Company and the Trust seek securityholder approval for the grant of the Performance Rights under the PRP to Mr Salwin.

Aspen Group - Notice of Meeting 2013

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For the purposes of the approval sought under ASX Listing Rule 10.14, the following information is provided to securityholders:

• (i) Mr Salwin is the Chief Executive Officer and Managing Director of the Company;

• (ii) the maximum number of Performance Rights that may be acquired by Mr Salwin is 5,280,172 and the maximum number of Stapled Securities that may be issued to Mr Salwin on exercise of those Performance Rights is 5,280,172;

• (iii) no consideration is payable by Mr Salwin at the time of grant of the Performance Rights or upon allocation of Stapled Securities to which he may be entitled upon the exercise of any Performance Rights;

• (iv) Mr Salwin has not previously been granted Performance Rights in Aspen Group. Since the last approval of the PRP at the 2010 AGM, Performance Rights have been granted under the PRP to Mr Gavin Hawkins (former Managing Director) for nil consideration as follows: 2011: 2,015,027; 2012: 1,575,250;

• (v) as noted above, only Eligible Employees are entitled to participate in the PRP and, of these, the only current Director who is entitled to participate is Mr Salwin;

• (vi) please refer to the voting exclusion statement contained in the notice of meeting to which this explanatory memorandum is attached;

• (vii) no loan will be provided to Mr Salwin for him to acquire the Performance Rights under the PRP or to acquire any Stapled Securities on vesting and exercise of the Performance Rights; and

• (viii) the Performance Rights are expected to be granted to Mr Salwin within 12 months of the date of the meeting.

Part 2D.2 of the Corporations Act: Termination Benefits

Under section 200B of the Corporations Act, a company may only give a person a benefit in connection with their ceasing to hold a managerial or executive office in the company or a related body corporate if it is approved by securityholders or an exemption applies. Further, under section 200C of the Corporations Act, a company may only give a person a benefit in connection with the transfer of the whole or any part of the undertaking or property of the company if it is approved by securityholders.

The term “benefit” in Part 2D.2 has wide operation and would include the accelerated vesting of Performance Rights.

Accordingly, securityholder approval is sought under section 200E of the Corporations Act for the:

• giving of termination benefits to Mr Salwin in accordance with the PRP or his employment contract, if Mr Salwin’s Performance Rights automatically vest if his employment is terminated as a result of the Board exercising its discretion, or as a result of an Automatic Vesting Event triggered by the winding up of the Company; and

• giving of benefits to Mr Salwin if Mr Salwin’s Performance Rights automatically vest, as a result of an Automatic Vesting Event being triggered due to a transfer of an undertaking or property of the company.

This approval will only apply to benefits:

• given on the exercise of a discretion in accordance with the PRP; or

• that automatically vest as a result of an Automatic Vesting Event.

As at 1 July 2013 the estimate value of the Performance Rights to be issued to Mr Salwin is $612,500. However, the value of the benefits at the time they may be given cannot presently be ascertained. The eventual value will be determined by reference to the number of Stapled Securities issued on vesting of the Performance Rights and the market price of the Stapled Securities at that time. The matters, events and circumstances that will, or are likely to, affect the calculation of that value include:

• (i) the number of Performance Rights held by Mr Salwin prior to cessation of employment or office or at the time of the Automatic Vesting Event;

• (ii) the number of Performance Rights that are exercised; and

Aspen Group - Notice of Meeting 2013

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• (iii) the value of the Stapled Securities when the Performance Rights are exercised.

If securityholder approval is obtained and the Performance Rights automatically vest as a result of an Automatic Vesting Event or the Board exercises its discretion to vest some or all of Mr Salwin’s unvested Performance Rights (or to provide that Mr Salwin’s Performance Rights do not lapse but will continue to be vested in the ordinary course), the value of the benefit will be disregarded when calculating his termination benefit ‘cap’ as permitted by the Corporations Act .

Recommendation

Mr Salwin has abstained from providing a recommendation on this resolution as he is able to participate as an Eligible Employee in the PRP. All other Directors believe that the issue of the Performance Rights on the above terms is reasonable in all the circumstances because it is an appropriately designed equity based incentive for the Chief Executive Officer and Managing Director having regard to his role and responsibility, and further that if the performance hurdles described above are met this will result in benefits for Aspen Group as a whole.

The Directors (other than Mr Salwin) unanimously recommend that securityholders vote in favour of Resolution 1.

Resolution 2 – Placement of Stapled Securities to Clement Salwin

The Board proposes to invite Mr Clement Salwin, Chief Executive Officer and Managing Director of the Company, to subscribe for a placement of 5,764,706 fully paid ordinary Stapled Securities ( Subscription Securities ) at a price of $0.17 per security for total proceeds of $980,000.

Mr Salwin or his nominee will be responsible for meeting the cost of acquiring the Subscription Securities.

Approval Sought

Securityholder approval of Resolution 2 is sought for the following purposes:

ASX Listing Rule 10.11

Under ASX Listing Rule 10.11, securityholder approval is required before Aspen Group can issue securities to a related party of Aspen Group.

Aspen Group seeks the approval of securityholders for the issue of the Subscription Securities to Mr Salwin, who by virtue of his position as Chief Executive Officer and Managing Director of Aspen Group is a related party of Aspen Group.

For the purposes of the approval sought under ASX Listing Rule 10.11, the following information is provided to securityholders:

• (i) the Subscription Securities will be issued to Mr Salwin (or his nominee);

• (ii) the maximum number of Subscription Securities to be issued to Mr Salwin is 5,764,706;

• (iii) the Subscription Securities are expected to be issued to Mr Salwin within 1 month of the meeting;

• (iv) the Subscription Securities have an issue price of $0.17 per security. The Subscription Securities will be issued as fully paid ordinary Stapled Securities and will rank equally with those traded on the ASX at the time of issue. However, they will be subject to a voluntary escrow period for a period ending on the earlier of 12 months after the date of issue or the occurrence of an Automatic Vesting Event;

• (v) please refer to the voting exclusion statement contained in the notice of meeting to which this explanatory memorandum is attached; and

• (vi) the proceeds from the placement of the Subscription Securities will be used for general working capital purposes of the Aspen Group.

Approval pursuant to ASX Listing Rule 7.1 is not required for the issue of the Subscription Securities, as approval is being obtained under ASX Listing Rule 10.11. Accordingly, if securityholders approve Resolution 2, the issue of the Subscription Securities will not count towards Aspen Group's 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

Aspen Group - Notice of Meeting 2013

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Part 2D.2 of the Corporations Act: Termination Benefits

Under section 200B of the Corporations Act, a company may only give a person a benefit in connection with their ceasing to hold a managerial or executive office in the company or a related body corporate if it is approved by securityholders or an exemption applies. Further, under section 200C of the Corporations Act, a company may only give a person a benefit in connection with the transfer of the whole or any part of the undertaking or property of the company if it is approved by securityholders.

The Subscription Securities are subject to a 12 month voluntary escrow period. However, this escrow period will be accelerated and end on the occurrence of an Automatic Vesting Event.

The term “benefit” in Part 2D.2 has wide operation and would include the accelerated vesting of the Subscription Securities, as a result of an Automatic Vesting Event relating to the winding up of the Company or the transfer of an undertaking or property of the Company.

Accordingly, securityholder approval is sought under section 200E of the Corporations Act for the:

• giving of termination benefits to Mr Salwin if the voluntary escrow period for Mr Salwin’s Subscription Securities ends as a result of an Automatic Vesting Event triggered by the winding up of the Company; and

• giving of benefits to Mr Salwin if the voluntary escrow period for Mr Salwin’s Subscription Securities ends as a result of an Automatic Vesting Event being triggered due to a transfer of an undertaking or property of the company.

This approval will only apply to benefits that automatically vest as a result of an Automatic Vesting Event.

The value of the benefits cannot presently be ascertained, but will be able to be determined at the relevant time by reference to the market price of the Subscription Securities at the time the voluntary escrow period ends.

If securityholder approval is obtained and voluntary escrow period ends, as a result of an Automatic Vesting Event, the value of the benefit will be disregarded when calculating Mr Salwin’s termination benefit ‘cap’ as permitted by the Corporations Act .

Recommendation

The directors (other than Mr Salwin) do not consider from an economic or commercial perspective that there is any cost or detriment to the issue of the Subscription Securities to Mr Salwin.

The directors (other than Mr Salwin) believe that the placement of the Subscription Securities to Mr Salwin:

• provides a strong alignment of the interests of Mr Salwin with the interests of securityholders;

• represents an appropriate mechanism to retain the services of Mr Salwin; and

• provides a tangible benefit to working capital of Aspen Group.

The directors (other than Mr Salwin) are not aware of any other information which securityholders of Aspen Group would reasonably require in order to decide whether or not it is in the best interests of Aspen Group to pass the resolution.

The Directors (other than Mr Salwin) unanimously recommend that securityholders vote in favour of Resolution 2.

Resolution 3 – Approval of Grant of Options to Clement Salwin

The Board proposes to invite Mr Clement Salwin, Chief Executive Officer and Managing Director of the Company, to subscribe for 17,294,118 options exercisable into an equivalent number of Stapled Securities (Options).

Approval Sought

Securityholder approval of Resolution 3 is sought for the following purposes:

ASX Listing Rule 10.11

Under ASX Listing Rule 10.11, securityholder approval is required before Aspen Group can grant the Options to a related party of the Company.

Aspen Group - Notice of Meeting 2013

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Aspen Group seeks the approval of securityholders for the issue of Options to Mr Salwin who, by virtue of his position as Chief Executive Officer and Managing Director of Aspen Group, is a related party of Aspen Group.

For the purposes of the approval sought under ASX Listing Rule 10.11, the following information is provided to securityholders:

• (i) The Options will be granted to Mr Salwin (or his nominee);

• (ii) the maximum number of Options to be granted to Mr Salwin is 17,294,118 and the maximum number of Stapled Securities that would be issued to Mr Salwin on exercise of the Options is 17,294,118;

• (iii) the Options are expected to be issued to Mr Salwin within 1 month of the meeting;

• (iv) the Options will be granted for nil consideration on the following terms:

Conversion right	Subject to the Options having vested, each Option will provide
	Mr Salwin with a right to acquire one ordinary Stapled Security in
	Aspen Group.
Exercise price per Option:	The amount that is a 20% discount to the value of Aspen
	Group’s net tangible assets per Security at 30 June 2013 or the
	amount of $0.20 for each Option Security, whichever is higher,
	subject to any Reorganisation as described below.
Exercise period	The period on and from the vesting date until the expiry date.
Vesting date:	The earlier of:
	1 the day which is 3 years after the Options are issued; and
	2 an Automatic Vesting Event.
Expiry date:	Six months after the Vesting date.
Exercise	Mr Salwin may only exercise the Options once and must do so in
	respect of all of the Options.
Reorganisations and changes to	Any Reorganisation (which would include a bonus issue) which
the exercise price of the Options	affects Aspen Group after the grant of the Options but prior to
	exercise of the Options, will result in the number of Options and
	the Exercise price (as appropriate) being adjusted in accordance
	with the ASX Listing Rules (in the case of a bonus issue this is
	ASX Listing Rule 6.22.3) and generally accepted market practice
	to account for the effect of the Reorganisation on the capital of
	Aspen Group or the value of Option Securities.
Pro-rata issues	In the case of a pro-rata issue, the Options do not confer a right
	to a change in exercise price of the Options, or a change to the
	number of underlying Stapled Securities over which the Options
	can be exercised.
New issues	The optionholder cannot participate in new issues without
	exercising the Options.

• (v) please refer to the voting exclusion statement contained in the notice of meeting to which this explanatory memorandum is attached; and

• (vi) the proceeds from the exercise of any Options will be used for general working capital purposes of the Aspen Group.

Approval pursuant to ASX Listing Rule 7.1 is not required for the issue of the Options, as approval is being obtained under ASX Listing Rule 10.11. Accordingly, if securityholders approve Resolution 3, the issue of the Options (and any Stapled Securities issued on exercise of the Options) will not count towards Aspen Group's 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

Mr Salwin will only be able to benefit from the issue of the options if, and to the extent that, the market price of Aspen Group Stapled Securities increases above the exercise price of the options.

Aspen Group - Notice of Meeting 2013

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Part 2D.2 of the Corporations Act: Termination Benefits

Under section 200B of the Corporations Act, a company may only give a person a benefit in connection with their ceasing to hold a managerial or executive office in the company or a related body corporate if it is approved by securityholders or an exemption applies. Further, under section 200C of the Corporations Act, a company may only give a person a benefit in connection with the transfer of the whole or any part of the undertaking or property of the company if it is approved by securityholders.

The term “benefit” in Part 2D.2 has wide operation and would include the accelerated vesting of the Options, as a result of an Automatic Vesting Event relating to the winding up of the Company or the transfer of an undertaking or property of the Company.

Accordingly, securityholder approval is sought under section 200E of the Corporations Act for the:

• giving of termination benefits to Mr Salwin, if Mr Salwin’s Options automatically vest, as a result of an Automatic Vesting Event relating to the winding up of the Company; and

• giving of benefits to Mr Salwin if Mr Salwin’s Options automatically vest, as a result of an Automatic Vesting Event being triggered due to a transfer of an undertaking or property of the company.

This approval will only apply to benefits given as a result of an Automatic Vesting Event.

The value of the benefits cannot presently be ascertained, as it will depend on the underlying Stapled Security Price at the time the Options are capable of exercise. However, the matters, events and circumstances that will, or are likely to, affect the calculation of that value include:

• (i) the number of Options held by Mr Salwin prior to the cessation of employment or office; and

• (ii) the value of the Stapled Securities at the time the Options become capable of exercise.

If securityholder approval is obtained and the Options vest early the value of the benefit will be disregarded when calculating Mr Salwin’s termination benefit ‘cap’ as permitted by the Corporations Act .

Recommendation

The directors (other than Mr Salwin) do not consider from an economic or commercial perspective that there is any cost or detriment to the issue of the Options to Mr Salwin.

The directors (other than Mr Salwin) believe that the placement of the Options to Mr Salwin:

• reflects an appropriate equity based incentive for the Chief Executive Officer and Managing Director having regard to his role and responsibility and further, provide a strong alignment of the interests of Mr Salwin with the interests of securityholders; and

• represents an appropriate mechanism to retain the services of Mr Salwin.

The directors (other than Mr Salwin) are not aware of any other information which securityholders of Aspen Group would reasonably require in order to decide whether or not it is in the best interests of Aspen Group to pass the resolution.

The Directors (other than Mr Salwin) unanimously recommend that securityholders vote in favour of Resolution 3.

Resolution 4 – Grant of STI Right

Under the terms of Mr Salwin’s employment contract, Mr Salwin may be entitled to a discretionary short term incentive ( STI ), under Aspen Group’s Short Term Incentive Policy ( STI Policy ), depending on the Company’s and Mr Salwin’s performance against financial and non-financial metrics determined by the Board ( KPIs ).

Any entitlement to an STI in respect of the 2014 financial year will be provided to Mr Salwin on the following basis:

• the value of the STI may be up to 75% of Mr Salwin’s base salary of $490,000 ( STI Value );

• 50% of the STI will be paid in cash after the end of the 2014 financial year; and

• subject to securityholder approval, 50% of the STI will be provided as equity in the form of Stapled Securities and will be deferred for 18 months after which time the Stapled Securities will be issued

Aspen Group - Notice of Meeting 2013

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to Mr Salwin. Accordingly, if securityholders approve Resolution 4, Mr Salwin will have a right to be issued Stapled Securities on becoming entitled to an STI ( STI Right ).

Subject to the STI Policy, Mr Salwin will not be entitled to any STI unless he is employed by the Company at the time the entitlement is to be paid or provided. However, the Board may exercise its discretion and provide Mr Salwin or his estate with an amount of an STI in the form determined by the Board.

If there is an Automatic Vesting Event, any deferred equity component of the STI will automatically vest.

Approval sought

Securityholder approval of Resolution 4 is sought for the following purpose:

ASX Listing Rule 10.11

Under ASX Listing Rule 10.11, securityholder approval is required before the Company can grant equity securities (which would include the STI Right) to a related party of the Company.

Aspen Group seeks the approval of securityholders for the grant of the STI Right to Mr Salwin who, by virtue of his position as Chief Executive Officer and Managing Director of Aspen Group, is a related party of Aspen Group.

For the purposes of the approval sought under ASX Listing Rule 10.11, the following information is provided to securityholders:

• (i) the STI Right will be granted to Mr Salwin;

• (ii) one STI Right will be granted to Mr Salwin. It is not possible to determine maximum number of Stapled Securities that would be issued to Mr Salwin on exercise of the STI Right. However, the formula for calculating the number to be issued is as follows:

Number of Stapled Securities = 50% of STI Value / volume weighted average price of Stapled Securities on ASX for the 5 days prior to the issue of the Stapled Securities on issue of the STI Right

• (iii) the STI Right will be granted immediately upon approval of Resolution 4;

• (iv) the STI Right will be granted for nil consideration on the following terms:

Conversion right	Subject to satisfaction of the KPIs for the 2014 financial year and
	Mr Salwin’s continued employment with the Company (subject to
	the Board’s discretion described above), Mr Salwin will be
	entitled to receive, for nil monetary consideration, the number of
	Stapled Securities calculated in accordance with the above
	formula 18 months after the end of the 2014 financial year.
Acceleration of deferral period	If an Automatic Vesting Event occurs, the 18 month deferral
	period automatically ends and Aspen Group will be required to
	issue the relevant Stapled Securities to Mr Salwin.

• (v) please refer to the voting exclusion statement contained in the notice of meeting to which this explanatory memorandum is attached; and

• (vi) no proceeds will be received from the grant or exercise of the STI Right.

Approval pursuant to ASX Listing Rule 7.1 is not required for the grant of the STI Right, as approval is being obtained under ASX Listing Rule 10.11. Accordingly, if securityholders approve Resolution 4, the grant of the STI Right (and any Stapled Securities issued under the STI Right) will not count towards Aspen Group's 15% annual placement capacity pursuant to ASX Listing Rule 7.1.

The approval only applies to STIs provided in respect of the 2014 financial year.

Part 2D.2 of the Corporations Act: Termination Benefits

Under section 200B of the Corporations Act, a company may only give a person a benefit in connection with their ceasing to hold a managerial or executive office in the company or a related body corporate if it is approved by securityholders or an exemption applies. Further, under section 200C of the Corporations Act, a company may only give a person a benefit in connection with the transfer of the whole or any part of the undertaking or property of the company if it is approved by securityholders.

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The term “benefit” in Part 2D.2 has wide operation and would include the accelerated vesting of the STI Right, as a result of the Board exercising its discretion or an Automatic Vesting Event relating to the winding up of the Company or the transfer of an undertaking or property of the Company.

Accordingly, securityholder approval is sought under section 200E of the Corporations Act for the:

• giving of termination benefits to Mr Salwin if the Board exercises its discretion to provide Mr Salwin with a STI if his employment is terminated;

• giving of termination benefits to Mr Salwin if the deferred equity component of an STI automatically vests on the occurrence of an Automatic Vesting Event; and

• giving of benefits to Mr Salwin if the equity component of an STI automatically vest, as a result of an Automatic Vesting Event being triggered due to a transfer of an undertaking or property of the company.

This approval will only apply to benefits:

• given on the exercise of a Board discretion; or

• that automatically vest as a result of an Automatic Vesting Event.

The value of the benefits will be up to 75% of Mr Salwin’s base salary of $490,000.

If securityholder approval is obtained and the Board exercises its discretion to provide Mr Salwin with some or all of his STIs, or an Automatic Vesting Event occurs and the deferred equity component of an STI automatically vests, the value of the benefit will be disregarded when calculating his termination benefit ‘cap’ as permitted by the Corporations Act .

Recommendation

The directors (other than Mr Salwin) do not consider from an economic or commercial perspective that there is any cost or detriment to the issue of securities to Mr Salwin pursuant to a STI policy.

The directors (other than Mr Salwin) believe that the issue of securities to Mr Salwin:

• Provides a strong alignment of the interests of Mr Salwin with the interests of securityholders;

• Represents an appropriate mechanism to retain the services of Mr Salwin;

• Provides a tangible benefit to working capital of Aspen Group.

The directors (other than Mr Salwin) are not aware of any other information which securityholders of Aspen Group would reasonably require in order to decide whether or not it is in the best interests of Aspen Group to pass the resolution.

The Directors (other than Mr Salwin) unanimously recommend that securityholders vote in favour of Resolution 4.

Aspen Group - Notice of Meeting 2013

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GLOSSARY

The terms set out below and used in this Explanatory Statement and in the Notice of Meeting have the following meanings.

Term	Meaning
$ordollars Australian dollars.
Aspen Group the Company and the Trust.
Automatic Vesting Events the events identified in Resolution 1.
Board the board of directors of Aspen Group.
Company Aspen Group Limited (ACN 004 160 927).
Corporations Act Corporations Act 2001(Cth).
Eligible Employees means any employee who is declared by the Board to be an eligible participant for the purposes of the PRP.
Explanatory Statement this explanatory statement.
EPS earnings per security.
KMP the key management personnel of Aspen Group.
Meeting the meeting of securityholders convened by the Notice of Meeting.
Notice of Meeting the notice convening a meeting of securityholders at 11am, on Friday, 6 September 2013 attached to this Explanatory Statement.
Option an option exercisable into a Stapled Security on the terms set out in this Explanatory Statement.
PRP the Performance Rights Plan approved by securityholders at the 2010 annual general meeting.
Performance Right a performance right granted under the PRP.
Reorganisation any one or more of the following: 1. any distribution of cash or Stapled Securities by way of a return of capital to holders of Stapled Securities; 2. any bonus issue by Aspen Group; 3. any Stapled Security split, consolidation or other similar action in respect of the capital of Aspen Group; or

Aspen Group - Notice of Meeting 2013

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Term	Meaning
4. any other reorganisation, recapitalisation, reclassification or similar event with respect to the capital of Aspen Group.
Stapled Security a fully paid ordinary security and a unit in the Trust stapled and traded together in accordance with the constitution of the Company and the Trust as amended from time to time.
STI Short Term Incentive.
STI Policy Aspen Group’s Short Term Incentive Policy.
STI Right the right to be issued Stapled Securities on becoming entitled to an STI.
STI Value the value of a STI to which Mr Salwin may become entitled to, which may be up to 75% of his base salary.
Subscription Securities 5,764,706 fully paid ordinary Stapled Securities.
Trust Aspen Property Trust (ARSN 104 807 767).
TSR total securityholder return.

End

Aspen Group - Notice of Meeting 2013

Page 15 of 15

LODGE YOUR VOTE

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ABN 50 004 160 927

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
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www.linkmarketservices.com.au

ONLINE

By mail:  Aspen Group Limited  [By fax:][ +61 2 9287 0309] C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia



All enquiries to: Telephone: +61 1300 554 474

X99999999999

X99999999999

SECURITYHOLDER PROXY FORM

I/We being a member(s) of Aspen Group Limited and entitled to attend and vote hereby appoint:

STEP 1 APPOINT A PROXY the Chairman OR if you are NOT appointing the Chairman of the Meeting as your of the Meeting proxy, please write the name of the person or body corporate (excluding (mark box) the registered securityholder) you are appointing as your proxy

or failing the person/body corporate named, or if no person/body corporate is named, the Chairman of the Meeting, as my/our proxy and to vote for me/us on my/our behalf at the General Meeting of the Company to be held at 11:00am (WST) on Friday, 6 September 2013, at Level 3, Newspaper House, 129 St Georges Terrace, Perth, Western Australia and at any adjournment or postponement of the meeting. The Chairman of the Meeting intends to vote undirected proxies in favour of all items of business.

Proxies will only be valid and accepted by the Company if they are signed and received no later than 48 hours before the meeting. Please read the voting instructions overleaf before marking any boxes with an X

STEP 2 VOTING DIRECTIONS Resolution 1 For Against Abstain * Issue of Performance Rights under the Performance Rights Plan (PRP) to Mr Clement Salwin Resolution 2 Placement of Securities to Mr Clement Salwin Resolution 3 Grant of Options to Mr Clement Salwin Resolution 4 Issue of STI Right to Mr Clement Salwin

 * If you mark the Abstain box for a particular Item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

STEP 3 IMPORTANT – VOTING EXCLUSIONS

If the Chairman of the Meeting is appointed as your proxy, or may be appointed by default and you do not wish to direct your proxy how to vote as your proxy in respect of Items 1, 2, 3 and 4 above, please place a mark in this box. By marking this box, you acknowledge that the Chairman of the Meeting may exercise your proxy even though he/she has an interest in the outcome of those Items and that votes cast by him/her for those Items, other than as proxyholder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the Meeting will not cast your votes on Items 1, 2, 3 and 4 and your votes will not be counted in calculating the required majority if a poll is called on these Items. The Chairman of the Meeting intends to vote undirected proxies in favour of Items 1, 2, 3 and 4.

STEP 4

SIGNATURE OF SECURITYHOLDERS – THIS MUST BE COMPLETED

Securityholder 1 (Individual) Joint Securityholder 2 (Individual) Joint Securityholder 3 (Individual) Sole Director and Sole Company Secretary Director/Company Secretary (Delete one) Director

This form should be signed by the securityholder. If a joint holding, either securityholder may sign. If signed by the securityholder’s attorney, the power of attorney must have been previously noted by the registry or a certified copy attached to this form. If executed by a company, the form must be executed in accordance with the company’s constitution and the Corporations Act 2001 (Cth).

APZ PRX302

HOW TO COMPLETE THIS PROXY FORM

Your Name and Address

This is your name and address as it appears on the company’s security register. If this information is incorrect, please make the correction on the form. Securityholders sponsored by a broker should advise their broker of any changes. Please note: you cannot change ownership of your securities using this form.

Appointment of a Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box in Step 1. If the person you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the name of that person in Step 1. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a securityholder of the company. A proxy may be an individual or a body corporate.

Votes on Items of Business – Proxy Appointment

You may direct your proxy how to vote by placing a mark in one of the boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on the items of business, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

Appointment of a Second Proxy

You are entitled to appoint up to two persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company’s security registry or you may copy this form and return them both together.

To appoint a second proxy you must:

• (a) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.

• (b) return both forms together.

Signing Instructions

You must sign this form as follows in the spaces provided:

Individual: where the holding is in one name, the holder must sign.

Joint Holding: where the holding is in more than one name, either securityholder may sign.

Power of Attorney: to sign under Power of Attorney, you must lodge the Power of Attorney with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001 ) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

Corporate Representatives

If a representative of the corporation is to attend the meeting the appropriate “Certificate of Appointment of Corporate Representative” should be produced prior to admission in accordance with the Notice of Meeting. A form of the certificate may be obtained from the company’s security registry.

Lodgement of a Proxy Form

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below by 11:00am (WST) on Wednesday, 4 September 2013, being not later than 48 hours before the commencement of the meeting. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Proxy Forms may be lodged using the reply paid envelope or:



ONLINE

www.linkmarketservices.com.au

Login to the Link website using the holding details as shown on the proxy form. Select ‘Voting’ and follow the prompts to lodge your vote. To use the online lodgement facility, securityholders will need their “Holder Identifier” (Securityholder Reference Number (SRN) or Holder Identification Number (HIN) as shown on the front of the proxy form).

 by mail:

Aspen Group Limited C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia



by fax:

+61 2 9287 0309



by hand:

delivering it to Link Market Services Limited, 1A Homebush Bay Drive, Rhodes NSW 2138.

If you would like to attend and vote at the General Meeting, please bring this form with you. This will assist in registering your attendance.