![](data:image/jpeg;base64,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)

Annual Report

and Accounts 2025

![](data:image/jpeg;base64,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)

Introduction

01  About us/Financial

highlights/Environmental

targets

02  At a glance

06  Welcome to

Mitchells & Butlers

08  Strategy in action

Strategic Report

24  Chair’s statement

26  Chief Executive’s

business review

30  Our markets

32  Our business model

36  Value creation story

40  Our strategic priorities

42  Key performance indicators

44  Our sustainability targets

46  Task Force on Climate-related

Financial Disclosures

52  Risks and uncertainties

60  Compliance statements

– Corporate viability

disclosure

– Non-financial and

sustainability information

statement

– Section 172 Companies

Act statement

62  Financial review

Annual Report

and Accounts 2025

Contents

Governance

66  Governance at a glance

68  Chair’s introduction

to governance

70  Board of Directors

72  Directors’ report

80  Statement of Directors’

responsibilities in respect

of the Annual Report

and Accounts

81  Corporate governance

statement

94  Audit Committee report

98  Report on Directors’

remuneration

Financial Statements

120  Independent auditor’s

report to the members

of Mitchells & Butlers plc

128  Group income statement

129  Group statement of

comprehensive income

130  Group balance sheet

131  Group statement of changes

in equity

132  Group cash flow statement

133  Notes to the consolidated

financial statements

183  Mitchells & Butlers plc

Company financial statements

185  Notes to the Mitchells &

Butlers plc Company financial

statements

Other Information

189  Alternative performance

measures

192  Shareholder information

![](data:image/jpeg;base64,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)

About us

Financial highlights

Revenue

£2,711m

FY 2024: £2,610m

Statutory operating profit

£322m

FY 2024: £300m

Adjusted operating profit

b

£330m

FY 2024: £312m

Financial review Go to page 62

Environmental targets

Net Zero

c

Greenhouse gas emissions

by FY 2040 (Scope 1, 2 & 3)

Zero

Operational waste to landfill

by FY 2030

50%

Reduction in food waste

by FY 2030

Sustainability targets Go to page 44

a.  As at 27 September 2025.

b. The Directors use a number of alternative performance measures (‘APMs’) that are considered critical to aid understanding of the Group’s performance.

Key measures are explained on pages 189 to 191 of this report.

c.  As defined on page 51.

For over 125 years the Group has been at the forefront of

UK drinking and eating out, running many of the UK’s most

beautiful and iconic pubs and restaurants. We employ over

50,000

a

people in pubs, bars and restaurants that are located

across the UK and in Germany.

We are a leading operator of managed restaurants and pubs

with 1,631 largely-freehold managed businesses representing

some of the most popular brands and formats in the UK.

Our scale is impressive. In FY 2025 we served over 100 million

meals, and over 320 million drinks.

Our strategy remains focused on our three priority areas of

building a more balanced business, instilling a commercial

culture, and driving an innovation agenda, whilst pursuing our

purpose of being the host of life’s memorable moments, bringing

people and communities together through great experiences.

Mitchells & Butlers plc  Annual Report and Accounts 2025

01

Strategic Report

Governance Financial Statements Other InformationIntroduction

![](data:image/jpeg;base64,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)

Our brands

Our balanced portfolio of recognised and diversified brands and

formats is loved and trusted by our guests, with 65% home-grown

and over 75% in existence for over 20 years.

Mitchells & Butlers

at a glance

44 sites

Alex city centre bars and brasseries

offer all day menus and drinking

across Germany.

45 sites

All Bar One bars are modern and

cosmopolitan serving food and drink in

bright, contemporary environments

positioned in city-centre locations.

28 sites

Browns restaurants are mainly located

in city centres around the UK and offer

casual, elegant, brasserie dining often

in landmark architectural buildings.

103 sites

Castle pubs are a collection of eclectic

urban pubs, with each pub having an

individual character to suit its community.

The pubs are located in city and

suburban areas.

33 sites

Ego restaurants are Mediterranean-style

family restaurants based across the UK.

The brand was fully acquired in 2023,

having operated as a joint venture

since 2018.

149 sites

Ember Inns are local pubs with an

individual name offering food with a wide

range of cask ales. They are in prominent

residential locations.

Annual Report and Accounts 2025  Mitchells & Butlers plc02

Introduction

![](data:image/jpeg;base64,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)

143 sites

Harvesters are pub restaurants in

suburban roadside locations, principally

targeting families. They are well-known

for spit-roast chicken, smoked ribs,

burgers and the salad cart.

63 sites

Our High Street pubs are unique,

individual pubs located in high footfall

locations in cities and towns throughout

the UK. The pubs offer music, sport and

enjoyable hospitality at competitive

prices points.

133 sites

Miller & Carter are steakhouse restaurants

offering premium-grade beef. They are

designed to be the steak lover’s

destination for everyday and special

dining-out occasions.

82 sites

Nicholson’s has been in operation since

1873 and is famous for its extensive cask

ale and pie range. Nicholson’s sites include

examples of historic, authentic pubs in the

United Kingdom.

42 sites

O’Neill’s are Irish bars located in city and

town centres as well as on suburban high

streets. O’Neill’s offers live sports and,

in larger sites, entertainment through

music rooms.

12 sites

Located in the North West and Midlands,

Pesto offers authentic and freshly

prepared Italian small plates at sensible

prices in an informal, relaxed setting.

123 sites

Premium Country pubs are a collection

of individual pubs situated in both rural

and suburban areas. The pubs have

contemporary dining rooms and bars and

many have terraces for al fresco dining.

228 sites

Our suburban pubs are typically located

in densely populated residential areas and

are local community pubs serving ‘value

for money’ food on sizzling skillets.

82 sites

Stonehouse pubs offer freshly-carved,

slow-cooked roasts, and stone-baked

pizzas along with other pub classics.

149 sites

Toby Carvery is one of the leading brands

in the UK carvery sector. It aims to offer

a good value and varied menu of roasts

from its famous carving deck. The sites are

generally in suburban roadside locations.

172 sites

Vintage Inns are traditional country pubs

serving freshly cooked food with a wide

range of beers, spirits and great wines at

fair prices.

Mitchells & Butlers plc  Annual Report and Accounts 2025

03

Strategic Report

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Mitchells & Butlers at a glance continued

Our performance

Our property

Our brands

Our people

We are a highly cash generative

business with a long-term strategy

to transfer debt to equity as debt

is paid down.

We have a freehold estate of large,

well-positioned pubs and restaurants

with high amenity levels.

We have a diversified portfolio

of proven, established brands.

We have a proven senior

management team and depth of

talent. Highest-ever employee

engagement scores.

£16m

of cash flow generated in FY 2025

83%

of our pubs are freehold and long leasehold

with major investment planned every

seven years

65%

home-grown and over 75% in existence

for over 20 years

Our value

proposition

Our business has unique

strengths that enable us

to create value for our

stakeholders.

Annual Report and Accounts 2025  Mitchells & Butlers plc04

Introduction

![](data:image/jpeg;base64,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)

Our people Our pubs

Our people are fundamental

to the delivery of great

experiences for our guests.

1,631 managed businesses with favourable spread of locations,

price points and occasions. This leaves the business well-hedged

against changes in consumer taste.

50,000+

Employees making us one of the largest

employers in the industry

9%

Retail staff turnover reduced by 9 percentage

points to 55% due to the effective delivery of our

People Promise

1,560+

Apprentices currently in learning

UK sales by region (FY 2025)

London

21%

South East

(excluding

London)

14%

Wales 4%

East of

England

8%

East Midlands 5%

North West

10%

North East 3%

Scotland 5%

South West 7%

Yorkshire and

Humberside 8%

West Midlands

15%

Employees

Go to page 37

Mitchells & Butlers plc  Annual Report and Accounts 2025

05

Strategic Report

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Mitchells

& Butlers

Welcome to

Annual Report and Accounts 2025  Mitchells & Butlers plc06

Introduction

![](data:image/jpeg;base64,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)

Our purpose is to be the

host of life’s memorable

moments, bringing people

and communities together

through great experiences.

We are pleased with our performance over the year,

in which we remained consistently ahead of the market,

across all market segments. Sales growth has been

broad-based, with strong like-for-like performances

in both food and drink across our portfolio of brands,

supported by cost efficiencies and a capital programme

which continues to deliver strong returns.

We remain committed to our Ignite programme

of initiatives and our successful capital investment

programme, driving further cost efficiencies and

increased sales. We have confidence that continued

focus on effective delivery of our strategic priorities

will generate further value from our enviable estate

portfolio and customer offers and give us a strong

foundation for continued longer-term outperformance.

Sustainability and respect for the environment remain

central to everything we do, with some notable progress

during the year, including investment in removing gas as

an energy source from our estate as well as a significant

reduction in waste to landfill.

Our purpose is to be the host of life’s memorable

moments, bringing people and communities together

through great experiences. We will achieve this through

the successful implementation of our three-pillar

strategy which has delivered significant business

improvement over the past ten years. Over the next few

pages, we examine this strategy in detail, illustrating it

through the work done by our teams to delight our

guests and build a sustainable business during 2025.

Phil Urban

Chief Executive

Mitchells

& Butlers

Mitchells & Butlers plc  Annual Report and Accounts 2025

07

Strategic Report

Governance Financial Statements Other Information

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAaUBKcDASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD2nIxmoydyketPx6UzB6e9WQKiBegp/eikoAXNJRRQAUUUyTPlkA7SR1NAyDcstyoUg7D81PlcHaQc4rKNpItz/rWZW+9trWWNVjCqoHtQAwTZfYvJ71KpH3AOe5pgUI+VUfWhWAdvU0CJdoFRt6CnckUA460AIrYAUrSkk9KXJb8KcAFoABwvPJ9qRW3HB/KmNOA2wA5qnqepRaZYSXLkDapNJuyuNK7sY/jLxJHotk0MRX7Q/AGe9eOSyvPO0rsWd2yWPWp9U1KbVb+S6mYkk4C9gKrgALmvKq1HNnZCKiPU1Xvr5bCAu3LnhR61IZFiR3Y8KMmuSvrp72dpWbIzhR6Cqw9H2ju9kZ16vIrLchlkaWVpJCWZjnJqPPNIc0oHNerbseY3fccGxSHB5pu0mkPFAmOViDSgnNIAMU8DGMUySVSQORmgv7YqPftPNISSc0CJ1YD1qUNnpVdMd6k3Y6U0Q0TjG3NPUMcGoFkOMVLHKc+1VchomycinnPrTQckmm7s8c0xWH55pQ+SKYvU54pccighoso4xzTvMx0qruIanBsdDTTIaL6S9OOlXIpiTgmsdJSpwTVyNgRw3NMlo24ZMY5zXRaHrDafceWxJgbqPSuPgkxKBzjHNaEUhYshPTvSKhJxd0eqrqCSRIyjIbpxVhJSyjg1zHhnV1mgNtPjevA47V0qMMZXmlY9KE+eNyTcCpJHPvVP7dLC5Ey4XsRVsEY+YUjxh+CAQfWkWOiu4plyjfnRMVlQ7eWFUHs3gyysMelWLBCQzs3NOwCNEssY4IemWtvNbyNk5QnNXDNFvwSARTivmOGDHI7UAV3uIkkILc+9OhuQX+XNRX1mlwmU4kWqiQzKvykZXtnmgRsrhumA1IZAflbgiqNlfbpDFKNrD1q6QkmQpyaBleWdAdrg4PcVA2dpaFt4HVatlQQVdB7VTnthEpeIkNjnFABBeB02Mu1umDTDdm2k5DAH1HFVhm4UIFKuP4hUarfxkoQJVzwGosJs27a4SUblqxk/hWRbnOTtaJwPunpU0F/IshRgCKVguaYORUUhaP5hyPSnRyCRdw4FLkH/AAoC4iEMMilwM5quwkjf5OlT5GOKBjs00+wpT64qKXcy/JwaAHnkVXlPqDiiJ5lOHGRUr8rnFAFCRkkBVjg9qhWQxtsPzqe/pVidEY8qRSJbAj29RVCZDLHs+ZQR7ilstQWV/JdgGB4qxvaLEboCp71VmS3SdS8ZjYnhscUCNFxkYYcUJCgHGaWNgAAxDD1pzhs5UjFIY5VCnNMYHdkdKSR9q+lOQ5UfzoAcfu0LjFHJOMUOMJkdaYDHUk5FL25qJGk3fP8ApUuM9aBDdoBznmlJ3LgjNBGDQeKAGgYPQYqO6VkZZE5HcVMD60Zx8p5FAEdvcLJyvXuKdLtk6iomt0E3mR/LznHrUrHjJBoAQKVTpn6U0MhHymnRzDtyKcyITlQA1ADFcHoc0BgRk00w/NuU4NPQYfDLx6jpQIBtboc0jRrjnIqN4Y2fKSFW9KkjGDgnJ96AGqjLyDuA7UreXMQABupR8rccE9qbIiO2DlG9RQBGR5ZwzMvpUE8EUv8ArVB9HWrhUkYlGR2NNCKPunj0NMDNEM0TYhbenoamju9p2yDaferDw5bKjafY00ruO2RAfrQBLHLGy4yCDSOijJUn3FVnszndDLsb+6RwajF28LhLhWH+0OQaQFlT6UKSznIH1qBpBuDxncp9KnjlVj8vJ9KAGFgW+V9relIyY++m73qWSKOU5I2kdxUQWRDjduWmAhihOCFKkVI6Ryw4YB/QHtTZlkjUOoBz1qMDePMVCCO1ADBbKhwnzL/dPaq81jBJkYyp6qe1WvOTjqrdwalykw5AyOhFAHIap4Utp0Lxx4HtXFal4RKliinjsRXsDRbkJR/m9D3qhLZvKpEiANnqKTjF7lKckeBXujS2zH5SKzWjkjJyp4r3a/0CK4RkaMZJ61x+qeDSMtGowfasJ0F0OiGI7nnKuwPBqzDeyI2Qf1q/faBLbt9xhWTLbyQn5lNcs6TjudEaiZ2GheO9Y0Rw1peuiD+A8qfwr1rwx8Y4L6WK11SArKxCiSMcEnivnFWJYKuSc9BXomgWWl6VZRXOpl3uQ+MxEtjI6YHf6CuaV6avFm8Yqbsz6VstUstSDi2mDsnDp0ZD6EdRWdrXhDQdfUm+0+J5D/y1UbW/Ejr+NefW+vfuVe0uP3h/1bkEgnIHQHODz06YGOmKz9V+IOo36uY7k28EJ2hY3+ZvTd659PbjNEMRzq046kyw7i/dY/XtE8OeCbkRzq988nMduYoyU9D04HvXJfb0vLJ0hvLi3fODbAAqynrjAGOlZep3cdw0s/nNJk4B53MO3JP+fSqwmjgt38zqzZLM/IGDxxRGity3UaVjqPNWRIX8i2ij8sAwykfvE7j2H+Jqk1xFY3gktpGWNgRhWH3c/d9OAeDz+lZtvfyTQRxAM9seSpJwffHf9KxL55ZJ3dCwSNTkgDnHTHoKtUrCdXpY1FuXurspGxUM2dufqAT2PX8Kd/bNzokkltp00saS/K+zncfYevHXrWZpShppWucRHy90e44BOGrRzpt3bloJAkzPw2Pmz1x7dSK0sjO5Jp9rNqtyxadpIo4ztVhy3PA/nUlixtpTdKUjSBtwcdR2x61VW7W3u0itZGO44YKeVPcn9fzovrvNvFGu1FjkyyxkHfxgZ/X86EhnZw/FW1Nmba/iaYsuwyRhkyvTJz1rzTUbKN5JJLf97GWwGHPX0xV77Q0rEbQQp5yRx7VYtbaUSFV+S3lAO8kA/wCOKFdCaOTkQqg80YdGwfcdj+h/SmTHMxPrjP5V195oxNnP5OCpIZGPrkd652Swle7kt5YjHMfmQDkE9hn34/OtIszcTPyD0ooIIbA5+n50rKUC57jNUSANRSDmpVxTJhjnB/KriJkanBrY0uXy7lCM8VjA4bnj61ftHCuvNN6oV7M9Ohbdbxt6ikaodNk8zTYz3HGamNYo2Ynal4IHrRQKdxBinqMU3GakUUCsLnimHrTiKaoxnPWlcqwU0in000XFYtaSP+JpD/wL/wBBNFLpX/ITh/4F/wCgmimhM9zZgq5J4oHPNRyKXGOgzUg44rc5xaSgsAOabvBHFADqazhetJk9qaULHmgBrz4HANRtFJMmSxBqwEUHIHNO+lAEUMHlD1NIrhm4bNSSPhTg/MelRQRbTluBQBIclSe3rVdWLOu0A81YdwQVUdahtY2Rmdj/ALtICZjt6U0uAM96GkRwQp74zTkiCg9zQALIv4mklPOO/pTvlGP7w6UmQrFnxwMk56UAV5JI7aJp52Coo5ryPxl4p/tuc21sSLVW5I43Vp+PfFZuZjpllIQin5yv8vrXAqBnJrgr1r6I6qdOyuxyjgHv0pwz0pMg+wFZer6gYlNtE3zkfOR2rnpwdSXKi5zUVch1TURN+4gOUXhz61jt6dKcD3P4UxjmvWhBQVkeXObm7sa1GdvWjvzRwe3FWZhuGKjzzRnnFHemIep5p5JpijuafkHvQSxOtKuelIeuKkXgdKAFGaUAnrQBg0/iglsUccdqkBUetRDNSK3GCKpEsk8w446Uqy81Ec5NIODTJsWCxf6U9TjvwKgD4pQ+40yWixlSDmkGMgUwEDrT05bOOKEQyZRxyvNSIVV+G/CmEn1pirg56mmSa0L4UnuatJKUZD271kwSNu9hV1W980yepv2dw0MgmTqMdK7fS9TxaCSUEA9DjNed2szeUea67w1eIYpIJW4zkZpM6cPNqXKzpFv4n58wEe1PTUIidu/n0NU2sopDuA2+hWq1xaSJzIuR6r1pHabX2xH4PKn2qMxSh90B+Q+9VdOMe0hXzjqG61ogK3QFTTGRG3lmGJUx/tA0scV3av8AI3mp79RVkfKOTkU2SRVYBT1FIBsbF3ZyuGPY1C8DRsZDgE+hzVhXVk2ZUnvUqBcbKAKWyKccH5x3p8Nu8RyH/Wp5bUdU+U+tQOzwfeyR60ATtcKBhjz60n3kJ6j2qFGWXpjHoasxqNpC9O4oAphY0ferYPpUZkImV+vNWpLcF/lFNNo24EY47UCsW9iOm4rTRBEWztpqb0Ta9SJIu7ae9A7C7Nowo4qNoCTuUndVhuMY6UhO00AMBYLjjNQuGPPQ+1WMimspoAhSUqMNU24EVG8fPSkZlGPmwewxSAk2nORQSu3DZFVftTQv86kj1XmpBcwz8Bhk9jQFyKQspxtDLUsQ+XcucelSKqFcAc07btXC8UxEcjIeHHFV5/JljKOfocdKtOisORVZ4GRwwwQeMEUICCAzW67T+9jHTHar0VxFLxuw3oaFRcAgYNMkt0c7guG9RQA25jLoUHeoLaSe3Xy5kJTsRzVtUYYyc08IG70AJuym5DuFNSVJDhTz6VG86QtluB6igR5cSRkYPpTETYPWlJB70MrYyDUEh3cEFT60ASsQBzxnpTQM/e/ChgGVQe1SoAyHd17UDI+e9I3NVZXmikwORmrIOVDetAhHO1cmnxS/J0BHvSg5+VhkVHPbgcqcHtQA2S0WRt8ZKN6ioSJ4GCuN6n+KpIZXB2MMH1qVmORzwO1ACKWYcChtwIKHI7g0oYJz0odd2GXrQIjiX95uI596dOiuwKnBoGe/Wjg/WgBuG4DfmKeQrqAw59aRlOOKZlh2pgKySIflxIvoTUZ8pmwdyPUvQhhkUMATyBQAxQw4fkdiKcCM4JDr79qXgDimmMEZXg0gFKcFVYEehqAwyjIYnae3Wp1XnJ60O2ODmmBny2yAZG6M+qU2OGUfOPn/ANpev5VojYRgmoJLV0JeIn/gJxQBHHLLu+ZAw9+DUreVJ0DI36U1JlZtsox74qXaDwjhvSgBieaoOSHHYjtTi7qu47eaYxaE/MmM9xTxKjDBwfrQBEwhlzuGGPcVCLeaEgxEOh/hJqdgobO3j2pGRsBoyfpQBE4BYHDRn3HFPAc9GDU4PLtw44PrzTdoHTigBk1mlyoWQMj9iKz59OubY5cxyxe9aodwMZ4oZy/3gDQgObuNHtrxMqFauc1PwesqkIoA7Eiu6l09WG6IlG9qiMNxbqN6GUH05NDs9xptbHjlz4Pu7a5VvLDpkfcNXvtcFlcB72AN5bZjBGSvHJ+teh6g0RtnkUFRjnHBx3rzPXYZEaaaNTNGpyS3OBivPxEVfQ9HDydtTTuNcjvIischtSSCC/OD2wP89q5aW8mE08QZydxBYj26gevvWVBcPLctIrMxB4ANXJrpROVeRznAJxz+FYxgomspNsvS3Z+xxSJDJuK4YE52nt/T9aw5riaSPy3yGZicY5J+tb8cqSowRXOR0b5c02e2hGySBxuddw8x+AeQRWhIaRqEVvZAuzOVcqA/8J4JP05FLJeL5reWVbccofTP9KpS20UcLMmZEJySpwPTr3py2cYhRXl8p9+RCgyQD+gHt1pCG3UstwyZC5Zd+9zjjmoYrSSCJWjmZnJyzkHj6Vciuldo444E4XI3nPGeecVbbyRD848l24EiMSPof7opXsO1yCdJ7HT3WPHnyJgndg4PrWIkz28Un7sHdgZJzgV11tBD5KszJtAIIZufb61ElppcEEt3csoEZ4PUZPQAZ5PXr0xRzBys560v3jO0RkDqC3OPpWhFdPLE+8ybwcpIDkH/AGSB0FSvcx3s4S1sIX3DAYLye3UdP5VupoFrb2aSMoVt2SNpbJ64GOtDY0ijp9yZSbSaRnDDO5vbnH9KluIwIo45ojvZwyjO0gDnr+NVYx9ivFJXDDOzeNuD6kGp5nWTzZZGIkds7ihP+f8A61JMGZl1ozToTbxFrgArsA4YZ/8A11BF4L1yY7mt0jB7yyKp/IEmumtL94kGxo5A3BI6NW7FciSFZPmDdCp6iu3DRhUdpM5q7lFXRxUPgLUCuZ720Q+ihm/oKkPw+dlAOqxg/wDXE/412RkJByTTd+a9BYan2OL20ziJPh7drzFqNq3pvRl/xqFPBmsxvwkEuP7ko/riu738+ppQ5UkZIzQ8NBjVeSMjSbW9s7VoLq3ePBHJGR+Y4q5nJ4q4k7oPvHPrStMkh/eID9BiueeB1vFm0cV3RT9qTAzVs28T/ck2n0eopLeSMgsuV9RzXJOhOG6OiFSL6jADUg4FCjP4UprE1GHrQKWlAoAaaTFOI5zRigRZ0of8TOH/AIF/6CaKXSuNTi/4F/I0U0JntzNjGT3pTwKbK20YIpqerc10HMNlJPygVKihUAxz3oXk5xS5zQAv0ooFFACUh6YBoPNMO7G39aAECnkE5pksnlJwCWPQetTKuO+ajkjy27OCOmaQxpJ2bR98iqLz3BDWyfePcdqWR5BC/lg7h1cmlsnjVQhb5m7kc0AWIIwgCLlto+Y1Z3EikRFjjCIMen/16VeBg9fpQIdtAwW5NcV448Urp1r9jtXH2mTjjsD3re8Q69b6Jp8k0z4fGFUdST0rwq+vZtQu5LqY5kcnv0HpXLiK3KuVbm9KHVkRZmkZmYlmOWY9z60hIpADnFNlkS3iMkhworgs27I6HZakV/eLZwA5/eN91f61zZcuzMxySck0txdNdTmZj14APYVFmvVo0lBHmVqrmxSeabxSmmZ5rYxDqaTJz6ClzjtTcimTcBzzThimLntT1U55oAcMGlVTnpRwOlPXdnnpQJjduDTwcdaCCaTHrTJJN3FJu9qYG9qUcmgQ8NShjmozwetKM+tAmiYPzinHHXNRKxFPB3daokXcPSgHByOKAAKXjFCEyRCSeelThgoxmq6YxTx600ZsmDZGc09CScVHlWXilDAj5aZDRaiCg4HFXYQC+M9qzU+Y5FaFsCrjFMlly3kwjdsGtK2lcQuY2w+OKy4wAxBq5ZyFXIHrSHF2aZa0Tx8YpGtrokOpIO49K7ey1y3vUBDqc+9eJ+L9HkgvFvYDhJOuD3rLs9e1DTnX522j3zWXtLOzPZjDmgpI+jnto5vmU7W7EUA3FsADmRfUGvKtB+JkcYEd4SD0ziu/0vxdp9+o2S5P0q009iGmjdW8SQYJwfQ06HEm7PPPFVXa3vBkEexXikS3uIW/ctvU9QTTAsPaOjF4yQT2qaN2KgM2GHXNQrfpEQJ1dW+mRUhktrpN6v09KALAlwhZmz9KesiFASPzqrAhjX++pp7SEEfKcUAPMMb5MfyvVZRcRP3IzzVpAG5INPMm0dQCPWgBEYOO4NIFdT1zT9pkG4EAUq/L0bNAAkpLbWGKbPEcb16jpiiXJGduR3xUQlI4Un6EUALHcMMK+c5q4CCMmq6hZD+8XBx1pT+5Xg0ATlRSE84pBIGA96Xqc0gG5xyaZJsccjrT36cVGzHFAFaSzPWJmU/nVeSzkbqMMP4lq8twhO1uDVjjaCOhp3EQWokCgSdR39am70uaDzSBA3akI3Cgn2zSE8cHBpjEXGDkYpF+VsZzS54zikK7sEcUCHE4FICAM+tIxxxipEXK4I4oApyxAo2SGU9RVBZJbVsrl4j0HpWhNbuHzE2D6GqMwYHEyMo9VpoC+k58sPjjFKZxOmI8Z9DVa1lT7pcEe9WfKT0APqKBDI5MnaykGrYICEdfSoStGcUDIPLZpM9KlK5GB1FP3d6ARnNAiJJMnGOacZBnDHntSsik5UYPekeIPyeCKAEC85PJ9aXgnpQoI680d8/zoAQqCvXNJ070OfK5bgUfeTeoyPagBQaCuenBpgdScDr6GpO1AhOSMZpm47trDFOAUA5BpDz16UAJnseKU0EbhwaQq+MrzjtTAMUHjA5pCGyCpwccg07JI560gGuMMCDShiR2oz8vvTRg8NkGmA/arL0waYEKHKk07DAcnI7UhyRx1oARgGGHUVXa3A+aJiDU2T0PWjGOlABHOzLsmGPr3pklmG/1fH405vmGG5FAG3BVjigCsY5oiNxIFTx5IyasEh0AbmoSroCQMrQAhJPB6U3FOU7xkUbTQAwjFIRT24HNNOAMkgDGc0AMyV+mM1h+JdYl0q0jEHliWUn5nJ+XHUkD68VqXF7DHbmZiRCAMyHgdccZxn8K808XeIrLVDCtuJXW3c+Y/KhvUD8cVhWmkrG9GHM7kWs+MLuF/me2YbxwB0I7E1m+dLeRzidkdPL3gA9T09PYVz1/BBd7XskMcY5YByQB2HPoc/nSQapJZKQjszKCM+orhu3ud6SWwqSWsVyxeAKjIdpUYZTnv+H86zZWZbrLMGQZ2uelXoULQTI8kabyWLb8+5FQy6YigNFMrKwJznP5Vdib6k2n6gEcZffyDsJ4NaN6I1k80hZLWYHDoeUb0PuOvvXNvDHEwZxjOeR/jTJJypKq7cjn0aiwXNkOyxEM7soAHy/xe+MVp/Zbc6ahWQqRC0nzfeLbsD6VzttcSNt+bOFycHBP+NXl1AMhXmMsdvHIzSBMZIF+zMIWcAqAGZcZ5+vrREtqojM0rsSf4uF47YHX86ffWty1hbzDiJBs+uSf8RVW5aNIkRgd3oD2/wAg0WuF7Gi2vxQD7JbRBYskmTYMn+nNVI7yRSwc53srkPyMdgc/jWUsEjSHEikEjGTirYtiZD5sgVuvJPT8Ac0NIabNuPV/LQCOKPJJJ2Lggfh9KludRk8uN5VeF+CMnkjscHtSWkNvoeLi4YyXKJ5qJJg+WD0Yr268Bjn2rGvLmW/8y7kdXDHaCR8272qbDuaRupJJVDvI0W7OGwQfofWrUUwdJ0kGcclyPy+vcfhWXCZHZYsYxt3Eevt+VbAu4eJVOE3HPGNwz/SlsBTjDwR3DoW2bcqBwcjtXUWF9vWFOGkb5ienGO35GufndEneWEh4ZGywJ9fvVqWUAPlT2/zsMKFz0Pv+B/WrhNwkpIUo80bM2hkjg9BTkYg88cVDC7zBpTEoUdWz1P50zeQ53fhivbpV1UWh5lSk47lrzAPQUbkYg+tZ07s6EI2Diq6XksLEOM89q35jLlNdsAZzTee+KZDMky9Dn0NBAUfKSOKq4h4baPlJzUkU7IflOD3NQbmxz0pvOc9KBddC95scn31GfUU2SMj7h3D2FVASDnBqeOYhiQcEVz1cNCeuzNoV5REApccVOJIpvvjD/wB4f1pPJbG4YZfVTXm1cPOnrujtp1oz9SICgjFSYpjVy3N7E+mf8hOEfX/0E0U7Sx/xM4T9f5GiqRLPZnkXeS5HApYZVl5VTt9TUKW/mTGSTp2X0q3wBhQAK6TlEYE/dODQiFVwSTS4pMkcUAOo61G7iNC7dBVYSXF0MBDDGf4j1oAth1J4IJpajhhSBQByfU96fux1oAXAFRuvmLt7UsjlVLYz6AUm8JGS3HFICG6AWIRDAzx/9eora2USeZjJAwDVRzLcO0jNhc7RWmmIoVGRnpQNihWMvXio9QvY9PtHuJmCqoJ69aklnS3gaR2HA/OvIPHHid9TumsIHPkof3hB6n0rKtV9mvMuEOZmP4m16XXtTeQufsyN8i9vrWMvJzSdMnofalVTjNeW23qdaSQ4HHJPv9BXOapf/aZfLQ/ukOCP7x9atatf7AbeJsEn5yPT0rFX+mK78NR5feZxYmtf3ULkflSg0m2gcV2HGOJ4qPnNS4yBTCQD70xCHjpSEUA5pT0oJFUYFSDFM6j3pccUCHt7UoBxTVPNSd6aENOeBQelLn5sUjcmgQYGKTHPFA4pynBzQAYwM0ozQTmlHvQJjgOKVD60DrRgdOaZI8Gjqab3xSj72KZDHjpT0UuvBqI9KliOFx2pkslA+WlBA6UivkYpVAxk0xEsWd2avwybXHrWfG+1hn0q0j7mBoIaNCNsucd6ljk8uQZPeqlsQSQT3pWbEmCeKYjV1K1F7pMseMsoLLXnJXB2sOnGDXpdo4JVSeCMVw2u2RsdWljPQnK1yV1Z3PZwM7wsYslspO5Rg061v73TmzFI351NQQD1ANYxm0djimdPo3xBubYqkzE16l4a8UQa1bysjgGMZIY814BJao4OBtPqKbDc3mnvuhlce6k1vGt3MJUuqPqJJ4p0AbBB7dag+wpvJgfbnsO9eL+Hvibdaeot7pBNH6k4YV6JonjrTNQjXE6pKf4Cea2UkzFxaOkS4ng+WaNgOxHSrsM6MMhgw9KiiuUnBDgEY9aabBCd8LhX6+1UIslXJJDYFMVGdiCwqI3M0SlZY84/iFPhXzxuBwPagCwjPGMBN6n0p8cYLZGR7GmspVRtJHrT0ynJ70AS7to54qozZm4AxnrTpHcEjGRT4sbcheaAGylggCnkmpCG8vHX600qWcEkD2qUc0CKoZ2YAgKRUwlK/K1DBR1qM4fk0AT7wTx0pxUFKq5ZOCBilE/IFADJ7RH5B2kelJFHNGw3PlatBRjJwc0owODQA4dKXOKjdmU5wNtDPtXcBn2oGSYPUU1xhc7c1Cl4jHbgqfep3fam4AkUCGIwZeD+BqRUZxgcVTEiSZCHDelRrPKhJ3HjqDQA+e7+zNiVDj1qzBMk0YeNsqahkkS7g2soORWVC0unTEFSYSevpTEbrc5Heo2UkbWG4e9JHNHOodHBz271KWx2zSGUHtY92VG0+1OTzIuG5HrVpgpHIwfU0u35cUwI2JTBPQ0bs08jIweaQLigQ0gGhcinYHTvSAMvoaAHDBU1GAynnoaXf82CKUnNADwoYe9QFiHww4qTOBuHSkLLIenNAA/MeDz9aSP5Bx09KcAM800hlPIyPagBCFJzgZpe3tTQ6k+n1p4bHNAhjjKgq2PagDA5pWQOMjg0gJ6GgAI9KTJzTqTgmgBSSwwefrTM4pw4oHWgBu4AcjijII4xS9/ajAzwOtMADA8NUbcNj8jT8YPPQ0h9McUANyT1H40g6cHNG4jp+tL+GKAG5GcGlHynPUU5tv8AEPypNuB3xQAuBIDg7TSIJIzhxvU9xTeD06U4HsenpQArW4Y74Wx7VGZCh2uMGn/cYFeBRJiYbWH496AEHzr8uDUE+JHjt3X5WO5h/s+n60jW09v80LGRT29Kh+2gylpRtIXGWHvmkC3POviJrLefJYWwIihXbMxJ2s3BwPfnmuKZ5riw8uO3cIox5m0/N75PH5V1PjiJp4vMh+7C7Bvm4bdjsfcZrgLa5MspVriZSW2jBzgcflXDVTUtT0aL9wesk+xoEj2JGcMWyN2fWhbIGJrqVjlD+7hUZY/Wo72ZoJ1DXRmBOHyvK+xrQtJJLm0dvl82KNpkJ/ujgg+461FrFkogis7NnuJUyflIABG7vj1NULm53wKqR/K2QoPBX0OBTvMbUJkjBCEchzwCCRnH45qSR4FkWS3+YoMZkA5ApkmdbXE0aNCdjRvz8yAiq9xGpnxtZP769B+FbS3VtHIlwsaF13ArjOMj/OKjuGj8iZ8gGU5TacjceppgVrezKScB1QYYOaWcWwkj8rcSpyxHrU73chthC7SlQuSyHr6AH+tUTLIm4puCfd5J+b6VJSN1taSeyNo6q2QcE8Dn/DFZ0sInLIEJIB+bvWdcH5kKg5/uHrmtOO4hSSGSOQCQMNwIyFI9qVgI5bA2MAeZSrMAVBGWwe+KpAh5AI1CkHqe3vW3P5GozG7v7j9yq4wqnP0A9TWTqV+91shigS3tU+5GuCSPUnuadrhsdfY+Hbe40aW7M+5Y18xixAyeeSD6dqxrPSLm4JcxsAWbYGH3SB/OqEGqvHHgjKZGQfQYrr4/EtnJBJG0bKrtu3g8jPU/lUPQu1zjllkBIKPkcYxz6cVOrzlN7gogIAL4O38KvXcb7/tcsPlpcSM6JjoM5x+tM8tS4CnqCM/0oA1dJEc9lcRuUk+XO7AGD9KtWNzDabIoDySGZl7f55rD3/ZvmjuQSR8q45GeoNOsLgCVyzqRuOFFKw00dlcX8QYRsAoIyxX+93/GqnmDDY5QD9Kw5bv5I4yOrjrXQ6ShudJvbNlAmhjNxA56soOGH5V04Wt7N2ZjWp+01KisVYA+vOaq3qD7wwKI5Mng8U27cFNoAzXsvY87qWdOkfysscnPTvWmp3L07Y9Kybb93ECTgkYyKvQzDpuqokNE5yBj9RTCxwMgU8SLyMj8qaQCARVEiDO3qaUA9qQjPPTFOHC8UxDkcE8c465qeOfY2c81U4DYFSKwB5GRSY0mi+Qsihk49RULcHGMGoknKkcdO5qyGSYcnDetefXwd/egdlLEte7Il0v/AJCUX4/yNFP02MpqcWeOv8jRXn8rWjOu6eqPZ1GByc0cCk3ADpSgg10HKKDkUnFLUcjlBkDJ7CgA/ioaUKw3EkmiNWAy5yx7elOYZHSgAAzzS4FHYU132jIGaAHgRYJkl8sD/ZzmmSWsFyo/0whPaMiqs7klVY43HpSPcsR5cS5bueyj1pDHyWtmZAovtoHAXyjVlbe2WIqbnIA5JjNZsdu3mFwcgdS3rWL4s8Qpo2hzBHBmcbUGeSTUSkoq7KSu7EXiTV9AlWWw/wCEoFnPtwSLKSXaPw/xrhRoHhED/keD65OlS8+/WuTMjO7PK7F2OWJ6k0Bs8AV50qvM7tfn/mdShyqyZ1n9geESc/8ACb/+UqX/ABqvdaZ4LhzC3jwRuwz/AMgiZuPwNczcSpa27Sueg49zXLSO00jM5JZjkmt8PTU9WvzMK9Rw0TO0bwx4FZizfEYkk5JOiT/40Dwv4F7fEX/yiT/41xO3igcdq7kjhcl2O3/4RfwL/wBFF/8AKJP/AI0v/CL+Bf8Aoon/AJRJ/wDGuHLUA07E8y7HcHwz4FIx/wALE/8AKJP/AI0z/hF/Anf4jf8AlEn/AMa4roc0z1yKdg5l2O3HhbwJ/wBFG/8AKJP/AI08eF/Ao/5qJ/5RJ/8AGuHVfUU8A45osJyXY7X/AIRfwLn/AJKL/wCUSf8Axp3/AAi3gYn/AJKJ/wCUWf8AxriVHHPWpVGOaLC5l2/M7MeFvA+f+Sh/+UWf/Gnjwv4IB/5KD/5RZv8AGuLU/NTpGPanYnmXb8/8zsP+EY8Dnn/hYf8A5RZ/8aP+EZ8Df9FD/wDKLP8A41xQNKQMUWFzLt+f+Z2n/CM+Bj0+If8A5RZ/8aUeGfAw/wCahf8AlFn/AMa4gU9RxzRYOddvz/zO0/4RnwOf+ahf+UWf/Gnf8Ix4HH/NQf8Ayizf41xQodtop2Jc12/P/M7X/hGvA/8A0UH/AMos/wDjSHw34H/6KF/5RZ/8a4kPnjFBzRbzDnXb8/8AM7ceG/A45/4WF/5RZ/8AGlHhzwPuz/wsH/yiz/41xA6U4UWfcnnX8q/H/M7f/hHPBHb4gf8AlGm/xp48OeCduB4//wDKNN/jXDjBFSIxAp28xc6/lX4/5nbL4c8FD/mfv/KPN/jQfD3go8f8J9/5R5v8a4lhg5BpVUmnZ9yXNfyr8f8AM7hPDvgvA/4r3OP+oPN/jViPw94PA48dZ/7hE3+NcKqDGA3NWUbaoFFvMXMv5V+P+Z3EXh/wiM48b57/APIKl/xpf7A8Ik5/4TbP/cKl/wAa5JFKITnrShgTRbzFzR/lX4/5ncxaT4UVlx4yz/3DJR/WovE3hPwrexxXc/i/7MFX740yR8j6A1yG/lSO1dJdRi78PwqRncpH41nVjodmGqWvpYwP+EY8C/8ARRP/ACiT/wCNH/CMeBf+iif+USf/ABrjJ4mhuJImGCpxUdcbdnax6qV1c7f/AIRjwL/0UT/yiT/40n/CMeBMf8lE/wDKJP8A41xNGKVw5TsJPB/gJ/8AmouPpok/+NEPhXwVbOJIviYVK9CNDn4/8erj6SqU2hOCPXNM13wtpkg874kCdcY2tolwv65rq7Hxt4JndI18WRyM3AJsZkH5kYr51eNXGGAqu1sycxsfpWkazM5UkfXEL6PdJ+61ZJEI6rCxBpw0+w6xant+kDf418r6V4n1XRJVeKeRVz90sSp/CvXPCXxOsNTVrfUCLW4AG1nPDVspp9TFxa6Hpogs41/e6ru9xbN/jSxnTGOBqgJ9DAwrKttUtL5SIZo5CB/CwNSS2kU65x83qOKtLzIv5Gt9js2PGo5H/XE0otrNBj+0P/ILVz3+mWcgaM+bH3U8EVaj1aBm2uGR/RqLeYXXY1WtbFxzqHI7+Q1EdtZKeNRJ+sDVU8zfGSq5HtTImVm2gkH0NO3mF12NJ7Wyk/5f8f8AbE0gtLEDH2//AMgmqZbHSmMWzkUW8wv5F1rWxYEG/wCP+uLVC1jpm4AagQf+uLVAjuThlwfWl+VmO4c0W8wv5Fk29iAFOp89v3DUuNPGFbUhn/rg1VSoY5NMlhV0wRRbzC/kaHk2JH/IQGP+uLUeTYr/AMxD/wAgtWSsTr9znFTABxgna1Fn3Fddi41ppxYMb8D/ALYNUn2S0/g1IgenkmqBTMe0/Nim7XT5lO5fSiz7hddi82m2THJvxn1EB/xpTp9mRg6gT/2xNVo5lkGDwak6DPWiz7hddhx0ywH/ADECP+2JpraVYsMf2kefWE0A5FBHpRZ9wuuw3+xrBRldRKt/eEJ/xqylraqAG1Hd7+Qw/rVbPY1HMzRgEDIos+4XXY0GtrJ12m+/8hGm/ZrSNfm1DI/64NVBbhH4zg+lSBhjk8U7PuF12LYhsW6agP8Avy1Kbayz/wAf/wD5BNUmjD/dOCKbkgc0WfcLrsXja2R/5f8A/wAgmj7PZL1v/wDyC1UlIY+lO6Ciz7hddiy1rYk5+3/+QWpwtrJul+P+/LVTK5XI4oQBkJLYIos+4XXYti3sT0v/APyC1NFpYbsjUP8AyCaqpuR/mGVpk1uGbfG5Df3aLPuK/kXvstjn/kIf+QWpRb2QGP7Q/wDILVnhZl6rmnjkdKLPuF12LRtdPJyb/n/ri1L9lsf+gh/5BaqZxR0os+4XXYt/ZbEf8xH/AMgtSfZLHr/aP/kBqqZyaDkDOKLPuF12Lf2fTx11H/yA1AttP/6CP/kBqojDduaNvbNFn3C67F/7NYH/AJiP/kBqT7LYD/mI/wDkBqodKXIIxRZ9wuuxdNrYEf8AIS/8gNR9lsMY/tL/AMgNVHBxQPei3mK67F37LYf9BL/yA1AtbAf8xL/yA1UaKLPuO67F42mn5z/aX/kBqT7Jp5/5iX/kBqomlos+4rrsXDaaf/0E/wDyA1Kttp4/5ieR6G3aqODQOe1Fn3Hddi99k07tqWP+2DUn2PTz/wAxP/yXaqHejHNFn3C67F/7Jp466n/5LtSC1048DU//ACXaqXJqnqOoQaZbmWcjOPlQfeamot9QuuxrXLaTp8HnXOsrHF0y0Dcmuf1Sfw9qSqF8UxwxEjCrYyMT+Oa868Z6pdajagyNtDhtkYPAxjH51yCajP8AZ0sYn2FgUYA/xe3tWNSo4S5TenSUlc7jVtO8JagjD/hYnkxs2VVdHmYDB+uTWDJ4W8AtN/yUVVHYf2JP/PdXCyvK0mInAI/hz/Kl3OCN/wB4/ISDkE881zuTlqzoStojvT4U+H5LP/wsGLaex0Wb/wCKpF0LwBGGSL4j7eDvA0S4Oc/jXn84XYXVR6HnmkeFFn8ndwQMkfypDPRW0PwFLEoHxIy4J2udFnJGe3WpovD/AICYKreP1kCHr/Ycyt+YP88155i1K+XGGyg+bAByfUc89al060ub955I5dkcCAt8vOT0HpQwO3/4RrwEzOsXxEPlt1H9izkj8c46+1IfC/w+CbR8RmJAKpu0iYgZ69CMmuIgnliZbZgeDkbRxyecg1VlUs7NgAAnHOPwApXHbzPQo/DngOKUO/xCVmBzg6FP/jVqTw/4JuYhv+IqEAkgDRphzjPA3egrz2NXktpCeg6A9x61FaRK8bF4jtOFX5jyf85pXBo7s+EfAsMZn/4WKyqeNx0Wbv8Ajmorbwd4GlIeL4jeZkFv+QFP0HX+KuYuLlG0iaCRAWL7iWyNhBHGPTtVyxhdLNUKsiRxNJK2NvBJKrn15p8yBRfc6r+wvAQiVJfHwYL3OiTgH681FL4Z+Hrrh/H2D13DRp+f1rl7e6txGUez+Q9WV8cfXp+lOCWLhhsfa3YHtS5vIdvM6BvBvgOODn4iHltm7+xZzzx7/r0qWy8K+B4biNz8Q/NjjYNsOiTgNjnrn27Vxt5cIqpHGELJwCeid+B2Puc+1OjZpgWcFuh+Xvj09z60XQarqekXem+DtQMYPj7iJMEDR5jyTknrVdfCXg7ym/4r8ZLAgnSpRj9a4W4xb3rqV/egDcyMMA46e+B/hQ9tNEFeWbaTyAPvEf59am/kNep3M3gnwqyGRviAAGJww0eX/wCKqqvhLwNZqAfiA4lPJLaPMQfwzXM29zHGAXtnmH+2/J+lWry0SaJDFFgOoKoTuOcep/Ki/kFvM6yDwz4OKFz45LgLg/8AEnmXBPQ4zWto+ieFUvkEfjLzpBHKgUaXKmdyYPJOO2fevPNOuFtYWhnBUL0DD7ozgj8OtaM9y+n3UM9uVIkBCgjgjoaE9dikvM6RdD8Ghdv/AAm/I4J/smb/ABqI6B4Oklz/AMJ3+H9kTf41x7bCjMnCnoAaZa8vnOOa9eDco3v+R58lZ7HcPo/g5AAfHOB76TMf60R6T4ODZXx1n0zpM3+NcJdOWmXH/wCqoUdldSeOav3u/wCX+RNl2PThpfhNcD/hNQfrpcv+NSjSfCpOB4x/8pkv+NefRudoLgexzVpJ8c4H51or/wAz/D/Ihpdjuv7G8LH/AJm//wApsv8AjSjRvCw/5m//AMpsv+NcULoHvUyXBYAgCqs/5n+H+ROnY6/+xPC4Of8AhL//ACmy/wCNH9i+GP8Aob//ACmy/wCNcqJCw6UodR9cU+V/zP8AD/IV12Oq/sXwxwP+Eu/8psv+NL/ZHhcH/kb/APymy/41yoJYcmlyuMd6OV/zP8P8hXXY7awsPD8Vwhh8TC4cZ2x/YJFzx6k+lFctpLgalCO/zf8AoJorCpTV9X+RpGbse121x5rOhHKHBqximKqbmYAZPWn1wHQH1OKTIJ45qOXJ6nC96dGAF+XOPegB/ekJG7HelprIC4b0piHUxztU07dngVHIu7GT0oGVIl3BpX7dj6UkbgklmGzPXHU+lSyMCfJUdepHYU2a6tLOBpXIAjGct0qW7asdrlXWb9NP05riZvLiXnBODXhuv61JrWotPISIwcRp6Ctfxj4rbXrwxws32VOOeNx/wrlSvJ9zXnV6vM7LY6qcOVCrljg/jUmQil2I2qMk0wHAPQADkmsnUtQ81TBEfl/ib1qKVNzdlsFSooK7K1/eNdy+ka521VznrRgUY9a9aMVFWR5cpuTuwDe1KOKQCjNMhgq7jk9KQHGadnikBGMUyQHPajbzzTwPpRimDHAdKd1poJpwIzQSG3jNGT+FPJGzApoHHWgVwyRzS5zS8DpzTCTmmICvfPSkPIFBzikoELipCuRUWT60u5h3piY/BCmmkEtUsZBHIyKdheTjrQIgbg9KcuMcimtnNAyeRQJjsZzSHNOGQKCKZIikinhj60wA04ZA6UCZLtz1NTIBzVdT6ipEOeOhpiLCcsKmCksMdqjiG0bjU8fHPagZMZMLxRFg5zULEgn0qQHEfvQKxKrde9dZAf8AinLZyf4yP1rj4m2sAe9dbIRF4WsQeCzZrOT2Oqgvi9DgPEcPkavIcYDgMKya6TxbFuktpx0KlTXNdK46qtJnqYeXNTTFopKM1mbC0hozRQAUUUtMQhUN1AqtLaEHdGcH+dW6Kd2gaQadr2paRNvhkdSepz1rvtD+Kk8ZVLtQ69N2eRXn7KG6jNQPaKTlODWsattzKVJM+kNI8W6Zqq/u5l3ehPNbUkFvdqCyhhjgjtXyxbXV7p0odGbAP8JrufD/AMUZ7Aql6ryJ0PqK3jUTOeVNo9ia1u7M7rWTcv8Acfv9KQagokCXMZglPRj92sPS/iLoupOqiUxk8Ydcc10gkstSiKq0cqH3rREMmVnYZGHX1U1LHJnI6+lZX2C6tjusZxt/uSUv9oywENeWzIB/FH8wpgaxODtBpEXJORzVaC/tLj54pQxH5/lVpZElHy5zQAn3WxTyARg1FtOSc0nmJv2FuaAHYAcEGkn2smR1FIY2U5Uj6U1UYtk8e1AhomkgTJGQepp8E4c/MMZ6U90BTHaopASoAXimBLcIv8Jw3bFRR3MiHZKuKSIyYwyll9alIT+KkBYDKRlTS/jVdYyBlG/CnLKuSCcEetADmDHOKbuKg7l5FO3L1DDP1pThlwe9MRCkKM/mAc1KyhhjHNIF29KeDk0AQqHXqc1IMN1p3HekxjPHFAFeXCuODU5OVpDgjtR/DxzQAo7UhoDdsc0bh04zQAAUgGO9OppBA45oACSBnkimCRSakVtwwOPY1Hxkh059RQIdwaQ0bOMqcUmHHXBoAMUAn1oJ4z+lID6ZoAD60jIG5VqU0UANA45oIGKXPFHBoAaKWjHpQ3TigBOpoHWkAPrzSgc80wDrSEc0uOeDRQAgoNOpCOc0gGYApRzx3pcZ7Vja/r8OkRiJB5l1IuUTsvbJppXdkBLrGsw6TbnOGuT9yL+pri5J5r+drm5Ylj0B7fSoR5t3O93dOXZ+pNEswwQo4FdMYJBcyfEqvNYjyQC8Tbjx27/pXDybo7jcQyZOemcd8V3t4wePoM9Dx1rkdQs53eX7MQccbCQCB7e1cOKh71zroS92xhvEiiWVRjoMnt3pF8uSzWQPseJsFSOCD3q2CiaW8MpHmyPuP+FZot2JfyWiIA+bLAZ/CuTqdDIwWdydoZV5OM4pXdTNKzt0OMgZ71LGIo3eM7QzIeFOcnt7UiWc1xOttbxGWRzkIvU57/SmIZcWoSFJUdmMhBU+v+OKu6dfyabFMgz87Ddnvj/JqCKSSzuBBPHHsDAMnykjpznt+dXL+ylazEiIBG48yMqOGA68k8H25oBMl1XUFvEN0sEcYd2UbfYdT+p/Gqd3A8SQ7P3i44PqRzVeA5h8kt33LtGcNjnP4VotaTpEiSERkfMDn6/lxUjGC6WKwa25Ekj4LEcgAdPzP6Vdhto5F2IT0AOAetUYY0uCyx3G7A5LcZ/GtKI21hZgTmZtxx+7G1fzOSfxqblWHXFsm2R3Hzlep4RuR09/61HJeTh2gHKHHUZycA5Ipst/ZzRGIxyBT0fduBxzUlvKkswa2Mby8YDkqTx2NIZTkWSaU5lEozwCcjP0xxVqGyaO4DJgSBgDjIH0/p+NXLdrSWBjJH++RsMjD5gcjOOO3vVNpZYty2q+ZLI2FwO54+6fcnrQmFia5sLAwrLJKFyxiZVYfUH8uPwqzavptrGgg3eZn/WbeSfqT/8AWqk0UX2domiX7VGQwaP7jsePxAxjIOPeqimVmBMvnKCv3Y8gH0znGOf50WuFzfmsobiaOa0kBkQk+UVH3vXj3rNnhkkuBHdOyvk7s8c+vP5U06TKxk8gtBexxiRiv3Sp4H0NQyXl9b26xXxJ/iDNhiR9DzxSs+gaGrDbwwoSke9SMjkklhzx+ePwrXsHiFs27DZOBvGQOe3+e1clBrYOUZQgAI3A98H+tb+lanprLHHM7MyjjsB7/iTRZjM7U541lABXcActjt9MCtOwtmvdCUH55oclADyQTz+FVtSbSI5dj3DTOxxtEeChJ6HB46fWtXRLW4SF5WRlSdMqXG0YA7HsOP0qW7AkY8iiGMgBTlcgVHbY2Fz0A3Vr3doLlSyRFGHysM8fUfyrGuEa1snEhVcsBnPPAr0MLVVrM5a0NSqjLNK5LFc1ciVVB3AnHSs+3KKqknJ96mNxtGASc11pmDRcEoZwB2p4nZTjtWesgHf8KerM5woNPmFYuCdt1TJcYIxmqRIjXOctQjk85qlIXKbSXHHX8qlE/AH8XqKyklxirIlz3xWikQ4l9ZFIG44/nTy4VgAc+9UUmxxjP4VIsu4gD8aq4rGxpJ/4m0PP97n/AICaKi0dv+JrBjgfN/6CaKzm9So7HvbHapwKcDuUGgLxSH2rzToF9qUUYooADTWPQetDNtFIhJOaBDuFxtzk1BM+ZliU5c+napJJQik9T6VTto5I5nmbJdv5UDLOxIIzuPODub2+teS+PvFhu5zplk+IE4kKnr7V1fjjxMmmaPLbwuBcTDap9P8A9XJrxcklixJJJyc1xYirryo6KULasecDryO3tQBuyxPSkHzdetQ3lwtrasT988IPeuSK5nZG0nZXZT1O9IHkRkbj94+3pWSBSFy7Fm5JOeaUHNetSpqnGyPLqzc3di8k5PSkPWnZGOTTCfmrQxHDiggGkFLjHSmIUDjmoX68cVN1qJxz1oEN3EdzTxL0FRGjrTAsq4x1p2fSqw4pwY9qCSzk96O1MDkin9utAhR8xpOBmkB20EimIM0hFNzg0/ORQJiDGaCcGgjAzQMUAOEhHAxTxKduDUBGTSjINMm475velBNJuJpRTJZIrZoY81HTupGe1MklSJic54IzRtIOKejADFAG5utAmwQjbgg5qVBubp060iMvQjBqePbGGPWgY/PAFSZwOtRZHWmu3pSAkDbmPPShpMkDNR5wM1HG25ye1BaRcUnfx1rr9Z/cabptqeCIw2PrXLaZCby+ihXks4H610XiicNrQhU/LCgWs5fEkb0tKUpfIwfEEZl0kN3jPWuRzXaX+JNOmj9RXEZrDEbpnXgZXp2H0h6UZpD901zncKDmlqsS6nIzT1mPRhQImopFZT0NLQMcKQ0A0tACUtGaUUwD2qGW2jkBOMH1qal7UAUPLntmDRMSB05roNC8cahpEoVnbaOzE4rOxUctvHL1HPrWsajRlKmme2+HPiLa6myQTERv9a7MXFtcfdkQn0zmvldIrm0ffA2ce9bmleNtT0x8mZs/7eTW8aqe5g6TPoO50WKVvOhzDMOjx96hS6vtN+W5iE0XTzU6j6iuM8MfFCC6kSC/IQkff7V6HBqVnepuimjfI4wa1TT2Mmhbe/trhNySjPcHg1IYYJfnXhvUGqV3o1tdneqmN+zR8HNZ/larp2dgE0QPr81MR0SgnqMgUONuCOazrLXLe4Plsxjl7q/FWWe5M2VKeWewoAsAqw4HNLjselKOAMjk9aQg56cUDF5UcDioGJ83gZFPkkYHHalQdxjPpQIeAAeDiopYVfJ7nuKeNrDnIakwy98imBAluUOSWI9zVpSpHHFAkB4pHX5OOtAh45FRlgWA71HFcYO1+COKV1zypoAQy7ZgrHirCsMeoqm8WAGPUVJC6schjx1FAEroGBI602NsDG7n0qX+H3qqYQzZyQw6YoAse560x4w3zDginJuAw3WlIoAYCR1p3HY0YpDjtQAEZOe9IWPejtQTnFAg2gqRnBpikqcNT8d6TIbg9RQAuOOKRuoxSig9KAG8+lIaUvgil6igBlGaXFIRQAmaMg9DRn2pAAOlAABQR3paQmgBfl79aCM9KQUZIoAOvTtSA807Oe2Kr3t7BptnLd3RCwxDceeT9KEBT13W4NDsDO+HmbiOLPLH1+grzuKSXUriW9u33sxyT2+lVb2+uvEWqvcTjCHhYwfuLU8kqRRrFFwq8fWumnGwE885YBBx3JqpJMVBC85qN5gW5JyR+FQM2BncOPQ1pew0hxfjJ6E8iud16UWw81ULZ+UOOn4/lWzJKSCwPTvWdqIElmU6hucd648TJONjelFpnOy36vahDEc9fNU9/oRWfcXDyRiIO5A9OAfrxVi5RohsBGF7VRZiSpFefHU65DYwRk8dRitOLVpLKIi1XyyQQzA4Jz6+orNRTNKkQHzE9qR9okZTnOcDd7U2rsSZLFcs0kwk2OJVwePuntir0V+yWIsnYtGvKg/y9qy1QbOh+tW4ZFadIWzsVSM/7XrQwRteG4rVJ7m4kAeSOP7gHCliOf6UzV7xLiVwMxRgBVHp3JqhYXS2U2858qX5S3cc/wCPNW7uBJ1M0LB1bpj1qOpXQzofLt2BLxuP7yenpVm8u1faB90jGB6VmvDIj5ZSCD0I/wA5qwqq6gL1PXJ6frTYIardWUBV/uj09aXzZIJY2A6c8+tSx28aA7XV2HG0cUyezuWUt5RIzyy0tGwL66kJbwzn7kwG9T1DD/IqdkJIeFwUJLNjqPxrnCWCkEYYHn1qzBfS2zcDg4yPWhxfQakdEL23igLsC852jklQMdB1PTjmp9I1dbVNkwzCRkqfy4rnH1NZmBkHA/h6A0w3YmlBklZV6fIvQVPKxpo7u91O3EFzHbujtIAI5AuCACDg/jVCSM3Vkn2ggLLt2gj0z8x56kn8O5rJ0trCW6jjS4uJcZ+WSMBBx3Oc/pV26meaZAqkqcIu48Dn/GltuNtPVGXqmni3IeKNhuUFgXwO68D6iqtmphkKyI6qcBge/p/WukurFpIo2kTAK8MT/X8aS/0Ux6RaTeYm4b9pBzlR0ziqctLE2aEsr23huJI5IgZ5QElnYZZVB4C+nH411E1+1/CLi1YQxxp5bQrzkDjB7Y+grhmsLpbpSoMgfHzrycnr+td/pXhC9+xobiRgHJLBCOKxkzWMbmVZ3EjgWoRm3Jjdn8ev0rK8QweQnzFVIflT647e1dtq2nf2YkDRltoBDEnkZ7mvPPENys0MIjfdtyTu4LcDmtaG5FWyRnedyq5p7S4471RR8uo71O+SyjvXoJ6HI0WkYscLyTV9P9Gi6/MaitYVtofPl+83Cqf61BPOZGzWqdlqZsl8xncnNTp64qnFzyRVkNVxYmWVbjg5qQSkDnFVQ5xTg3FVcmxaWYqRViByzcnvWfn1os7kiUA8jNUnqJo6nR2xq1vz2b/0E0VDpDg6pbkc/e/9BNFKb1FFH0JGsixhXbc3c4xTgc9Og70ksixjJBP0qJZyfuoT9a883LAOabn5qhkd1YLj73apFDY5bj0oASWREGZDhaSKdJI96Z29AT3qOeWNWx5YYj1psMLtcGViduPlB7UAOCtv3HJPUZ6CsvxD4jtdC095ZXxJj5VAyfpV/VdRg0yxe4ndUUDOT2968H8Qa5Pr2ptcN/q0P7pT0A9a561XlVka06fNqytq2pz6vfvdTEgk/Kufuj0qiRtNKSMcEEeooOxFLMcDGa89u7OoR5o7eIzSnCiueurtruUyNnbn5RUWo6gbufCn92hwtVlbnmu/D0eVcz3OGtV5nZExHNKDg0gNGea6zlHEgij600nFIrZWghjwc0u7C00GlxTEJuNMJ5605uDUZPJoEKeRQOKQGlzmgB2M04Ak8UKDinJmnYm4/oMAUzJ9af2yaadp5NAhQxHPBo4PSm7s0DjimJjypFAJFJkU7gYNBDDJIpMUvTmjfximFwAFBo5pQKBMVVLdKXpSr3pD1NMm4CngU1fX0qQYNMTAdRUyYDZNIqZGScCnBAfvHI7GgCRYy5yB8vrTwATtpnm4/wB2lXI5pFWHYx3FISMUyR9p2rUDSY5PUUDSJpZNq49aWHlelUd5keraHC0i2rI6rwfbg6k942BDaoXY+56VQub1r3Up7gnO9ief0rSZzo3g7yz/AMfN+2T/ALtYMA+UemKzjrO5tVXJSjD5suud1vJ/umuLbgke5rsCcRP/ALprj2PzN/vGssR0N8B1DNO600Uo6iuY9AqyvJG/saPNGBuXA9amnTchx2rOd22lD2q46oRdU90bipVmPesxGZelWEuD0NDiK5eWRTT81TDK3SpVkK8HpU2HcsDpS1GsgNPBoGOpRTc0ooAdRSUooABSSRJIOQPypcUCgRTazeM74G5HbNaOneJdU0hwVlkXB7E4poNNIVhzWkajREoJnpOhfFpVVY75SR0LCu+03xbpOqqvkTglv4Txivm6WyV/mjOGpLe8vdNkEiM2Ae1bxrX3MZUex9Q3Wl2V8hMkYyf414NZ39matYENY3X2iMf8s5c/lmvJtB+Jd5akLNLvXpg16jo3jG0v7RJfOjUseY93IrZNPYwcWjSh14IyxahBJauTjJwVz9RWtHMrjMcgZfrmqzfZdQg2sEdSOQRnNZcuhSWrs2m3jwHtE33TTFc3pFDEHBpwCrjjFcq+valYxmK/tMEf8tU+6a1dJ1iG/QkSoSOynmgDU2jdSFSDntUnHpg0hx3oAYUBHHB7U0SMp2yDHoaV2ZRkLmm7nyMruB7UwEaBJmzjB/vCkXMXyuSR608ocbkOGHOKA5Zf3i4z3oEDKsi5OcVSeF7eUyREle4qd/MgUlV3JT4bhLhcA59qAHxTCZAR1xzTlA3E4NU3l+zTDcMKasrcLtIU5yKAHiRC2ATmlY7TVBkkdt0fB9PWpYblt/ly/Iw7etAFocjI5qJpIw3IKn0qwpB+YUyflaAISwP3SKcOV54qAMB9+rBLYzjcDQIAfQ00jnIpQAfb2prfIM7aAHdqaT2bilBBUEHAo4I5HHrQAEClxgdKRR6dKCcCgBDhhwSDRg9OKO/NKR3FADdtNxg0/nmmFO5oAdijFAIwBSkCgBCKSnYpDnNAxB/LmvKvGHiVNd1JLGxdms4SQSOkj9z9B2rrfHmttpmhG2hk2XN4DGpHUL/Ef1A/GvNtOtVt0+0yH5sfKPX3rSEbsDQj22NvsPEmOT6VXe4V1JBzj0qKaTcx5znvVdyBitwJfMw5PrUcxyhJbCmo92Dz909KduG09/alLVWKWhAjYUJncuOCRjNUr6dVJAJJHCkcjpwauTsFiOev3hWXdhZfn+63+znDfl0NeVXTjK1zupNWMi+cCTKgnPXIxWa8iE4C4/HNaVzA3zYaqAt28xdy/L1/DvWUC5DLYss6sKtLKqMS8auPRlzVPOWZvU8U5VBTJ65q2upCJ33PzGgRT2Bpku9MBtgz6dTV6xuEto5WMYklYYRSM7T64qKaC6nka5uIpXUsRvzxn/PpUopleEzSP8vJbg57j0PrVgm4t5zGUZD1AA4/KtGW0EGmRymFUmf5vLVudg6Dk9+aXW2MlnDc7j5sZ8t8dwRkGle4tSpDbtPBLcCTATqG7j1FFvcQQRFS20nq23J/PtUCTyxW6xhWKEfNx2qEITu2YIxnA9KRaLk90nl5jDFieckn+dQQahdRSgoQcnoec/hUPkSEohCjceB3qwllHJhS5YAYBAPJ9KaSEyxcC3vgSQ0U6/eOMqT9aoSWN0PvRcYzz/jV+NmtrhCVDlSMhyeAOuffpVt3a42bCgUA4jzjcTnOT/nrTTJZz3lZjH7xQc80xImkkCICzHPTvWrdaZc2tsrzOuCOAE5/A1UtbmSznadR85BRT71VxWFgkewmfJ2ybeR6g1cTUArl0Z8ZGRnp7/rWQ8hkkZ2OSTmpLWPzHAzgHjrScepSl0O407xHazxtaXZIiK4iJGTGw6H3B4yKa/iARwyRPuYqSoGeG+nt/wDWrnJLA26qQdx6rjnPapJLN0jMz4wSAAp68c1g4o1udn4Tuheagd8KkhA/XCjnH9a9Tt4VMRUu4Bx8qnGP/rV5B4e8y0eK4kUJ5rbB39Oleo6Pd+dFF8xG5QMsPf8AXisJ7m0Ni7fWPm2zJuDx/wASt19cg/5FeKePdBl8P6pBty1lOXe2kBzx8vyn3HH4Eete85yuM5xzmuY8aeH113wrc2ka7rq2Pn2/bkZO3PoVJH5elaUZ8rsRVhzJ9zwe3w0xIBwO3etS2ti7iaUAItV9NS18lZJZGX/ZZdw/nmp728wm2GSNl/2VYfzr1YWUbs8+V27D7mdp5OBgdqiRSWwWAqmL9wB+7j/X/GlF9k/NGfwp86vcOVmoiHvjFP2ms6PUo1GHLKPpmraanbMuPPUZ7NkVopxIcWWcEDihTzgnmoTdRN8quhA77qlQq6HgH6GtLoVmSsPlz6VRjl8u5HoTxWiw2x4BPbINULyDIEi0pX3EjpdDmzq9uM5+9/6CaKpeFmMms2qn0b/0E0UmwsfT5VT9aOB0paQ1xmgwlS+e9OyegpMAGlyB0ODQBHtVGL4y9I0qQwNJI+AOST0FKVdjyAFHJJrz74geLI4LU6VZSnznxuK/wis6k1BXZcI8zOY8ceKH1m9NpA+22ib5v9o9hXIA5PFOwT1/OkAH0rzJS5ndnYlZWExk4zzngVga1qm5jawnIHDn+lXdX1FLK3ZFYee4woHb3rkQxJJJJJPJNdGHpXfNIxqz0siyMVIpqsr8VKprvucLRZU4p27NRA5xTs0zNjycqaiDnbT/AOGoc4FMksBsLTc/7VRBhRmmImLZXnrTO1J2FKpoJAU/HSmg08UxMkU9KTPWm5pd1BJIhG3mmnOfam7qdnimAY+anE9ajwSehp4GBQSxVz3/AAp2Tu5plLmmJj6MikxxTe9AiQU6owe1O5pktCk805Rk4pADTlHPNAhxXFPjGTSbSTxTgMHJ7UXCxKqgA5pGb0pC2eTTS2TgUilEkA+X/apxfanP3qgEm16YzFjRcqw9nySaqyuWOB0pZJQOB1pEXPJ60irWFjyMY61uaNp7anqkNuB8gO6Q+iishF2/Nn3rqLKc6FoE1wylbq9O2Je4QdSfzqZuyNKMOaWuxX8Qagt9q5SI/wCjwDy419McVWiO1faqUYJbcTyRzVuM5pwVok1pc8mySd9tnMf9g1yMT+Yua6TU5xHp8oz1GK5S1bqPxrGvqdeC0TZapwpmaUVyneP68VnXCbXz61f7VHLF5i4pxdmJozhQetSNA6djimE8YNbJ3JEViDkHFTpOVPzHNV8UUmgLyyKejYqVZCO+azQcdOtSJMw61DiO5qLKD1qQGs5Jg31qdJGA45+lSVct0uaijcnr1qQGi4xwNHSkp1ArBS0gNLmgBRQyhhgjI9KBS0AU5bFHJaP5TTIpryxkDRscA54q/SYB6iqU2iXBM39E+Il9aSIkkmUzgjvXp2jeOLPUEVWnAc9iOa8LmtI5OQMN61FGL20YNG5IHocVvCt3MJ0ex9SwPb3EZVtr7u2KzbvwvAzmexka3n7FemfpXiek/ELUtLaNJJHKr/C4yK9F0b4raZdbUu98LtxnGR+fpW6nF7GDg0bn9v6npI2arYtJGpwbi3G4fUit+z1ay1GISW8okBHUdqitr+y1WEG3lilU9QDkVn3fhi0kuPtVmz2tyOd8RIB9jVEnQ54HpSDrWDFeavZKftdst1EOssJ+bHuDirlrrunXmfKuE8zujAhs/Q80XAvyEKjHGSPSq8CmX5iGHPerSyB0zjj1qIKGY7W6UASlemBkelUpIEaUND8jDrVks0fLEY9c0FlwH3cdqYiJNzgrKM+9J5KhcYwe1Tcbg2Mj1FKr4/iDA0AVUZ4pAH6UXiiQKy9e1S3EZkjJVsY5qKAAoPOXB9aBEcd2UZUkXa396tIEOuaotArI2Vz71JbFgmA25aBk7wIVqBXltlIZcrnrVhH+bFLJtJoAjjmScfJ1pwzkg1XEixSHMZX3AqUShyAH5oEO2jJ+XFJ3pQOck80uM0DG5xTWJWpH4HOQPXFRqwUdcigQ0MpPvTh79KQhG+tKAR9KAFJHajIPWkxQDigA2gUc44paKAG96MZI4yewp2M1V1K7Gn6bcXROCi5X3bt+tAzzXxjcjWPFTxA5tbACNj/eYnJH9PwrHuJtzKMYXjA9BinOWjRtzZlkYvIx/iY8k1TdiWz2rqirIBkrbenSoCeaHbdQOcUDF3Dr+FPiXr9e9NK8VHu2NzQAs8JcEBtvPGOmayp0ZEYbWVl/iXpWvI4MeR3qsTkYKrXNWpqWpvTm1oY62ryM3mbvu/dqvLAZFdVTMgj2/if8/rWrOHKs0YJKnpVFnV5QXBRujA8V58lys607mE0EiEgrlhxj0pYh8hYr0rTuFJPlvMMdg2c4/wAKobcptwSA2PT8KL3QrCxKY1LO+0sMDAycfTtU8UrIwKQqo+6TjqKkESNG80md2AqLjOfX+lNbfCodlLZPDEdKlsaQ++klllCzEk8IMN0xwKtLPDLaRiSRliICOxHcE4bAHXtWb5iuHPynjqDjH4UtszPuVdpcDJI/i9eMc0wL39mjczxXKMmSH57GqE8XkERsvzjnK8D/AOvUqXS8Kq5HU/NwPoDmnyec03+ugRexVtxGfcZIpJBcqlvmMkak56sR3q/a6fPcFS0xw/AGTyew/Hp+NRXML/ZftBztQ4d2ydzHg9eSc57U2y1h7U7WHykY49P8KbXVBdMS5jcXLbcKo7dOn/181LbXPkyKfMjU467smquoXC3UguEOQxywBzg1XW3ke1NzwFDbTjk/Wna4rnSyXyz2/lls8cHBz+n9awLm0lT5mSRUySCy4z9PWpdOMjOW4KgZYs1LqF3JdyANKAuQAuMDH0oWhLKMQctvEYKLy2eTj61KVMbbH5GNysOvXqParunxl7aWJkDecdo7Yq3bWyw74iYpVxnaeoPfBpyYRRVimYABy0gfjcoAH51trOCLe3SPYFBZQAQOcDJFUbD7La3nmSyKY0OUixj5vTHT8zVuTUku3KrEYXY5GGIHXqfU+9ZM1RoQie5vbewUYfcAEYgHg5yeeOleqadbC1tYlychdi57Dqa8nS2csk2/fcI37uUevXaffuDXbJc6lqDK3nurtGCEjxwvv6/TrXNM6YHaxPgkE49qmiBLySewC/hnn9a53TL2eVjFK6yyI21nxjr3x9K6a3XdHtPcVESpdzwTxro/9heKLqBF228x+0wf7jEkj8DkfTFc0zZVq9f+KmiSXmjw6pCoZ7IHzB38s4BP4ED8zXjrdK9SlPmgjgqx5ZMi6mlxQBS5qyBu3mpvKXbk81En3qsMcJTSEyPyk/uj8aFUBhtd1/3GpFfmhm+YU0BoFrmODdDdzYx0bDD9aifUbrBDmJx7rtP6UsUimLHeq0uATirbfQhJXOo8JalF/bsCvC4JDchhj7porO8Jn/iorb6P/wCgmimpNoTWp9c0Gg0lYgMJ+anA9QMdKAOazdb1i20bT5LqZgNoyOaTairsdrvQyPGfiaPQ7FkibNw6kKoPWvE5pZLq4eeVy8jnJJq5rGrT6xqEl1M5+Y/Ip/hXtVAnjaOteZVqOcjshDlQhPpVe7uVtrcyOevC+5qdmRFLPwBWDqqXD3skNyjwvCxjaJ1KsjA8gg9DniphDmY5Oxg38ss1y8kpyWPboPaq+av3UGIt3pWfXow2OWS1Hqc1Mr9qrg4pwbkVaM2i6h4p2c1XV6mVs1aMGiVelMYcUoNOyM9KZDIlUntT9vy571Kq4pH5X0oJIc9qUGm4JNPA4piY7IIpRTMEUoNMVhwpxpmacOlBLHZ5pQabmkzTFYkLY6UgJNN6ilBoCw8tjFKDmmUoNBNiUUhpBzS4pk2HDBqXA9KjQYqZee3FMLCDA7U4DJ9qXgUhbApXDlH7gD0oyCDzUG8k9aN2ByaRaiSM/FRPKR0pksuRxUIfHWi5SROj4O5qR5gOlVnkOMUJk9TmpuUokqqWO41MinI9KSLp61fs7KS7mjtbZSZmPcdKe2rC13ZGh4f0o6jdgz/LaQfvJX9h2qLX9TXUtUJiGIYR5cYHoO9amuXkWhaWmiWJ/fMN08inue1ctCCBg8n1rOPvSu9jeolSp8i3e5bizirSHiqqHip0PHBrY4zN8QTbbZEHV2rnY3KP+lamvzeZdpGOiLWRXPN3kelQjywReVtwzUgNZ6zGPjtViOcMOorCUTpTRazRmmBs04VDKFIDDBqJ7ZW6VIDS5oTaAoPbsnriojwa1eo7GoZIFccDBq1MTRn0CpntnTpyKiwQcHrWiaZI9JNh6AilEzK+4dPSmZpO9FgLi3DOwxxV1GyBmshSVYEGtC3csKykrFplrNOBpmaXOKm4ySgU3NLTAeKWmg0uaAFoooBpAFLSUZoAZJAkn3lFVHs3iO+Jzkdqv5ozTTaE4pj9K8R32lyfLO8LZ+8vSvR/DnxRiQrDqDb+n73FeZSQxy8FR9aqSWLRsHhc5FdEa/cwnR7H09p2tafqqB7a5SQH0qPUdBsdRTMkQDn+NPlYfQivmyx1nUNKmEiSyoynOQTg16ZoHxX3bY79SR/eFbxmpHPKm0dk0XiHRQDbSi+tU/5ZycPj0yOD+NWrDxbpNxN5dyxs7x+PKn+U59vWrOneINP1WMPBOhJHTOD+VJf6PpeqH/SreKYHuRk/h3q/Qg2CqTRkggqRnOajWaHYVLqQO3pXKf2ZrugOH0u7N3Zr/wAu055Uegap7TxZpE10kF/C9jeE4CTLgE+x6UXCx1Stjpgio2jBORxTUljIBQgqe+c1KOvP5UCE/h201kAAHapMUxsnjFMBHHlIWX5vaqUSyLIWBwc9Kut92gqrjBGD6igQi/MN3Q05vXtVYq8DZU5HpU6PuG4dD0oGCyZJUqMe9MkjAPmAHI7CpAfm5ApdpJ9qAGJNGW54PvUg5+lQvGqnp+NSI3FAEm7PXpTSqg8DiikZgoz1oANinp1pNvvSZ3DINOHSgBh3KeOaXkjJp2Kb0oATPIpcgHk8UhFIy7gBmgQ8evGBycn9a888U62dSvGtrdybOFuD08xh3rZ8Xa4bKAadbS4nmU+YwPKIf6mvO3kIYYIVccAmtqcerAhuJMngk1WdztxTpXpuNy5NbFWIsdBTtuduCMCjJ3bQAff0qQr2A470gEkHAwagkwFzUpICkjov61A53d8D0qWAsMmVwME570yQ7N3HPpUYcRygj7tOnYkf7XrU76FbDY4eS7lWA6ZHT/Gse/crOVVmI7Z61sSSFLVVH3iOaxbplIBPX1rlrU1Y3pzdzP3ldyt8wPOTTlGFZjyGOaV0yeOpqLDwv8vfn2NcTVjpWpPb+aJNu0Oucg54rYie1kUeZFA6js6nI+jD+orIS6YKG2Rrg4BK1diuvtKsom8pu6njH0Pf8ahlLQq3yW7SfukK47BsiqlnIY70F8DcCue3Iq7c2zRxqGk8xhyxznNUmaAHcAcjoO1UmJjWgEUzJMdrDjBGadDMkEqsihj75xViFU1BDEw/eKPlYYyR701bQQK251LEnDDoMdfx6VVxWEu72S6hZZmz3CjgZ9fxqlGocYYYHQY6k0sxweGDH9KaGGzjgg5NOKJk0SRECf5goUEA57VdMZt4Wiy5R+eOhxUMG1ZAxQSIzYKk4z7e1WzIskBMbALE3yhjlsfX8KTZSQ7RREyXdu7FDINqse3X+dS4t1kIhiKKuQdx5yagMjLb7o327pF3HI49Ks2ipI6rJlpc4J7E+xqWwsSmDyY0ZZUXpkk5Lf0/GhbXrERgEbo8dT7daZLaZHzxTb13feYBccY6Dn6VJbMqKch1UjIzyQcUhiTwWH2fdIrR3CjGGGAT61ShdDcIof7p6AdT2q3eTYYK670xuHcClsHSFz5MAZ3H35OStSUkdHYuJjH8zERtvYbcBSPT1rrbK5gtlmZAfNYFTIfuouT0/wAOnvXFwmRUBdwGzycHjP4mr9rfGZvLn6bgqMCcDPtWMlc2jKx1Ph3M19PNEW2tIAgbuMcnHau3iISLdnjFYOlCGOLCxYkThuMYq/qF39nhAHDHoKhI0lsLe28d/ZTW82GjlDIw/wBlgQf5mvm27tms72a1mP7yCR42x3KnH9K+lk+S2WM9QACPUk5rxP4mWIs/GU0yqES7iWXI7t91v1H6114d2bRzYiPupnH0h4ozTWPFdZyD09aklOEUVGo4Ap8nLULYBlDUtNNAE8BOMe1Nk60kRwwpX5Jp30A1vCjY8RWv/A//AEA0U3wt/wAjFa/8D/8AQDRTjsRLc+u80hYKMnpS5wKg2mQlnJVB6elZjGX17DZWMl1O/lxIMlq8S8V+JZNevSIiVtUPyA/xe5FdB8RfE63bf2RbPmNT+8IPHHQV58BwOB+FcOIq3fKjppQsrsAB+J5JpCccD86Xviq9y52lF6muaKuzW5Uv5mk+SPIUdT61Z8ZIx8ca/j/oJXH/AKMaq/lceta/iyLPjXXSRx/aNx/6MauyKSVkZvc5OS3dlII4IrEnhaGQq3WutdcZx0rJ1OzLx+cBynWrjKzImtDCpQaCMU3pWxiSq/rUqOR0NVgaerYp3Jcbl1ZAcDoalFUlk5GeRVlHA75q0zGUbFgH5abJnFIH4pHbOKZlYRfTFSgD0pkeN3NSMR2pk2I2GaTnFKTRQIb3pwowKdgUAJRUm3PSmkYoJE6dKdSA4PrTlXPNMAo708KPWjAz0zTFYcg9qeEIPNMUnOSakLZGaLj5R67R9aCxqIyAHrRknrSuCiPMmByaTOR7VEzoOvJqBpSTxwKLlJFhpAOlRNIWqMv71G8nalcvlJDJjqaYXLHiogpJqaNeKVwtYcqknnmpAM9KRQanijaR1RFLMxwAOaBblixtJryZbe3j8yRugFdS1zbeEbF4UZZ9VlHzkciP8aiFzF4T0rYFU6rOMsf+eanoK5Qu08rTSks7nJJPWobc9FsdKiqK5n8THmSSWZppGLOxJLN3zU8fSoh24qRa1SsrHHNuTuywtOMqwwtK33RTAcYNZur3W2EQqeW60SdkFOPNKxkXM5uLh5D3PFQ0p44pK5j1EIwyKjBKnipetRkc00JkqXBXrVhLlW71Ro/Gk4pjUrGqrg9DTt1ZiTMh61aS4DdTzUOJaki1mlzUQfIpwbNRYq5JweoqN4kcY24pQadmjYCo9oQPl5qBkZeorTz2prKH4YU1OwuUzKs2kuHwelPksweU4quY3ifOD9au6aFqjWBpc1DExZeetS1lYscDThUeTTgaYySgHNNBpRxQIfRmkHNIaQD80U0GloAWikozSAcOKXvSUZoGI8avwVyKqPYEZMTY9quilqlJrYTimVra/wBQ09gY3dcdw1dtoHxRlsSsd5EJUB64+auS7Y4xVeWzjk5AwfWtY1mjGVFM+g9K8b6LrG1YrhY3I+6/y4Nad5p1jqUPl3UUUyEcZxXzAv2qzkBRm+U53DtXV6N8Q9RtHRZ5DKi8bW64rpjVjI55UpRPUj4Y1XTJTP4f1PAH/LtcklD9D1FXP+Ex/s5Nmt6dc2ci4BdEMkTH13L/AFrP0X4gaVqvlxyP5EncMP611zeRcxjISWMjg8EEGtEuxltuMsNZ0/UIhJa3cUqt0KtVsjJyDxXI6l4Ds5ZTdaTLJYXHUGMnaT/tLWd/bnifw+Uj1WzW8tIzzcW3XHuKL23Cx324AlTxilPHSs/S9c03WLNbizuI3BGSueR9R2rSXDDI5HtTFYbjI5GarlJIpfkGYyenpVokAZzSDd65FADCeOlAY04r6U3p1FAA5LISuCRTI2YfeXBp4AByODS8nrQAM20D3pFY4wcUhVgeDle4pdqnoMe1AC4B6DFOU4HIqPBB68U4HIoAcDSHBpKWgAxUVzKLa1mnOMRxs+CeDgZ/z9amrj/iJrQ03REtUbEly4DY7IDk/mQBTW4WOBvb6a4lknnctcTEsx9M9qpvJhQCRxQcEEOQzZzn2NVpuCQvrXSApJlk5p28fdxzmkA2rx96hQMktye1MY5FGSaSViAFBxikY4BJ5FQM+44HA7UmwH+YXDAACo2A5JOaRmCdDTS6su3HNTcdivPzhlPAp8cokUHPTrTGTI+7x9aqswtpdxGV71F7MpK5NN/ExJwOgrImJZ8dvSr93OrQkjoelZJc78qfoayqO5pBCgndj+L0q0bdiqttJAUAGo0miLDzRkjunWtcqSic/uyMj0rgqPU66cbmDJEY/lPfpU0ciwNuAOduDipLpG8zlcDrmmPGpjDnt2FZXLaGSJ5QeSNsq45XP3azmJD5HIq2QQCAcZFV3iKYU8k1cSWiSLeuDGRk9Qen41tRtaXUH+lxMJF4V4x0HXawP/1/rWHGMDnkZwRVuKSQZGWbIwCT2okNFmXT7aa3leyJJQbipHzKPX6f55rHeNo3MbfeJx7YrRtri4sLoXMEvluAe2c+o96r3KLPJJKo2A84z056fSnGQpRH2Vs7j13DGAe4qw1qgjRRLhyfljZNuPxz7/rUdqfKXYysWA3Ky8+tX2kt54A5Pyr1Cr/jz/kUm9QSM+MyWdxLb3kb7JPvDHPsasRMqyCVVBHUsvY+gHWi5miaJVDOygYXd/8AWNQ2gfd5ar87DjBHNDdwSNGW6jmKnDbMdByVHsacsyq+UcvGMAgr/MHp+tZo8xZf3gClScjBBp6rwCGA5zuBzn2+lSNk0twpbzVUAdCG6enFaOnS7z7hjgEHGKopbm7bgoem/qBj1NbFlas0TtDEzrEMFzwoqWVE2LdYgzS7QXfhscDntx1qIxR2+qBy3yuRuR1IBzjtz+eajsLuUloZzGzoc57Y6Yp2pyyGK2I2hy+2MLyxGRmsuptZHW2Ms9pLAYQChO3bnIYf06n2NazypqF9uBJhgPX+8wrDlk+zQQsHy5G1ADxmtK3by7ZYo1xgYPvSRS1ZtJKJJcAkgEAVwfxa01pNNsdTQDEDmGQ98Ngj9Qfzrt9PjPysT9frWV47tlvfBWqIeGjiWfHoVIb+VaQdpImqrxaPAzSdaDSpya9A84mjXJB9KG605OBTGzmn0ENFI1LTWpDJI+tK/XFNj6insPmFNAbfg+MP4ktc9Pnz/wB8GineGHMGrRsBzhgPyNFPYln1fwxIzXHeOvFS6PZ/Y7Vv9JcYG09Pc1o+IvENholk0zSgyHhFzgsa8Tvr+bUb2W6nJLuc5Pb2rhr1eX3VubU4X1ZXYtK5eRsuTkn1NHSgsKb1bjpXDY6BGbANVGUls1dKEnGKY8W0ZIxW8FZEsqbSDW14u58Ya4P+ohP/AOjGrM25OMVteKoN3i/Wz6385/8AIjVothHOLbuxyDT3t90RjbGG61dWLFNZKLgcJqFuba6dCOByPpVU10uvWDsn2hRyvBFc0eetdMHdHPJWY2jNKaSqJHhqkVzUHNKHIpoTVy2JfWpd4PeqIkpwcVVzOUC4JAD15qUOTVFHINTLJxTTM3AnJOelLk4qHdk9Kdn3p3I5SUGjd6imA45o3U7hyj/Mx0FKGLVEDzS7j6UXFykoyD1Ap+Rjk5qAZJ6Y+tOGc84H0ouHKTKVHalZvU1HlBgk0hnQdKLhykqknpj8aewP8Tj6CqRuucCmmcnvSuVysueYqcgZqNpSc9qqNNx1qNrjtmlcrkZZL44zUTTYNVmlZjQoJxmi4+S25P5jN0p6Iep601cCpg2R0oEwHAp6CkVcmrlrazXBAjU7QfmbsPxoempKTbsghheWRY40ZnboAOtdEjW3hmAyyhZdRccAdENUDqFtpEJS0YSXRHzSddv0rFcyXEpllZmY9z1FZtueiOhKNJXerLE9xNe3TXFw5Z3OSTSqcfSmhflp6itkrKxyTk5O7HA56VMtRjgU7cOKZD1JJJlSIuTwBXNSTNcTO5Oc/pV7U5ZHAjjB2juKzFBRuRjispu52UKfKrsD1ptPkHIPrTKg6ApGpaCOKAI6KOlFMkKOc8GiigCRJWU1ZjuA3WqVHQ9aTimUpWNQOD3p26sxJWU9eKsJcg9TWbgy1JMuA5pwNQLID0NSBqzsVckBoIz1waYDS5pAPxxxTgaYDTs0xj6Wo8mnBqBjwadTBSg0APBpaZSigB1OBplLQA+kpop1IA5paKKAFFLTaWkA6ikpaYCnkYwKry2cUuTja3qKsUU07CauZrQ3NswaNs4rpNC8e6lpLrGZnaMcFH5FZ3UYNV5rOKYZIwfatYVWjKVJM9q0D4iWGpFI5XNvORj5jkGuxt7mG7gIyrr35BFfLRtJ4PmhPGa2dI8Xano0qlZnCg/dOSK6Y1ovc5pUmj2fVvANjezG80yZ7C8zuEsJ25PuBwfxrCl1nxV4UkCajbG/tkP/AB8QA7iPdf8ACreg/E3SL6JVvZ1tZiOrZ2k12ltf2OoW4aKeGaJv4lYEVpvsZ7GXonjHStcQGG5Xzs4aJ/lYfhXQhgygg8Vymt/D/SNWYzQo1pcnkTQ/K36Vhpc+MfCrCKayOrWKcCaI4l2+470Xa3Fa56RRkGuQsviJo8siwXszWVxjmG4UoR+YrpLbUbK9RXt545A3Qq2adwLO0UhWnAjsc0e/6UxDMHGRzSc9acOtGKAG59aNpPKNSkDHSjaFHFADGleM4YU9GDDNB2kYbOaaqMp4YMD6UASgc9cV4v4/1JNS1+byzuhiAiXB4wOp/Mk16T4t1g6RocjI4W4n/dxc888E/hXiV24Mhwcj1q4jRNZyq1orMPnX5WOeuOn6YpyOzt+NZMTlLnbzsl+Un0raSJIVxnkda1ixtBIcScnr0pwG47eme9QNKAwYYJPApslwSNoP1PpVXAfNKPuLyB1NQEhV3GmBgcnOTVeWXkjv6VDY0hzMXfk8dqidijnn2qB5GGD09KXzd4weoqWykiyJPkxnmq82Nh3VEZAOc1UmuSx68VEpaDS1IGlaMlWPy9qhc5GRRI5ce9NBzx2rnbNRCSBxk1LFfXEEqyI/Tqp5BHoRULADvTNjE5IwKlq5SbT0OhtJYNU+VF2SDllxn8vWoLu3WCbZHIzAcEt0rMify8MrlGXkFeDWomowXQxc4STHLDofr71zzp9UdMKiloyp5QlzngqetJNCPJ45ZB+fNTy2p3DbKGB5X3pkcTRs2WII9azRTiJBbq6O7Kehxx3pzRbYApIyRgn0qxEHY9SEHrSx7SrGRTkHpQIryqMfMvYCqkgypXPbpWgj75cYC5Bxuqr5LCQI+M55PrQDEgM8fl7QJI8fdI4P19PrT7mNI5FnhL+W/Vf6e9W0t1O5DnAHQUOkKDySrFR2Y07isUTA1wv7gdOi/wCFSJayvHteJtwHuMVP5LtOG81hKmPu4A/AVcVpmyko+Ynkk9aTYJFSCfbG1rcAPCwIVmUFoz2IPXAPUd/5VZoiqIBg4OOG6CtB7NnlBJBOcZHQ1Su42875WUBffA/WhA0XLUnAWRjjdzx1Fb4v2mEVtEMRAACNeg/xrlUmWMpiVWfPUdq2rKcMpJkKSg8A8g/Sk0VFmn5Ys5VlwTKW+bB5xz0/KrOj2kt1dm+ljyo+7H1xzUGkRLfXarJN5iLxnqMdjXommaJFFiVwRGMBUXgHvmsupotditaaHI07Xd4QX4CRj7qD/GtEW6qx46VqhQwIA71RmZI5ACwyetJmi3LFqgCVR1+1WTRNXDHiW0kyPTEZFXYW3HApuqqZNJvIwMl4XUfipFCeopHzKepz2p0fNRdQMnPvU8Ir0zzCbolM49afJwAKZ2qhCGozTmpnU0homjHIqUjn2pkYqTqwFNAaWjOV1WyjHVy5/JGoqHRG3+J7RB0VW/8AQDRSbEdtrWsS65qL3c2dmTsUnhR9Kzcjr370hO4n3oAx714zd3c7FoOz096uQ2jMu9uB2qGyRZLkI5wOvNdIkCGPAAIHTFXFDMUwDHBNQywll2nmtaWDYx6D2qMIvXFVcRkrBgjIrb8TJnxZrPH/AC/T/wDoxqqvHz0rT8SLnxTrHH/L7N/6GapPQnqYgiz2prQ8Z71bEZJ60Om1cnpVIDJurMzIynoRXBahaNZ3bxEcdQa9OaPchwa5zxJpQlsjcIPnj6+4rSnKzImro4k8UlLjjoeKK6DESkpcUmKBBRmiigBQacHI6UyimFidZSOtPExqtmlzTuS4otiY4pRKap5pdxouS4FzzTR5xFU95o3mjmDkLfnHNIZic81V3GkyaLjUEWDKT3phk96hozSuNRRIXNNLmm0UXHZC5J70oGTTaXNIZIoAqRT6VACakTmqREkTjrU6EDg1DFG0jAIM+9XFMNoNzsHk/u0nOwlSctehYtrQyL5sp2Rj170lzqJwLW0BWIdSP4j71Smu5rtsE7U/uiljQL04pJOWrKlOMFaG4+JMHJ61YWo1xTwfStTlk7u7JARjFPFQjGalX7tMgcM0Y3VXubkQJ159KzY76aNyQcgnoaTmkzanTb1Nlo+MECq8lqj5ytRwamG4kGPetCJ45BlWBpq0jWzRiXdv5QBHSqddFeW/mQHjkVzzLtYjHSspqzNYO6EoooqShrdabmpCM0wqaZImaKSigBaKKKACiiigByuyHg1Olxn71VqKTimNOxopID0NSBh61lqxU8Gp47jB5FZumWpl/OaUGoUkVuhqQGs7FpkoNLTAadmgoeDgUoamZ4paAJAaUGmCloAfmlpooBoAeKWmUoNIB+aBSZooAdmlpop1IBaWkooAdRSUueKAFopKBTAXn1prxo64ZQadS0wM+SwKtuibaPSp7LWdS0acNBPImD1Bqz2xSMiuMMARVxqNGcqaZ33hz4tvlYtTjEox99eDXp+la3p2s24mtJlcN2PavmWbThkmNselTadrmp6JOHhldMdRng10wrJ7nNOi+h9F634V0nXItl5aIzdmxz+defX3gPX/AA9Objw/ftJCvIgkP6VH4f8Ai642xX8QdRwWB5r0nSfEmla4u61uF3kcoW5FaaPYy1jucLpXxNW1kWy1yGW1uk+VywynHcGu+s9asr+NGinRw3Qqc1W1nwnpGuRuLu2RnP8AGBg/nXnmo/DfWtCnN34evWZR/wAsmJ5HpTu0Fkz10dPaj+VeUaP8S7nTJhY+I7KS2ZePNC5WvStM1Wx1a0W4sbqOaNv7rA1SknsJxsXaTFL6ds9zRg0yRuOfamgfMMHvThuJOelZviDU10jQ7q7ztkVdsef7x6f4/hQB5n451j+0temCNmK3HlRjtkfeP51xUrEk4qxdT5Y89eSfWqRf3rXoaJEUhIzmtCxuzJCC5G5flcD07Gs+Q7qgS4a0lMgztIww9aSlZjaubMoWMEc46gVWLHPB4PrT4w06iSV9zfw46EVBcLsbdn8KpvS4IHmKrhcVXc4GQcnvUYcliTjPanKw5rPmKsDygx89ap+ayuDnHPNTu4LYIqtcL3xUSZSRJLJu5XNVJDRnC8MaaXBOOregrNu5SRGzADJOKb80h9F9KlWNc7nAJ9O1DDaeBxUjEUbOgFOJ3CmGkxigAYbajLZPSnMc0wDmgC3bXLwAof3kR/gb+Y9K3rKOC5t8g71HTn5gfpXNCpo2ZH3ozKfVWxWcqaexrCs46PY6RbIMuzD7RyAF5FVxbyW0m2QA9+GBP41lG7uWGGuZdvpuNRRStHKHVsNngj+tR7F2LdaL2RsS26l8svyt09QagubNtm7cXA9KtWl3HeKUOd38Q9asRxbmeMtyvT6Vg7rQ1STV0ZltJKRtWTaT1BFWJrd3jaUnkevepJ9POcrwT0NMR5thhmBDAH/IouKxDG/zhtuWGMr/AFrQzFI5dJeWJ4I5AqHy1ChiMFhtyKgzJD94Ex5xkDmk0MuSGGG2cxIGmAODgnmqclqZo1AUZZQTkc9quRlBGzKvykfNg1pwXenwiEHez7Rlf8img3OXhtna5EDBAVO3lcirqo9tKsSXKklgSFB+UjtU+oWDX04nhTy+OQTRY2WD8zEAHgY6mhsSjqa2jubK78xf4uCD0r1nQ9RintBG46/TivH5NyBSvVa6LSNYaNFVAWkIwQO1Zvc6IxurHp7xCMgZyD0NUHsA0pZ8kg45puk3jTxBGO457n+Va02NjE+lLcLNMoBUgIycZXH4UNIHLDtjkGqdxcE7uM4HA9aLZJY4Q0znc/zH2Pp9KglnzXMnlTPF/cYr+RxVmBehqz4jtltvFWpQLwiXUhUexOR/OoUGEzXqQ2uec9xshzJTelHVs0NwKskjY0qCmE81KgxikMlTIWnRjLe9NBJpw+VSfQUxFrwypk8TQt/tOB/3yaKs+FQE1i3cjk7v/QTRSYG1kDoamtreSc5AO319abaWr3MwVRwOSfSugEK26gAYUdK8Y7EQxWUb8MNvvU6w3lsPkBdO1SwhJV+Q81cRGVQOc1aGZhu0L7ZwVY+oqQW4fmN9wPoatz26zZDoM+tUWs5YDugYn2piHC3b0zWn4hhJ8Taqcdbyb/0M1lx3zLIFlUrjvWz4knH/AAkuoqvJ+1y5x2+c1S2E9zKWEg4IpHtDIuORVoBWG4npVlVUrkU0IyZLYxKFAJqCa3DwsjrlWBBrf8rd1HBqvJAG4xxVAeQ67os2nXLOqMYG6MOlYpz1xXtd5psVzbyQyqCGGOe1eY6/4em0ifeqk27fdYCuiE77mMo2MKilI7U3PpWhmFFKD7UcGgYlFLg0lAgooooAKKKKAClpKKAFopKKAFopKWgApKcAT0BpwiY9qLjSb2GUoGamECry7UpljQfIuSO9Lm7FcncYsbt0U1MqRpzK4GOwqBp3f2pqqCeeaLNi91Fw3bkbIVCr601IyzZfk+ppinFSq/OKpJIxnOTJlUCpMgVGp5p3fNaGBJ3xUgO3pTARijOOtAtyTIpktwI1681DNOE4Xk1TZi5yxzWcp20R0UqF9WJMzSvuJqPaRUlBrK518qtYjAx2qWOV4jlCRTDRTuLkNmz1Vdvl3PcYzVLVIESYSRMCjelVKUklcE8VXPdakclnoQZooYYNJQA6jikooAUoDTChHSph0oNK5TiQdO1JmpSM00pVXIaaG5ozSYNKKBBRRRQMKDRmigQoJXoamS4I61BiiiyY72NBZ1YjDfnU6sMdc1kDjpUqTsvHas3T7FqZphqcGqpHOp74qdWB6Gs2mi0ycMKdketQg07qKRRKCKWo1OKcDQA/NLTM0oNIB9LmmA0uaAH06o807NADs0tNpQaAHZpabSikA6ikpRTAQHnFPpvelzQAopaQUtACjOKa8ayAhlBFOFLQKxQm05T80TYNLbXeo6ZIrxs6kHIZTzV3FLjIweR71cZtEuCZ23h74sTQrDbaiFdV+UueCPrXoul+M9F1UhILuPzCfunOa+eprGOUlgME+lR2st9pV0s9u5+Tpn0rpjXT3OadDsfSmpaJpWvQFLu3jlB7gDIrznUPh1rWgXjXvhS+kUA7hAX6n+tc3Y/E3ULWRSCOD8yt3r03w78RNM1eJEuHWCYnGG6GtbxkYvmic7ZfEfV9HcW/inRpoVBwZkUkfUiuz0nxp4f1jAs9Tt2kPSNjtYfga17mzstUt9s0MU8TeoBrz7xD8JrG8c3GlSfZbjqAM4z/AEo96IaM9GjmSVcoysD6V5n8RtfW4vU02Fg0dtzJ6GTuPwrnrC98W+FNT/s69d2tFUt5jcjHsfWsC9u3uZ5ZpGLNIxYk9yea0g76hy6lK4k+bj6VB5lJK9Qhsc9abkWkWQykcmhkRh2I9Koyy4HBqmbuQcBjUuoilE3rK5WBDE7bdv3Se4qWTZLnb0Peud88yAbj8wPBrZtZw0Axgdjz0NVGomDjYgmiYdKj3EDb3q5McnaPzqjKrJk9u5pSQIjkk29etRC5B4b1wBSmN2Xc3yxn+I9SaiO2MYQYI796ybZaRIYiXO4bF689T+FMJVeFAx7UzzGNHfikMBS5JpBThSAQimNT26Uw0wGmk70poA5pAOUVIOlNUcU8UIQjHiowcHvTzTCaLDLMM3lOHjdVYevWt3T76K4yS4Dnjaf6VzStxyATSl2yCGIwcjHas50+ZGkKnKzuVlGMY3A8EGopIQx4XjtkVl6bqfn7YpjiTHB/vf8A163ICGPJ/CuVxcXqdkWpq6Mv7O6ONq7lB6VIYmwQ8b7WH93pWyLZZB97HPSp4raRcYZce3FK4+Q5u00qdnYo4MZ7Z/IVqWWnR7SXjfcG43CtcWxwOApHU5zn2prRgY4wQe1FwUAW2TYBgA+gFUbmxeAZ2/KOnOavNKI168ds1l3V+7ZGeOlIdrEbEYyMH6UxWKMJI2KOPTvVFhKcvG3ftTo5WPDZHrmnYpM7/wAI6usj+VJJiXcMA16HhZI+DnIrwi0u2tLuOdCQwYHPrXq+h66t7GmSOR61n8JpJcyuM+5dQxuRvZtzD0/zk1dv3EeFGPm4rIaTb4gnLOAol+8ei9zWhekSSq2cgHNElqZzjZHifjqBU8c35Xo3lt+JQZrFbhMVveNdreM7va24BYxn/gAzWA5r0afwo82fxMjprtkUMajLGqJAcmp16VAnWp1oAeKe2fLOOp4pqjmkupPLRQOp5+lMRf0OUDXbSNT03Z/74NFVvDHz+I7Y9fv/APoJoqWB63aaYljZiJcF+sjf3jSSRKw5HHStGRTtqic85rx2dyRCix25GDjNX05Aqs0KTAAjpVqJAuAKaYmDRbyKjaIo2R1q2V5FIyZ+tVcRkzW5uJMMgx61N4ptXh8TanJE5LPeTHb9XNWmiYnpV/XYA3iHUWK5IupcH/gZqk9A6nKRahJGfKmjKkcZrYtmEg+Ugg0slnHMpDoDnvVc6ZPAd1owwOxNNMTNHaSyjoKjlTaGx1qCK7micC5idf8AaxUzSxz8xOpPpmtESUCj+duYnbVfUIYbm2aFlDI4xz2rTkjYjaOc1We1KoFxk0bBueWa/wCGZdNYzwKWt2yOnSud+nrXt9xZrNaSQSrkMpwDXj+rWD2F88LLtGcitqdS+jM5wtqjPNFBFFamQZNLu9qbiigLjvlNLtB6GmUGgdx+w0bGpn40uT60BoP8tqPLambj6mjc3qaNR3RJ5Le1L5P+0Kj3N6mkyfU0rMLom8uMfealzCvbNQYoxiiw+a2yJ/tAHCrUbTO1MxS4oshOTYnJ7mlxRRTJAU4Gm0UASqalTrUCmpFYUyJFpSakGcVWV6lV8jrVGTTZPwBmoZZvlwpqOSXsDUVZyn2N6dHrIQk5yaUEGkzQRUHQlYU0lJkilBBpDDFGKXFBoGJSZp1Jii4rDHGRUWcGrBHFV5AQ1XFmckANLmmClBqrE3JkNOqJTzUvWoZrF3QYpCKXFFK5TQwqKaUqXFNNUmQ4EJBFFSkAimlPeqIaaGZozQVIpPwoJFzRSZpaADFGKM0UAH0qVJmSoqWh6jWhejuVPBNWFcN0NZGKkSVlPBqHDsUpmsDTs1Qjul4DVaWVW6Gs3FotSuT5pc1FmnBqgskFLmmA06gB+aXNMpQaAH5p1R5p2aAH5opM0tIBRTqaDS0AOopuaWgBwpwpmaUGgBwNOplLQA6ikFLQAUYoopgV57OOYZwAfYVSaG5tGzGzFa1qMVSk0S4pl3QfiBquiyBBKXi7xuSR+Feq6B8SdO1YLFMBFcHoOxrxWeyimH3cH1qmLK8t5w1qzF84XBrohX6HNOiuh638TddSZ7bTrcoVQCZ3U5yT0H5fzrzOVsKB7VPdOxdULmR1UKSTnJAqnK3OO/pXbfQxirFeRh2quz0+VgCfXvVRnrFs2SHs/FQuoPNBbv1ppJqGURMCDU0M5U4yevI9aY3NR8q2RSvYDfjlRkDI249AKhlliRvn2vIv3Rn5V+vqayo2IBCsVz1HrUnPHWr59BWLLzs5JY5OMc1WccUoHFLg0r3GRingUAc9KdSATFJilpRxTAYc0hpWOTTKQBQKKUCgCRelLSDpS0xDGphp55pjA0AC9KU0i8U6kMQEg5BPHStrT9cKFI7s5A/5a9x9fWsVuKjL/hUyipaMqE3B3R6Ta3iSKrB1ZD0Yc5rRRlYDgA15VbahcWb7reVkJ+8OzfUdK6LT/FkbAJeKY27ugyD+HWuWVJrY64V4y3OzkYMNp6Dnio2kJHpiqFpqVrd/6i4jkPop5/LrV0cjjmsnpubXT2K1wWas2aM9q2TCWHTrQLFV/eSKWK9FzwaEwZhwW8pbKo2fpxV37KZEBkhJbplBin3L3knywyvAO2yMDFUJdP1C6O2W4knUdmbA/SqWoiS4is4ZI4pL6JZGONgO4r/vY6fjXQaW66Ywmmuomj6osbhi/wDh+NYMHhuUEMLbkdjgqa1rPSXDK14ygLyqpyx9s02ovcuLOr0r/TGe5uFBWRtwGM7mPXP0rRupUUY6DrnPFZENywi4ARQMADgCud8XeJ4bCzlsY5d95KuwIp/1YI6n/CpUXJmdWa3OE1K7Go6ve3w+5NMzL/u/w/pis6RvmNTKMRgD8qgaN2PQfXIxXoLRWPOe9yJjmoycChjgkdx703NICaL1qdetQIOlWU6U0Jj0HNU798z7B/DxV9cKNx6AZrNhUzTNI3c5psDd8JwhdbtmYc/N/wCgmipfD5xr1rjp83/oJopWA9idcjFUpF2n/GtHAIyaqzIvNeMzvRVxyOKlVwDiqzRzOxAIAqWK2cYLMTQgLykHGakMZ/Co1AVR61Oj5XB61RJAQd2O1aOsqP7c1A/9PMn/AKEaq7MmrusKTruoDB/4+ZOf+BGqWwupRUJ/F1qURKy8Cjy8MuQDU8agE4zVITK3yNJ5bgH2NVbrR0kDNbv5cmOMVfazLzeapOR2qVVO0gAg1aIbORiN1p0xW7BcE8NVyG9juZGVDyvSt+W2SZMSoG+tYt1oWGMts+xvQdKGNMeyblwRz61wfjnSN8H2mNeVHUV14ubmyJS5jLL/AHgKLuCHUtOlRGVsjpRezG1dWPCqQir2rWbWOoyxEfxZFUa607q5zNWdhKMUvFGKYhKKKKADFFFFABRRRQAUUUCgBaKKKACiiigAooooAKKWnRxNK4VepoGNBpRT5rd4ZdjdetNC96SYWHK1Sb+NtRjil75pMaiiQ9c0UinIp1QbjKWlpKADFNIzTqMUwGgEU4MO9FBApAOxnpSFaQAjpRu7GiwBio5VyM1NxikK5GKadgauilzTlRmPANOZdr+1W4xuAxxWq1OdogW3fGRyRzSoc8VtafbhpcEcGs/UrY2l8ykYU8inOOg4S1sV6KOoBorE6BKQjNOo70AM20YxUlGKLi5SI0hUGnMKQDFUmQ4kZXFN5qfGaYVppkOLI6Wgrik4pki0UUUDFoxSZooAXFOV2XoabRQBaju8cMatJMjDg1l4pQxU5BqHBMpSsbAanb6zo7vHBqyk6sKzcGjRSuWg4NO4qANmnhqgolpwqMGnA0APpwNRg07NIB4NLTAadmgBc04GmZpaAH0opoNGaAHjFLmo6eKAHClpuaM0APopM0ZoAcKWkFLQAfUVNajZ5sx/5Zjj6npUJ4FSXzfZdPSLPzt87/0rehG8rmVR2jYpBwzkjr61BI2T7023fJ3cYNNmfax6V3NnOkVZTg/Wq564qSRstUJPOaxZaFzhqQ80h5pRyKQxtIRQaQHtSGJ0NTxtuFRYBoQ7TQBM6kfMKRXzUgOVx2phXBqhDs5o60zNLmmAppCDRmkzQA0tim5p5ANN2mkwAU4daQDingcdaEAopD1pw6Uh60xEZPNL1FDe1IDQMWgZpKeATSAgfcTUZ4FXTHmo2hHrSaAp0lWTADzuGKjdAg4OaVgGRyPE6uhIIPBHBrfs/FN/bqAzLOvdZSc/ga58AsflBzVqHT7m4PCEf7THFS0nuNScdjsrTxfYz4WcSW7Hu3zL+YrVivo7jBiuI5FPdDnFcbaabbW3lm5j8/5wWVTglcjIH68+tS63bWsFzPPpDyrBFIfJcjY7R54yPWsnRXQ2WIl1O6hmQITsZsHA6c1L9sXG5IsDjk9f8/415nb+JtUgIxMJMDGJFBzWnD4wuEjHnWsLn/ZYr/jU+xkaKtFnci9nmwEYBTVpEkYNzvJ6GuBfxmwUBNOQMOhMh/wrN1HxDqOpIUmn2Qn/AJZRfKv49z+JpqjJg68UdZr3jOKxha10xhNd7SGmzlYs9cep9+grgIS0s5kclmY5LE5JPc/jUBPpgVbtVwua3hBR2Oac3N6liR1iTJ5PYVSlmeRss2fQdhS3D7pDz7VATVMkXtSoMmm1NEvFCAmQcVOgqMDAqZBxVpCY24JFuV7txTUURoFwM4p8oDlQWAIFRvkHHWhoDU8OnOvW3/Av/QTRTfDn/Idtv+Bf+gmipbA9waIkZXpVaSI+nFWPtKGQxL94VElwJC8ZHSvHZ3FZ1CITRHz0pLjMSnjcCaSJwx44PpUDLIFOJCrnBpqtkfN1p4bNUmIehIwTWnqvOtX/AP18Sf8AoRrPwCgxV/Vvm1q/9ftMn/oRrRbEvcroAWAqdVHOBUK7IvnPFW0KkdeDVIljVZV4zzUyqACSBUEVqFnaQvnParhGa0RBRuHKOFVCQep9KidFI+XrVqdXKjaMmoHRYY/Mc4J7UxorPCskZWRQQeMVj3WiFQXtH2H0zxXQoBNGHxxTmRAtSx3seL+NNBuYIxcumTnkiuFz2719Ea/pi6lpc0eMsBxXgOpWrWl7JEQeGIFa0ZfZZE11KlFFFbmRp6Jp8OqXwtZJvJZx8hPc1oXngjV7ViEiEwHdDWDbTtbXUU6HDRsGFe02bNcWcV0XBEi7uO1ZTlKOxpCKe549No2o25Ils5kx/s5qo0MqZ3RuMeoxXrV/NufJHHasZ4I3BLIpz6it4RbV2YydnY87II7Git3XZbeMrDFGofqxFYY6e9Jqw0xP0oyK6jQdAFzF9ouV+U/wnitkaJYKOIB/OsXVSdjRUmzz/k9BShWPY/lXe/2XaL92BR+FIbKFekSj8Kn2yH7JnDLBK3SN/wDvmpFsblukLfU8V2LRBRhVAH0qIx+1S641SOZXSrgjJAFVniMbsrdjXWmPjBFYGpQFZi2OpqoVG3ZhKFjPp0bFJAw7U2itWiFoat/D5trHcLkjGGIrLzW9pWLi0a3bkMKxrmFre5kiYfdPBqIPoVJdSOiiirEOjPapcVCpxVgLu5zUS7lxfQZikxTyhpMEdqm5dhmKKdn2pCKq4BRSYooAWjFBPNB6UANwc0obHWloxmgBki7hU1odwA9KiK81JbErNjtVwZlOPU27QEc0viC2MlpFcKCccMamslDgCtO8tRNpcsY5+XNdL1RzJ2dzhUORilNR5MchHocVL1rkaOyLuhKKXFGKRQUlKaSgBO9JinUlMQmKSnUmKAsNIzTSlSYxSU0yHEhKkUnNT4pjLVXIcWhlFKVIpKYgpabS5oAWiiigA/ClDFTwTSUUAWI7ojhjVtLhG6NWZRnBqHBMpTaNZnbb8vJqVWwBnrWVHcMnerMdypPNZuDRalc0Awpc1Argjg08NUFkoNOzUYanAigB+aXdTM0UgJAwpQwpgNFAEoIpc1GCRTwaAHg0U0GloAcDilzTaWgBwNLng0ynA0wJ4IjNMF7Dlj7VQ1S48xmYH5T0+lair5FgX/il7egrBuWLIQexrupQ5IHNOXNIbbsPlApLg4YimWpAdT2zikuz+9aqexJXYjGahPNPY9qYetQUFJnDUtBoAXhulMI5pcY5paAEGRQVzS9KMg96AFQkHFSnkVAfrUsbAjGeaYCdKM05hTaYATTaWkpDFpc03NGaBDxg07H0qIGnBsUwJKQ9KAwPag80CGU01KRTCDSGR7wDT1mFRsh60zB9KVwLXnDsaYzZqAE08GncAIJpY4vMfaWCj3p2M0jj5cCgQ/yTDIHRlYqQQOxregu4LpV2gK/dR1rlju6ZNPVymCGO8dMHGKgLHV7McjjB/OpbxYpkDoNuRtMYXAFYlprQwEuVJx0dR/MVsJNAyBg4IPOc0wscpdW7WlwY2HHUH1FRbuPetrWRDLCCjAtG3r2NYYNICROuT19ac7cUwNTSc0wHKCzYrQj+SPPtk1Ut15zVi4fZCR61S0QFMnLE+pzSU2lFSA5Rk1ajXgVDGtWkHFUkBIOlSKaYKntozLKq+pxViZQvHAueOSvH+NTZEkYcdDVWX5pnbszE06GURkq2dh647e9IRs+GwP7etv8AgX/oJopfD6FPENrnBBDFWXoRtNFQyj29YIw5f+Ju9V2gaN2fPWotP1K31KxiuLV/NjYZyD371cP7wYPFeTJW0O1FfG4YNVGjMd0GAzmrroVOMUg68is2Uh3DAZ4oZHCnb3qQBTwetJCD5zKWDDHTNNCHQq4UZrT1dlTWb5iOPtEnP/AjVZETuavasinWL05z/pEnH/AjWq2Je5nQh52dJF+TtV5FGAo6UxeQOMYp0asGJJyKaJJ9uBSjNNMoVeVJNSDDAVqmSxuM1BdwedEoPPNWT8oz0FMJYjKnIpiGLCEQKvGBSNGdtTLnGTQeelMCq8YJx2rxj4i6KbW+a5RflY54r21k3tyK5jxron9o6JKVXLxoT+FTs7j3Vj56oqSWJ45WQoQVOKZtb+6a699TASvSfBmuLLobWMhzLGcL9PWvNiD9PwrU8P6gNO1WOVjhG+VqTipaMOZrVHoV1Kr7QOo61n3UoijZyeFGcVbMXmSb4yGRuciub8T3YgU26N8zdfpW+yMlqzl7mZp7mSU9XOa1fDujvql8rFf3SHn3rKt7eS6nWCJSzuQABXrmhaJ/ZemJGFxIwy1ctWfKjohG7GrbrCgjQYC8YqJ4O9arwbRyvNVzbnGScVyXOky3iNV3jPcVqNER2JqFoc9qVwMpo/aoSnPNajw8Gqzw45FFwsUSozzxWbqdtvjLDnFbRj4wRVeaHchUcimnrcTV0cSRg4NNGTwBWhd2TLcHAwtMSAJiupVFYxUG2WNJdopRnpVnXrb5Y7pBwRhqrRNskUjgZraEYvLJ4TyWGVrLm965fLpY5KinyxtFI8bDDKaZXQtTIKtW/wAy7e9Vamtn2zD3NTJXQ4uzLRQ4pjrgVcKZ6ComjPpWCZsUyD6U3BFW2j9BUbxnHSrUhWIKQinlCO1NIPcVSYhB0oppYCgGmFx1FANGaBhTov8AWrSUqcSKaFuJ7G/ZvsxW1ZP5rNGedymsG3OVHPFbOmOBdoM9Qa7UcDOIvk8u7lT0Y02M5FTauNuq3IH981VR9prmkjpg7E3Ipe1GQ1GKyNxDSYpaWmA2kxTqKAEopaAKAEoxS4oNFwEwKaRnpTuTSgYp3FYj200rU2KQimpCcUVytN6VOUphQ1SaM3FoYKKMUHNMkWikzRmgBaKKKACiiigCaO4ZDgnircdyrY9azqBwcipcEylNmyHB6GpA1ZEdwyHk5q5HdI3BODWTg0aKSZd3cUiyc4PWolkz0IpSAxB9KgosA04Go1YUoaiwEmadUYNODUrAPFKDTQaXNADxS5pgNLQA7NSwRGeZIx1J6+lQ5q3YnaJZCcYQjPuaunHmkkTN2i2R6jcL5xReFUcD2rDMobeKu3kgeVj6jr71k/ccg969Cb1sjmiupJC+MD3qS8++D6iq6kB/Y1NdHdErZyRxUX0HYqmg8jjrRR0NSMbTqRh3FKMUAFJj0p2KTkdKYC4yKjZcGn80uARz1pAQ5pA205FSNH6VEVIoAtI4dM9+9Liq8L7GIP3TVjORkHIpoBCKQinZoIpgRkGm4NS4pCKQEZzSBjmn4pCtAAHpwkphBppyKLgT7xTgQarbjSh6LgTkZ6U0oaZ5uKUTUAIY/ak2VJ5q+lIZVx0pANGRT8A89KjMnpTS5PemAkigcg8+lRkkHkc04001NguKs0kY+R2X6GkMrk5ZmJ9SaQ4oBUkA8D1pALuJBPNMq8TYrasAJGmK/KT0BqiaAClHNJUkS7jQhFuBcLUN0+5wueBVgMI4yTVBmLOSe9U3oAlPRckU1Rk1YRaSGh8a1ZAwBUarxUgq0IeBV6xjPkXU5OFigZwffGAP1qnGjMRgZ9q0NRdLHQhbH/j4uWyw7hB6/jVImTOe6CliRnlVVUsxOAB3NIfU16x8IfAUupaimu6lAVsYDmEMP9Y309KiT7CO18CfCzTo/DNtLrMMn2+U+arq+Gh4Ix6cgnOaK9PiPzgYwAMUUrC5j5S8A+JTpN+LKc/6LOeCT90168SGVWHORkEV83qxVgykhh0Oelex+CPEn9q6b9mmcG5hAUk/xVw14faR2UpdGdZkEc1Gw+bilTpgnLd6jkdlYcVyM3JUBz6VJDAiTmQdTUKtuwanViCooQiwVBOau6mv/E5vv+viT/0I1T4A5NX9U41i9x/z3k/9CNarYl7kKsMYx7U+Mc4piDdxipYkIPc5/SmiSRtqYyQM9BTthzWdqmp6dYASXt1HGR0BIyfyrl9R+JEKKU0+BpHxhZH4Wtowk9kZzqRhuztZc+W2SBx3OKqDUbS0tx9ouY0x1y2TXl174o1nUOJrsxg/wxcD/Gsxmd23SMWPqxzW8cO92ck8Yl8KPUrvxlo8IYQytK/+ypxWJJ49mC/urRB7sa4lJcZBHFBly2cmtlQijnli6j2Oom8baq5+QxJ9EzVKfxHqtxGUlumwRggKOlYnmqHYZpfO2rhiCatU4rYydao+oGCBiWaJWPXOKZ5EB/5Zr+VMebAzknJpPOHHNVZGXM+4r2tufmKLj6VA9hZSZBiTn2qwsw6HpTTIrOBgYosh80l1LVvdNbIsSopUD1rH1LShqVyZvMZGPY9qvyfM2QelNEjFh8x/Ohq5SqyWxW8PaQ+n6oJ52Q7fu+9ej2+owzcMQpPPWuF+QsC64bGARVmOYoAANwHqawnQ5up0U8bKO6O5aMScjBFVpIgDjOKwLTWXgHLE47Gtu2v7a9wSQGrinRlA9Gniac9mNMHBzzVcwgnpWsUGOCCPaq8kFYnSZMlvjNVZISBwK2JIiOtVXTtRcDLZMrULQEg1ptFx0FQFCvai4WOX1S2KgnFYp612uo2we3JxzXGzp5crCrg7iYytzSpA0QGeVrCzWhpUuy429mq3sIj8R2gjnW5RflcdvWsSu4vrX7XYyRHqoyp9K4hlKuUYYIOK2pSurGM1ZhSqcHPem0VoSbdqfPtlfv0NPZKraRKDuhY+4rSeMZ4rnkrM2jqimUqNkzVtkqNlxxUgUynWomWrjJmomjppjM+SIk5FNCkVdaOomjrVTFYgpacVxSYp3AM0+LmVQaZUtshedQKa3FLY14xgDBrW0tc3sfPQE1kx8nHpWppbAXDyE4CIa7NjhepyWqndqlwf9s1SqW6fzLqVs5yxqI1zs3sTREEY71JyPpVZTtOaso+RWclY1g76C59RRS4BpCMdKg0GniilznrRjv2qhCDmnCkpaQC0mKM4oFAwxQaWkIpCGnNHanUYpgNxQRS4oNO4EZWmGOpqCKakJxuVitNIqwUBphSrUkZOFiLNLmlK03GKZGqHUU3NLmgdxaKKSgBaKSloAkSZ075+tWo7sHrVHFFS4pjUmjYSUHoc1KHFYqTMnTNW4rsHrWTg1saKSZpBs04GqySg9CKeJOaixSZYDU7NQhh608GhoZIDS5pgNLmkA/PFSLIUjYDvjNQZxT15z71dN2kiJ7FKdyX6YAJqhP8A63I6Vo3IBzzWfMuVBHbiu6W5zoj7g9qnHzIRUKcoRUiMdu0VJRB04paJBk5FNV+OaQDx6UhXmlBpfemAwcU7dRwaQhfWgBeOxppIHejaMdaaVHrSAerBuKRl96izsbIqYEOM0ARbe1PRzGcdRQwx0qIsaALfynkGlAFVoTjntVgEUwFptKTSUwCkpaSgBKQilpKQDSKTFPppNIBhFJSk0lABmikxRSAWkpaSgAppp1NagBOO9J06UlKaQhQR6UGm0UDuGKs244zVfrVpcIlNAhtzJn5BVYc05m3NmlUUMRJGtTqKjUVKvFUhkoqSNCxqFeelattbdDjJOOKpaiehYsbdS/mTEJCnzO3sOaxb+8e+vJbhxgMcKvoB0H4f1q5qt6Ahs7djsB/eEdz6Vkors6qqksTgAdTTbsjPdnSeBvCs/izX4bVFZbaNg00nbb6V9T2dvb2FnDaW0e2CJdqADtXJ/D3wvD4X8OQJt/0u4RZJ27gkcCuvVsd8DvULuKTLETBZAOOaKp2MklxdNKygRDKoO+R1NFDBHxjWjouqy6PqcV1EThThlHcVn4oAzxnHvWLSaszo2PoDTb621S0S7tZAyuOcHkGrEj87SOa8t+HetNZ6r9glfEU+dvs3avVmGRyM+hrz6kOV2OqErojU7RyDinRyM9x5KgnjOaVUIHJyKeuIyWX7w9azRTLOxiBkjPpV/U5Ams35kwkYuJPmYgD7xrjNV8ZWOmqY42M9z/cTgD6muY8ea3qF74s1m0knIt4b6eNY1HGFkYc+/FddOhKSOWpXjA7jUvGejadG3l3S3Ew6RxHcc+9cZqXjrVtRO2FhaReick1yUa/NntU4xnjpXXChGO5xVMTOWhK7yTyF5pGkYnqxJqRQB2qDljTwxH8WK3Xkcjbe7Ji6KOvNJ5hxUJOTmguQB70ybD/MJyTwKiMmO556VHvO4g9MUm7K4+9QBKj5GW6+tLuy2e1QAY604MBTEx7HlfQ9qbnkU0vxuo3ZPPVRQIfyTwTSZZMnmm8jmgttXnqaB2HrK5TjrT1LYycE+lQhsDB70FjnI6UhFwSllHrUolCrtyM1niRkbilM3PvTFsXiRkZIPPTNTrK8TDy3I+gqgkqlfmOBVhZVxjOQKGrhdp6G1b61LGV3MT9e9bEOs20uA5CnvmuN35IycGp0YKPUHrXPUw8J+p1UsXUpuz2O0fbMMxkMp6EVEYB6CsOyuXiwFfAPStUX3l4E6/jXn1KUoPU9elWjVXusWSAAe9VpIiO1aIMcybkbioJBgmszYzZo967TXE6xAIrhiD3rubxgqn6Vw+sKfPyK0giWZG+prafy5lbOMEVQeTBNNEjFuK6OS6M3JHocBEsauDnIrjtctfs+othSA/zDH610uiys1mFbsAKr+IrXzrfzB95OaypvlkOSvE5ClopBzXUYk9rJ5VwjE4Gea6ZVDICOc81yddHo0/2i32N95On0rKqtLlwZO0dQtGetXmXmmMuaxuaWM8pzTGQ56VdaIZqJo8GmhFNk5qJo6umPmmMmKYGe0dRFK0NmRUbR801ICiVrT0a0aR3lI4A4qq0Zycda6zTLE2+mrkZLc1vR95mVV2jYxSpikYdzV6EeRod5eOQAw2rUV7Fh8heSaTxPKLPSLTT1GJMbn/Gul6I5VqzkCckk9TzR1qSIA5NWIIFHzGudySOmMbldIWc9OKseVsWrHGOKacYrJzubRgkQjkUUrcGkzmgYhGaMccUtFACcd+KUilxmkK+lABijAoz60YFABRR3oNABiiiigBKQ06jFMBuKCKcaTNFxjdtIVp+KQ0XERlaYVqamkZq0yHFMgK03FWAoIpCnpT5iHTIM0uacVphGKojVC0tNzS0ALRSUtABRRRQA5JGToTVyO7BGG61RoqXFMak0bEcysOKmVwawldl+7VmK8K8NWbpvoaKSe5rhxTt1VIp1ccVMGrNpoq5ODTlODmoA1PDYFAyG5baxBHB5zVF/4gPu1pyL5iYHUcis2QbWIH411wlzIwkrMhi4ODTkOGY+1M6HNK/Cg+tUSJnn2NMZSDkDinA5FLux9KAGBqeGprJ3Wo+lAyY800jFIrc0/ORQIjzSGlK02gAIFLG2xuehpCaaTSuBZIzUbKAKWAPJkA/Ko6+lRvkt81NrS4XFRhUuaqjipUammIm3gDmgOp/iFNAzx61XIwSPQ0PQC3mkzVUMRTvMalcdyxSVD5xFOEw7jFFwJKaRSeavejzVpAJijFIZl9M03zvQYouA7FJTDIxpCxPWi4XJCQOtN3imUYpXAUv6UmSetGKWgQlFLRQMTFGKdRQAgHIp8r/wjmmlsdOtN60AAFSLxTQKcDTQEwNPBqDPFWrSIyyDJwo6k00BbsbYytvYfIKkub8cxwH5R1cdx6Cq93eh1+zwEiEcMx6uf8Krg7celaxM27i4GeehNej/AAw8FNqWoJrF/BixgOY94/1j+3qBXK+E/D0/iPW4rREbylIaV+yr1NfRtpBBp9nFZ2qbIYVwq+g9fqamTuyTTEgxknj16VHcTyNayGEbiR8vvUKSBlB9RxTnc5+ViFC5OB3qRWLttcQwNGkjhZMZ25yenpRWONY03TtQVJ7y2SRx90v+8PHoO1FJtFJPsfJtFFFZG5JDK8EySxttdTlT717P4X199Z02Jv8AlqgCuO9eKDrzW94Z1W50a+89FzERhlPeoq0+dabjjNQ3PbbieG0hM07qkSjJJrz3xD4ye+DW2mlorcnDS929qw9X1y91qctcOyxD7sangCqIHGT19KVHCqOstTCtinLSAinI3Ek59TXQeLuPHGv8Z/4mVx/6MasEDFbvjA48b6//ANhK4/8ARjV2JHH0Mkc9sU4YqPNKDTIZNmkLCo80A84NAh+RjnpTSQozTSRuNMdsgUAhd4JFAcFmqLknnpSnAHWmJkhc7aaHO2mhsjNIDmgQ4k0Bio+tNpM5oAl8whab5hzmmZGMUm4546UASiTJ64pQ2OM9ahBx160bieR2oAm3YPNKcZqIZ24/GlyME96ZLJiR2pVkPYZpAQec9qbtPOKBWLAckjJzVgTFcYOMdapIMDmn4I60AzTSYhNynKVq2Gooq7JgJIT6jpXOwybcjsetTr+7l4OENTKKkrMqnUlTd4nXvY74xNZSALjhQapvetGxSdMEcZqrYanJbMF+9GeorVmEdxHuxuVuntXmVaPs35HtUMTGtHTczpnWeM4rmNVi3c10N1p7RndA/wDwGsK8aRQRNER70RN2cpcW5D5p1tb7nzWi8ay5ApIbdo36Vo5u1iUkaum7owBWlMPNgKMtZ9pwBWwqhowTWHUvoef3sBt7p09/lqvXReIbIj98oPFc9XXB3RhJWYc9utXtKn8i9X+6/BqjSg4II6im1dCTsdu4PbvzUZXuabp1ylzZo+fmAwakf5siuVqzN07oi2imMlS7cUgpIZAUHeomjI+lW8UxlzxVCKTrxURSr3lZqNoSDxzTExljafabtFIyAcmutchUCAYAGKz9KgW1i3P99utXxlsj8RXdShyo46k+ZlI2yy3Ss4+RPnP4VxWvag2o6rJLnIB2j8K6vX71dO0yQZ/eT/Ko74rg0UyP6k9aJsIImiQ+WCO9TISp56VOIdqAe1NKVyOV2daVg+lITxSDig1JomMYZpg4OKkNMYd6tEsKUGmBuaeDQwQUtHWlxSGGAaQqf4aUCnUARcjrS4zUjYIqMqO1AgxikpcnvRwfrTASgGlxSUDFxmkxRS5oAbilpcUlADTSU40nQU0A3pSZpCcmlxVCEOCKYRT8UbaaZLjciK00qRU22kK00zNwZDmlzT2WmbaohpoKWm0uaAuLRSUtABiiijrQMVXZTxVmK8KYBquybQMNkU2lZME2jWjuFf7rfUVYVsisEEg5HBqzFeMgw3IrOVPsaKfc2A2Dmqt3HtbcvRqSO7jYYLc+lT7hIu3qDSi3FjaTRnsmFHtUZYMADVm4jMDAOMEjj3FVCOSRXRdWMbWDkcUUZzwaOnFAACVPtQQG5HWjFJ0oAbgjrQDg0/OaaVoAcGzx2prLnpSdKMntQITbikxTs8UwtjigC/b7PK2jqetRTxfxVXjkKGraTrJwxrWLTVjN3T0KRGKTODVySIN92qkkbL1FRKLRSdyWNs02cYkBqIMQac0m/GaV9BiUUUUgE70UUUgDNBoooAMUYopaBiYoxS0UAJijFLRQAmKWiigAopCaTPFADs4ppOaSigQYpwFIBTqAClFJSqNxwB1oGSRI0jADvxVuaTyozBEef+WjDv7CmqVt4cE5lbt/dFQ5ySS1aJWIbBVx1qxDE88qRIpZ3OAB1JqFVZyMA/UV1XhO/wBN0K6bUb63kurmNf3ECgBQ3qzH09MUSmooai29D17wV4bTw1oqRsubyfDzN3z2WtPV9asdLh/0q+gg55WQ5Yj2HWvJNW+IWt6oSkUwsoM5CQfebPq3X8sVzDyvI7SOxZ26knJP4nk1hKslsaxw7luer3/xVtIcrptjLMw4Es7bRn/dHJ/SuM1TxvruqbxJfGKN+DHB8i/p/WuZyaQ5PasXUbOiNCMTY0O4eTXrclic7sk9T8poqLw8p/ty24/vf+gmiiMmOUUnsclRmirdrbbvmcHFbpXOOUkkMt4MkM4OK0UAxx0pwjUAAUuAK2irHFObkxRxTwQKZ3FOyAOaZA4jd0ra8Yk/8Jxr/wD2Erj/ANGNWKBxwa2vGOf+E31//sJXH/oxqA6GPkilzim5yKSmSPDUpb8Kj6GkJJFAgL7X55zTGOTQevNBHGaBCjmkJpAaM0CHUvSm496TBHU0CH7geOmKaRzx0pDmk5oAfTe+KAPelpiGtnoKeq4puaXdimJiliKFbI5pvWnIQOtIB65BxUhbGfeock80qsc9elAEquWOMVIr5PNMDAg800NzTEyyu0kA9asx4HDdPeqKN84Ix1qcuAcqeaBWL0T4Yoe3OfatfTroRt5TnKsflz2rDV/lDHHHX6VaWTKhxx3FTOCnGzLpVHTlzI37lMtlentWLdwh+oBrVsp/tNqQT8y1BcQjaeK8yUXCXKe/CaqRujkp7NVcleOajCyIcMMr61r3EGX4pgi2jDAEUNjSK9sVJGCBWzbg+XzzWW1qpOUyDVu2uJLcbZBlexqGUP1G28+3ZSo6VwFzCYLhkPY16QJIp14Ncl4isTFL5qgc9TWlOVnYiaurmBRmijvXSZGrotx5c5hJO1uldJt6VxMMphmSUdjXawSCa3SQdxWFRa3NIPoNbimEipWXJqFwR2qEWGabkUwsc4pSeKYXHEinQIGkyegqHOamicY4rajC7uzGrUsrGijhmHYe9XAyoCzn5FGW+lZ8TnICjLHpWV4g1kQ2xsLdsuT87A118yRyJXZia/qf9o6gSufKjyFFM0223DzWHHQCqcEDTzLGMnmuljtlijVAMYFc1SXQ6qcSs0Y9KheP0FXmix1qJkrA2KLR1GyYHFXHXA6VAwGDQBUNNJp8nBqImrSHcRvWnI2RimMaRG+cVVtBXJxShsUgpcD0qCh2aM0mKKQC0lLSUwCkKgj0paSgBp3D3FKCDTqNoPSgBuKSgkrRkGmA6jGaSlpANIo4xTqMUAR7RSYp5FJiquAyjFOIpKdwG0UpFFADSuaaUxUlIaabJaTIitMK4qfAppFUmZOBDRmpCtMK1VyGmgpab0ozQFx2TRSUtAXCiiigA/GporiRGyDn0BqHFOQkMDSaQ1dHRvEt1YxNIOSvX05NZM9q8LdyvrXQlNllCuP4BVR1ByCMisIzcTqdNSSME4pOR7itCewzlojz/dPeqTK0Z2uMH0rojNS2OaUHHcZwO9BFBHek57VRIdKXdSdKQmgBTzR0oAOOlGKABF8x9tMlj2N1zUg8sjZICvo3pTZI5I+c717MKfQkizmgEqaOvtQPepAmScjqalYiVfeqhFKrlTVqXcVhZIyDUdWA4YYNRsvpSaGNDUtMIozilcY+ikDUuaQBSUtFACUUGigApaSigBaKbmigBSaSiigQlFLRQAUUU5UZugP5UBYSlqdLORuvH1qymnqPvEmoc4rqaRpyZn1at4Xxv2njoMVoR2qJ91APrzUwUgYAxUOtZ6I0VB9TO+ySOxaRgp/OpEtEU8/MaveWSacsPtUOtJmkaEUVlTb0XFSJET1qysPtUyxDHSs3Jvc1UEtiqIuKf5Jq4sQx0p4iqWy1EpiDiniD2q6IualEPoKm5SiO0CADWrf/AIF/6CaK0NDiI1iDgfxf+gmirg9CJrU87t4C7bj0rSGFAAGKjjUKoAp5PNeilY8KpLmZKppeCaiGaeG9qtGTY/GBmk600/WlBCjrQIeHGMVt+Mmx441/n/mJXH/oxqwM8Zrc8ZH/AIrfxCP+onc/+jGoDoY4btTiQB1qAe1PGc80CFJOQaTeQKCAehpCOKCRDyacCPu1GVNAyMmgCTG0GmnOc0zeTTg3FIAGalIyKjJHalVjtpolju2KaetBBoBwKYCZpaTGacaBCYNJ060u6mkmgB24AUm7PQU0dKcDnnoaVykh4BIoyOgpokwDSK1ArEyt0oJ+bjvUYNKeaZLJkODUo5quhxyetWFnAGCv40xMsQHAIc8GrUT5Tb6VSGDgjgVYXK7SO9BJoWNw1vcgn7net2RBJFvXo3SuZ3k/TFbulT+bAYW6jpXLiKd1zI9DA1rPkZSmg4PHNVvJ6ZFbM8QBNVDHzXC2etYp+SKesJ6YBHvVjZinKPapYFY2YPzBtreg6VnajazXFuyMAcDrXQKmetMkgDErjg00waPLJozDKyNwwNMrZ8RWht9QLnowrGNdkXdXMGrMK6jw7P5to8LH5kOR9K5Y5rT0W5+zXy8/K3BomroIvU6t4z2qEqQeRV8r8pI5BqBlJ7YrnNyjIozkVXkYA9alvrhYflGC1ZRlZmya2p076sxqVLaIuiTtU8J+cAcmqMbEkY5an3lz9hi2Kd0rjJ9q6tkc9nJli/1JdPiZImDXB/SuWkZpZCzEljySakcl3LMSSepNWbS2LOHYYUVjKZpGFi3o1p5YM0g5IwM1rcY96rK+3gHipA/vXPJ3dzdKyHsAe1V5Bipi4AqGRtxoGV2I5FVZRirbjIwKrSIaAM+YEmovm9DVww5bmnrCPSr50kFiiImbrU8cGKtiEDtT0i9ql1LjUSsI+OlIYyKt7MdqNny1N2MpEEUlWWXjkVEU3VVwI6KUqRSUxBSd6WigYUUYNFACEjFQkEtUxpMU0wYgyOvNLu9eKM0hoAdRUWdp608Sg9aLALRincEcUmKAGkUmKfRii4EeKMZpxoxTuOxHjFLinEUmKLisMxRinGkp3ATFM25qQ0BcHNO9iWkyEpTStWjjHNQkc1SkRKmiHpS5qQr7UwriquZuLQlLSHIpM0CHU+PlwKjqSHBmTPTIoew1udrMuIox6IP5VnMMMa1bofljis2UAGuJs70iPFNeCKVcOoNKDThQnYfKmZ8umMDuicH/AGSKqtazp96Nv51ug4pc/lWsazW5lKhFnNkFeCCPrSZFdIyI3VQfqKZ5MQ5Eag/QVft0ZPDvuYKxu+NisT9KnW28oGSbggcCtZiACMY+lUpQsj7TnGKFUcnZA6airsyHYuxPrSLIyH5enfNT3NoYTujO5f5VXyDW60OYkJSTkjY3t3qIqQc9RS0ueMGgBAfWlMfGRzQRQj7T7UAMwQacHqcqki8daheIrTswGnBpMUnSlDVIwxRzS5Bo7ZoASlzSUGgAooAJqRYye1JtIai2R0VZWEVMtuD2qXNI0VFsohWY8A1MtrI3XNaEduB2xVlIvas5VuxrHDrqZa2JNSCwBBzn1rXWD2pHj2xMcdqz9rJmnsYpHPmBtxx0pRbMa1FiAHSnbMEDpWvtGcnKipb2GTlxV0WoXooq6sfZTk46CpRF2PWsZSbZ1wgraFJYOBxUiw+1Xkg9qsLbj0qLmnKZoh9qURe1ahtwBjFILf2pXHymesNSLAfSrqwc9KkEdFyuUpiHFPEVXPKz2pyxHH0pXGolUQ8dKf5XtVoIO1BSlcpIhWMCpAlP2/lThwM0mOxc0VP+JvAf97/0E0VLoq/8TaD/AIF/6CaKuGxlUWp52vSnAUirgU9Opr1D51sBnNKSBTuoqNzzVEDi1NLZFM3UtAgP1rd8Z8+O/EHPTUrn/wBGtWF1rc8Z4/4TvxDz/wAxK5/9GtQHQx9wzinrUAOD+NSK1Ah9Jnmm7qXORQIdgU1v0ozSbs0gGEcmlAp2O9J1pgKAacDzikNLtwM0CDcfSgtRikxTELnPag4x1pKOtAAcAUDpQRk+1HTikITOB0pMc5oNFAxAMZpQaQ0daAJAakVgAahC1JtwKYmLjNPBxx3pBwBTt3YCmSSK5YYFXkJMAOM4NZwyPrV21b5WHU+lAWLWcgGrNpOYpQwNVVIKUithgQeBSaT0ZUZOLTR1RYTIrY61XeP5ulJptyrKI2ParLoc9K8qpHklY96lPngpFbaOmKXZ7VNt56UoXJrJmoxEz2oK7R71Oq0rAZxilcGcn4osfPgMg5IFcIRtYivXby1Etu6Fc56V5jq1obW9YYIBJrpoy6GVRdShSqxUgjqOaSiugzO503UIbmxjaRwGUc1Rv9ZVWaODJ965u3fGVBOPrUuFB+tKNJXuEqjtZFgzmQln6nvSplmwBk1GkW4ZLYXvSPcqgMcIwO7Vs2omNmy290lkmIxvmP8AF6VmSO0jl3Ysx6mk5zzyT3q/Yae1y28ghR61hOdzWMSvb2rSncR8orRCBAAB0q/9mCDao4FRtFjORWLlc2UbFPcRTvMOMU51284qNV3c4pDBS561KB600Db2qRTRcBNmaa8QIqcClZOKLhYzmjwelKqVbMWTR5PtUlECx5qQRe1SiPHapUTNAFVo6YUwKvNGO1RGL1FUIpPGGpnlAVceL0qMpxQBTaMVE8XtV/yxTGiOenFAGeUxSYq40ftULJg1VxkPSkJFPYVEfemgGljnil5NGT6UHnjpTATgd6aZBSmMHqaUIop6C1IixPQUwhjzVg7aacVSYmhisy1KswPWmdqaRk0aMFoWRhuRSYqJAwp4c96hoodRijINGKQxMUmKdRigBpFNIp9JTTCxHijpTyKCKdxDDmgLzTsGgU7hYXaMUxkGc1IDQVyKV2U4porslMK1ZIxUZUE9atSMZUyAgiprRS93CvcuB+tNKVp+HrUXGsw5+7Gd5/Cm3oQoPmR1F0McDtWZN96tW6PzN6k5rKm5JrkO6xBnmnA02nCpGOBp1NFBNMB2aazYppbAqF5KaE2Er4BqGKPzdxP0FNlb5aks5F2kFgDnua3or3jmrO0SB1kjyD930qhPECS68e1brMpXaR171SuLZSDtINdNjkRkq3PzVIArdKSaEoelRAkdKV7DJStMYYpwl9RTuG6GnuBGrlehqdZQww1QMuKQEildoCd0DcgVAykHpT1kNPJD4A6mm7MLEHQ1c02zF3cFGbCgZqWHTxgNMce1WVjji+4uD04NYymlobwpPdkN1YxI2E6+oqsLUD61oBQxpdo9Kz9ozb2USiIMHpUyQe1WAnPSp0j3dqhzZcYJFZYB6VMsQz0qyI8dqesfPSo5maWI0iHpVlIB6U9FHpVhQBjipuOxF5eOAKhuACBCMfNkt7CrhbCk4rEvpme4DBWZV6kcY/H1qoasio7IrrK7KD5YH+8cdan+z3JvFsmaCG4bAVJJNoOenJ4H4mi5NvMk89pEhVWjEkJkH3jxlV6nJGcDpmrN/cCDUNPvZzbXG6JJnwhzEwydjAdDkf410KPc45NdDaPh/wDsbRVlvjNBqrvveB1yjx5IyrDg8YPBqrtywI6YzS6Hq128M0L3jXOlSs00lvdMAUcnlo/R8n7w4PcdqciqQVQhl6ow53L2NZ1Y2N6EujJIx7VPGABkc1DEpJyfSrKcduKwOtIkVADnrS+UB0pw4XjmnhqLjsR+SMcdaQx4FTZox6UXCxGFGKBH3FP25oAqblDGGPu8049BxzShcc05OeopXAhAwCTSdO3GanMYxmkVD6UAXNGU/wBrQH/e/wDQTRT9IR/7Xg54+b/0E0VpDYxqPU87xT1WlAFL0r1T5tiMOOKjIzU4xim4xTJISnFMBI4q1jI6VGygUCIeSa3PGf8AyPfiH/sJ3P8A6NasbjNbPjQgeOvEP/YTuf8A0a1A+hh0uSeKQHJopCHdKXNNzxSCgB+aUUgo5FADyRjGaUjC1GGPoKcSSKYMcO3tSZ4pAcUtBDFFBoo70xBilAwKaWOaVvXNIYppvvSc5pMEUABNL2pMUYzQAmM0AU4cDFIelAAo561Ig3PjJNNXGeaecDkHFMVyx5AAJz0qMEDpzTQxPVj0pRnGBimSyUEEVYt+pqqoBPJAPpViIkNQIuJhQR2qMsO3rS7jjNNJXGaRSNK1l2Oh7GukQeZECOcDmuRgYlB7Gt+xuijxqT8si8fWuXEwurno4KpZuLL+3jpR5ZxmphgcGnbQMnjFeez0yNU+WlMYAGeCaim1KxtVPnXCLjtmufv/AB3p1tkWw85u2BxTjBsTaR0kgEaZbA9c1wHjGayaTEUis/oKytV8V6hqUjYfyoz0VawXZnYs7FmPc1006LWrMpVU9ESZpaYhyMU+tjMVDhhiphKBz1NQCnDGKE2gsSPI0p5JHsKciEsFC5PYVYsdOuL+TbAm4dzXZ6Z4cjs0DSLuk96ynOxSic7p+l5kV7lSo6iuiSBAmIwMe1aUtojj5lwPas6W1liJMJO3uKycrmqVhDCAMkVBJFlc4qdLnJ2Sgg9s1YMQZflGR7UhmMYOeRTTDg9K1zB6imNAM9KLgY5i9qaYua03g9BUDxY7UrjKoGKd2qbysdcUCLmlcLEIUGnrHk1Mse01IqClcdiHyhTliFWFjBp6xDOKaYFRovaoyuOorTeIHtUDQE/w1SEygY8jI5pjJ7VfaH5emKjMYxzTEUGTHambKvNHTDF6U7gUJE4PFVSoJ7CtV4uKzrqLHIpoCqVAOCOT0pphOe1TIhfBxyKkZTnLCnYVyi0ZqPac1fZR2FQsnFFxlMqTRtqYqe1NINO4yPZmmlKl6UtO4EKxmpAgFP4opXYWGH2oODSmigYwoOtKGI607FGM07gAYGjOelIUFAytABS4oBFLikAmKSlxRQOw3FGKdScUxCYNGeeadSYouMaVz0pCoI5p22kNNMGRn0rb8L4XUJPUxkVjkVreHcjUj7oaUn7oorU3Lk/MT7Vmy9TWpdDJJrMl6msDoRDinCkFLmkAE0xmwKCcCoJHxTRLFZ6jJ4poOTSMw6VdibDJDxVR7aWQebGCcHHFWHPFW9P+eCRc4O4GtqS1Oev8JkrcTwnBJ+hqwl4r4Dce9actjHKCTj61lTaa65KAkVvqjluTSkOnYgdKz5F2nkU4NNbHlTj3qTzI5RhutDGVKXNSSxbTUVIB24ijqaTNFADo42kcKilia1beyFscyYZyPyqzp9sltaJJnMsi5JPYelKxyxJOTWE5tuyOqlTS1Ywgnk03bk4p5pQKyudOgmMU5UyacFyalC4FTcdhixirSYAxioQOamQcUhok7U9VyM01FyeasqoHFIYwDBqQCjaKM4pDGXBxEcDPsKx5ZbiNJI0DGJyM4XkdOnv7VqXbN5Py9uarb7q9thZr5kilsxxjOA3sPf8ApWtJ2ZzYhNouarpVva6paXl1dLpFyFieKC6sCiPswAT5ZYckck4rI8Zar/bGsLOZVZjEglaIkws4GN0eeduPXocilg0eymuLBbia/mkkLfa44Yssq5+QRkn52OelVplS50+7uDZyebbMsbsSQIgSQoxjgDGOe9daRw3G2cVgdPjnl1NjdGQx/YvKPCHgsH6Dr+lbOkG3AFvaXUtxFFkl3i8vBIyQBk5GR+tZcVudLk+wala243PFM1wp3si4zgFSRyG561vaZZQWa74HZ45SXDN1I9qzq/CbUb8yRbQbc+lTgUIm7Pc1MIyMe9cR6aEQcUu3PIqZYvmz2p/l8+1AXIduRShcVOIx0p4h46UhlYJzSlKtCIUoiU0CK3l84pfK9BVox8AU8R44GPzoC5VWEjipPK4q0q85pQqZ5NArkujR41KEkA/e/kaKn0raNTh+YDr1+horSGxlUep5SMd6U02j8a9U+cY4nFGc01jmm5A60CHtIQMGmjuR3qNnBNAYnjpQIcwANbHjRT/wnXiEj/oJ3P8A6Nasc9OTW34zz/wnPiDH/QSuf/RrUD6HPgGlODThmkxSEIBSnilANIaAFWlJHSm80AZ5oAeBRR0FJ2zTEO5zSE00Eg5JpScigBwY4pVPrSdqTmgVhxXNOK0gPHXFJkkjFAB3oI46igg03pQIDyaOlLRQA3PNOAJ6UlO5AyDQA4IdwzjFLgZambjjmnr0qhCDrgVImc80ijnNPJwaBMeoGc4FWIccetVyeBirEeNoJ7UCsSs2BxUJJxmpeNtRu2OMUhont5Djaa1Iju013B+aGQH6A1jQnB6VtaXiWO9ixktBnH0NZz2Omg/esZeq+LL+yl2JENpHDGuduvE2qXJOblkHotbWp2wu7Bl6ugytcYTg4PGOtZezitTrp1ZSVn0JZriac5lmdz7mosn8aTrQBVbF+oE0dacABTunY0rjSGKCpqUGjYz/ACqMn0FGx4+HUqfQ1NyrBViyEZvIlm/1ZYBvpVel60mhnsVlYWdvboLRFCsucjvUzwHPTmsnwTeG+0UKTl4W2n6dq6Y4J4Fckrp2ZstjM8n1pnk4OQK1DEGOGpjQbeFPFIZiXFpHL95B9RVJ7CeIboGyPTNdA0eGoaHj7vFMDnorjDbLgFW9xVgxhvmBBHsavSQqwKMu5fftWfNp2074GIb0NAXGNDk9KikgHAxzUyzywNtnQ/WnoI7h9yNnFIpGe9uSOnNMMRUdK2GiAHSq7xkdqkZnBM9qlWKrXlAjpTljxRcCBU2jmpIo/nyOalEYY4qdI9pGKEwZGY8r05qMxH3q8Pu88U8x/JxyPWqJMpoiVBIHWoJYc9ua1ni+XAFReX607gZDREdRSCLParc8RNxkHgCkCkdqaAzbhcHiqrRqy4IrSkXLHIqJoM9KpCZnLCoBxUTx81ptCR2qIxc4p3EZrR8VCyc9K0niwahaPHWkMz2j9qiZK0ClROgFFxlApTMYq40eRkVEUp3AgoqQrTCMU7jEooopgFFFBoAKXg0lFAxCg7UmWWnZoouFhAwPt9aU+1BUGkwV6UAGM/epdoHQ0gb1p3B6UAJRQOtL3oGNxRxTsUmKLgMI9K1PD5xqQB7oazsVoaKQupRZ75H6UpPQFudFcAtWbKhrUfBFVJFzWJujNPFJnirEiY6CqzA80h2GsarydKnIqJxmmmJorgkUnJNPZaStLk2I3FT6e+13X1waiccVHHkTAA4ya1pvUxrRvFmoXYDGetMJYDpmoCsgJIODTTNOnXmum559h0iB/vr+dUpbJfvIcD3q19vAP7xKcbq2lON236ijQZlZkj4YbhTXCsMrz7VqNErJhXUn61TntmX5sYPtSsBTopx4OGzSY9KQzo4ZhPbRsMD5QPypJQAOvNYkF3JANqnK+lWobx550UqBWEoPc641U0kaAXvTgM1KijbzSkAHgZrA6bDFU1J0FAz6UqqSelACDk4qwqHHNM24FSxyjG1qBjlzmpQcVCXGeKVck80hku6kJyOKDj1pAQO9KwXAjepBquEeFyyMwDDa+w4JU9atb045FQy3lvHktKBjrTje+gpWasxYpBCfPkmMckR3QuMhi2eCCOhAJ/L3qG1tL3+zNUNpeoIJQrXMTN802CSAM8nHWs661CGdlgU71LdD0/CqvmzOTstlHYHFdKcjgmlfQ1LW2snit7O5iVZWnDIVk4KkY2v2HPOevJGK6OaJbdo7Z5VZoIwp28DJyTj8649DesfnmWNO5wKbq1xETAYpkeQKRKYxgAA/LnHeiUefQcJ8jud1HJDHyXUCpRc24xmRePcVxfhzQbvV5fMWJmhjOcn1rt/7EkSPa0DF84ziueUOV6HZCrzK7EW9t1/5ap+YpG1O2QZLDHtU6aOYgqLb8twCBxQ+jTO4HklR7CoL5isNYt+doY/RTSf2zGDxDIf+A1dt9FlSIB4yTk84qf8Asl+0P6UMZlHWQfu28lRnWLgn5bZse5rcGkSf88T+VKulSgf6oild9hadzAfVLzBYQLwO+agj1XU5E3IiqfQrXTPpk6kqIsn6VFb6Ldcs6ck+lP5C07nPte6ksZd5cY7KnNOQ3s6BhO+D6cV1S6NKvzbOacmiTchYwOcnAxk+tGvYLruYmi2k39rwM7ufvdT/ALJorq9J0eYajG2OBn+Roq4J2MpuNzxvApPumlyM0jcnNemfPDdwNMdgelK2MVHjBzQAopwOKb1pOc0xWH5zW74yP/Fd+IR/1Ern/wBGtWEK3PGY/wCK78Q/9hO5/wDRrUB0MY80/aOaamB1pSR6ZoJGjrxS7RgZFBHpSDPc0igIFIBxxQeG60vIHFADTkGlHIxQeeTQTzxQIQ/ewacORxTDQDt6UAS4xzmm7s96TORSYFMBwPPNKOOnNNAwc5pd5PFAgbNJ1pSSRSDNAhckdqUHPakBytB4FACk5FHakWlPTFAD1UsMKM05UYHBFJFLtI7U95MtkfjTEObGz3poI6moySTT05OMUxDxk9KuKNsXPWoEVTx3q1geXikCGE+lMPWlYkA46CkPGKCh6nFb3hoB9U2f34nB/KuezW/4SOfEEA9VYfpWc9mb0V76M3o7L0wSK5DVrdbfUZkAwCQwH1rsbjAupQOzkfrVC68O3mt3Sy2oXCqFYntUyaULm1K/tXE4/j/9VLjHXFd7Z/DmdvmubkL7AV0Vj4H0m1GXj8x/Vq53WijtVNnldrpl5esFgt3fPtxXU6Z8P72cq123lIecCvTLeytraMJDCiKPQVYWMgfKaydZvY0VNGDpHhHS9OAIhDv3LVw3jzSlsdTDxJhGHavVy3OMYNc14z0w32liVV3PHn3qIyfNdjaVjx+inOhRyhGCKbXWjE7P4eaittqUtrIcJMAQPevTjFmQ7eK8HsLt7K+iuEPKMD9RmvddOu47+xiukOQ4ByDWFVWdy4McU9VpjK2OKtBRk89aayEdqyNCoqBzyORTXj4IzVwIoGc4NRtGWbg0xFDyc54qJok3gjqK1BHt6jNVmiBkOODQBnz26ujb1BWswae2/fbna3931rccMzbMcUkdoVkLE/T0pDMbzJYmxPGR71KFjmOV5rZaIEEFAR+dULjThndAxRvSpZSZVeLbxg01Y+ual/0i3wJkJB/ixUiFJB8rCpKI44c8gYxUyxc81LGMDFSIm89RQgZB5eeMVMsRAwBkelPSD95nPFTo26RkCkY9e9WiGVJogFyKpld2SBWrPG4b5VyKq+VzgjmqAzfK5OT19qaYcVpNAME4qExetNAZb2+4moGQocYrXEGTwOaj+z4JLU7gZhTMeSKrGPnOOK2WgBXGOKqvEBkFaEIzHizUDw8VpNES3FRPGV6imBkvFULR+orVeL2qB4/UUAZjLxxULR9xWm0I54qBo8dqBmftB68Uxo/arpQenNRshFAFFkxTCMVcZfaozGDTuMrdqBUpjphXFO4CUUUtAxKTFLRQMM0ZoooAQqDTSpHINPx70tFwIwx7ing5oKg0wqR0NPQQ80D6UwNjrTwwI4osAHir2kRNJeqV/wCWfzNVHtXR6fZLDbICcSNy5x+lVGNyJzsi83UgUwrxzT24PHQcUdRXM9DqhsVXUGqksfPFaLKPSq0q0jVGcRioyKsunNQkUhNEDLUZHNWCKiYVaZDIT0qJhhgRxU5HFRuOK0i9TOaui0jhkz3pMkqc1WjcBSM4NTJIQOSDXZF3R50lZ2GOiMvzD9KqyW4ySnb15q8XBHIFRkRknnGae4jMKvEfSnC5kHVs/WrboPWqkkWOlSApkWQYYAGomXHQ8U0jHUUoNABT4H8uZW9DTKKTGnqdBHMWXIOVPepoW3A1hW12YchgSv16Vt2DCaLzB0zXNONjupVOZ2LCjPWpBgUHFAHNZmw7HrTcDcOKcT7UhNAFlIFIzmnMoUHmqnmsv8VMaZj1apsF7Ekr7e9VXuMZ7U2R8jlvqTxWTe3oYGKI8d29a0hFtmVSpyoLvU5JMpE2E9e5qgWLHkkn3pPrS8V1qKRwym5bhg9z/wDWqVrmYjHmGoetKFJNFibilixyxJPua2/C/h258T63DYWy9eXbsq1l29rJcTJDEjSSOcKqjJJr6I8DeEW8LaAHaIfb7hQ0jY5X2pN9ENHQaboOn6Rp0VnbRKscY5YjljjqTTJbWO4kCrCuwnOWFXraO4mYm5XCqeAKveWOMAcetHKilJrYyEsIQQWQFugGOAKlk0+BYySg54Bx68Vo+UNwbHIFRXIYiJQuRvBYegzmjlXYOdlYadDjmMflS/2fCOkYrRwAMnikAzn2o5V2DnZQ/s+LtGPyqOWwGMRBN/8AIeuK0XkSMqC3Lfd96VIlL7wuGIxmjkXYOeRnR6VEqgsu5j94mpP7PiznZx9K0tqgAngH1pigy5wCq5xkjrRyLsHO+5nNYQn5SoJ9BTv7OB/hwtaiQKv3QM+9OOBx1NPkQudlK1sYYZVbGPr9KKvqyRyqZCAPfvxRRyi5mfJSjinKMDBpAaVmAIrY80Y6nPFRse3pUjtngUwAYNACYFKRgUvQU3qeaBXFA5rc8aE/8J14h/7Cdz/6NasPditzxmR/wnXiEf8AUTuf/RrUAtjFY4X3pFbnjrQW9qVSOeKADJ6Uq8dfWkApR1oAmuDEQNg5xUA5GORT+nakznAIoAQ/d+lMHWpMcGmggUCEPNJilHWgjB60AAApeKQZxzQOTTAPrTh1prA9KVQRzQIUnmgHNHU5pcDHHWgQwU7GaQLS0AA4p46e9NxxQpwaYEgU4zUjLlAaRfmPpQ4I70xEYHNTKvuKjHAzUqjIoAliTDbs1ZydtRImFpWbjmkCGMxwQaaWyB9acxDDNQnNIpEhbkV0PhDJ8RW+OgVifyrmt3Irp/BIV9cJzgR27sazqfCdNFe+jMuDuu5/+ujfzrf8Jk+ZOoPGAcVzbvumkb1Ymug8KSBLyUHutZ1P4RdN/wC0HV/dozzmlUhjTtnpXnnqAHxwakB44NRL1ORTjnAx0oAlUDPrmh4kmjaMgYYEVEJAKNw67vwoA8d8W6UdO1RwBwTXPevpXrPjPSxe2HnoMuo5NeTsuxtp6g100pXVjGasxB6V6T8NtX3RS6bKSSDujHtXm1aWhak+l6zb3IYgBsN9KucboUXZnvO0Z9DVeaCR5gwkwB2p9vcJcW6SqchgCDT+/Y1y2NQAGMEc+tHl88U9SPSlxknBpgQPlMEjOarXrLFEOfmY8VauZvIj3nkelUSFuDvYfQUALAeiMud3U1Z8lcfLgioFTBHHSrUcmODQMrzlbc5J/Cm7lmTIUirzJDKPmUE9s01YSFO0DHvSYyoUwOxHp2qhPpsMxLIfLb29a1SADg8elMaNj34z2rNjMIxXNoPnTcnqKmtp43baCA3oeK1wnGM1TutKiuR08t+zCkMnjQKucVYSLcOetZFul1p5xNmVM/jWta3cMzYR/m9DxVpksWaJ1AwO9VjES2QOa2NuUyRmqxh5JBqxFBouOahePH8Oa0fLwTnpTWiXGVP4UAZXlc5z+FMkgB5xWi1vuOcYNMMDDr0oAzRHk4qCSEg9K1jEF5qCSMEZpgY7wc5xVeSEkZUcVsvBwaqNA/bGKAMhoce1RFc8Fa1zArkg9RVeS3IJ707jMswg1FJCPStN4QB6GqzDJ5U00wMxoOOlQFCOCK1miyOORVd4qAMtoxnpUbRj3rTeL2qBo8dqYjOZfaoWUd60mhzzxUD2+aBlJlHGKYVqeSBlPBqIKSOvNA7kZWkJqQimlKdx3GjrilpSvNIKBhRS0mKQAKWk6UtACYHcU0p6U+kzTuA6zhe4vI4h03An6DrW+t6jT9R1OPpVbSbbbBNdNx/yzT696ZeW5VFMXVM10U1oclaV5WNgNvTPY0oO3Aqnp0xlsA38SsVNWs5rjmvesd1J3ih5OQcdagcetSU1+ag2RUdarsvWrjLUDJSGVCKjcVYZajZaaJZWIqJxVllqFxWqM2VH+Vgacr5ps/AqJG4rpg9Dhqr3i0Xzj2ppGTUO6l34NWZCnI70wnNKTmmFsUANZaiZcVMWBqMg0AM70GlIpKBgDVq0vZLUkLyp/hNVaKTSejHFuLujo7PUI7lvLIKSeh6Vob17Vx6OUYMpIPtXRWt/HLCGyAwGCDWFSnbY7KNbm0ZeyTTWwKhF0G4AH4Go5LhR95gPxrKzNXJD3aq01ysKEscVFNfxRoSH3HsBWPLK8rlmPPp6VpCnfVmFSrbREtzdvccdFH61XpKWuhJI5G29wooopiFFOBJOBTcV1Xw/8NSeJfFVpbtGTaxMJJ2PQKOcfjQ3oCR6R8IvBAtrdfEN/D+9cf6Ojdh6163t+v8AjTo4I4I1hijVI4xtRR0Uegp+2hKwNkW3Hanbak20nQU7CuN20MAATipNuaUqCKAK0qGVAF4PWmpbzbcl8MfTtU+DjHGe1LCGEeG65p2FcFi2qMkk+ppBkA8Zx0HrUuKULSC5Wt45HUSTAhzzsz93mrQB7flQF7hSaQSKXKI2WA5x2pgMG+QsoGF6Zp37u3jGSAPSpR064rI1RBPPGAS7N/q4gfve59BQBCLu3utWQsxaNMhRjqcdaKn0+xiSZV/10gzucdAcdB7D1ooA+XdvGajI55qbvTWGTjFaHnkXGeOtBXHWnFcHNJt5NACHkCm9KfjmjGT0oEMA61u+Mx/xXPiD/sJ3P/o1qxShxW14yH/FdeIf+wnc/wDo1qQ1sYuM9aVFHOaUDApCOCaAAnHSlIGeKTpSUCHimng0Acc0uARTAaWopcYHNIBSAQ+tBwe3NKV9KOAc4piGEHNJUhOTTTjNAXAEd6UtjjtSAZFAU5oAcDnvR9DTSMUdDQBIDxjigjAwKYMZqQY9KBBtbFAUg9KcrYHWpV5NMQg2468ikYgDPFKVyTSFM4B6UxCKcgZFWIxu5HaoiD0qaL5Rz1pATsQFH0qEsKDJkEelRMcdKRSHFhzUZbignvUZIpMtIcDk11XhLbDFql2w/wBXalQfcmuVTk+ldbZD7H4BvZf47qYRj3A/yazqP3Tqw69+5gIwb5umea2vDk8cOqKHICuCMmsCM8U+SYwwtKD93mnKN4WMoO1RPzPUCD2B5FAZlOKz/D+pLqelxtnLqORWkQT2rymmnY9lakqMpHPFOaPI4qNV4qQNtHFAEMsZCFhnIqWK3WSNWOcjrTgwYYNKpKNlT+FNAE1vFLA8TKCGGOa8R8TaW+m6pIhUhScrXuO5XBPRhXJeOtI+26b56jLJ1Iq4S5WTJXR5BS5wM0MpVip6jrRXYYM9e8A6vHfaILaV/wB9AcEE9RXVhFOSjjFeIeFtRbT9ahbdhHO1q9uiMLwKeoIzkVzVFZmsHdC8gdKUMdtCBFyMnBqK6+aEpG+GxUFiMQz/ADLuSnfY43+aKTB9Cap2Ek8WUl+ZfWtICN0ypwaQFZoJY+q59xRjBG7FX08xF4OaQiOTiQYPamBTZwg3c0+K4DgY6VO1t8pKHcPSqpR0JGwg/pSYyw4iZGJ9OtVYNzoT71VvHu9uyOMMGHUVZtJmjt1SUfMAAfrUsY4rsbmpECmnkq3ahV5qQFEWV/vVBLpkU2SoMb9iOKuIpC8HBqXBcKOapITMlWv9POHQzxd2HWrUF3Bc8bgjHjB4rUVGU5xmo7jT7e6X51wx7jrVK5NyuYNwwDmo5INgxioXs7/Tm3Qt50P90nnFOg1GK5fypAY5O4aquAm1R0OaZKPkIVeauLZRq27JbPfNK0B2kYosBkiN2OGUioZI2VtuK2WiIXkVE8S4wBzTsBmbcjGM1XeEKxwDWn5DA5BpssWecUrDuYLwlpRgYoNuQ3bmtcxr6VXkiBb5TzQBjTW/zVUaFt3OMVuPDnOTyKhMWOSM00BjGAn7mPpUbx5GGTmtgwhsnGKrSQHOMUXGY7wEcgcVA0R9K1ngIcAHioXjx2zVCMl4R6VCYjWwYsjpVd4vUUAZTQckkZqFrYZzitV4x0qJoCelIZkPDjoKjKEVqtCfSq0kWDQBnlaYVNXvKx2qJ0wcYoKKmDS9qnKe1RMmM0XC5H1NLRjFFMYUA8jjNHWrmn2xuLrKj5UXefwqkruxMnZXNOGQR2McHePr7k81HvByGP3jTkjVEIJ+YnJphXLV1LRHC3dli1iEfmhSNrkHHvU3fFVoG2zBc4FW3BPNclZWkd2Hd4hmk6nnpSZOKXrWJ1IjYVEy8VOwzTGFIZUZaideKuFahZec0CZUZeKgkWrrLVeRapMzZn3Ayp9hVIGtKVcq1Zm7axB7V1U3ocdZakitTu+aapjbqcVIYDj5CDWpiN/GmEClZXU8jApmaAENGTRmkNAATkU2nUnegBKKXFNoAcDijOOhNNozQFx4ldejkfjSFy3Uk02iiyC7FzRmkpaBBilFFAoAWlApKUfSgCe0s5766jtraNpJpG2oijJJr6i8AeEIfCWgJEwBvZwHnbHQ+n9K5f4P+B/7LsBr19GourgYhU9VX1r1MEk4NJK7uDdgxS4p2KTFWTcSgjI6U7FLigQwChwduBTqWgCKJNqgM2SKeBk+1O2DnilA4oAMUhwBk8Cncf41FJibdBnBx8xHOKAIm824kOxyIumAP61YjiSFFRAABSwxrFEqKPlUYod9uQuN2M4NAEN3dx26bR+8mb7sYGearQWcoRpAw8+Q/O552j0FOXJnZYxlv42x1rQUDaPXuKAC1iWIgKPqfWipYs7xRQB8gsRwe1LuBFMUZHWjaR3zWh57HMMGmEkU7k4pcDNAiMGnkfNSEc0uc0BYQ/nW14yH/FceIT0/4mdz/wCjGrFC4NbXjTP/AAnHiDn/AJiVz/6MagpbGGRk0AHFKOKU5xQITA6nrTR1yBTie4pRQAhPFA4obikFAkOxTQaXJpgBPegY/d7UjDNKBQOe9AhuO9IR3p3cjtQSMADtQIaOKcTxTfel7igAIyRRikJ7UUDFI4oDYo3HAFKQKBCjk5qeP36VEI8jOanXlQuPxpiBiAOKcMFAe9MK4pSCM46elMQqgkgnpUxIByRTI8njGR60O3GKTZSQ1yD0qM896V2AX3qLdzSKSFY4qItzT3PFRDk5qWaRRYQZxxwP1rrPEMgs/DWkacOG8vzHX3PP9awdEs21DVLW2A4d8v7KOTVzxZfLea/P5ZBSL92uOnFZz1aR00/dhKRmRnFOuMG1l/3DUSn5s064YC1lPbFaS2Zzx+JE/g3Wmsr3ymbKscc16tHIHUEYII614BDKYZUkUkEHtXrXhjVlvrAIXG8DIGf0rz60Op61OR1AA6igDJHFQIeBzU6yheK5zQayksfSkAOanG1+9NaPAyDTATAbqce9RTQ+dbvEeVYY5qULxzQAVPFMDw/xJpzabq0kRGATkVkZr0r4i6WZhDdxjJUENgVxFrYIyh3P4V0RqpRuzJwbehRhgkkdSgIOcg+le0eGNTN3oUO5A0sY2tXmqoqDagGMV1vgvUI7e5mt5GAD4ZaxlW52aRp8p2M92baEysg+lVor5Cctj5q0HjiumIfhe1UJ9HAJZDkexpDL0LxODtxg0rxfxRnpWbHCYiCjHI7VZW8ki5ZCR9KYEwuJE/hNTreRuNsi4NQxajA+QxVT71YVY5l5ZCPUUASRbG/1b81Jhhw67hUCwpGcq/604SyI3HIpAK9qGJMZ2n0qFrfaPnXPvVlZ0kGGypFSgHB2MGFJjM8pkfKwGOxqF5JIsELkVpOqN99NpqPygFO1gQexqQuRwyh1HGDV6PAGe9U1jwcbMe9TAMDgHNUhMtIp3E5+lWlAyBjrVOJmByw6VZjlUnPetEQyVlwMAc1QvNMhu0O5Qr9mHBFaCEsScUpX1FVa4r2OXa11DTxlX8+Idu4FT2erQ3DbHzE44w/FbrIPaqN3pkFwPmjGfUcGlZhcHZWBAwc9CKrSRHGQM1nTWOoabIZLdjNGOSh9KsWmrxO22cNC/wDdcYoTGSKnzdfwpWGflq6fJkGUZTnuDUBhbzKYFNoQwBAxioLpBCu/bke1XiPL+Qqead5QZfX2NAXMoRrJHvAxmoJIeCK1ZoYwwBbafQVXaFQ2c07DuZPlDOCKY0AOa1WhB+6RULJg4I/SlYDElswfmFV2gwMGtuSH5SRUDQFh0pgYjwqBweT2qB4iO1bc1oCuQOaqmNSMN1FAzJaEZ45NRtER2rSe2yeKhkiZfvDikBnSRsOlQMgP3lrU8vPQUxoARyKYGQ9qcZXn2qs0WO1bZtypyKrSQA9qQzHaGoXjJrUktyOgzUDQnuKAM5osDpUZT2rQaIjrULRg0DuU8bTn0rY0xRFpzuD88j4x7D/69ZzR+1aMVsYY1+fPyj9eTWtHVmdZ2jYex45FNBwM0Y9+KaxweDxXScowviQHPQ1p5LLuz1FZD9CR3rSt38y3XnoMVhWWlzpw8tWh+elPHSmGnpyK5Gd0QI4qNhU5HFRleeelIohK1Gy1YIqNxQDKzKaryLVxhxUMi1SIZQkTOfpWNMMSuK3pF5rEuhi4f610UnqclZdSHFODsvQmkorY5yZblwMMM1JuhlX0NVcUUCJmgPVeRUJBB5FOWRl6E07zQ3UUwIjRTmA7UygAoNFJQIKKKKACiiigAp1JSigAFLSCnfhQAAV6B8LfBTeJtdS7uExp9qdzkjhj2WuP0bSrjW9WtdNtkZpZ5AgwM4B6k/SvrLw5oNt4a0WDTrZRiMZdsfebuT+dS9WPZGmiJFGqRqFRRhQBwBTVy0h7Cld382ONEyHzuc9F/wDr05ziMsB07VpsZjwKMUKcjnrS0AJRSmkA9aADFKBRS0AJSA8UMc8KcnvShcDk80ARs+zknJZtoApflhzhfvHJPqaftBYHAyOlOIBPPNADFkEhOwnC8E4pqw5kMjElugyKdHFtzjgE5xUnNAAqgHIABpeBkmgUhBNADoiXcHoKKWPhxzRQM+Q8A0mCpoHBpTnHNaHnDigIqPaR0pQxB56U/Ixkd6BEWSe1J3FSkDqDSsoBzQFyHJBrc8Z8+OPEH/YSuf8A0a1YpXJzW54yH/FceIP+wlcf+jGoH0MCnMwzwKGXnNIVwN3rQITNGepoxzTv4QKAG5ziloxikx2/GgEBxjHekUEmhuSCKA22gY4nt3pCMU9CuGZjzjgVGcnnPFAhN2KUetIRQpxxQIU0o9aQmgUAKMMadtGOKj7HFO5JGKAGjNOHuacQQvOKZwRzTAWrUZLJjtVUHsBVmNyFxQA4gLjBz7UgznJ604AHk9e1MJOfrQNIlRyqnHAqF+xz2pGb+Goy+3p0pFJA7cUwGmuc80btq80i0hzN2pBzxTM5OaegLfd/L1qblpdDp9AH9n6Pfas3yvjyISfU9TXPbi7mRjksc5NbWvXH2bTrDSFwhhiBlHq7fMfxGcVhqxqIats3q6RUCVecmo7yTbYSe/FKDVXUnxbBf7xq5bGFNe8jKrb8Oak9jejnCkg8+tYgpVYhsg9Dmudq6sd6dj3O1ukubZZkPDDnHarCyVx/hDVBc2IhY/N1/GupU1xSVmdKd1ctBs9KlEjAdKrK2KkDnvSAsLIG4PBoweowagyppwk28U0wItQtEvrKWFxncpxXlc0DWdxJAwIKnAr14EFT61w/jDTDDMt5GMo33uKmWqGjlqkt5mt7iOVf4WGfpUf+NLj16VmWesafepc2sci4KsBV7aRhkb8K4HwzqsiQm0ClmHK812NvdNsBc4bHI9K1TIZbUJKxDDaaiZdrEFeKPNEi5U/N6inq7rxIu5fWi4FSW2if+Ac+1JHbtF/qycVpNEsifIRUSqU4IIp3AYkLuuQ5z9aQLcROe496nQANwasAbhg9KAII585WVfxqygQ/cNAhU9gaYYNpzGSDQBYCNt6g/Wo2VOhGD7U0TSxZLLkCmC4QvvYHntSYE0ZYDAOamUxtwy4P0qsskL8qxUVZTGM5DUIRIIFI+R/zp625A6ZPtTFjRnBViB9auRBl6NkVoiWQKrR1ZVwy4anHaT8y80jRA/dNaIhjGCds00qTyKGDqaTeR1oAjZeckVVubO3ukKSoD9RV0vSAg9hQBzknhye1fzdOumRsf6tuQaItZkt28q/iKSj+Lsa6TaGqC4tIblSkyK4I7ila2w79zMivjcncFBB6GrOARg459qypdCntH36fcMAP+WbdKI9bNu4g1G3aJ/8Anp/DQn3G0aD2nmA55qJbcAAZzV23mjmw0UodCOPQ0426gZBpiMiSLY5wKjAYnBHFaMlu+7cOR71AVHmBCeTQMpNAACc8VEqAHGOK0BB85Ug4FOFsuOOlMDKmgwMgcVTaBX/hrbmjGzFUtm1sGkNMyZLTHzJ07iqzw5/hP41vSQbj6VE9tlcd6AuYT2xC/KKgEZxhxit54tqYI/KqUkG4ZKnNAGU0ZU8dKry2+eV6VpNEQaYYiF6YoGZLRFeMVG8Y7gflWlJEWPTpUTRhsggUDMp4AeRVd4MHpWu1secdKiMACn1oAyEt98qrjGT1NTuPLTaQM5zxVw22UkYnbjGKz5n35x2ropLS5z1HdjVIORUZ9qd0UYFRnrweTWpkI7EDpUmny4mMf97oKikJIwKZCwiuFfkbetRNXRcJWlc23HWo8nbjOPcVKrBk4781ER82K4mtT00yYHNOI7UxOeKmyMY71LKIivrUL+mKtHmonWkBWZTioXFWivFQSLVIllOQcmsK9GLlvcVvyLjP0rC1Af6QPpW9Lc5a2xVpaQdKK3OYWkNGaKAYUUUUxBSUtJ70AIaSiigQUtIKWgAooooAKKBS0AKKeBnAHc44FNXGemfavSfhL4HbxHrI1G8Q/wBm2vLFl4kYfwikxo7/AOEXgY6Npn9t30a/brlf3Yb/AJZr/nNenHdgYxipFRY0EaqFUADaB09qXGetUlYhu5CS6HLDI9u1SAhgDml9cUw/KCMUxArqZGANPJwPeqqtslwQAT7datdD0oAAMdaU0daRjg4HNMAJ29aZu8wYAIX9afjNOUAUANACgAZp2KON1LQAUUUUgClHWkNAz260AJvy22n1GgAlbkHgZ9jUnemA6NcOKKWP74opDPkDNKMt1pyjJqQDGa0PPZERxyaAB0FSN94fSkJ28igljduO1BbI6U7JIye9IM87vu0CGj2rb8ZD/iuNf/7CNx/6MasZkyOOlbXjD/keNf8A+wlcf+jGoH0MIikI7E048Ck6k0wuMxzSnpQRim9aQCntSH1o5prA5+9QITPBpMZpeADTQSVoGOpvTpRgilxQAo680owG56UlKKBC8ZpaRhnGKd1GKBjGG2ngDGRQ3pSKD1oAcfmU49KZswADThkjjvzSFgvbJoCwKuDxUyjbz1Y9qjByc4xTwT0AyaAsPJJ6jFDNhuKjLFcgnJqMvj8aCrEjGoGNDNUZNJlJDiw7mmEljx0phJY47VJnAxSLsOBGcVt+H7OOa6a6uRi1tf3jE8AnsBWPbW73VxFBHy7nC/jW9rl1HZWkOk2zEiL/AFrD+NvWs5vojejD7T2Rlahdtf6lNdOcl3JqHcM1GDjg04cGrirIzlJybbJF61n6o/7xE9BmtAe9Y9+266f2wKmT0Kor3ivS9abS5rM6za8P6k9leKobap7n1r0a01WTyVkljLJ/eUZryEHHfHvXc+FdYJAic8jgr6+hrGrC6uaQZ3EN3DOoaOQE/wB3PIq0r5HNY8lpBcbioKOecrTFuLuwG11M0Xt2rlNTc6gkGmK7N14xVS21GC5xscBu696tliCTjj1oAmRqh1S3hvNNkhcZOPlHvTozu59KSLEshYjOOKLjPLZIngneJwQVPejtXS+LtO2SLeRjAbg1zQ5GR0rNlItaZdtY6jFPngHDfSvSk2XUImRgQ4yMV5WcEH2rtPBWp/aLaW0kOHiOB9KcRPc3bZHt2OSSD61fiuccMODSFCcgjHemeQwOVPPpVXAuKq53I4B9BUw2ycSYB7GstdyvyMGrkc2eD0pXAmaDYc9R2IoVXB55HtT43HVDkelTI6E9ME00xDVT+6TSnIOCKlKhTk8D1p2FZadxEeFZe1QtboR05qwFxSHimBV+zIO1PSAqMxsR7ZqY4K8UgZg1ADlMg++mR7VZjlRRgMQfQmo0m9alCo+M1SEycStjgBhT1ZWGSpH0qusK7sqcVIqyxtkHPtWiIZLtB5H600xoeoOaf9owPnWmrNG9UIgMWc4ximGB6uFQw4OaYIyOckfSkBWwydqTfk8daukuF7MPSogqE8pg0AVmxjg1FLaRXC4niDqfUVaNuS+V7UMzJw34UWHc56fQ5bWZptOkaNsZEZ6GmWusTRnytSgaAj+PGQa6UAtio5YhINrqpB/vUrW2HcqJJHKoMUiupHUHNQm2j37h976VXuNAQzGS0keCT1U8Vlvd61pNxuuYftMOeXThsf1ov3A3JA2z5V5qILIE+ZcGpYNWtLxVMUgyR909qnf5xzjB6YqronUy2jZmJyAKY1uSc4yPWtI28g+lAiOMJ0osFzJeEk/LyBQYSMZFajwqg9GPeq00Z8shfvmmFzPeCP23emarSxfJ0NSW2mS28jyzOzuzbqtGLHNBVzEa3yPufpVaSInqpFdC6b1+RagltxtwV5pBc5ySM9FqmY2Mm3Hy/wB6ugeDa33c+9Ma2URkbfeiw7mTsGNvbFVpYSgLDn2FaM8At9rBc5OFFZn9qRi+giZJJA5YHZ3xj9KcYtkuVihdyssWSMFk5FZI5YZ4Brr7nTdPu2ld5LiFwMHkNj2rFn0aVQfsssc6/wDfLfka6oqyOdu7MthkkA8etNxt7D60PHLBJtmjdCP7wxTSd2SDjmmIawyaawyDnqRTgwLBemP1prgbcA5yaQzSsZvMtx6rxVgrnnFZemSBJ2hP8X9K2R0rjqKzPQoyvEZHw1TBec1HnBzT1YE81lY3HYHpTCAVz3p5xSOFx70gIMZWq7rirZ6VBL1qkSyhMOv0rB1EYlX/AHa6G4HyNWBqf+vX/drenuctbYonrRRRW5zBRRQaBBRSd6WgApp9KXoKSmISloooAKKWigBKBS0CgAoFLUtvBJczxwQoXkkYKqjqSTgCgDT8M+H7zxLrdvp1nG7F2G9lGQg7k19a+H9CtPDei2+l2YHlwrgn+8e5rn/hx4Kj8I6Agl2NfzgPK/p7fhXa9uufxoSvqxN9BhFN5p56UYqyRmKQrmn4pDQBVkidpRjGPWrAXAAPOKUClpANNIF5zSnmnUwEoFKaQcUARTIWUbWZSDnjrREzOoB35HcjFPZu1OXgCgBR0opNwJxS0gClHWk7UZNACIgUE4GSeTTxxQKTcN21etAEiEbxRRHjePWigZ8hoQWBFS7+ce9Z0cuMZbirKN82c5FWmcUoljHzCmsvzU5TxTxzTM2iEDFOAzSsozmjlvlNAhDxzWx4yO3xtr5/6iNx/wCjGrGYZG30rY8ZKW8ba+B/0Ebj/wBGNQFtDCLbhmkBLZ9qNrAY7Um0imIQnmndRiginBOM0gZGcjp0700dDUpGW/CmAHGKARGffpSY20/Z60FfWgY0AnpRkinjAppwTQAL0p6jihQCKRsigLClmHSlUfIG701AafigYwdc08c0m0dQcUAdun9aAQhPz5FL1PvQF4o6CkVYBtBx3pGkIJVetRtIegpgPNFx2JN/bOD3phPtimseajLDvQNIdvphfJxTWYdBSKD3pFpEicHNPA5BHbk+4pg6VvaDpiSv9vvcpZRcnPSQ+lS3ZXLjBylZF3T4V0LSW1Kfi6mXEKf3V9a5p5HuJmkY5LHOfWrus6o+qXrNkCJeEUdgOBVFegqIK75ma1ZWXJEcB81P70gpQfmrQwCR9kLH0FYznzAT61uXFhd3FoJIo2ZAeayHgdG2vGUb3FZOavY6qcGo3ZWopzpt+am0lqaCj0q5YXTWlysg+7kA1Sp3B60NXA9W0q/S4tgd3OBWqj59Pxrzjw5qXluIZG6EEfSu8hkEkYdDwRXHUhZm8XdEk1hDcPuXdG3qtV/tF/ZNtmQTQjuOoqwszL3xT471JAQDn1qCyawvYLssqSY7kdxWmEWPheRWBPZQy/vIf3UvqO9Fve3tkAk8RljzywpOwGvqFqt9YywH+IcV5lJGYJ5IT/C2K9JttRt5hw4Xnhe9ch4stlt9TWeMfLKuSfeoaGjE5q9ot8dO1WOX+FjtaqGRikbkYqUUz2CFxMiuv3SKmVecVzfg3VBqOmFS+ZIPlI9q6hWBOcYNXazJAxA9etRtCycip0JJp2OcGgCskhUjIx71bVhIOuajdFJx3ppR4zlKALauyYGNy/yqUICd0TY9R61VinBYZ6irilX5HBoQmKcZw33jVPUpHgtzsVmcnC1e3ZGG5Hr6UpjVgONwHSqEUIyywx7/AL1PEmKmeLdVMI8MmHHymgCyjhsH3qUyFAKg8llAaP5kp5lDIc/KQMYppiZYScYyaljuBnAG6obaOOWIBuuatpBHGQR2q0IT7RGTtY4J7VMFj4I249qVreGRgzL8w6UySDshwKtMkV4VZTg805VdVAzkVH5MuMBuKekcyDAaqEDMM4ZSPcUg8tf4/wADTiJO65o4bh4+KYhoBzlQBn0psmWGGp7JEOjFT7UuGwOQ30oAhaI4+XtTEOG/eVYBJ4YY9KJtuwbwMepOMfjQFyMx+nSoTCSGBUEEd6HmKbsLIyj+LGP1p0V2j4B3KfVlwKWgXZh3/hW1u132ztDMe6nHNUZ5NS0eNIrqIzxL/wAtV6j8K68ABd6kfgaY7CUFHQkHrnpSt2Hfuc4uvwyhSmOmeeta0ILRLIvVgKp3vhiwvdwQGNjzlT1NRCW90xVSaGR40XAZOeBTTa3B2NCZG2AOveovLB6U6G/hvEJDYI6huDUwjYgEUySkIvm5qF0y+z+Grcitu+7SsgdMsu3FAylJCE4FV5ItgweSe9XdhXl/u/w0xIjIxJoHczWtMLlfvE1BJbknAzu9q2pIgKhaEHo1AXOYvraKNJ5ZmYBYj3xtA9KwdNspXvJbqTBWNRGmBgepwPqf0rr9VsmudOuolUM5Q7VI+8RyBXDWPiOGNzaXkTQOhOVKYA5rak0tzOom9jbmXEXC4duTiswxsHIVsD3q2NVtpBiO4Rx6ZqKSYMTg5Fa3uZWa3IPMd/3bneg6gjIqjNp9pcSfcaBugaM8fiKuPHgZ9TmmbM/NnGKAsYt3pF1as2wC4j67k6/l1rP3bCScqR1B6j8K6MmRZDhj65BqK4W3ulAmiVm/vdG/OkNHOpIIp1fOcHNdNA4dAfUZrEu9MaMl7aTevdW4bH9av6WzC2VXBUoSMGuestDpw8tbF2RB1pE469amwGFIYsGuc7kLkkYNKVBFN21MB8tJjKrLlwaidatkc1C680JiaM66H7v8a53VRidf92unul+UfWuc1hcSIfY1vSepyVtjNPU0tFFdBzCUUUUCCiikoAQnmiloHWmIKKWigBMUYp2KMUANxSgUuKMUAGOD/KvVvgz4Ml1TW0125jP2KzP7ncOHk/8Arf1rh/CXhm88Va7Bp9rGxUsDLIBxGnc/WvrHRdJttB0i302zjCQwIFGO/vS3YPQ0QDjBH19vwpBlmbK4APB3ZyPWk8zKnNKPuitCAxRtHWlBzSEc0ABpuKXvRmgBKDQeaBSAQClooNACGmsT2WnAYqNnfzFVfu/xN/SmAyOMNOZjuz056VP0pegpPv8AHakAiBdxb+9Tie1AwOBSDrQAtHUUZ7ZxTfmwRjj1oAXPanKuBzSICB8/WnbgCKAHx8OMUUyMnzOAPxooGfE8U7RfKeRWhFN8o2EEd81k+3vTlkeM/KaEyJQudBHKGxg/hUwf8KxorkPjna1XkuDgBh+NXc55RaZd3hulAbBzUCMp5zin78nnGKZnYeQTzWz4xJHjfX8H/mI3H/oxqxd/GK2vF+P+E31/P/QSuP8A0Y1IS2MDLBuaeUJGacwDEEEU4Dg56UyWiFgQeKBnbipjgiosYYjPXpTAZ82RxS89xyKlxxmm5yxP4UhohByaCmOe9TBRTcFeooAjCHNP2e1PIwMGmmTd0oEJgUnfmlHPWj5c8ZJoKSDg8UnTqaVmODxTCASOaB2HhgBioycZyc01nAOD+lNLn0wPekCiPZ8c4zTSSRk8+9Rs/FR729aCkiRmqPdjnvTS9R76RaRIWzzTGY0mc0lK5dhw7VIPX0pgq7p1hLqN0sMSnHVnPRR60m7Ald2RNpOmS6pdeUnyxrzJIeiCrGuakJZEsLQ4tbceWgB646k+9WNV1SGws/7N045X/lpIOrn6/hXOpknJ6ms1eTuby/dR5Vu9yVOv+NSKKiB5qdelanOOqa1gN1cpCvUkGoDxXT+H7AwwNdSL8zj5Qe1RUnyxNKUOaRphEgiWNQNoAqtcW1tcoRJEp9+9TynmoGfBxXBc9KytY56/8OjDPbMCv901y9xBLbymKVSG7cda9JyuOSKw/EGni8txJEmZE7gda1pzs7Gc4aXONBpab0ozXRYxJY5WSQOpww9K77QdSE9oPm56H6156DzWzoV99nmaNjhW6Z9azqRuioSsz0SOTIzwfrSgqDlcLWTHcfKOTTvtQB6muXlOi5sC4GOTR9oHrn6msQ3TZ4NMN4xbANHKFzYuGhmADAB/7y8VlaoZfsvl581R0J5xUbTs38VRPMccnI7iqUSWzFjuFLmMjD55Bq7BbS3LhI03ZqGa1ja6Eq8Vc029m0+YMFDpnmolS6oamdf4T0B9HllnduZlA29utdcpGevJ61haRrFvqCBQdr45BrYVH3ZUcVm99SywMingEjOaYrHowxTs7ulADlXJyaeCCMEUxWKnBFSYB6UARnDNtAx70fPCRtyRU0XD8gYqdlVu1NCZFFPnkde4NWUfPzDj2qo0BDccUB3jbD9PamIvMAw44b1pnbDqKYkwbuKkQg9D+dAEaIbeXK8xnjFWTFFKuSo5phHXHT0NC5XpTQhIoDBJ8nKmrYzmo45ATzUwxirQhPNUHGRmmYd5QueKjnj3crxipYISSJAxNNMTJ/JZQCGpcuP4c1KvYGmSSiM9K0JISZs8CnqJiP4acDK+OODQybBktimIbtfPIWhgcDKj8KQOrA89KcXRQAWA57mgQzkZGB+dZl/dhJeoOxtqoTjnuT7VcurxbdSzEIqn5yewridUvUumZklOxgHBxnjPHp3H5VnOdkVGNzZl1KVHOZ0ORxggjGajOoyecBltw5+U9vWuctYUEvmB3S2XPBAO7Jz1rYtXEiq2fmbPT07Vze0kbcqNGG9mjYMiZx94hun1Fa8IuZwGk2xoe681Rs9kajOCxOORxTNY8RWuj2x8+cJIqb5GHPkR5A3kd8nhR3PtzW1JuTMpo6CLT1I+aRmz3HSrAsolC/JkE4APOa8vk8Y6x4RWB9ct2gtpyGSBrjzriOMk7S4bG4nb1VsD0GMV6LoeuWXiDT4L+xcSxHglT0PcV1qy3MGmaiWFsMssEWen+rX/AAp5tYO0aD/gA/wp6Nngde9SAcYNbJIyuypJptpIfmjx/uE1Tn8PW8pys0qexAIrYFFNwQKTRzM3h+5UYEomQdAOD+WazjbSW3EqMCSfvCu3JA60x4o5eHVT9RmodNPYtVGjiPJzziq0kfz8dK7GfRrWfcI8xv3wePyrKn0m4tlIKeYn95Ov4ispQaLU0zFMAKbqwNatbe4uYUljVyi555PPvXUeV5bMCcr6VzF2wm1OdgflU7QPpWVR2R0UVeRlTeGNOux80Hln1FULjwZeW7btOvNykf6uXr+ddShyAKshjgcgc1lGpJHS6cX0PN501LTiRe2Eir/z0VSQaiS8im5VgPYmvVAVf5GQEDjkday9S8JaPqTbmtzBMekkJ2kfh0rojiH1OeeHXQ4CRgD0zmqzDPNbeq+E9Y0lmNsv2+1HO5R84+orBM0ZkKMGjkHWNxgit1NSRzShKOhHIpIPNVrW4Md35bdGq0+cZ4xWZc5V9w4I5BokroIO0jpIG45q0qBxWbaTebCjg8EVoRsp9c1wtWZ6cXfUR0INOTPIqTYG5J/KmhCH46Ui0Q45pHTpU5QClZARQBmXMfFc3rSfLGfeutuY/kJrnNajzal8fdINa03qc1ZaHO0UUldRwhSikooADSdaUmkpiClooFABTgKTFKKAFoxS4pQKCbjcVPZ2c19eQ2tvG0k8rhI1Xklj0pm3g17r8GvAhgtx4k1KHEkoxaI6/dQ/xY9T/L60n2Gjt/AHhGHwf4fitQA95KN88uMEsf6DoPYV1oVVAJIGO9GGz8gGBxzS7M8sfwq0rCepGjO7H5QF9fWnFRnJPtTiQPSmH5iO2KYgJw2OBS5qPBLZqVVxQAUUUnegBAOeaWikoAKQE5xRSM2PlA+Zv0pAKOaCB6Uq8UE+9MBjOofyywHGetPAwKz5lkubj5Aq7Tt3EHpV5VKoqt8xA60gHdaKTOKaWA4zQA/GaAw5ww49KjRnc7mGAOgp6xgA46E5oARpQibivygcE9SaIssodu/QVHNEZTx90Dp71PgheT260AOR13gZFFRDc8y7DsUdfU0UDPiy4i2tuUcGq9aZGRg1Rnj8t/akxoYp564NWI7gpw3NVSKASO9FyXG5qpMh6Mc1OkjZ55HtWMD6HBqVJnTkHNUmZOkbfnIevFbvi9h/wnPiAZ/5iVx/6MauPW7yORXR+NJYz488RDkEancjj/rq1O5m6bSKYbDU8t+VZyuc8SH8al858Abh+dO5Diy2TgUhwFz6VAsrkdRQZZACCM/jQTykiy9c0qkYJ7VVMzhs9qDM4Ucj86LhystBjuNBYtVUzf7VJ56r15oHylr5epNRscnIHFVzcAdBimmRiMHmgagWiwA5NAlC52459aq5JHWkyuOeTQOxO0gzkkk+1MaTdweB7VCZMUwvmkOxIXABxQXJ71XZjmjdxSuUokpb3pheotxzS8mgqwpbNAHNAXHJozSAXvTgKbnArUsNLMoE9y3lW45JPU/QUnJLcqMHJ6EVhp899J+7+WMfec9FrRvdTg0+1OnaZjaeJZR1c1R1HVDOotbYbLVPlAB6+5rOUdKizluauSp6R3HDJJJ5Y9T608cUmKUCtFoYPUeOnvUqHAxUQqSNDI+1epovZXBK7saGl2f2y6UNkRg5Y12JkRFCoMKBjFc9bKIIVVOverAnYHrmuKpPmZ6FKnyxL07qRwaqFyGqN5S1IsgxyazNR7uWcBjgVPuAA3AFTVOQ5HHWnRsWABq7E3OU16z+y37Oi4ikwRx0rJNd3qNqLqEwtg56GuKuIGt5miYEbTW8JXVjGa1IM4qRHKkEHBFRmkzWhB2GlX4uLcAn516+9aO7IyQa4izuXgnWQHGDyK7WyuFnjUjBBrCpG2ptCVwx3BpCuBkdaviAN2oFiXPygmseZGtjMLMDUJZnPPFbX9msx6EVYj0ZSMnk0c6FyM5p9zDaq5NT2mn3LuCQQK6yLTIowMqM1fit1XHAArOdXsWoGRZaeUUNko46MOK2bXUr6yIMqmWPPUDJFBG1/UVdtmCtxj8ayuVY0Yb+1u0BWTDnsxxUwDDBXke1ZstpbXIxImD6jioohd6Yd0bGeHuvcUyTbD5bBqxFj0rOtNTtbptp+R/RuKuEsmcHK9qNgJiQD05p67twIPHpVeKXLYIwDVpMEcU0Sx+5W69aQqrkAikIB/ClU5YVSERyWoByhNMLPG+T0q3zn2oZAw5oGQpcZHUE+1Wo2DL71Q+yBGyvFKu6I560IRomPA3A1IjfLjvVJbxFwG4FWxtmxg4PUY71dwJQAaRd0Lf7LfpTMMG+lSI2eCcGqRLLKkFcg1XlkVzt460v+rO5encetNcokomZgoxzmruTYshiqLgAkdiarTTgjErBQBk7uAB9e1Es+VbaMKfUZJ/wrzHxt4oj+1/Y7aVBGh/egfNuPbBzQ/IDub7XYLc7YpEdvXd8p/KsG48Quk4kD7RnJ+bJzXlza2wk2x72QHuSB9frTZ9WvZ02GYCPqAB0/wAahwnIpSijvNR1ZLsuZ7geU3VN2B9KzptbtJZCPMQDjG3sf61w2WJyxJY9zzSlQqkAcqOMmmqHdh7TsdmdftwojjkGAeS3frUkXiVI2AyGU4JBbBFcMu4EFTzT3bJLA9hVewiLnZ6fN4zt7PTN1tE1zct8kUCgsWY+vtXC+LbuewNtZ3s5ub24T7VqJyDtmcYSLA6eWv6u1Jo9xDYXMms3a+ZHp8YeJCceZMxxGPcA5cj0SrfhfRrS6122lvdQ+zXN7IwsWmG/y2/57DszFvlUnHzc9VGdaVGz0InUSWp0um+HPD+lXGijxO0Z1uOJixvbyOW3YfwLIkjAgBTwowQawNC8QS/Djxde2ksZn0eadkZo+VdQflljIJB4xkAn0zxXqOl+ArPTGEKv59uV/eMVUO79cvkHOT1/CotT+GWkTyS3OlzSabcS5MiqokglbtvhPBH0we9dMqbscka93qdNY63aXlvFd2V5HcW0gyGQg7a04bkSLyRkHoDXz/BpeveA9dZYEEMhXd9ldy0N8B18hz/F32t8w9+lel+H/Fdn4is4rm0fyplJDp3XplWU9ufwqNYmtk1od8Dmk3YrMsNWjnUISFcfeT0rUIDjNWnch6DXkZANuOfUkVly6y1idt9b+WDxvU/KefXv/nitEjcgJ6g1V1HV7PRrP7VfXCwxA4UkZJPooHJq4NdVcmSHC+hkltZoXVo5ZDETu7lSR/L9av8AB4IrjvDXiOz8R313AluI2GWXeOXwQQ3oDnnHautDZ2nI6etOpFxlYFsVLnS7W6YmSHkjGVbH+fyritV8IXWnO0llvubZjn5Rl19iB/SvQgwzmgHrWFSnGa1NadWUHdHk68DGOelLlg/J4ru9e8PRahE1zapHHdjkkDG/69s+9cM8bwO0EqMsqn5g1cFSk4PU9OjVjUV0SoxYjHaraSdM1RVjxjvUu7auMmpRq0W2lYN8uCCOaxtT0DTNTj/0m3Tec/MnysPxrSViV7fjUUnyn5sc+lO7J5U9DzzU/CV7Zuz2EhniXorH5q5i6LKxjuo3jkHBVxivW58AErXPataQ3wKzxhvr1rSNZrcynh4v4TitJnEbyWxYEHlDmtuN+hrA1DSpNOuBNA7FVOcGtmCUSxKwGdwzRNp6odNOKszRibdUwXmqULbTgdKto/FZWN0OZRimlcKSvUipY8OKfsGKQyhIhaA5+9gVhapDvtJRjqtdO8QwTWPdxZVxjjmrg9TGoro4Gkp8oMczoeCrEUwEV3HmhQeKWm5zQIKWiigApQOaSnCgApQKKWmJi4p4FNAq7p9hcalf29laxmSedwkaj1NFyTpPhz4U/wCEs8VwWs8bmyhHm3DAcYHRSfc4H0zX1TFFHBAkUahUQYAAwBWD4K8KweEPDsNjHh5z888mMb3PU/0HsBW+x3NjtTXcbAuq9859KR3OKRkxIXA68Y7CkCbT1zmqEIMnrUmBTsACmEk8AUALxRTNuOSaUEmgAJ5oHSjFLigBvTk0Zpc496a7kJkDJ7ZoAXsaaq7Eyxy1OBIQFhg45FRCIee0hJzQA9QeppskiqQmRuPQVL0oVMFjxk9T60ANRNo5AzTjTjx1pnqT0pAG3NNRQMluSaVv3gAB4p2MCgA+gqGZyXEUZYMecgcCnTzLAgZhknovrRGMDJGGPJHpQA47UUk/nmofPBxsBZs8Ac/nUxx3pQPYD2oAWIHeD/EetFOT74ooGfGeM0x0DqQafSd6YGc6GNitNq9PGHjOByKoHI47ioZSYuKM470maWgB4cdxXQeOCP8AhYPiTkg/2rdf+jWrnK3/AB1/yULxL/2Fbr/0a1FyWjIEjjo4I96es0gPQVUyQetKHIOc07k8pdW4kH8P5U77RIR0qmJm9aXzj3p3JcS0XkPb9aB5h9Kr+eaUTE0XFyssBT3NPwp6mqnnH1o8w+tO5Lgy3lB2zR5ntVTzDR5houHKy1vx3phlquXPrTN5pXGoE7Pmm78dahLGm8mlcvkJjJQGzTAOKeDRcLDgKkHFRg07NO5NhxpY4nmfZGpZj6CrNtYy3C7jhFHJZqsSalFZp5VkoDDguepqJS6I1jSb1kTR21rpqiW6PmSjkR+n1rPvdSnvn5bbGOi9qqszysXdiT15oxmko31Y5VElaIq9Kd3poGKfWpgx46UoOKbninKGZtiD5mPFLYSXQeoLOFA61qW9uYF3fxelW7HRzDGJJTlyMgU6VCCeK5a1S+iOyjTtqxiyEVKkhNRD6U9Qc8Vhc6CQtmm7CelPValRKVxkcRJOGFSbCOgqQRYfpUxQCqUhWKzKW2k1na9pf2i1E8a/vFGSB3raSIvwBVgWuEKyEYI6GmpWYOJ5YylTyKYa3vEGnx212XgO5G9KwWHNdcZcyuc0lZ2AGtzQ9Q8txC/QnisPaTVy1tnkJZeGHIpuN0JOzPUrIR3NnuXh1ODV22hCkA4zXL+GNS3x7JDhgQrGuyiVAQQcg9682ouWVjtg00KIQQRgUwL5bc9KtoVGeabIEI5IrMsjMeacBgU0NmlSQF9pHNIYxyRxipYW5AHBpzKP4ulQD5JMg8UgNRSOARUoGzlG69aqxToxCnrVgqcfIeKokbLbW8/+sQq3ZlqIjUbAgxOJ4R2PUCraMVGHGakTAPGeaBWEttQt7whWJilHY8VpqAoGG5rKuLGO5X5lCuOjjrVdXvrDqRNEO/cCqJsdApI6inglTkDNZlnqkFx8oYiT+6xq6swWQKByaaET7ielCtRHIjAjG0j1pTwc9qYCn25pm0NTyBtyDTU6GgCN489Fp8b+WVYkqc8U4blPzHg0SRiZQOmDmmItQzySCTzRtA5zUqtGwxkcjNUllMQxLyDxT1VHfcueOOtVewrFkOU+UnIPAb0qhqOp2ekQmbUJVRM43N/h1qLXNattIsJZp5FUKpOPU+nv2rwjXNbvvEeoG4upWZF4RCeEHoB0FaxXMQ3Y6zxD8SLi+3W2jSvHEQV85gNxHtnt+AriNjyOGmkLEnPJ70i+XH8oHOO9MMp5z0H6VqlYncmLANtxmlVhuX0NRhWZgM5Ip6IMj8CKGIdI2CdvY8GmtJluRw3B96UrkEimuCUBA78UrjHR5Ct3461GcgY96nYYhI9SMVGc7QwGCuRQB0ll4a+26Dpkt7HerYXVy5d4CuN4+VSxP3QFEhHXJyO4q94n1/wzdeFxpaWznUom3w3AcKtt0AjGMsUChVwQORu681ueOp10vwB4e0yAEGVEdkT+ILHzn/gT5/GuM0v4f+INUs4b62tLRLW4XzI5pbpPmU85wuT+f411Rg1scs5po1YPjD4gTT7e2a3sZZEQK11IjM7kdyAwGf51bs/i74i3fvxZMvtbbf61ia38O9e0LRZtTu2sri2iIMiwSszKCQM4KjjkU8fDnxctulxFpa3UboHRoLhG3KeQQMg9Kb5iUobnbS+OrPxRpk2natp9rcwyr8y5aNlI6MvXkdj/AJPH6WJIvE6W016bO9mJW1vZm+S67Ksxxw44AkA5zznvzNzb3+l3Gy9s7qznHOJ42Q/hnrUzakNQtHs7wCReqE/wmsXLXU6YQTXunsek6m0M5WZClyjHzEJ4ODhh9QeorvrC7EsKknk4zXmM86Xeg+HvEdsP390q2t0O5nRCQ/1O1gfXI9K6TRNS3wE7+AfQ5xQnyuw5LmVztiA3zfpWXf6XYapsTUbSG6VMmNJV3bSeDx9KsQ3W5ACRk9B3NSMzEYUkqeODjGPpWqfYwsZFx4ftrSyuG0SztLDUBGRBMIwu1jx+o4rbQkDbvUjgdc/nUGWXDE4Pv/8AW/xxT2G9QS2B3wKbd9xkpdRjLdfRTT8DGQagRwy42+3OKcO2BigklXI96w9b0aC/JJ+WQDKuP6+1bDMVTIPIFMnxJEkg6/3qxqrmibUZcstDzi4tprO5McqbWPQ9j7ing8gtya7K8s4LyPy5o+OzDqp9q5W9sJrGYLJ8yH7rjoa4XGx6cZKRAxAX6nNV55FOMGpHkAfHY1Ul/wBZipNEiGVjtwKxr1ju45rWkbArMuVHNBRz+oJvU5xj0rL09ypeE9jkVs3i9QOa592NvfLJnjODVIiSNdXIwKnD46VXUhjmndDnNAIuQtgHPU9KvRqDgYrLhf5vpVz7Q/GOKTKTJ5l8tT/Ksq5TIPHWtFcyZLGop4hsNCZElc851a3EN/Ljvz+dUcY61veJItlzGwH3gc/hWFIuFHvXdB3ijzaitJjCc0CkANLVEC0UUUAFLSCloELTxTKePagQ9fx9a9++DPgT+z7UeItRh/0qYYtlb+CM/wAX1b+QHrXnvwu8Enxbr/m3KH+zLNg0xI/1jdk+ncj0+tfTyBIkSKNdqqMADoPpQtWGwrZJyTwKXHy5HFLjNDHauK0JG5OMZ5pNpJ65oUZ5p+Mc0AN6DmkOMdaZI2TgGkEePrQAucnFKFwc5oVSDzTsUAJTC437MVJTGXIPHOOKAALg9aZJHvYc4Ap2MDAOacBgUAIRij+IYH1pajdyrAZ69KAH5yxHYdaXIPSookIBJPJqTGKABj0ppYsQAOO9Px60oA9KQDQMUv0/WlPAyenqaprPJcyEQjEQ4MjD730oAc0RNx5mdxHTPap8E8nk0KqqMAUGgBDkn2pSaKSgB8f3xRSRn5xRQM+L45geDU3GKq3Fu1rKUPTsaWKbs1QnZ2ZpKN9UWagngDgsBzVgYIozir3MzJII4PBpKvXFuGBZRzVLGOD1qbDDNdB46/5KD4l/7Ct1/wCjWrn63/HX/JQvEv8A2Fbr/wBGtQMwaKSloAKKKSgQtFGaSgBc0UlLmgAoozR+FABRRRQAtApB9DUixOe1K40riClA9KkEaj7zAU/7TFF/q1yfU0ubsPk7kkVqxAZzsX1qY3NvbcRIHcfxEVnvNLKcs3HoKVEGelFm9w5ox2JpLme5bLsQPQGmAAdqXp06UoHFWopGM5N7ijpS4oA4opkhThQKkiiaRtvTPek5WGlfYWKGSZ9kSlnPYdq7XRtHhtLQNKo85hyx7VHpWmQW1qs0JDSEck1qRzHy2SVTx3rCdS+iOmFK2rGyQxgYRgxPTFU5YTg7lxShf3paJ8kdqXzZZEZiM461izaJnPFzwKRV2nkVdHPUUxlGeaxZY2JQTiraQewqFAEw2eKtRHd3qWykSxxqRg9KkESkYIpu0jpUik7cY5pAQXR8iMFML61zN/qjyzm3Vz9a7C6sxfW5VTtNULfwzDHIJJDuYVrGaSJkmQ6TYRXViyXCAK4+Y4/WuH17TH0zUHi2nZ1U+1erLFHHEI1GAKxPEeinVbLco/exDKn1p06tpCnC8TzONckZrVsvkmQjGCcVQSJlkKPww4Oa0Ik2hT6V6UVdHFJ2LM0jaffJMnCv94D6122lagZ0VQwIPQ1yWqRebp6SgDKH9Ki0PUmt5RAWwM/Ka46sOZtHRTlY9KaVYIt8mR2x71NakGMs6g5ORWVZTvqMsauw/d9QO9bPmbQFKkY9q4pK2h1J3AsM8IAKQKhbJ604OjcHilHlK3JzUjH7lIxTWix8yjNSgRtyKRkIHB4pDI41Ctkg1ZRGZWKNzUSKe/SkWVYZPlbvVITLcJkTAk61Zj2t1GPeq6ziTAPPpioFknWY5+52xTEaajaeGBp3DfeGKpJNskBJ4NXBMjDnB+lFwI5rSOUZaNXz3A5FU3hvLEhrZmkTvG1Xwm5sxufpUgL5xIuR7U0JoqWutRSOEm/dv3DCteNlZQ6MCp7dqzLixtbriRF/lVb7Fe2ID2kxkQf8s2pktG+CMYzTxytY9prKu3k3i+TJ/tDitKOUZ4PB6UCJ1OBzzTjuIytNUhhQ5ZBnoo61QgDb1IZDnue9c7r3iaDRbJ5FO+blUjBwGPoT6DIz+VaWpagltZSXJKhNpy5+npXh2t6s+rajI6HbCOEX2rWEeZkydivqGpXmr3rT3lw8hJztJ+UewHYVXkmQKFIGR36U1l2KcnAxzUJZHIU9e1b2sZ7jyCCAXZlPep/JYBSRx6+3vVaMujEKQ2P4c1ftZSvYFT95O/4Uhj4omCAhe/5GrkcIbPHDc89vWnJEpXapDK3Q+hqzEgVc7eME/j/n+dMRTMShwSODx9CaaICEKnAIYda0EtzLBvXkDvTrm3J5C4BwR9KdgM/yRswT0FVXT92U6l2VR+Jx/U1qmHCbT3B/Oq4gV7i3SThftMKnPTG4ZNCWonc6D4uXjSeMEtVYiK0tY0RV427vmJ/UflWR4N8WXPh++OWMllI2Li365H/PRB2cd/7w9xVDxdezalr1zqEmC87kjaOB6CsaMMqO4bBBGOxHcEH/AD1rplpK5yWVrM+l31Oxj0NtReSOewMJcN1SRT2HqTnGK8d0bxh4g0x30611KWOCI/uYnVXVUzwBuBwAKworrU7fTo45WuUspH81ERmWOQZIBCnK9c9hyKZO0sssU0arIyrlwnDMvfK/4U3UQ6dHl0Oh17xbqOu+V9vigbyV2h4gYyRnOSMkZ/KudL27SoX2svHJG0n/AOtS3MhkO+BiYx/EvUe3/wCqoLC1m1TUreyhUu8z7Aq857n+VZSSlqdUbxPRLm6/szwZolk3yGS8e6UDuqRqgP8A30W/KtrwzqoaUw7fM3qSAM5bHp/tDn8veuB8T6u2p635MYAtrFBaQBTgYXO5sf7TFvwxTdJ1aawuophLgo+7OOnt9DWM9GhrW/me4afeRTSZjnDRMAUZOuQcYb0PsRnitpHLo2RnH+e1eZQfZdb1STV9MvXs75VV5FTvgZ3MvUgHIPfFd9pV5Jd2scs0XlS7Rv2j5Xz3U9x/LpXQrW0MpIvkkryfyp8LjJU9KgzhmVuDmmbvLfJ4pkFr7rsBTgxzgYzjOaa/IVx3qOZvJTexwi8knsKALKsHXPfoRUKsRFLH/dam+Z5UgYHKyDr60kvF0rKQVkXBwaTWg46MVvUfWonRZEKsAVPYjIp+7Ix2pOlcTO9HK6zorw7p7aMvD1ZB1X6e1c8cgdOc16V/PsaxtU0CC7VngxFMeSf4WPuP61nKJtCpbRnES45/l6VSnAIPvWpfWdzaSmG5jZXA4PUEexrKl6YFQbrXUw7wAN71z+pAMp46V0N8vJNYF70PpVxJkSafL51uuTyvBrRByoFYWkPiSaPtkEVuKPSm9yU9CQALgirUGCM9qpk1JE5DgVLRSNED2pHUbOKRMgHJJ+lTBDsyB1qSjj/FUG63hlwAFY5+lcg+Sxb8q9J1iz+02UkbAcrXnDqUcqwwQcGuujK6sebiFaRHRmnYpuK2OcKKMUUDAU7tSCloABW14a0C58Sa/a6Ta8PMxy452qOp/L9cVjgfgMV9F/BfwO2kae3iC+hK3t2m2FW4McZwenYng/lQB6Nomh2nh7SLfTbGJY4YVA4HLH1Pue9XywBzjHsKkPtTcZq1oZ7jd+7px9aTrkGlxhuOlDDnNMBwGB0psjbVzSFmH0oYZ4IBz1yKAIIleVzIWwvYetTk44GaMAAKuABS0AN5JopT1opAJTWGaUmgdKAALiilzSdaAEPSoidwVl5yeT6VITnIFMkjVYiu4oG/u0AOztA285pwB79KapCALg4FDDzFwGwB6cUwH/rUdxN9mhaQqWI6KO9PIwoA/HNQKoncMxJ28YpAV4Y5bmXfcoCgUYUE4z9O9XgAq4AA/pTugpKAEpm7Jpx9KTaKACg57UuAKYW5I9KAHxACQGiljPziigZ8iMi3SGKVQHHQ1iz2728pQjvxXaeI/D0+kajPayoVMZyr/wB5ex96xGCXMRjnUhwOCRilJXLjKxkwSHdtY1ZqrcW728uwjAHQ+tOhlPCtUqVhyjfVFjvUFxbh1LL1qxilq3qZXsY5BXgjFb/jr/koXiX/ALCt1/6NaqNxCJEJA+YVe8df8lB8S/8AYVuv/RrVJZz9KKKKAClwDSUUAO2+4o2Gm4o/E0g0HbDS+W3tTMn1NH4mjUNB/lt7UoiHdqj/AD/OjFFh6EuyMfxUu6MfWoaWiwX7EnnY+6ophkdv4iPpTaKLC5mHJ6kmlGPSkpaBDwRinhqiFOBpiaJc04Hmos04GncholzzThTEBY4A4NdPomhxzQ/aJgHHTb6UuawKLZgKnHzdKlW4RSFXk+1Sarpjx6g8ceRGTxVzTNISFlklGT7iuapJPdnVCNtixp0sqjDlgD0rpNPl3HY79RwDVaBIww3KMfSr9zoMc8STW2QxGeKyUk9DS1gMUXnEqQr9/emGAQEkHKnrWW1lPbTD7TvC9M1t2tvA0PySbgRxk0MaK7JFtDevamTQoyDHpU00TW53qAyk8imSQeZHvUEZGahlFURxhOvQ1MsCldyNSRsVjKsgPNOI28ow57VmykPVXVs7sipcPjK5pkVyyn5l4q5HIrHnApDCIsg9jU5faOSaaNhOacqBm9velcZGH3txU8fBwSTnilWFN3v2xUyoVYcmgR5PrEIg1y6UDjcaao/d1o+KYwviCY/Ss4A7a9ij8CPOq/EzdijE+lup7oCK5QZRzjhgetdfYD/RoQe8dcversvJVH96samkjWOx0mh6u/yuDiSPgj1Fd3YSNeWnnAhznkdxXjcUjRSB0JDA+tdp4f1t4SJEPy5xIvvXPVp3V0bwnbQ7MiYnHkn60jWr5Bwea0ba5S4hWVGBVqmJU9ua5GbmKRLC4wDjvVpHdgK0PJD9MVC8GO3PtSAhEhBBx0qKWOKdsqdrelWhF0z0PrSvaIUBUcnvTQMhihlQgpIPpU4hlxknNUWSeByythR+taFneCZBu6+maYhqwzH6elSCF9uDxV3Cbd6ZxUi4YD0pgU4EmTryO1WVkkz8y8e1SllUUglTaT2FMkYZImY47VLGQRmN6jDRSE4A59KT7Ou7jI+lMBbu0huo9s0Yz/eHaqpt76wXdbyefEBna3UVcKSoMhs/Wk8yReSvA60AMttWhlcLIfLkHBDDHNWbi5ynQAerHgiqs5guV/eqOvQiuW1+8SxgdkdgnOFZvur/APX6VUdXYlmX4615hGLK3ZcOCSw4JH+H8686DY+YsPwFS3t1Jd3TTu2Sxzn27VTbG44B59a7Ix5UYyd2K8rMSC3FKIwQTwR6ZxUBIXPzAfrSrLhfvD8qGCLsShlw/I7HutXY1BIVm5H3WFZccqkY3ACriODjJOAOuDj9Kko2IGDfKxCsMEEdM+9aAfZxIBgH5iO+en61iW7MxBUq/wBCD+nWtqykSZPKmXjOAT69P61VxWLEACW7AH5SePpg1LL+9BAYHZhfwABqrdwtARGTwBkMOh5qAXJiVlfPzAZ47+lNMTRouilEdgAmAc/XNRNYm4vrW2RGaSS5jACDJxvB6fQGpY5E8naMnacDPbmo4tZ0vTfEvl6olxLYvBKs4t3CyYcbRtJI9c8c/XpVLclpmuPh9eakmoQNNbl7cnysOS+5Sc8AdOx98elcHeR3eiusUtvJb3Uc4aO5DkYwDwuOM5wc9R04rt5NctNPg83+3F1OC1CmG5t/3d4FOAscitgSjGAejr1BwOc25+KdrqcIt9Z8MRXQHH2hLlorj2O8L1/T2reUkzmUJXOWsLqWa5MSsziYN5mIzLkbSSdgIyRyfY81HK24xqy424yB/WtK71bw/Jbv9ispmk3kiK8jVWAPYSw7SfoVqvBqmiI4MujyNnj5b9l/nHWVvM6U7LYqfaHcHzSzODhZE++D6e4+v51vaZf2uiaRc36SR3GqXAa3jAXHkp/Ex/2m4UDsCx7ikj8YaNYbV0XwvD9p/wCfm+mNwVP+yu0KPxzWfN9u1S4+1X8zvM7F+T0FF1FA7y0sUonbzjuJJxkn3q6r7W5Gd3B+tD23ljeVHHGKV4sICeCOeawKNLS9QmsblZN7Mh6jccg46g9j/OvUvBviX90un3LfuFfCSZxgt0B9v88V5HbgtJjgZbH0rtNIIs7xJSoZVC7hjPXPFOMuV2G43R63dMySRv2Yc/0qOQ74sgHJBqvCm/RgY3LKFDpznZxgr9KWznJ3KeTjium5z2LtnMbmwHXIP40Tx+daSoOSyMuD3yMVmaTcmG7niOcBjnHatkDZNkdDzRFg1ZmBoWspqHgu31EEl4osSr3VkyGB9+M/jWlZXK3FhbSjqFUMM5IJUZB+hyD7ivP9Hb+ytf17w1qihINR3tC7NtSViflw3+0uB25Wu40+JbfS7aCNQNoAyARk9/zOTWklYRdD4Zh6EipA1ZqXAeVyCPvE9e2atJJxXnPc9BLRFkUvfpmolbin7qENIiurKC8gME8avGecHsfb0+tcF4g8O3Gml7iAPNadS3Vo/wDex2969EBpDgnkUnFMuMmjwm8yyNweK529PBr3PxB4PsdXiaWIC2vQCVkRPlY/7Sjr9Rz9a8X8R6TfaJefZb+AwueUbO5JB3Kt3H8u+KnlsW5JmHp77NUjXs+VNdQgwMGuNLFbpHHGGBFdzEokRWA6jNOWgQIcUgBByKsOmB0ojXORUXLsSQTgEBzV+L5uVbPtWY0FNSSS3bIJqRmndRAplh9a4DxDp4gujMq/JIc5HrXdR34nUI/XFUr+2SWJ0kUNG3XirhLlZjVhzqx5myFexptXr+zlsbswkHA6HsR61U+Vuowa7U7o85q2hHilxTth7c0hGKYhKco5FIMd63vCfhq68V67b6baggOQ0snZEzyT/KhsDpvhT4GbxVrv2u5TOm2bhpNw4lfqF+g4J/8Ar19QqiooVVwB0qhouj2eg6VDp9jEkcEKgDaMZ9z6mr2PmzmqiupLdwbpigDApDSgVRIYpj80+mscYoAZgjk5Ipwzs9zSAljwOKf04zQAzbinUHjrUTNnJx0oAexApD0zTUG4BsU2XcWCjpSAcq87s/hTqXGOKQ/rQAYprHHHegsACM80AcZNACEhASewyaq/aTcKpjXaN38VTTRGdfLbiM4JINEYQSMFP3eMelADldTlVZWI9TSx7+rMMH0qKYSqhMaDcW6mpAzBVXrnvQA5stwKFQIMCgcdKU5bHOKAAmkpcUUAJiilpKAEph6k+tPJFJjPSgAj/wBYKKVD+9AFFAzkNf8ADlh4htkS7UiSPOyROq5/mPavItf+HmtWUjyRQG4jB4ki5yPcdc17qqnZkgU6PcpIycdyPStmkzFSsfLd1aTSRtBcxPHMOQHUqRisR1KOVYEEd6+sNX8O6brlq0N7bI4JGGX74PrmvJfF3wmv7cSXOlOLsLyI/wCPH9aynTe50U6q2Z5hBLkbW4IqeqskMkEzRSIySo21lYYIPvU8T7vlPUVnGXRlTh1RKKu/EGLZ498QyAcHU7nP/f1qpVteN1EnjjxCp6HU7n/0a1W0ZpnF0U+WMxSFT68UypKQUUUUgCijr0FFMAooz9aM0gCjNJRigBaM0UYp2AKKPzpwRmPCk/SkLUSirUen3co+SCQ/hV+28M6hc4IVVH+0aV0OzManDP4V1S+CrhQPNnUD/ZFZ2saG2l7GWTzEI57Yo5kFjHFPFGKSi4co/eQQVyCDmur8PagRKibsLJwfr2rkat6fc+ROoY4Vj19D2qZFR0PQNVsC4WRk5XuO9VolXABFdFo8q6jo6BgGYLtb2IrJnsTBIwBxzXHU3OmJGiMDxzXQaXNmLZnDDtXPASKc9PertlcGOcbuntWaYzo5IY54isyBqyLnw/tPnWUhRuu08itiNw0YZDuFOVireoNVcDlri7mi/c3URR+m4dKfGZFt92Q4PpXTzwQXSbJUUj3FY154cZUL2cpX/YzxRcChHGGY57+1Ry2yxFmGT3qMXE+nyFLqMj3qdLuK4G5GGW7Umh3C2kQrtlGPerDwJtyrD86rycnbt5xUO1gcbj+dZspFyPercjgd6uRyxt8p61nwM7uQx4q6sKlgwODQMvxbAcDvTiPmHNVwMc5pyg7gc0CPO/FHzeIJcGs8cLVnWX8zWrlv9o1V7gV7FHSCPOqP3mb9p8scC55EYrm9UGNQk+tdKmFlUD+FQDWDrlpPFemRoyEcZVj0NY1H7xrBPlMyrVjdtZzZX7hPIqoO57DijrUFWPS9A1MFQitkHBAz0rrUZnjDx/MO9eOaJqElnepyShODXpljqBjVWRsxtziuKrHlkdFN3RuJIVUleG96ejsT84H502KSG5Qt39qb9mIO5HP41maE5hWQg8g1JHGUUqeahjklQ4dc1ZjIZ9wbjpg00IiltklQgjqKqLZ/ZiDH2/WtIP8AvihXj1qRkBHAzTApW8hJKNwTVthsXP6VFJED93t7UIxPyMaYCpmTJqbAEeMVWXfFJz0NTt84G1vwouIjMHPyHFTiCZeUbPGajBZKsRz/AC/h60xMiDyjIlIAHOacSRHu4KkdQaguwJEdJTiNu/pUUc6RQLEhLZHGew9TTEUtW1VbeFhtCj++T0yDXm3iXVGuZmUMdqjbknOa6XxXfbs2ySqx3DJB/h+n41wGqOWdl7Z5ramtSJGUZCxIj6dyaMnHzHI9DQWAOBTGY+tdRiL8g/h2ew5zSqVkOAp/EVCRnjrT0fyueKViky3HD7D8quwBFO3ad3tWV9qfPtmrMVzMWBB2iosUaxtFI3GHd+GMfSrFs8iOEjcEjpHIMH8+9FpcMwAd+MVPJbmVRgbl6428fhTA0LK8jml8q5ieNxwEfkfgai1qza3fzIt5RiACR14P+fwqtC3klUmGAM8MP5V2eg6JPqun3F49s9za2qO0cGcGd1H3QT1Hqe/SnFXCTSV2cL5t79njiitZ5prwsYI413u4A5IQc4yDzjBweuKZoumSeM9cOmNNHYNc7pi/kZQOBkg5O5c/X8Oa1vBem6h4h8Yyz2PiBbK+MTN9pyTJsI2lY145xxjICiu9tPg1oxtZI76e+uZ2cst0kpUkdsrgjg555zXTGnoc1Soot6nnN98MvFHh13untobq1g+eSS3lB4/3Wwc/hTLYWGsWx82OMunLHofT9Dj867u9ufFfw4UyrqMXiDQ04aC4kHnwL+eT6Z5HsK57WLDRtdth4l8KPtZsi704DEitgk4X1wC3HUKccjFTOGmg6dTucxN4XmIjeAybHHTNQDQ1SYqwDLnB4wa0LLXpYnMDN8g9D2I7VqWtxFdPIoVQ4QNz+R/pWDN9TL0zR4vOyExt5OetaEtsDPLlcHbxgcAdP61swxRRoIVXM0mMkepPApsttw4RgScKCeNwHf8ArQkIwWhDBwByGGc/Sq08ahflHXgZ5ziuga2XD543NnIHtxWbLb/PEAN2dx47CkBVtYg12iAHJeu7srQm3BHO/GPUkCua0iy33yH8zXodhaKlrGxXnHP86ymzamro09GvBA/kS5ETjafQfhVsQyWd9sHIPzKezD1FUXtjLFuT/Wfw+n0q/p12lzCLS5bG0/u3PVT/AIV0U58ysYVYcruZryGDU5juIG/oK3W1NI7aB5Bw7baxdVtzDqDB8biOgPPt+dMumzo+87j5MoY8jGDx/M1oQ1cf4hTT013TbiV1S9mEi2pb7sjKhcRnPQbsEHrxiuet28Ua8tvbXkSaNYg77uSKbfNKB1VCPu8AjPXmtqf7Hq1nA95AkpsW+0RMWxtcAgH9aZd3QtdNlZCVaT5EHfJ6n8hTc0lcIwu7E1nMEUKi7VHAGc8VpxS571zlnIFVcYx7VqxTAHrXBe56Lia6v71Ire9Z6TA96nSTJ61VybF0NTwarBwOpqRWz0phYn9ucHqKo6ppFlrVi1nqFus8LdARgg/7J6g+4q4DzSnk4HHvQI+fvG3w9vvDdx9pshLeaY2SsgXc0Xs4HT69PpVnR2EljC3UbBk17uwyCOx6jsa5fUfBGm3LNJYqLGYksfLX92T7r2/ClLVFQlys87mjGzNVoyOa2NX0DVdJVmmtzLABnzocsn49x+Nc605X7vQ1lY2ci4ZBnFRSYYGqomLHNSCQYosFxvlndlSQan80mPZJyKrtJg8HFRPIWOM07EsranYi/wBPZQMzx/NGfX2rjJI2RirqVYdjwa7+L0PSo7nS7W+TbMnzdmXgitoT5dDlqUuZ3OBwVGQaXee+DW7e+G5oSXt3Mif3W61ivG6OUdCrDsRW6kmcsoyjuOjQySLGqMZGOFVRksT0Ar6j+F/gePwloImnRDqV2oadxzjjhR9Af515h8EfCS6trs2s3UW61sRthJ6NIe49cD+dfRh68ceoFVFXdyZPQT88ds0mKdikIrQgaCMmnYqNAQTmpKACkNKelNANAC5FIcDmgLiigBrYPWggADHejFDdsDmgBGzjA7UwgjGetLt5LZzmmsSDz0oAkFRXEghhd+pCnA71Lkbc+nWqYkN3cMiAGFDy/qfQUASQAsgZuTj86m2k/wCFLwOFGBQQc9aQCbcj6c9arW0eGdzkknmrEuChXOCR2qCKMRkqXbcaAJiOcVGGzIwAO1R17UryrHhmYAHvmlLbv9WRjPzGgBw55FFKvA60UAFJS0xmC8dz0oAU0hpcZo/EUAJgY7fjUM0hVAsfMjnC84/H6U6eQRRFiN2eAB3NMjhbcWmIMnt29qAJrcYIGckcE+tFPj++PXnpRQMxQ21fr+nrSiTbtYkADg1GGwPTGMn+Rp5A2kccdfb2roMS1tTeC7MImGRgd6RwU4Afyz3AwaYpLWpAPK8rz0pkd0m8LOzO57dqaEYviXwdpPie0dLm1CyY+S5Vf3i/j3rwHxV4M1LwlfeXcr5lux/d3Cj5W9Aff2r6eMfHCuFPOM1keIdCtPEmiT6dcRMI3GVduqsOQRWU6alqi6dRp2Z8vxvuA9a3vGn/ACPXiH/sJ3P/AKNaqHiDQb3w1q8ljeDDKcq+OHX+8KveNMHx34h55/tO5/8ARrVjF9DeS6o5y7i3xEgfMKza2iOxrKuIzG5OOD0psSIqSlpKkZJDJ5coJ5B4NSXMQWQMv3W5FV+1W4T9ohMR+8vIpAWIbaKSIFl5qhKqrIVHQGtK3ysQB7Vmycu31oTuwY2lUbjikAyau2dsZHBwcU5NJCim2TW2meau45q7HpcC/fQ1oQQjYABjFT7cDkVyuo2b8iRSi0+2XkQqceorThhjUDaiD6AVWZcD5TTknIGDSTY7I0ozIvAbirKuvGcA+tZkc569qtrLG4ANUiWaMcsiY53L70lxFbX9u8Eyj5hgEjoaghV1wVPy+lXAkUpwwwfaqvYR5nqNi+n3slu4xtPB7EVTr0LxJoRu7BrmJt00IzjuRXnp61cXcTQUnJ4paQiqJO18H6w1vKiM2Ub5JAemexrstVhSUeao59R3ryKwuTbXKnPyscMB/OvT9Hv1vtOELt+8QdfUVzVodTaDIo0OSSc+xpxQEgkdPSnEbGPNRT7yAUNcxsa1lOQoUnArQX727tXP2bkEb2wa3Y2DKMEU0S0TgF+R0oyyNx0qIblapFcE80wGzCOYFZEVgfUVhX3hyKWQy2rCJ+2K3mZQeKY/zAFTSvYEcVdDUbLHmKTj+KoU1VwwBGSTXZSRpMmJFDD0NY934cilYS27BWHY9KE09xu46zcXEAk27Se1Wx8tUYrlbH/R7pDG39/savRFZlyh3D1BqJFX0JFenPcolvK4I+RSfxppX5cchu1YviSQWGkuQ/Mp2/WnTV5JEydkcS7tLcSyZ6sTUtsPMvI0AyNwzVaPhBnvzWlpKjzHnI+VFP59K9mKsrHnvVmkCHuJD6tgYrs5bG3vtLjguI1ZduBkdK4myVnuIgBnc9eiIERFRhngV52Jep2UVpY8p17w7PpdySiloT90jtVKCyAAZ+c9K9fubSG7j8uQZTHeuD1zRZNLuNygtC3II7Vn7VtWL5FcyVUKuABV/T9SkspACxMfcGqA6dc0ZrN6lnoWn3qyQiaFvqBW5azCdAdw3Z6V5hpmpNYTZOTGeorsbO8ScCSFvfArNqwzrIwQf8aVo1kBAO1vUVQtNRR8K2Q3TmtAENjpVIGR75oGAb5lqwCGUMnB70MeMdahWNl5U59QaBE4lUggjnvUUmG+719aCVk6Daw/Wj0BGDTGKrfJ8wzUe0O/yHn2p24glcZHrTAByV4agCTe6jDrQrqTmkEp/ipoZW6cVQh0oaQYJrI1Od9Os5GyCzDEZ9TWlJN5VuXYZAGc5xXFeINSNw+GYEKcj600rkswb2fqWbDnrz1rmL6fc5A//VWvPN5gMrr1BCiuemO6Vj7811U0ZSYzoM01mH405xgYpnHbrW5mR8k0dOlOPFMoAkSTB7mrKTMR8sYJHPSqgbFSpNjnNJoaZrW8s5IONo9hW3DcTLEuPLA9cZrmLeZmbO7Aq62pFcKGbC9WJ4FRY0OqtnlvJorTyA8k7rGhbrksB/Wu4+Imvp4f0y18OadlGkjUziIbSkA4Az6sf0Bz1rmfhVaf2jrlxrN2C0GmpuVmPHmNkfouT+IrHi1nRfEHji41HxAtw9hcOQwilKGLspbHJUDAwMYropLlVzlrvmdl0MrUtZvtUuobh3WGS3UJAYFEflqOgGzGMe1Zcl3dyOfOuppd3d3JPXvXvll4H8IJMrw6JbTIy7lMkjSAg9xkkH61z3izwzpPh/XbHxAmj20ujKwgvrXyh5aBuBIo/EfiB61u4nHGUbnk6RLKhDAFeucVS8yfSrsXFrKyEHPytX0e3w28IXCh00dI1cZDQzyKDn6HH6V5L4m8MaPba3cW1hd3EMSHYguf3mTnBOQBgZ9eaykmtTspSUtDIuimuWH9sWyhbuFQl7Gg2+YMgCYAd+QG+oPcmqukXLDVVwflB2EHqRVeyjn0rVWt1kDiRWAKHhsA/oRkfjTIQba6jmPQ9DWM+5tBNaM6GLUnXWZWZj8jEL6gd/0raa/EpR2O5t/PoRgf/Xri5Zybq4cdSTj3BNXRehQihuNhHHrWRpY7L7RGI4o8hS5Of8/hULIslzGAcMcKD/s8k1z73pe7gGc7VY/zqzDdtLcDk7gMfpzRcOW7O00m0QTFVUAOo2kfTr+VdnCB5Srj7o5rlfDqFv3hJwV4JHTAAArqYwVZU9Byaxk7s6Yxsiyq+lRXsJwssZ2tnB96mQ8inTrvtnHtnP0qoaMiauiW1lt9Us/s12vIGAw+8v0PX8O9VX0mS3triCbmCaJ1Ein2447VmwTNHIXVu+CK6SzuYrqAxOQyMNrKT29q7FqjhkmjhIZgLeK3GN5AaQbiOPQ1SnuRcXO5XJjQbEOMfU/59KseJdKn0CZYQxktbhiUuc/eH90+hrPiI2DA+ua560nsdeHiviNGGbFX4rkevNYnmhR71JHc/hXMdh0Udz75q2k/Ga5+G4zjmr8c/vTuS0bSS5Gc81Zjl5HNZEUw9aspNzVpktGqsnNTK3NZ0cg9aspIKdyWi2DQeahElSA0E2FI96x9V8NaTrCn7XZp5naWP5XH4jr+NbFIcGkB5bq3w3vbUvNpcwuohk+U5CyD8ehrjp1ltp3gnRoZYzh1cEEfhX0ER6fyrP1PRdO1iDy761SXH3W6Mv0Yc1JaZ4MWPfg+9IOvNdf4j8B3OlKbnTzJd2uTuUL88Y9x3HuK5DvjP6U7lbk0ZxVjdlcg1R+YdTTllIyM0CJ2J78irOj+G28U6vDpyR7lJzKxH3Ez1/pWf5xeQRxo0jMcKq9WPQAV794C8LL4e0cSTKpvbgB5T3GegHsBV04uUrIwrTSib+k6VaaLpsOn2UKQwwqF2qMAmr1FFdtraHn7hSHpS0UwG45zS0hIPAoI4PWgBu9S+0U7IpiqADmlAxQA40lL2oxQAmaa3YCnEcUmDg0AIAM4qCdgQevyjPFStIIxjBJPHFQmNg3J4fj8aAKMsjXKKckAdAePzrQt0EUCqABgdqhMaRyBQvsKuKMDpQAgGKDxSk0lACY5yRUUzAJ0FSnFN8vd1pAVIbZNxcrkn1qwI1QjA6dPangYHFHb3oAAOKKWkxQAxiTwtLtGBxzTsUUANPTpmsu+jupp223Hk2yjJYd/b61qE7QWJAA5qugNwwkIxCv3UPf3NABbxbYl4I479anJVeMgYoYkLUPkvLyxwKAHJJI04VVwv97NFSW8YicAdPU0UDMZjt2YAMnb69xTRgquc9OM/wAvwqIMAwH3htyAO6//AFqkJbaueR1z/eHY1uZFu1UY6HHpUKqSZFjRQ4blz2q1bgBTxnA5BPI+lUoXBuZs55PemnYROkkR4MrO3tT8tG28JwePmPFNZQDuB2KOuB1p8fluCUjdgepNMRynj7wuniHw/N+6iN5ApeBx1Hqv0NeG+NMjx74iPUf2nc/+jWr6dZSMptRBj7xryr4weD4/tNxr9iq58xvtSKMdz8/+Nc9WH2om9Gf2WeP9RUM8XmIeORUoBU4NKelRGXMjSUeUxcEcGirl3DzvUfWqdIlCU6OQxSKw65pppvegZsqQyBl6YzWW33ifWrNhNhjE3Qjj2NReWTIUxzmpVkweo+3gaWRVA5PWuktLVY0xiq2n2ohjBI+Y960xwM1z1J8zNoRsAUpyKDIcGkMlRNNWRoNeTBoSRScUxyGNCpzVIllyP9KsxR7uhwarwc8GtGFQoFVcVrlq33IBuHFX4HSQ46H2qrGSvuMVYhWM8K2CaLhYtNGwPqK8w1/TW07UpRtxE7FkNepKkiL/AHh61R1ewg1aze3ZB5oUlCfWqjOzBo8mpKmuLd7W4eGUEOhwahrcyDkDIrqPDOpiGaNXP3Tt57iuXp8MrQyq6nBBzUyV0OLsz1S+gJIngbKNzUEUh28/rVfw9fi8tfLyPu5XPb2qxMFWYryDXDNWZ0p3Q8YY+nvWtYkk8tx7VibXByDkVZt7gLIOdp9KgZ0YIKmm/iBUcEvmRjAGasOoK/MB9aq5NiLGPcUmMHAPFOCEAlTn2pgw7Yztb0pNgIyfL1pqn5cZOKcSVPzLxTHwOVORSGQXNvHcjbIuRWe+kywEvZylT/dPetXHocUbSDncaVxmWmpmFhHexMjDjdjg1zfjS9inubaCFwyqpY4rs76aOGzklnVSqKfvfSvJ7m4FzdyzAYUscCunCw5pcxjWlaNhecAe1bNsPJ0wA8NK3T2rJtITcXSRgcZyT7VqyOHmOPuJ8qivRnKyOSKNjw9D52oJx9zmu2VDnkZrmvCaoqzSOVU5AGTXSyMQwKc/jXlV3eR3U1oS42jC9abLBHcQGKdAyt+lCzA4BHNNab8qxNDhdc8PS2EjSwqXhPYdRWBnnFerGSJshhkHrXM69odtLG9xbELIDyOmapMDkRVyyv5bGXehJXuKpHKMVbgg0A+poaA7u01CO9iDI3z+neuo02bzYefvLxXkEcrxPujYgj0NdX4R155tV+y3O751+U+9Sohc9CGc89KkG2oCrLgjmno+eWFAxJBke/rTUYrw3zVIWyaNueRQAw88g49qiOUOT09qs+XxyKY0ZAwvJpgRgqTwQaYI+NoPTrTjtAyRt+lQTlo4mlLYCg4PrVIkzddlaKwcZyNwA5rgb+VHYZGD2x/KtfXNVe4fapYDsAa5/wCVWLZG8cMTyMntWkUSyndP+5Bbg84XvWKXy5DYx7dq1LgkszMNwHQ1kyEZJx9K6aZjIaSCTn8KZn2pMnNIeelbEAQSecfhTCecU5z6UygA60uaQUhoC5N5pAwKQOWPPzegzUVW9Pj8y7jUjOWHbP4UWGmegad4zj8MeDLnQ7K0Sa6uIy892WICM64ZccfMowM5I615/FO8bqysQRyOea6vxR4W1TQIf9NtRFE8ZZG8xWJx1zjoeelcWuc5H51bM9Lnq/w+8dJpgGn6k7iw58uQ5b7OfTHXb/Kuh8aeKLXU7MaZplxHcQSKGneNs7v7qfpk14usdvZXBW+3yyRyITFC6srp1YeYCdpxjGAe/SrQvI4oFlt5zy21oZG3Mp56cYK4xyec9qpVWtDN4dN8yOh07ULu0jcW15cW8sR2boZWQ5Hfgio767ubpy93cG4kY7maTO5z65A/mPxrKj1JARLnbJ0Zj8yke47fhUjzJLhshdx+Vi+VP0Pb6Gk5qW50RjbVDIytx4gsDgqGmUHPJxnn9M1CImmhh2jjaDn+n8qvWEc0Rvrzyzm2gKocjBlkG1R9du9v+A1oWyRJGsTAAlAp4rKRotZGBNGSBLyD0xTYQfNGQcAc1tz2m0mPjk8N1xzVeK1Kl8rwTjNZF2IrYbyr555FdLo2lSTZYg7ifTrn0qtoViJShK5XfjpXoFlbJEAQihh04rOcraG1OHUv6bAbeGNOgXtWrG4IHBzVKIbupqbhTxmskasvRspYqDyKmYjyXyQAFPJqjG+TmpHlCwSEgn5TwO/FaIzaMGO5i+2SwxTpJMmPNhVhvQkA9OvQ/rWnY3JjlBVunIyaz/Engay8SaTb3qypaalGgBuQvyuAMYYZ+bjGMc8/hWToOgRWluks/mzzxXDeU5YnbhcHaeig7s4613qFocxwN+9yno+LfVLBrS7iWWFhhgw6ehHoR615nrWmS6BqbWjMzwsN0EuMb1/xHIrt7WVkYYPI6jNac9ta6vpzWV9EJYpP++lPqD2PvWc4qaHTqOm/I8qWXI4IoEnPU1Lr+i3Hh2/WGWQSwTZNvMON/sR2I9Pxqmrqc4J49RXHKDTPQhNSV0Xo5+OtXIrnjrWSDxxUiyFV61BodFBOD1NXopxtGD3rmIrgjvV6C6wvWi4WOlilHFWllOOB3rnoboMc5xVyK5yfvU7kOJupJ0zUyv71kR3A9aspMNuc81SZLiaXmELhTgkdaIiwQCVwXxyR3qkJvftTxKBnHGeuKLisXwMimNgZqp55HemvcZOM1LYWLBcg8Guf1rwhpetMzvEYLo/8toVAJ/3l6H61sq2alAJGM0rlWsjyPV/AuraZukiC3kA/ji6ge47VycySI2GVlb0IxX0YBWdqWgaZqu37bZQysrbg23n6EjnFUmS2cj8KfCJu5xr19GTDGSLZCv3m7v8Az/KvZj29qz7G7tI4YrVUW32KAqAYXH4Vo4+UEYIPcc120lFLRnn1XJvUSiiitTIKTOaBzS4xQAnApMjNIXB74FIGVu/FACtjqTincVG5yu1cZ7ZpwJwNxBOOSKAHCg0ZHrTGcAdaAHE1G79l60hY89eelV2U9N3zdeO9AFhSoBbOcdfao/NGWY/gKfFEAgZup7VDtCsfM59AtAAY2Z0fdghs4q0T6VBySBjip8cZNADdwHWgc80uMnkU6gBtJSk89KXFIBn3Rz1oxzmlIGaKAG0uKXHseaaDuxgj3oASmSSxxAmRwMDJH+FSYHpVWKMyuZpMNk/u1PRe2aAJFV5U3SLtB5C+3v70g378ZXb7USyfMsYB3tyPXHqfapQoU8CgAA9aU0U1zhaAHRjc4z09KKWH7ymigZz48tSShwSfl9j6U0yF8BVI3H5R/dPp/Oodo/1knCufm/2WqVGLyneCu04cjsexroMjQQhLXft3p69xis2FyZ25yCePWtG5zFbDdhXPAYHgntn61lwBQwP8TcnHY9wKBF5ZecVOTtIYu3lnsvrWeWw4UGr0Kn7OeG4PUdqBD5UDqCsTnbz83emapD9qe8glgjaF2dSDzkEmpFIdeZXJ9qW7CLeXBbcwLtx+NLqPY+XfE2jHQfEN5p53bY2zHnup5H6VlYr1r4t6CziLWIl4TEcuT0GTg/ma8n2+2K4ppwkd8LVIEEg3KVx1rMlQxuQa2GXI4qjdx5UsOorRNSRg04vUomm07tTaAHI+xlYdQc1uW9usswnXGGrBrV0m52sYmPXpWdRXRUXqbyfKMHtTy/FV8kn2oLHPBrkOgkLBs5qNge3SgGpFOBmgBgQ/Spk4PIpyqGGe9OCkHBouA9VHatG2bgBqrxBSACKuRxDg0XCxoRrwO/FS+SCOODUcJwB9KtKAaVxiRTPDxyasoY5uQcP1FRMmRjuaiM6RHaMbx0xVK7Jbscv400RiP7RhXOOHA/nXDn6fjXrc947QyRXVsfIcEFhXmerWJsr11wfLP3D7VvBvZmUrPVGfR0OaDx1pK0EbPh+/a1ulTdgZyvsa7+TZcxJOMfMM15QrFWDLwQc13+iXoutPjGecY/GuetC+prTl0L4SRTlelKVBxkYNHmhDgk0uFfkGuWxrcvW1w8e0YyK2I5wwHNc/BIVO0nitCI9w1AGrlRzmkdVYZ71SEwHDnFSCT+78wosBIyEfdOR701iqjaVx79qcXVhgHNMLhhg9KBkLby+ei+tLnIAHOKHZEHXaaztW1CPT7N5n4bHyYNJJt2Qm7IwvGeqrtFhC/J5euLBxwKLid7ud5pGLMxPJqzY23nzAHhB94161GmoRscVSXM7l6wBs7R5mGHl+VR6CnxAlgBksTjimXNwJpwF+4nyqPb1rT0G0NzfhyvyRnJPrWdWfUcIvYm8m6sGXzFdA3IPaum0+4kkQZYFfXNaTrBeReXIAQPUVmXGitBmSxmIPXY3evPlPmOuKsaqNhT3HrUZbBYlgF9K5e41q/syY54VVvXtTbfXTNuSXHPTFCg9x8xty3KRFiOv1rntX1YojAGm3t+VY4BII61gXG+5kJbgVcYrqJu5TknfzC/ZqcLgMO+asx2Cv3JNX7fRcsrbcirlygrmbDHNO4VFPNd74V0A2cn2yU5kx8ue1QaVpy+cPkA2iuytkWOJQOlYSkWkWkfKjcaeTxUIUEjFSleMVIxBu3Zboe9WYwCOtRKOKf0X5TzQhEgJJIIziomJOTSfMBnNMD9QaoQyUA5JPAHT1rA167W2t9gfMrL8qf3R6+/8A+qta4kzKQFJb7qj1PFcJrV4ZZSXGSOAx5Hp/OmkJmVLsaRsyZY9AAc/WopCrDjCqOCPWnjDAs2Qx6nviqtyQBkH5QOa0WpJSv5dyhV4GcYFZM2Pujr3q/wAzMzn+EZx6HtWfIMOWzk55rogZyIM9fWkGQeaXGWzQa2MxvXNNpTwaSmAUUc0fWkAAcgetdF4TurTS9esry9luY4V3MzWqI0itg7cBwR19jxWBEu5ufujqa0YHiaIhpvJdOUcrkH0BpSbWxcIp7npGpazd+MtHa8udLaOTTpf9LeWZVRVbjaqE55I544Pc1wZ0n7AZ9Qt4INSsI1KYm3AoWyvzKpBBXg5zjoeait7+2DXP26EzNOoG/IBB3ZJ9ycdevJ9asaLcWFtel7i5u44AOJLbBlX8Nw4/lUuo7alexX2Wc6Bk+9bAYWWmPAd1xDdyqRJFPtDBOoKdc5OAWGOOAetaF7faZPqM8hghu4d2EnMYt5mBHUouUJ684PrUF3aW188l9JdSpMw+ZJLbYg4wCGjBHYfwrVXTIs4mI25ZWHzLgkYJ6e1T2rS+YscIYvIcbQM7/bHery+HpfJ81b/T3THG245/LGf0rWs9Us/CunXCWKJc61dr5ZumQ7bVOp8vI5c/3scdsmqt3EpNbCTwpBcW2j7h/o7efdCLkGY9vfaOPrurZ2oxVUjZh1wox+dcppsotx5pUtITuLEjPNbUd5cSBQiygZ+9jArKT1NI9yw8Lu+3K5HJ5/SkHGcnJPJOOhoQohaMsAT94A5I/HtVhEaSVYlTaPTrUM1WrN/w5Aq2xDqNytkZ966RMj0rK0qARIMZG0d+M1sIR7Vzyd2dcVZFmFyB15zVpDu4BwT0NZ6nD8GrMZwaEDJlzEMOwPPWlZy2Vx1OM0MoKAcYp0I+Z+M8VaMzUjs4tS06aymZ4+Q8ciHDRsP4ge1Uo9BlsJ4bbcpgWB24XI8wsBkdx8uOuc1Na3HlSFycVvRMlwsbk5ZQce2a7qUrw5Tzq65alzm1iMZGFL45xjk9Pf37kfSr9rIVOMjGffGM+v4VLd24RyduPfGf/wBdV4lDnbnJ7E/rTtYi9xNf0hNd0e4stuJsb4Hx0kAOPz6fjXjlrcNgoww6naynqCO1e4QOXjD54YnGDzivMPHWiLYa79tt8rHegyMuOA4Pzfnwce9Y1o3VzahK0rFBHzipOtZ9vKR1q+jAjNcrR3Jj1O2pklwag60d+KktM0Y5/fFWo7nacCsdWqRZPegrc6GG65q7HPnvXMRTkcCr0N0ABTE0dCtwcZzmnC5464rFW59Kf9o+TJNJsnlNJrob+TSR3JedcdAOawZr4LJ97tVnT5w5LE9azbKsdNDJnNXEPvWTbSjpmr8bg00S0XAaU1ErinhgaszYFQeMcVNBdT2r/I52/wB09DUYINKaak47EOKe5s2uox3A2sNj+h6GrZ7Y71zBXmrlrqM0GFfEi+55FdNOutpHNOh1ibfSmM244FRx3Mdyp8ps46joRT0jKksT16CulO5ztWDYMc9KeoULwOKGUMuD0oAwAB0FMQY56CmPgdqeSBTD8xNADNpI+9imDBfa3OP1p4GQS2foKPujOzA/WgCCWb94EXBJPCDqPepVXcQzY3DnaKgt1VJJJGb94/Qe1TkPIcBdidSR3oAZHI53K3BFSqNqgqMZ60BAe3Bp5wFwKAGkqoyTTgc81XdctghiT6VOMIAo7UAOJxTSckYo69aUDFAC00nB4NH3jik2gNQADk+1LSKOMUOyouSeKQFO7gnmkRI3ZEx8zKcVYhiWCNUXp3Y9TUinI570xssdo/GgCMyGRysf3R1angYwMcCgJhuOKeBgUARJFsd2PLOc59vSpKUjjgZNN3AdevpQAtQSSZYKB3qUkhCTTI8Fjx+NAE0QwyiikVv3gUAn3FFAzlUTLNI3JX5XX19DV6zgaMhnIBXox5DD0NUVB3DgtInDAfxCrc8kdvbLFu3Qnr6rXQZFbUZTMzqPlbO0p2I9RU6xbIYyQNpTAI64/wARWcrGW52FshOA3qD0NaEkg8hCQUkXAYdh7j9P1oExu3MoIGfp3rTh2i2bJ7Z5HWqFsMo8jLtA4xnof8Kth82UjZZRnGRz+BFAhtpKWd48tg8gCrV5sa6mBeQDe2fTOaxlZo7sNjG3t6VuXDbbubawGZG69uaOoGPe2cN1C8UsIlhkGx1fkMPoa8U8beCv+Efu45rYmSxuCduBzGR1Un+Ve73UZZTufdkYwtY2tWEOraRNZSRnEifex91h0xWdSnzI0pVHFnze0JGf6VWnh+UkDr1rdu9Pms7iSCZNroxUiqklv8p4rji3FnfKKmjl5ozHIRjioK1dShEQGVOSeCKy2GK2vfU5mmtGJTkco+5abQKBHRQXZkiVh36+1WVZW6HNY2mzASGFuhrVVNv3D+dck42ZvF3RYQEHkU7+LioBcuGAdOPWrkYRwCDk1mWEbc81YDAj1pgQZPFS+TgZFS2MVATV6LgDBwapJknAq3FzjNAF+GXkAj8auq3GRVCLBGDyKkluhYwtIzAgDjNG+gD9S1NbO2YA/vSMAVjWMrGUMzZYnJOaxbq/kvblpXJwTwM1p6V886qOneuunHlRzzdzvNPCywhZBuBHQ9653xV4dXyWKjcj8pj+E+ldBZXESIoyOK0LgQXlk8XfGVI7GtOW5jdo8AljaKRo3GGUkEUyum8YaV9kvvtka/up+Tj+93rmeO1I1WomK1dDvzaXiqWwjHnnpWXRnByOo5pSV1Yadmep+bFcxq+BnHOBUTRAfMhP0rF8P6kLiAI5+boc1tPuVsrkg1xTjZnRF3QxZ8NhlIPrV2J2G1kNVCVbg4qSIMv3D+dShmmZAwG4DNIclcAkVXjk3jawIPrUg8xD6r60WHcRbiWNvnGVq9HKjjs9VVZWGOMUpiVULK+wjnnpSYE91PDbW7zysFRB0bvXluuanLql4zlv3akhVB4xWh4m1uW9uGtkkBgTGSP4jXOdwf5V24ejy+8znq1L6IkjUtIABmtOT/RolhU/M3LkelQWyi3Tz5B838Ipu8uxZsnJ5ronKyMYrUsQRmR1jUEk8ACvR9H09LCxRMDcwy2Rz9K5zwtpQZzdzjAXlM11Uk6jBBJ9q86tUv7qOunG2pJJjtUJZwOG6etRS3GeVbFVWnJGC1ZJFsnl8qcbZVDj3rn9T0dMmS2YRt6A1pPMAMVSm3yHjPNaRdiTnJLq4hkMcykgd+1TwrHMQyOCfStsWcboBKuQfUUyXw+ufMtX2v6U+ZAkLY24IGV5roLS2jwAV6e1Y9lLLZkpeQkHHyt610FncQsgIwWPUCspNmiL2nWYWSRsDaRWiI1C7F4qnZyGR2CfdFXkBLZqBhH1A9KsDB71GqYJIpdwHfmgRISAe5pkwaZCiybTSmTAyBShxjc3emAih0TZuBIGM03YW4PX1pcq3Q0SHbGMH5qoRzur3Jjjd4pCByjEdvYe/rXIXg33AjC5VBnrXT6w4+yxRHks4ZvqM/1rmGXbuLck8kiquBWc4OB19ayL6QM/lg8dzWlO21GPQkcZ9Kx9v2ibn7gOePStIkMURrFbqh+8eSfWsy6Kbtq9e9X7yTblzjkAKPSsvbjLMOSeprohrqZyY37w54xTSe1O3ZqM81qQNxRTuAOtGB1xxTENzTlyTgd6QYPIBqZAqjOOTSbBDscAdgKCcY6/hSk4Gewquz5NSlcrYk/ddzj8BTTjPy5IpvBHTFN4qrCHEnHXA9M0eY3QFj9TSDntTulACqSO4/KpIpEQ7mXJ7c4FRgnt096UMh7ED1pPUaLX2uWQ8YRR/c4z+NWFuZCFVd2CeoJ/nVBRk7Y2z9RW1ptuIyGfaR6ljwfp3qJWRpG7NGxjkUZPU9iK6HTo9oBPWs+KUIoCZLHq2MZq/aPzlgc/yrGbOiEdTpLZgAuWIq15mOvH0rHimzjk1dilx0NYM6Vsakbg8Z5q7E43Fs8VlQOCc4q5ESEBHK+neqiSy/vwDnnvU0G4RLKvIJwaxdS1BbC28xnGW4QVLpesRtEFZ/kPvVohJvY2FjaSKV++MqPpVnTb8g/OcdOKrxzJuVQ2VPI5qoI3t5CWXIJLZBropSsc2IpvsdnHJHcRgE9RWffW3ko8iDoM1R029IVVZskjI5rVnlWW0f12103ujh2ZWOYzsxwoC1l+K9OTU/Dd0uP3kC+fHnqCoyfzGRW5JHu5xk1AzBchwCDwc+lJq6sVF2dzwdZ2ADoeDyAe9W7bVYS22UiEjqzfdP8AhVbxDaDStcvbJSdkcp2Z/unkfoRWI0uCea4uXoehzaXO5R9yAr8ynoQc/rTwRj0rhbTULmycvBMyL3XGVP1Fbll4ps5P3d9i2k/vgEofx5I/Klygpm99KM02ORJI1liZZYzzuRgQR+FOBB6VDRopC7itSrPtFQMaQtU2LTLq3B6kmpWuSYjg1mb/AHpxk+XFJodyG5nYzLWxpsv7pRn0rAkO6YVq2Um3j0qWijqraYY5rQim96563nB79qvxT5280yTcWUY61Mkh9RWTHMD3qxFKMjmglo1FkFPV81REg9alSSmmQ0XMg00jmo0kp/J+tUTYMlWyrFSO4NaNnqhHy3BBH9/0+tZ+B3600qM5zVwm47Gc4KW506kOoZTlTyDnrSOwRST0rAt7ue1+4QVzyh71pLOLuNxzuP8ABnpXXCrGRyTpuJLAXmfccBOnFSSsixnofT3NN2G3tgqg7iKakOcb2yByec81qZCo5VAxXLmoRG8h3yuQueAathlxlefSmGJTlmyT6HpQAm1QPlH409Q2AAABTlQAZ/nS5FACH5RzimZ4681IcHikCAZPegCMKfvE0qAZyBSsaUcigBcZNBwBk0vA70xyMUALkHkUmMtTFXkHOMdqk6UALTWwBuIGfXFKx29efpVZjcSS7QmyP1zzQBJHuYFnGD2X+tPxSqoUYGaXFIBMUUtJQAhIUZJwKTGeaGQPjceB29aOg9qAGvzxTAy52ilOXb0FOVAnbmgB0QAYDFFOQ5cUUDOWtjJGPMJH2hOF/wBoVSuZxIxKj92x2zD0pZX3HyS3bMMnt6VWiYXLid0wmNjj1PrXQZFqGJUjEbDa+drH1XtWhd7xFEjqM56juKqwKyTAEBnjGcn+JT2qS+dN8aox2N0B/gbtQDJHm3BIo+cfdfGNwHarMg8uwQrjk4VvX2IqhbbnYyNnaPlYDsfWprmdJXWMnKgYVv73rmgRGjIWbbnHoe3tWnPKRe3Y/uyuRn61mRqSztkkZGCf89Kv3qBLy5Y55lY9eetLqHQsEmW23oqBsdccis+Dd86SP7gjvV+1O6H5Sg7cis92KXZUkFh0wOBTQmec/EHSlF7BfRp8sylJCFxyOhrhpLb5Tx0r3jWNMg1TTJraVwSRuUns3avJLvTpbK7e1ni2SIcHP86460Gnfod2HqKUbdTkLuyWaMhhXM39o1tJtx8vrXo81mB2rLv9LjuInVgD6H0NZRlZm04cyPP6KtX1lJZTmORceh9aq1unc5WraMlifaQwPzCukt5EniDA1ywOK1dInxKYm71lVhdXKg7M2QueMZFCo0ZymVp6r6VPHNhSrLx2rlNwhulJ2upB9avoMjIOaohVJ5HWneU6HMMmPapYzQWMA5qRY2IyMY9KpxXRGFlGD61oRkEAg1OqAfHJsIHf0rH8Q3YZo4EPAGW+tacxCBnJxgVys8vnTtIxyWPFbUldkzegkKFmHpW5b7LWIS78DvWTGTGMHrTZJnk/dxrkj8hXTcxtc6ZNaRMBVz9atx+IHGMKMegNcasRPMkhz6DpUUxKj5GZW9QaXMJwOi1S+jvrNraRVwCSmexrhZYzFKyHkg9asTSyY+ZiT6nvVQvuOD1poLWCiiimMuabdtaXasD8p6131tN58AdTnjmvNe4Heum8NakQxhduBxWVWN1dFwlZ2OoMefakw6NlSTVg44z3pVj546Vx3Nh0Eu87ZFq6sbKmUwR6VDGoz8wpbq9t9Mt2nlmVV/utTV2D0JNsIBLAx4754ri/EHiNnMlpaPlAcM+etZ+u+J7jVHKITHCDwq1z+6uulQtrIwqVOiHlyzckmrdtCq/vJOFHODUVvGqDzpR34HrTnkaVtxOPRfSuiUkjJJsmeVpXyeg+6K0NG059Qugo4ReWJqlaWsl3OI41+p9K7OwhitLQQR/LJ1Y+tctSZtCOpsoyW8KwoAFUce9REnOQaos0q/xZFOWVnGCcVyWbZutBZXdGO5cg9xUeC/K9KtJn/loPoaf5KkZSi9gKDpz15p8S+ozVlogRjGTRHCe1O4WJI4VcdqtJAVIxn8KLeLDjjNaSqQ6gL161DYxEsYrmPZPGJF/UVSn8Oz2kpl06TOesbVtwR/McDHFXlUqoNNMGcaur3Gmzhbq3aLJwxC8V09rPHPCHRxtYZ4q5KIZk2SRJIvcMKyLvQWVhPpsphfqY84U0aMLml5ioAvNGFk+7wRXNTaxf6e2L60IUfxJ0qzaeJbG5OGcxmjlYXN0xtgENTG6FTziq0WoW0zfu5VOKsRsrksv4miwxsb8bh0pJp0AD7gTjAHamXNyqMIFH+sFNmmitYdzdFU5+tOwjmdXkHnjBDfMSRk8VgXMiglVfYp6561HrOqvc3jbW2qTz9B2/xrL35b52baefdu/4DPFUoiuLcySTEqrr5anngGo2QQRk5wT6/wAqsKpABY4wOB0/GqV5JuTaOB0z61qiGUJQZ5sn7oNVpmGcA5A7elS3Eh3FF6AVTY810QRnJgMk03OSfSpMbU/3qYBxWhFhvejnt1NKBzT1TJFDCw4DCgjv2pc9sY+tEsjRSKV6gVAzu5Jckk0rXHew+STjAP5VEOBS4oxTFuFKFHelApSR2oCwuPTFGMdTzTCc0qqWNAwLZ+npT0Qvxg1Ikca8yEj6CrMQhLDDy4+oXFS5FJFi104soc5/Otq1sZUx8ox65zVG34AEU7Me+4f/AF60Y1k2gsTj3OKxkzaFkaMcaptDEg+vUn/CrsWDyvA+tZ0RAYEuPotXoiTyQfZfT61kzeLL8TYXgE1aiY5qnG+1cn9OtWInw2PWlY0TNS3b3x+FX43IXO4KO5JrKikwf9qqOr3Mk6mBcqncL3+vtTihN6mPrmqnUtRMkefs6DEQ9h3x71HBfvCq4LdeQDUf2fLH2NQ3DLHwODVDjodpp2utLs3sAAMCurtLmO6iGGHTmvH7WYq6knAzXU6Rf+Xwzk55xRaxtpNWZ3ohdDuhUZHoa0o5MKqnBLnBHt1/pWBYSPdOoidiBya2LfMcrNIeBwB9etdVFtrU8vFQjGehqI4OMHNJcxhkLD0pkajd8vQCpsEjHatjkseGfElTD4sZjn97AjE9iRlf5AVxrOSSK9K+LNuEmtZdoC7iytj72Rhh+GF/OvM15Of0zXPNWkdUJXiPLbI81QY7pCamnkz8tVxWbKOs+H+owWXiSO3vEV7W7zGwfoGPQ+3YcV63feDo5kM2mXAUj/llMeCfZv8AGvntCQwZThgQQ3pjp+tfR3gbVV1fw1a3AZfMK7ZMf3h1otclycdUcTe2Vzp1wYLuJopOoDDgj2PQ1X4PSvYZobeaLZcRRzIeCsig/wA65TVfA6ODNpMm1upglPB/3W7fjUumawrrZnDmmkkA1PdW1zZ3BguYXhkAziQVXJ6Z4H1rNo6FK5Xz++H1rQhbaapFRuFTxkjOelTYq5rQS4NX4px1zWHG/FTCYrRYZ0Edx71bjm561zsc5C1ehuc1LGzeSY7uo6VYSasOO5Aq0tzwKCWjajlqwsmRWPDcA1cjlzimmQ0aG7pS5Bqur8ipA4qiGh+OtOVijBg2GHQ00Y7UtNb6EtdzTt7s3SCBztc9Wz19q0RFhdhPAGABXOD8qvWmpPEdkuXj7EdRXTCt0kc1Sj1iawRUjwOB3FMZiW3fwDtQjrMNySBl7EdKXgZyc10I5xGlyvyg596QKfvEn6U4Y64/GnKOeTmmIRV5yaC2eBTjj1/Cm4z0GKAGlcgZpSyqKRmzxUeADk857UAPHzDJ4xQAD1FJk5FPFAAEA5odlRdzHavr1psj7Rj+I9KaIQR834/7X/1qAFL5K4FPwd2e1AUCnUAJRRRSASjFLUbSAZXOCKACQqByeaYCXYjBAqPhyVbPA6inhnbhQAo6t3oAkxgUmaFyeo+hpdtACoMuKKVPviigZ59ltxshzKvMZ9quII4YhMqZRhiRD1B9aq28QUYc/wCkwnI/2hUzTCR955VvldK6DJlyzjk8wZ5mHzL/ALSelVrqRbi4bb8hk+VvRWqxEzLFKG+VkGIpPUelQWUYlke6mGInGW9iOM0AXMvBb5Vdsyrlx/eFUHLlTJGCEOCmOzen5Zqa4u/MkESjcy/NG/8AeoJAMaRvtwcsp6K9AD7Uyj5VbKMMpn9VrQ1CVn1CcAZAlcBj2OT1qgkiBd38DHkf3Gq5qEi/brsY+YSOCvqMnkUuoizYncmCqk55Ddaq3asuoNhQo2jIHT8am0zLR/wyDPAJwarysPt8/DJwB7GmLoWxuACJGFDAg7q4/wAX6e9xZR35VDJCwjcr1Kngfr/OusUp5KkhiR+VZerWsVzp12jDlojtHoeSP1AqZx5otFUpcskzzYxh+euarXFoCpNWIpNyg5zmnnDcetecev5o5TVdJS9t3Up8wHyt71wE0D28rRyLhhXr1zb4Oa5vWtCTUImeNdsw+6396qhKz1MqlPm1RwFSwSmGZZB/CaJoXgmaORcMpxUVb7nLsdfbzx3MQaPkdx6VZVa463upbZtyNx6etdHZamlyArcPjpXJUptbG8Jp7mjsAOVpwdgcHpTQwIFShcjOM1h5GgoKMMHH406OJ0bdBLj/AGWoa2aOESyDYp7N1NRC4hQ4eTnsK0jBvclyE1G+Z7bylUrIeG9KzobMZ3SNtxXQ2+jXF4fPKMItpIyOtJBoc0xyyYA6CtowtsZSlcyTGsi4T5R/e9ab5KxrheldXH4dcgDbVyLwxn7y8VfKxcyOFC54xmnGzd1OEJ+lejxeF7QcsmTWla6DaRtxED9aORhzo8RuLJt5ABOPWs6e1kjGSuAOc17fLpNm2pS/uEI3nqM1U1XRNNFjcHyIw208gYqbuI01I8p1fSX07yJAN0MyBlPvWZXrV9oK6p4ZjtkxuVNye1eUzRPBM8LqVdGKkGinNSHKNhlSQTtbzrIp5FR0netNyLnqmlXCXthCx64qyy+WMhuB61wugeIF02LZIGYLnAqDV/FF5fsUi/cxZ7dSK5HQlKXkbe0SidbqPiS0sEZAfMm6ADoK4TU9UudRuDJMxx2QdAKotIWOSck9T60iqWauqFGMDGVRyAnLcVOkYTmT/vmmjanT5mozlsmrcrEpEhYu2T1qzaWkl5OIolz6mnabps+oyhEHyjq/au50/TI9OgAjC5/iPrXPOdjWMblfTbGLTYQpXLnqatvEjtuXrVowrMMGhbVlb5e1czd9zVKxU8qQ8gZxU+BgBl5qUbx1Xp3p4Ix81SMhAIPHSlbcuTnHFPMat904NM2ShsA5qRhDM2STzVmLEjccVFtxwUOfUVLEnG4EVI0X4I+MZzV2MAYHftVOBiuMnFX0ZWwWTPoaBlmEcnJwcVaG4qAGyahgVW5z+FSocS4ximSO4x9360oO0521KCB1GaNofJAwRTEQypHcJ5cqKVPUNXPX/hC2lVpbJjG45wehrpMcZIpQCOU79qadgOCgjNhL5N9GYxuyHHQ1vvLHbwIYnDbuVxzW9NZ211btFPEpVupPY1zl34buLdxJYzblU5ERpsaZbhVrlvO24AGAaxfFE5gs2G7nAA/E5/p/Krq6v9nYQXUDRNjA+XiuZ8UXUM14sCurowDEDpkZ6/pmhbgzmYovOuGf76/5z2qZ0WBsj5pP7zdF+lTPcrEqwxr8zD7vT8f/AK1RmNkTzpG/3V7/AErW5JBKzopLHfIx4Hr6Vk3MnUA9+T6n0rSu5RFGWO1pDzisdmIYu/OOg9K0ghMYy7MsetVgC3PqakkYyH5vu0qZL+yjIrbZGbGSDkj0puOM09+MA/eJyacwJPHWncLEcaZyanhjygNOWPCbR+NXIogSqDoAQKiUh2My5TG2oFAIrXvLcGI7ei5H5VkbSKuLuiWtRxFJT93HNJgUwsN2ntShSe+KXApVPoAfrRcLIcsQP8Wak3BDgICfQ035iMHA9hUiLjkDFS2UkPjQk5fa3se1Wo4VByFJHv0qAJjAxkn9Knj3kgAk/Ws3qUi5Cyj5hGseO/rV6F/lHyk+74yP0qnHGxxuXc38O7qK0oLTIDM3GaTsWrliJgTznPb5quwr/Ec/jUC7UzsXOKervjcf1qGjVaF3fk1YikxzWZAZZGby42bP92te2hETfOyyyf3V5C/U9/pRaxaZOh2Rbz/EflWoWh3qC2Dk/MTVwje+8/ex97p+FSxQ+ZhaLmijbU57VpFsLcBSFlk6H+6KwILO4uMtjOcnduFdB4mt/Nu8D+Fa55bMhvu007E9TVsdOeUiMXMQ7Hac4+uK7Xw94FkvbdLmXUgIgxG1I/mP0zxiud0i2aIpCgZpnxnb1X2+teu2VsbOygtlUbUUD5eOepx3JyTx0ranDmeplXqyhD3dw03RrTTYmS3LuXOC8hySPSqGu2zQWR1CBiksGXb5sgp1II6H1/CtmORR0wwB5I6AjtVabVNKE32C7vLNZpE+aCWVQdrD0PYiuqmknojzJyctW9StpN59utEkXaGAAdB/Cfr79a0ld3kKj+FQW+p//VXJWFt/wiup3iCWSaxjjLqpIL8/dQHvlsKPc101pHPFbL9odWnYlpNvQMeSo9hwBWlaCjLTYiLutTl/iTYrc+Dr2Rwd8G2SNh1B3AflzXg7PtGMYNfT2oWy3thPbyIHWSNk2n3Br5aclWKsAGX5Tj1HX9a5KqOmkxrtk0gFJnmnDrWJsL0U479fpXqvwf1cR/bdPfGcrKmfyNeWda6j4eyFPGFtGMjzlZAR64z/AEpomS0PonbkYbb7UoKjofyqtGGKjeDxxzVhFRucZqkZWIL6wttSiWG7hjmj/wBscr9D2rita8FTWz+Zpp86I/8ALJ2w6n2PRv8APWu+ESsfSka3R3Un+E8c45qXG5UakonjUsElvM8M8Txyj78bjBFAXNaPijX/AO3tbJtpN2n2RaGJh/y2k6M+f7g6AfU1moTWTidcZ3VyQLwD6HNPz81CmpNoNS0aJjVfFTpPiq5WkxhqmxSZoJcHj5sc9Ktx3JGM1i5K09ZiKTRVzoo7n06VehuelctHdHoegq7DeAY7UgOrinyKsxyAmudguwcfMPxq7DOTKuXIA/h7GhENG6jA1KKoxzA1aVxirRmyXFJtxyKcpJHtTsZpkhDdSwNmM9eo7GtO2v45iFdtj+nY1mbQetKEXrWkKjiZTpqRuyFihEZyaVFK8nr3rHhu5LZvlwV7qa0or+3lx82GPZ+ldMaqkc0qTiT4BO7vSMxoLjIHrQFLdBj3rUzIm3EYUZP8qjMWxcyOxYkcCrKRiPLZyTUbbixbOPSgB5FITtXA+92zTd2wfN64H1qVI8ZJ696AGRxkZJ6nrUtFLQAlJilooASkzg0p/Omck+vt6UAEjhBk9aaEJ+Zuvan7fXrRQAAYpGPFLSYoAB0oNHHag0gBBhxRSp98UUDPPZfNkjKqxWaE5UjqwpyKyyLcRrvVxiRB29TTVlaQiTpJEcMuOtaMDRxRNdrgQty6E/dre5mMvspbx2yyZSXlT3GKz555VAMA2lCBKvY1HLJ9slkMDEqTuiBPQjtU8Lps+0H52XiZfWgCeNFiTc5OyTmIj+E0+JPMbc5G4/K5H6GqKOZJTCxPkPzHj+E1chPzFjkMg2uPUetAmTtuLMQPnX769mFS6rlNUuTI37rzXKN6HccimCIRooZx5n8DevtU18sMurXUWXAedg4boMHqKALlkSLUNlDxkhhjFULWVZLiV8soLHoMir9+32XTXJ2t8uAVPPpWZpO8x/KV5HKsaCWjRg4ik5OATyo4qsHXiP725WyrDNWt+xnXPlErnGODWWXxdIDnyx1I6nNMDzS4R7PUri3kBDoxO0jBwenH0p4bNHjHzLbxWzSMMyRI4IPUY/8ArVDZyiVR646Vw1Ycr8j0MPXU1bqWSqkZPXpWdcJsk4+761qhNwNVr1IUiaSVgqr6msTpXY4jxNbRPLE2xfMfjPtXI3EDQSEEEA9D6102oTfbdRIRt6jha1LjSobiwWGSMBwOGxWkZcoVaacfM8/pyK7MNgbPsK63RNEt4b9l1FA8Z4U11UOhabCyACNUY9QRWnOcXI1uYPgnQr7V3M1wWWzTjLcZ9q7+5sYbWEpa20fmDpkdasxXllp9ksNsq7gMKifxGqduuoXEjeaEhOexyamy3QrvqZi+Fp72cTajOST0RTwK1bfSNOsWCw2oaT125NaUUQiIQuZJD69q0ILYKCWALeopqIuYqwW0jLmUKq9kAq0IEX7qKBVgICMU7YKtKxDZB5YA7Unl+1T7akWOmFyusZz0qwqeWjOegGalWL2pl/8AJZkDq3ApPYLmbaQq7M7Dlskn8ao+IgkGkTccsNo/Gti2j2wj3rlfH+pDT9PjJG4BwxX1xXPP4TWO9x1qDHBGCMgKOffFefePdNjivxfRMg87l1B7+tUb/wAeajcZS2VIEPTHJxXNXF3cXchknmeRicnc1TToyTuy51E9h1FNBBHBpa3IFDYNDjBBPQ0lKfmTHpTTsJq4hVd2QKdTQc1dsNOuNQdUhjyCfvUpSGolYKScAEn0roNH8OPct5t1mOL0xzW7pPhu3sgsk+JJPetwpCVxxkdhwK5pVuiNVDuRW8cNpCIYo1WNewFTKYZTgNsNIIVK4B5HeljtAWyzc+1Yt3NB/k/8Cx3FP2FQCPyNSLAFH3qHBCnuakBUZQOev6UpjSUHgfUVG3ApAmAcMQaBkD2rK/7tqRFkTJYZqxHIwGJRk9iKmXZI2OM0mBWHz+oNSxuqna6ge/erKxx56c08xwsfm61IxY89VIYdgeaspFn5iGQ/pUMduAcq2K0YY5UwcK49M0AEayRgNncvtzUdhqKTmWHfsdW6EVZIyckGP6UxYYlYnylZj6cGgRa3N3U8/wAS1JH67s/Wqe4AbUkKkcYNSMZNg3Dd7imBdZjgZGKaCGBGarLOygbfxDU9p0kxxtbtTETTDIyp59KajOOWG3PFMDspDPg/SpjIkqBQOaAM7WHiitnkZfMBGzBXJLe1eV6mHW/kUIN4bG1TwD/dB/rXpmtyLGoUkFUG8+5wR/n615sx/wBJluJWGFJ6nqT3qkAyKJLWIPIEMjd8d6oXM+XwpyfX1/wqxNNIxdvMCgdW6/gKzpHSNQ5zz03VcUIqXLMp+Y4Iqg0nmMf19PwqaZ3uG6cZ+Ue/p9KiZlX5QCX7gdq6IqxDYqRhwuAc1PsCRE447k+tLFGzJkoB75yaWc4Upntmk3rYEilsJfnqOtWoI9zEhc84ANKkShQpyWbqastmGPAAzihyHYrMxaZAOiAk474rUgi8qJM/eb5vwFUrKDfIxPOSFH5//WrWIDCRuy5waTY0ipKVBkyPlPGKz57UBdy9Kt3D/Nz0+99eaYrjyvm5BPShaAkZRhI7UxozW3LGssQeLAwMEVE8ZNsCqg+vFVzlOCZj7T3pwq0Y2P8AD+NJ9mfqMVXMQ4WIVzuwKsp0xnGe4p6WxRSW606O3ZiAoOfpUtpgkPVN7ZPyoOw6mtC2t2cAIm0euKmstMdiGkUVrxwoikbcVNy1Er29sseOMmtCGDd9KYox1FSiQqMLSNErFlYbeJNzksw7VBJOGYCONU+gqFndm5PHpUsQO/JAxjjNJmiRft4C6gu5PsTx+VXokWP2+lUYd2OtXCSieslIpWRKzr5mNx/Kr8ACxh8dBWbCpZgzd+lXLqQxokCH5m9KBuRnXkQnkJCk5NZsigXX2e2USTDO9k6R+2fX/PWtkqRHt3bSeGkz09h71f0/QLi6QeVCLe3z99hjPqcdSf0pxVzNzSJvCemeWVkZdxQZLkZyfb8a7eC5Bcqx+gxms+0tls7dYIxgKPzPrTklyW28EetdcI8qOCrU53c0mjUIWXccDt1//Xx9PrXM+KfDen67prSTmKK5t49y3RIAAA5Dkfwnnn1PHNbkNyrZSUHkYIBxU0kEN/Ztb3C+ZDKhST0ZSMEH3xxmtFJrVGDRn+FobNvDdi0NxDd5QGSeJtyuwHQHqQDW0Rx+tQ21rHZRJBDFHHCo+VI1CqPoMdBnr1OOlWMhvc/y/wAabbbcmG2xGRyO3PXFfLviCPyfEmqx/wB27lHTH8Zr6ikBB9utfMnjBTH4z1pfS7k/nn+tY1djWluY1OU1HmnrWBuTCt3weWTxbpjJ94TisNa6PwVA8vi2wCD7rlz+AoB7H0IjE9D9akO7dlcU2AZQAjoOop7jaMr0qjFjw7dGx9a4v4g6vOiW2h2smwXSmS7cZDCIHAQHtuIOfZT610upazb6LpM1/eozRRYAVR80jk4VB7k8f/qry4vd31zcXt8xe7un3ynso6BR6BQAPzqZSsjSlDmZCkS8BAFVeAAMVMqY7U8R4pGkVTt/j7VmpHVyk8WQMYH41dS2imAAyjt3HSqtshIy+DmrscoUnykDygcKDgj8a0VmZyutiOWwmi/hDj+8g5/KqrRir9lc3abrm5gfceAikYA+vpWxBDbanFumtXhbscgN+n9aHT7CVVrc5YrigKproZ/Dcq5aCVGXrh/lP+FZU1lPb58yFwP7/VfzrJwaNYzTKZhz0ppR19asYIpQQeCKixfMRR3DJwSa0Le9+Yc1V+zqwyKhaJ0bjNIq51Vrdg4z0rUt5gWLZ9q4eC9eJgGPFbNnqI9eaBNXOuSTcasCsW3ugyjmr0d0B/8AXq0zNxLtLg+tQi4U+lSeYGHaqJaAgmmlCOhqQHmlxk0hWIRJKh+VmB9jUy6heJ/y1J/3gDSFfamlR6U1JrqS4J9CwNUuv4ih/wCAU8anLjmND+dUinpTeR3pqrLuL2cexopqWGy8OT7P/wDWqYatF3hf9KyN1JyatVpC9jDsbQ1a23YIdfquf61ZimjnG6Nw/sDiudwKUO0Z3JlT6g1caz6kuhG2h0v0prOFG4nisyDV2K7ZVDMP4+n51fjj8zEkrCQn7oB4H+NbRkpbHNKDi7MArSHfkhOwqQYHal/l7UlWSFNx1p1IBQAYopaKAEpDS0hpAKn3xRQn3xRQM88gcT4uYlOUGGX1pL+4WQKsEmyKT5ZQO3tWVqWtfZ4g0EhjnXhwtOszlFmclo5vvDPetrk2LdtbyLGIwcSIcxtjG6rMk8bKkipiMHbKB3NZckkr5gV92z5kfuR3FTQzDesyqNjcSLTuKxZ4tpPKZ8I5zG39KlErYEzk70O2RcdvWqrujyNC/IPMTelWGuTHaiVwDcJ8rD+8KAJHlaM+T5nyv8yOe3tW6sMkmsX1wXB2zyLsI7BjWBY2wuZ9sjYjb5oz/dNbPiO+W2nnh2/vJJGAZTjBzRezE1cztTuBc3QhQsuPvr29qt6cVCuWjyO2O1ZNtGVi3OxD5KyH1961NOO/7zshJzkdxTRMi9JlbUskgYd1Pes37t0rZDDaD/u81fu5GYCNTGwLdccis+5Yrdsu1cqByvShiR538QUeLWoLl85ZGj2kejf/AF6wbacwOr7uO+K0fiJqLXPiGG0xsS3iGR7tWDbOCNhPB/SspxUtDFVHTqcyOrtr1ZFBGOa5LxJqD6hdtawS4hjGWOcZNJeXslhAxQnLDAqn4XsRf6gJJ8mNTyD3NcTi4s9+jOM4+0NTw1ogWM3Mqkbj8oIrdnsgy/LWo6rEAoAAA4AFRh1PaobuVdvU5eeEoxVlqB4gy4ZjjtjNdTc2kciZ2isiW0ZGIHT0oFZMqaLY3ttdPPbOtzt58qU849q6ux8RWrTfZ5IzHcngK4wc1gIhiIYjpzkcGtm7hjEUL3qGbTpxhZT9+Fvr1xVxkzKdOPU6SK1BQFn+c87hzU6mSE4cEr6iuMivr3wvepb3czXGnSnMMrclfqa7yzlS4iVkwVPOeua2jK5yzpuO49RlQQOCOKeEzSrCYZeP9Weg9KsrGORirMit5WalWOpwgp4SmBEq8iqd8N06RZ4AzWoFAGcdKyV/e3BkP8TYH0qJuw0SRx/IAOMLmvHPilqbS3/2ZWG1OMZr2O7lFvZyPnGATn6V84+Krp73W5mLbhuPNZW95I0jormBRTxHT1QAdK1uKwxDg1JSkcYxUr2k8UKyvEwjbo1S2ikRUZoxRQBsaHpUN9MGmlxGD075rvLS1hsohDGgCjnOK82068NndKwJxkZFekWk/n2iSr07iuWunv0NabRYlUlcr0quF77ql34+eP8AFacYxOm9Plb0rBaGjEijlfkGptsydqLVypMTdRyKsEkUNgiuLl0JDA0huiRxUrSDuAfwqF5FHRRzQgFa7VQN3Q1IJFbBzj61AfJfBZAcVZ85dg2gZ+lDGKuSeOalGARkYqv5q5+YVaRo3HBFJgOUMW4PGaVbZ5HJJIpRHn7p5PT2qSySZFYSks27g+1SMsJaScbWNX4YZk/iyBUIZyABxVlUBTLSN+FAhzNIgyUDVnROtxqLvueMrxt7VeWVASFdjjtUEVvKLgzF9yH+HFUBYK5zuVWB9OtKg2btp59CaawiZuAQfWnqCD8y7x2pALkMMSLg+ooWEgl4zuH901KEH8LYPoajwM90b26VQhyMAdrrt9j3pzHoFbaB1z0pFZ1bEo3L61BdoWVfKk2BztPt1oAwPEt4dzIpVk2gYPTHOT9en51wVxOGAZuF6AZ6n1+taviK63ahJGT8iEnHvxXP8sfMY/Oeg9vaqQEM8pbhTknoT2/xqm9uxJZ3/E8n/wCtV19xHL4UfwrUHkSSsuDsVu46/n3rVOwinMoj4zlzwR3/AAHp7mn29q0g81xsUdscmtGGxWP52C4z39alVAwM0pGxTwtNz0sHKUxH5UWWGC3QGqzJywI9CT7+lW5C0j7ycZ4UenvSRw+bLj+BeSTUpjsNhiz+8cYH8IqCQmWfA6Zq1dyZfCE+gHtRBDtAyOc07hYmtYvJh8w/UfXoP51PIClk+ASfbvzTWJK20YHLkCpL99se3j5RjilcRm3boMcg4wD7VXWVVLDIHNLKEJOR8r8Z9Kp7hExyvI71qloTcvoSW+R+atxOpbhijH8jWMHKtkNVmGUjByv/AAKhopSNJreaRsEg984pIQMsRESw/vDFSQMkqg5GecY9utTbHY4UlcckjrU3KuMitfNwXZTnnAq3AYYJNhjwf7xpi288ixsNhC8DGATV2C2nZPLmhZ1PfGWH0NK4i3EqYBG3B9KnESdMVmLaz28gLswQj5WwRmti0t1lUrKCeMhhxmi5aI/IUnhwPaj7KD0YGtEaSp+5Lwem4VYXw5Of+WsZzjGCaLlWZkLZc5PNSpandz0rZHh+6QcFf++qBpV4vBRf++qYXZVhj2L0BqRYGZsnpnNW/sDwpul2qB+NZen+JtJu/ENvo7xXKGWTyxO5VBnsOfU4HahK7BytqzTREQK56jp6V0Gm+G5Jrb7bcBlZjxGByB6+xrZ0m3sEKi3tlWVeGZhuY/j2rbVcoUPQ+nWuiFFLc5KmIb0RjQ6Lp9vBHLBADIvDM/ztn8eB+AFS3KEnIyQOQOmKvxfuJWXGR3U1NLAjxgpj1NapJbI5nJt6mFzJFnJyTzzVX7KSCwf5sdq13ttoBwVwe1MjAHG3Bp2GmZRtpch1bJ9Ks27TDjBUfWrjogO3GCehFQsxTqct/SlYe5Zid8Y6j26VbC/KTx0rIV5y+VyF9cVpQOzR8+lMQyUjHPp/SvL/AIu+ERNYReI7WL95CqpeKg+8nZ/w7+x9q9Pmx09eKvyQo8PluBjGMH6Chq6FzWZ8djJGSefanjrXpXxG+H11a6vLqei2JlspU8yeOBR+5fvhR2PXj39q82Xkj+VcsotM6oSUkSoc4Fd/8NrZW1p7guFKoVXPqa4SGPcwGO/5V7f4G8PWMmgqZ4AZD0fuPcVHoN+Z2luZDhVYHaMGrhBIGeMZJJrmo7fVNMcm33XduG5Rjhx9DVO/1WXxFJ/ZluskVrGc37EbS392L8ere3HempdCOW7MTW9Qk8TautzA2dLsnK2ozxK/RpT69wvbqapmNozg/jXWG0jVAiKqqBgADGBVWawG4ggHPOMVnKLbOqDSVkc3gnhenc0qQqp4XJ9TWlcWWPurioBbuMAVFrGt0ytM33LcZDS8ZXsO5rTto1hjCgbR0PfP41TTZ53qwG36UTOkweIt8wONm7HbrmrizOSNEYkcmVgsa9Of51aTUt422ULXB6ZGAg/E1k2FlAj+cBGU9eDz7E9K3EmVFBUjHXFbxZhKJat7Z3YS3UhYnomcKtXxBHIVdmYIPRuD7YrMWaTaNv32PHNaMbhE6bm4q0zJqxYk0+wu/lks4sgdcYJ/EVmXfhqwCZWWWI+5Dj8BwaLm6ntlwzyPM7DYijkD6VdtIPtsglnHKDbsbufWjkT6C55LqZB8ITuN1rdQyKecyZT8PSqsnh/Vos77J5FHeP5v5V3AHRVAAHYdqspKF6k0vYRY/bzR5dPpzgHdFJGf9tCp/WqBEls3JOPWvaVYv3OPwpsljZ3QKXFrDKCMHzEBP59ah4fszSOLtujyyx1IZUFv1roILgSDHt3qDxN4N+yE3Ok7nQHm3PJHBOQe4wD15+tcza6jJCw5OB2rnlBwdmdcJxqK6O0EjKetTxXOCATWFBfiZQdwzVkXGMVN7FW7nRpKpHapN2ec1iQXGR96r8cvHWqTuZuNi7n1oPIqsWBFIkpU+1O5JYINRtxzjNOWYMPQ0rDIyKQhoYHtS5APPFOGNo4prFM9cGgaEJ44FHDj0pVIJxmlK46U0xkBUxtnqD2q5Z3slsR826An5lPb3qAuAQCOtI6goWTggZwOlXF2d0TKKkrM6T5WAKtkHmjFYWkXzGSFCSI513BG/hPXHt0reNdkXzI4Zx5XYSjIFGabnIPHFUQOBBGQeKKjVApG0YAFPPTrikAGkpGLZwvTuajmdIIzI5wP50ASK2XAA+tFZcd3JdTKoG1ck479KKBnkxKArcuwfzh8xx0qxpU6XFvLaIcIzZQ+h9KqR2cgkeBvuOp2n3NY2lXk9pdzWSAmRDwfp3qr6lW0OqLutvtVgzwPz7ipVcQOHLDbKOlV4nZ40nZRHAcLJjrz3NJEiNO9oB8h5jkc/wAqoixe8+PyjCSPOHMR/pRaNNd3SvKpZwdsnpiqCwTXPywAedG3Ld8e1dPE8elWZvSFLFRvRv5mqSJb6F6aWLRrELtWZT0x1WsjVVD+Ir4SuSGuZBHnsdxrHudR+1TLcIW+zO+G963dQtx/bGqCXqbqVoj77jS6j6DZJSVI24ZP3bD+9nvW5YIwgUoyPGVyAe1c5Zl73VI14XyRyT0YjnNdBdyxQ2rB42jyPvIeBVx2M5blbzRLqO/yTiIcqD2qlLMDK8inBZx8p9OlEEnlRTM0hEg5Rh39qqXc4itnkbB2Rl+nXuRSbCx5l48hMHi24zJvMsaSbvqKx7aUkbq1/Hc6XXitpIxtUwRcf3cjOK5+2fjaODmp6nJP4jSuYVu7VkPBI6+9T6eBZxLGnBUcn3qCBjypNTE4xJ6nBrnrQuro9DA1rfu2dJaXvmRBX61Y4AyK5+1lIYYPWty1k3Jg1xnqDxPng0OEc9B0qGWLa3B4qB3cDaPzqhos/ZQ/Jbiui0qziu9LubGcb4m4we1crHckADNdl4aUvbySepx9aFuRV+ExbWzF/a3nhy++aW2z5Lnuvaq3gvUpbO8m0S7Zt8R/dlu49K2vEBFj4i0u8QYaRjC5HcHpWF4xtn0nxLp2sw8RySBZPbPFaN8rTRm2pRs+p6T5Ymix3xxRCN0Yz1HBpbVtyKfapFULK69u1bnEw204CnbaUVRJDcN5ds7d8YFUIEAY57dPrVq+bKxp/eOT9KiiH7kMOrGspauxcTJ8U3C23h+4ckA7DXzhclp7uRgCST2r3b4gXGyyitxg+Y3I9q8+WG2i/wBXboD64rnc7SZvGF4nGw6Zd3H3IG+pGK2bbwpNIoNxIEHoOtdEk4HGBUok3DrSdVvYtU0ZsPh6yhTkFmx1NJe2s0lg1rgPGOVAHStLLDtmhXJ6jBzUczvdlcq2R5xIhidkYYKnBFNrf8S6f5U/2tF+V+uPWufxXVCXMrmElZh3/rXbeFdS/wBG8qTnBriavaXefZLtWz8pPNKceZBF2Z6e6h9rxcMOppVyT6SVRtZyLdJY2yhHStBWEy7h96uJqx0ChRLnnZIKRGcPskP0NGPNOScSjj600SCTKSjDDoaQCShlJIqBV8xiXOAKmdjGQrcg9PaomAifeOUIpgPEcYP3qVkKjKHPpUBYAEikWVyoFAycbzywyKnXCrnvUEUpJ2nkCrieXgZQ5qWBPbRySpv3lfQVbAkRl5yPUVFDLEOAcH0p8k4B4YVIy7HIvd8H3q2rAgYdT9ax45GmOAA2Ksgqn34WH0oCxf3Yb5SnPWpVc5wSpHtVKIwt0jarBCAZCHNUIVsZ4GKmhHvUKLlgR+VTonzA547iiwMl2I7DeMHsaeyFV5G4U0k4BQZHoe1KJQMKG/A0yRqqG+4fwNU76MJBNIVPyqcKPX1/l+VaICMN/Rh2rB8T3b2enzIx4dD0PQHjH6/zpgeW3UjXN65J3SuSTjjFQumzJKnoeWXhqFA3GQvlie/+etTQR8BsMe2c8n8aodiKCzL/ADMpJ9O1WH2RKS7AEdSDgf8A16fNMVQqDn1x0WqDygSAlfMcdCxzz7Dt/Olcqw9nEmWkBWEdSeCahaQ3T/dKQrwB604RyTsHmAC9QnY02WQkeVCpZs87f89KqwDSu9tinaW/QUs0oihMacE/rTWkW3UqCHc9T2B9qgYk5c9aYDoU2nzX6jtTpJvLP+394CoDMFVcHe59ulPhVYGaab5j1C+9VYRoQAxxpM33gvyj3PeqN3cmU+UjDCn5j/ep0t15luW/iT09KyfNG9snk5qoxJbJMs2UJ4bn8aZOQWx2AwfemrMYwAwyp6iomJZic5HrWqRNx2cAbuvZqDIynrk/SkU9c9McU5QZGXtin6kmtaORbncRlfmH5Ef1rWhLTQRsuN+dvua5+R/LTy14LYzWxp7lrZD0y69KwmaI1NmbfdgAEjoxx+VNiZ4GHls2Q2cMT/OnXUu2xUdNz8D2FZ9w0oyUfd6AHtSSuUzp7K8lm3L5hyOmeT+NaNpftFIi3FoknJ5RCD7cVy1jfyLGnmbSyHDlRjcPWuojC3EccqlnGMrluB3x/X8DU2swTZ0traRyAS+WFIwSr8kH8K0ltDgEZ47tWTaXZmwYkwCOnA71qNLIlvI0wBiUZ+9+tbqmmjN1GmP+yzsDsG8+gYE0x7C8YZ+zP+FR2+swFQGZmyOML1+nrV8anCLdJNrPGxwdo5UjsaapoPbyRmXOm3rRMhspzxnhCa8b1/SNV03VXuDY3sQD+Yspt3UBgcg5x1zX0VaPHPEHWAxgc7mQc+1XJJXQcIdnfYSK0VJIiWIb0MHw3qY1jTbHUo4nQXEYaQIB/rOjD1HIJ/GupX5j3BA9KzftCkEiS4APOAxOPf1qnezlUbYssjADAdj8xPQZra+hzbs3JFBUM2Cfr1piuYuc4HcGubbSbmY+bI9qlwwJKqmR+uPzqTTZLqFC7XK3EXOUcYYY9D/Q0lK4+XQ6R1UoWXnIzVJyvIxT4p8KrhWMbHHII2+oI9RRcWwMm6MZB7g96oRVaQ5x+VIEDsCcE0j27/Kd3GelSRqYYj3GMknsO9AXLCxgRYP8PWkVsDAFZWjag+o6UuoOjxrdszIrHhYwcKfxAz+NaMbbwPbikxjJSS6gZ+ZscVM8128ZktlUunBXdjd7U2PBmJz0H+f5VWu/tw+XTpYIpZDjdOhZeOe1VHczmTK7OY5ShQsOVPY+leb+PvAKahdSappq+VcOPnRFykp9SByre+CD7V3f2HWpVb+0b22kRo/9VbxlCrdQQc9atPbwahDDJcRhmHGTkEEcHpVSjF/ETGTWqPmq5srnS7hrW8gkgnH8Egwfw9R7ivc/AE+/w1bAqc7RzWvqegafc23lS2qTxZ4SYbtuf7p6r+FR6LpVrpFn5VizrApJ8uRuU9ee4/wrlnSs7rY6VVT33LOsao9jCkVoglvbhvKgTsG/vN/sjqfwqjaaStnaC3Ry5yXllP3pnblnPuTViw2ajczasYsRkeTaluCyfxOP94/ooq5skZgzHgfrUxj1Zd7FExBBtAyfWoW8uLl2BZuAK0mQAHimxwqz5KAsBwSOlDiUpGY9nuHIFV5LDIOK3/IHpUUqImAxAz61Lp3L9pY427tVtLfzHUluQu0ck1iR26xsYnVppX+dgD09s13F2hkZtsZdgfkAXp71HFpaWVqJJVUSHpgZbPpSdOxSqXOREc0s7BFYwIu0RkFUA/rV4SmdHhtSFcDgNwsf1q5OLpMt5I2/wZ61WuoJDYGFGWNpG+by+/4mlsU7NFrSY0hQxtctcSIeW9Cew9q21nEeEhQvIf7x4H1rJ03Tnt4YU3KsYbeyr1Y+5rajQRggdTWkWYyQixOriW6lDSk4QICAK0YiyRBUZVLcu/Ums1l8276khRwP7tXokwQSc4HT1rRMyki8rptCRH3+lWEAbG4ciqltGEUnHJOatB9ozVIzsWkYDpVlDVFDk7jx7VaRsj2pisZuuX7afBJMsRm8pGk2hgucKBnJ44zn8K8vhm0jUrO3htrya51D7L9puLhlLKXchvL9toOC3+R1/wARb0Wvh3UZDEksYiVDG4ODubGM9jjv261y1x4iF5d3lx4Z0CUpPZ2liszR8R7skKUPBGNq7hxwDnGDSlFTVmbUeZO6KwafTbgwTKYyOcMMdef5Vpw3waPGRmtu6sJPEAvH1XyLSaKcQW7qdyk+gOOV5JzjqT+HG3tpc6VfSW1whV4zg88Edseoriq0nDVbHo06qlo9zoIrzacZzWjBegiuLW9+bFXIr8r3xWFzRpHapdgjg1IlyDnkcda5SPUc4yasjUAimQngdaOYhwOpWQHkGpVnxgGsK3vFlVWR/lI4q6jqR1yapMhxNdSCKZJGHHIxVSG78ttrdK0EYOoI5BrRO5FmjOljmRtyE4Hb1qaG83fLJ8relW5hhDXPXl2sTYYd+tS9DSPvG68YlUgHDdmrMvruS0AikRwXyAwBIIA5Ix2A5ptjqQcbT+dbIKTwlGCujdQwyDVRaZMotHOaTq91Nqsu60SCWKXJYsGwoBCqRjhsYzjp065ruLS9jvIywXDr95T396586ckA/wBF3D/ZY5+vJ6596WzmeO/t1jz5jOAw9ief0reM2mYTpRcTp+v3unpS0ue2KaTXScQcd6hBMj4bJFSgZHNI24/dbb+FABuAG1Ru9qzr+JnIklk+XHCelT3V3BYxhnyXbogPJrDurk3cvmSHJ7KDgCs51FE2p0XLV7Gha39tE6JGm9j1ZT04orJt5GF0nQDngDHaislVbNnRijgsyO32bfwnzKzd6xdTmWw1K2u1XbMOJBjrzV83byW+23BMsfHTk4qtrMQjiiuCyvcvjr/Cf8a6mcyNE30bFS2PIm4KDoT2q1plncauwiYFFT7meCR9aNJ0RbpUe6cxptDqTxzSav4shtx9jsIf30ZAMo9KrZakat2Rq32padoUQSMKmoAYwvOa506nd6lK090AFB+aIHgj3qo7rqEYlkfNzGMsD1arVrB5+27IEdooxITx1pXbHZI2LG3jkRJAmLRuHNaHiDUWGt39ujAqtxJgnsdx4rCl1VIke0t/+PRsEN/hWlfQNdeLdRVsBI76VyTxxvOKaeonobWlwFbPz8I0rjLJ3H0qG+m8yaOCJmxn96hNSm8BQs8QiK/dcd6zYbhgkl/w0pPlqh7571q9DLfUfcFftC28cuYI+VOP4qqSyNM+0sCWJLKBngdfzp1wPJh2bt3mnP0PpTzF9h0m61N0Cutu7oCfRTmkl1B7Hi19dS3eoS3M7+Y7uSSfrwKZECJSfeoVO7aT3qwvMjY9ag457l1Wwy+tW48ElT0PX61Qz861Zjb5x70mrlQbWxYt5PLlKMfm7VvWDl0Ge9crqRMaLcx53R8HHpWjpGsxSKvIz9a4akLM9zD1VUgmzrWhDIPWq0kA5BFWrO6Ey8Yqw1uJc44IrPVG5hm1VZMHoa9E0eyFlpsMYHIXJx61yMNm0uoQW4XcpcEn0Ga74kInoKcVcxrS2Rxvihjc+IdJtFOcSeYfbFWvF8C3Hh6dHXcRjbnsc1R09v7W8cXNx1itUKKe2a6O7tDfzRWxHyAhpPoKtq+hM3y2NWwjZbSEN1CDP5VZ2jzSfWnxx7VXHpUMs6I+AN7enpXScm5NtFIV4461Gq3EnJO0U4274z5hyKQrGdfDdcYB+6oAp6rtRB2FNCF5WLEZzU7LgH2FZvuWeZePJzLq0UQ5VVzg1yhVj0GK3PFkpfxJcdwpAFZCk45rkb1OuK0GRq5PSrKoQeaajEHipRJnrUjRJ5Zxwab8wGGGR7UokI4pQ3PXr2NIZVuYlngeJlDKR0PauEv7RrO6aPbhcnH0r0XylL7s4FYXiPTTNbiWMZYenpWlOdnYicbo4yj379qCCCQQeKK6zA6zwzqRLeQ7ZwOAa63aQdyHb9K8stZzbXCyqSMda7a11S5WMOAHjPcVzVoa3NISOi3CUdf3nrS8ONsg5HQ1Qguo7uLzI2AfuvcVYWTfGVbgj1rC1jUeWO/y35z0NIyiNtp5U0gyPv8AI7GnKwJ2PyvY0ARSJt5TkHrUBUYJXn1q4B5eccqailhBIkj49RSAtWZj8sEKKvRnewwBismFvLJKc+orTt5RIuV696lootCOIH5kGTVhI7Yr8yrWfMCRksRVi2thJBlmYGlYDRj+yRcqFz7GnSXYIwq5/Cq8UCJj5c1YLqAAFAoASN5uvQVMLgAfOxpIXjbKsTWVexXkcwZMyR56D0qkBrWt3HcMQrZAOK0kCscHrjg1i2Rzhgm0jqMVqeYcoelUiWOY5bB4NKixy/60bXHRvWopTuy3f2p0ciyrg9RQIllGw4zzxg+grh/G5eO3uEaQnIUrz1PXH6H867S4SUW7GPJIHBNcF4g3z3EssudkWyMr2LYJ/lg0wRyVpDvG51yq+3NTSSscJGPmPYelNDhYTz26+lFuBDG05Uszfd9TSbLRJHbFADITnsOpp5hAOfLAPYf4mmmRo1E0rfN/CvQU2FJ799oJ3N68D8qEmO5BcSwwggsHY9FUcCs+S7O0iIbR3C1p3eg3Eal2I/3VPSsmW1aFuAc+nrWiS6ivcrmZPvEZ+tRy3GQdqkjsPSrPkLMwOAO/HSmNAFPAqk4oLXKqvK5UKdvPpSyO5d+SQBjmrMcW1xxSFB82R1qudC5SogkKsAMZ9aQBcDdHz6g/0q8kW4AknHoKaYVGRz+NPnFylF4wRhSTj+8KTyXU7Tj61d8nlfQ9afFCsafM3U9KrnDlKPk4B6VPDEI+Tjd79ql2gndjgGo5m4x/E3p2qeZsLEMjFn46A10WmJiBOO+a59EJYAc811ltD5MKFhghc4qZ9hpEGoyEvAijIX/JoYDyiQOOh+tROxluvMIOxf5etWyC8SKoGGP5mmkJkVuvlliF47nPX1/wrf0G4KXKR7/3TgFfcf5/UVjLtWFhtyxwoFaWmxCKRFAOA+R6hSccfjzSkhHUDda3ZCMQrHKge/Wun0yQ3ELSyqfKxtOf4j9MZx71h3VuhtIrtwxC4DLH1OecA44+tdZo15BfWMTIqowXZ5Z4xgdK6KMHyczMKs1exPFZ2jRtiHaSAc+v49CKXKW77EjXlscJkdO9SGxQnML+UTyygDax9x/hg0545o4WDrGwAyChZcfhzWzRjcidLiYcNs4ztPp/hVizeVSwd2K46E5FBDH7u7I5HQ0wWs+9Su1M/wAIz/hTEy7vAyYwNw42gVBdRubXeib5Y3Em0dWHce1NtGyjNHhjn7w3f4VZJbg5w49FPI/KhrQChHIboMIFkVyMEyJgA/j1qH+z1tXKs7ZznnkCtUzordckcNkEEfnTiySfKOp9RmklYfMUYXTayJtQk7iwGQx9/wDHrV6GVh8u1lHdTk/iPUVQmcWsu2W3wnUMhPNBvVZh5jYU8gKe/wDSmFjVZEIJC854rl/HE9xD4Zu/s7MpbapIH3VJ5/w/GtObWhZajZ29xGDBdHyxcxyDbFJ1VXB/vdiM803XLe01SAaPPceXLcHcigZLBCCcjuOOaqOjuQzHSO7l07R4NNQR2rwx5cvyo2DgY598/Tnmt+K3NrHsL7jtxk9TVbRp7KSxENi6PHbZgBU5ZQpIwfyzn8alt723vi5gnjmWNijNGwYKw6qSO/tTk/IaJNwVm9eAfyqC4dhHvTO5eQfem78zuCehFJMw2kZPt7ntUCe5ppMJ7ZJV53jJPp61WWTPy/xbuQKoaLe/vJ7FiModyD2NW0JjvmUjJIBH51VybF9xvXZ+FY3kPqt+1jg/YrY/6VIP+WhI4jB9OQW/L1q5c3bwosNv817dP5cKkfd9XPso5/KrdlZR2FmlpCGKrkl2PMjE5LH3JqH2Lguo/wAtNqqoCqowFHQAelIYwO3FSiIEr6CnrEc5bmpsaXKjBPugZb6UiwugIYAE9cVf8vikK47ZosFyqkWByTVe5tEuZEQoDtOSxrSA5ocBACR16fWiwXKUdssQIUYHbnJqOW28xucHBGM1pbMjJGD3FRtHzmiwXMiawVxg9unNZdzpsaFSVzjpXUGOqN0p4CoW96iUbmkZ2MJRsUADHpmoY7zz3aOFjsU4Z+2fY1bvbORipHGDyKRLRPLCNjaO3Qe/0rPY1bTJ4YwMY596R7h472O3EbyMwJJA4UD1pTKltFuYkIOAoHJ+lOhM0j73DKjY+Unp7VaZm0X1c468etTKwZcA81Ahy/3uB0AHFWkq0zNonQ4Ap25wwYttVecdzUW4KMk/h61GPOkfex2QqPu55P1p3Jscd4rjvNZ0oWkEUU731+IUSRMoFxgs3Izt5b/gNcgLqC1uNPk1rxDJMZtSaeT7FKfKSKEFFGB935lAAGePpmuj8azrb6fBPHqUemsqTlZ+T95WUKAOx9RyBmuSgufC/h/VryPT4m1C7srZbW1wMrdzsWV2GPTON3oDjsaaOqgkdH4V8V6Xa2FlbeZdXPnyzTXZkgLmIbuGYDufly2CeTk13dxZ6N4j08rCYSHU+XMchlP484z2/wD115zoayx61NYaxYW9ppllZx2+2MHarnDAh/vHJds5yM47813+k6bbKg2TKw45jnyR6cNzkfWqsmrM0qU5RXOjzrWNGu9HvXt505UZBU5DD1HrWW0zL1JBr2vUNDs9TsvJuF8navyuCMq3rx+orybWdFm0+5eKWLa4GcAcEdiPrXDWo8jui6Nbm0Zmi7kUj5jVuC/fjLE+xrNMZ5pACDWNjoudLBqJUgBiBWvaakSQCxriFdxjFW4L2SIjIP5UrBozvftqgAsQR70J4gFrKAT+6P6VyMeqZ4Y/nUj3CTAcYGKNUNRXU9ATV4LuDKODXH+K7hoLeKdGIBm2E9uQcfyqtYxFGDRynryta15ZxappkthNwkqbQ3dSOVP1BxVasmyg9DmLDXnjbmSuw0vXFl2gSZ9jXlkzXGmzNb3cEikMV8xuAcdwcc1attSeFlZW2nsc8GhJo0fLJHtyXJdARz+NHnpBNHcsq74v4jz25rz3SfFOAElbBrZl1rz4WiU53jj1rSMtTnlSselI6zQrIjfKwDDHfPNLj0psMYigiiVcKiKo/AU456Cu5bHlPdi1DNcLEQoG6U/dQdfr7Ch95QBG2/3mPaoxAo+QcoeSWPzOfc0xHB3erPc6hM0kmSsjKP8AZUHAFXonLoDz+PesNLCQeLNRilUqsEzHH94E5X8wc/hXTiBVIy27tx0FcLvc9lcvKrDbSLfdpnjGT+lFXrWLEy9uv8qKqK0MJ2uedLEmnLFMgWS7lAVwvIXP9atwaLbWCyS6s6iGT5lcnODWff67Y6EpTToxftJnfM3Ko3eucvNRvLoodQna5hPKoeFXPtXc5pHnqLZv33iFL5v7KtABbr0nHf2FY42eaYlTzJkyfoarWUE07GBGVF3ZQ/dzj0rWtri3gP8AocYlvlbDlhnHvU35tyttiP7AIwmpTyeWYzgRnqSParMt4b1mLlIbNhhowe/rWXfveCczSupY/K2ecVQRAJ5ISzOwG5SaV+gWNclEiaBDl1ICkcnFd3e2aHXdVNwXRHupCMd/nNctommR+YJ3RmDDk+/rXW+Jb0Wl5elXD/6RJlT2+Y1rBW1ZlJ30RQ1G6wVso2DxtwG+npRGY4rZ9QfgRDaqHv7/AFqjo1i7zvcXwMcAO6IHoT/hTLu8bUppdwUR2xztAwGFU2ToSb3u54yvHnFWCjnGKn8dXEGmeCLmIHebjbBCSeQx6j8gal8PWzSSPchdsifc+n+cV5p4614614hltbcstlZtsWMN8pfozfXtReyImzmhjI4qZeSSKrBjuq0hG33qEcktyQEkg+lWEbAHsap7isgFWFbigpaFxcODG3KuMH6Vy0ol068ZRkBX/Suh3nKMO9V9UgWeJZMZfo1ZTjdXOrD1OSdujNrQ9bDIo3Dd6d67a1u0mxtYHI/WvE1+0WkwZCcjuK9I8I3sUQR7yQNKeien1rmsj1VUtuekaRYCP/SGHzEYGfSjxFqK6fpM8u8B9pCj3qvdeIbey0qW6aQYjQlR68V5Vea9fawQ99euUzlYlO1R+FXCF2YOet2eieBIreSylWKZHu2O+dQeVz0ruoLVIBx1PVj3rwLT9aOgX8V/p7hZUI8xc8Sp3U/0r27TvEFpq+jxahaOGikXIHcHup9CDWqgkYzm5Mu3U+3EUZzIfTtTre0WIZb5nPJNJaQ4BmkAMjdTVzg0zMjx78UyZtkLsewqfAqldtukSIdvmYUPYZTLCC3knfAEaljmqWkX8+oWck0ygAMdhHcVPq6NJaLbKfmlPzEf3arajLHo/hyQphQE+XtWMnZXLWrseWa5L52u3kg7ymqYpJXMszuTlmYk0IMNg1xnYTooPNOCD8aaowevFPGdx5pXATBpBnrTxz3pcAj0pNjBXGMGkeMOh54I5FMK8cUIXPHYUrjscTrunGzui6g+W/IrJr0e/sY7+zaKQc8lT6GvPbiB7e4khcYZDg5rspT5lY55xtqRV0Xhy+xIbeQ5HYmud5PSp7ZZlmWSPIZTkGrmk0THc7uWy3N5sJKv6rTDeXEalZkJP96pbS4V7ZHIGCOxqdirr2YHsa4uY6bXHW19FNEELjI9atE7AB1Q859KyZdPif5kzG3qtQrc3mmyBZczQHv6U9HsI6BWwvqvtSgbCSpBU/pVAXsUkYeCQY/iWrUZIjDqcg9QaloCdYAD5kf4inxAhiyZB6kUsbDYJIycdxUwj3gSJwe4FTcZahZZk2SYDGpYGaMmJj/un2qtEVk/2ZBVyBfMXa4+cdDUjLcfXr0qGWX97tVc09GCMUfg9qdHFhSSOfWgBsbMp5XHvVyN89R+NZ0F3FPO8cUm+SP7yntWgE3KpXiqQiYHBzxTkIkbae1NUKGw55p7IFI29T2FVcQRghip5zQ1q0bNJDznqDUgOB9wg+9N/eg53EqPTjNAhLm8aGAFoty8ZFcRq6l7Z33Ykm2vtPZi3J/9B/KuuvpnRCMZAVm/EDI4rC8SlPJiKxAFkwG6cgf/AFxQgPPtpaRIj0HJp8k26YHIAUfKOwHrUMzlEdwcM5wKIkCqEIwT9496pIocqNdzbjkheg7VeiidTjbgg5z05/z3rSt7NYo0ZEGGOM9qu3duktv8kYR24HHetOUVzBupJ0igCsxh3gEk5yc0y4hYR+aVABGQTwKlimWK7ENxj5SHK8/mKt6q8+t366bZ26w5znB+/wC/0HritFC5PNY5y2G6yRSo3c5Yd+aR4sfw8V0cvh4WNulvtPmIMM3ZvpWPcWckec5A9KzktTWL0M4EbsCmEYA6e4qVkAPoab5YIznk96mwyFpdgC4AqN5vm7Gp3jQ8HFR+SCOBn2AqkJkW4ZyWOD6VbEaTxLs6qPzpFs40AaXk9Qg61II5ZvuKI4x1YdqZJWnYKSkfJ61B5R3Zx857ela7WqRKTtG736/iaWGxeeVYxFl2xx6D3pJjsVNNsXnuI0C/IDuZvQDrW9eMSRHyAeXPoOwq6beLTLYIg3SsPmYH73/1qrx2rtskkUmJvu5P3j60Ri5MTdiG1smMLOVwz9M/w1Jc2ctujPGvTGQf4v8ACtuOJYw0e8Foxl9vOPb+X51LcRI0TeYAoALEnsB3NbctjNSuzlVI3jGSB8xPv2ratCE1GFQcrtKg+o//AF1WNkBlwv3iMg9c960tEtTNqRDLlY12jA4z1NZy2KO6swyQRAZKnHT8eff6VPLOyLAyfJILmLYyjrlgG/Nd2frVqK1UWwUAK20YJ9ce3/1qjeEtKjE48vLMvUFjwM+nG6uqndRSOSerZtJIGAcZwanZsxOp5IBrNickYGQD2PFTo+ZlG7oORVkGg1ukg6DP0x+tMEcsWRHIcdg3NPSTPb9anGCaZJXt28lAJB83c47elWAFZQRhvRcd/wCdO8tX7fnUfl7Dlcj0x2pgJNEk4Ks53YwG43D9KglWSAKWBc9FI4z/AF/Op9rKOCMnvjrTgysCGYHPXd0NAIjQL5eZG+UetUbi1gS5Zyihsj7wyF75ArQMDBt0eWUclOtRTQLfBSJTEwPUqDn2IPQipaKTOV13wraazqVg8srGCzl8xo04WX03Dtg+nqa27nSdPu5Ybq5t1eW3UrDKXIOD1QnjjjvxWhJp4MPEnzj+IcZ/Cq6sYmMUo+UjByOD9aauh3TObufAuiXN3NcK13CrPulijl8sHvtOBnHXj06dq6CC3htLZLe3hSGBQAkca4VQfSp5U3DfAeAB7k+v1GO3bt6UyRhFG0pICIpcEHjGKcpt7sRzC6jv1u8j3ZVWGMeygfzFaAm+T7x57j3rlIwPlu4iZGc/N5QLZJOfu5J9fWrs900umXRsplEwiYI3Xa2ODz3zUoGjM0bUb+11aNr+5tppvNdPMhx93d0bHGcY/P2rtr68SFYrp2wm3lvQf48V5DpmY9NivWZzJcSFwc54zx/LP416p4WtpNXt4rq8VXtISRDGejSf3j647e9DlZ2Qct9Ta0a1nIfULtdlzOu1Y/8AnlHnIX69z+HpWmS2c8Yp/O7v+NSKg7jNJKw7jUX5Rmn7cU4CgsB/EKYXDAHGaaxwMD7x6CoYJpJdzMoChsDP86flmmwh3Y+8T0A9qAuNeWOBfnYbz2rKfxBpazqktwxc8jbGxUfUgU7WDGZY7PcPMlBZ8H5imegHX6//AF61LKOxWzWOBYGjHDKyAEn6VHNqJsS3ube7j3W8yyjGTtPI9yOop+x84Yc0xtMsHO8W/wBmlHR4SVP6VA+n6hHk2morMOySrnH49adxpk5HOBz9KhdQBUT6lc2x232nyKM48yLkflUlvd2uoFTbyg9yrDa35Hr+FK6Y7kDwBxzVSe3CjgVtNGAORiqzxb8/yxScblqRgNFmTcTwOme1PEoCtsYb+mTWhc2+VIVcGs1447ba0uF5wP8AaNTaxadyxaCZQTKwJPpV5XxWVbzSTPJgkANjcRwfYVfj4A6k00xNFsHocZqDUbxLWxmlZvuIWpWm2cEnceABWVqsbTRCMZCu6IzdzlgMVVyLanDeJrh5td0vThpgv51MKrEOT8rq7dwBwHHPHXPQ1m6fJqyapYR6d4Vjjik8/VnjaTmQNvWP58Zj2ggBR3PbPEPiC71JvEGoGDU/7LjlWNyyMpYu77CAR8wUCR/Tue9SXc9tZXd3YaZ4vuLVLeO105Y2bf8AMWw5BP3VXBJK4wTjOKo3WmqI4tM8R6paafPf36oNVuGuzAzBJVSNRhgp/h46dsAnrVnRNX0rR9Qiu7i5uL65kuJrh/JkBRtgYRlhj7xYE56D6Vl6pfaK2oXQtZL/AFaZTHp9mssrYKhQr7HHJzyP+BehrSt9UfUPEWrWWmeHoY0Fl/ZsUZjUNbfOE3SEdizEEew9CaE7M3lK0LPVnrGjaol9plr5FrkzEuxwQrfNkkGpdRsjq1qYrq33h5gqsvDxn1B/yK5zSZvEUN3q/wBqeC3ttPURRRwjETJjcAmfu/Lzk854rp/tPlIYnuWMsSH5VOcOe2fbNaWTRwNyi7nmev8Ahq70w+b5bNbOSI5cYzz39DXNsDnA5Ne2JFbXmppbb3uIBEEaGQZU8ZP6muf1/wCHkF6GuNEYQzDI+zs3ytjjhj908dDxXJUoW1idNLFX0meYi5aLPyq3seKgk1toCPMsQyd2D/8A1q0b3SrywlNvqFtLDKOAZFxn6Hv+FY91ashIYHP+etc7Vtzui76o2LCW01qSKK0kVLh2CiORguM98njHvVm5sdR0xVe4tZkViVUsp2sR1weh/CuQDPby7kO0+oHP51sWHim8t1W3nk8+1DbjDMN8efXB6H3HNCSG1JbHRaXflnCsMc9a6mEq6BgelcPJPDcFr6zXZEzk7ASdmecc81r6ZqhY7S9SJxudtomqW9ndtZ32x7O5OV8xQVSXHHB6A9PqPesPxf408OLp82maVp1pcSXCvGbhYERIz2ZeMsfQ8Cqt4puLZuA3HzD1rzTU7eW01KSLBCLhlzxgf4VqqjSsZqhFy5my2hY85Iz6V2HhSBr/AFG3i+ZnZgMZ6D1rkbK3u75xFaW09y/92GMv/KvafA3hV9CsfteoIFv5ei5z5C4+7n+9646dPWinBuQV6qjG1zsMYOAT9KaT6c1GiB2ZlZtvQkn+VSDAGAK7jyRhXA3OxIpN5Kk7enShmHcZHpSMWyFHU+/SgGcP4n1JLbxEyrgN5aeYw78cZ+gplvqu6ADOAvQ+tYPjBjJ4ru3QfKNq/iqgH9RVK2nZMAscZrgm3zM9ykl7ONzvNO1IyXCDIxz/ACorD0e5T7Yg3DJz/I0VUXoY1I+8edrbPGkkYA8qTJ55ArQsdJiZVjkZmLqCpP3asR2bxo8N/iKPBKt3/wD11BaXxu7X7BGCgjPEjD5m/Gu1Kx5zZJdtFBCbKBA88JDk+o9KzxftHN58aCP+FwvSpZp2ErzKvKAK2Kg+zvdxzCNdqOd4z3FJgT/a11C1ltjHunUfKQOtP0qxiLwOwZpPuyewqOxU7ohAp3L8shA7V12n2MOnRPeIwYY+dGq4xuZylYthotJ0xpYXV48fMD1qC/tjfeL9TacMIFu5F3Y4GGI/Gs2djrF38oKWrDtxW74q1NdHv7yGFkeSe4lO0/wksck1oyErGdr2pCFV0u2k3o4AVhziqNvEkzbS2wop873PYVnWkUrJI8hJcHdGccsfatSa3SOxukaZETyTLJKeoYD+lTuD0LOu66PD3g9ZyR5syYtypw28+teKQsxDMzbmZslvX3rV8V+Iv+Eh1NDCHSyhRUhQ+wALY96ylGEHtSbuznmyRMM5PTFTIcMOOveq8PCZx1NWUGTQYse3Mw+lSjg4qJcbzzTwcN60DJhwqH0zUi4dSD3GDUEhxGp9s06FvnqVsaPSSZBcQJuGzt1qDzJLRvMjfnqeavvEBuGevesi6vfsc5RowwxnnvXBZ81kespK1y7fa9PcWYgMhKnqM1li6I71RnujNIWACg9hSK5rrh7qMZu7NSOY9c89q9j+G2izWdi1xOz7Zz5nln7o9/rXl/hPR21XUFeT/VKQee9e86eUgt0iUgKowAKbZm0b6uMD1qQPWckw9amWUetMReDDvVCP99M8meSc/wDARSXVxstjg4ZuBVdZfLhwDyflH0rOTGkSkLLMCfvMcL7CuJ+ImpIkMdmjdwWAP6V2KTJGkkzHCouAfSvHPEF/9v1aaQNuUNgVz1paWN6UdblBCG5qcY6nrVRSQRnvU+7nFc7NyffkY705D61DuA69aeMsAQaQEwGeQaQMGyB1FIrGkGVbKnrSYwLEDpQHwKkOH6DmmNFxSGVri68nHUAng+9c3rti8t2LjjDAZIro7uy+0w4diAORiq508yWZjZ8+hNawly6olq5y0drGvXmp8DHSnSI0cjRnhlOMU2m5N7gkka2lzBoWhJ5ByK0Yyc4rnLeUwTLIOxrpo9s0KuOp71DGTpINvzU75XHy9D2qoXCEhwcetOjbJ+RuKmw7iS6XG7b48xt7HimRXt3p8m25QvF6gdKtpORwRVhPLkGD1PY01K24nEs6ddpPuERDKeQKuxZjuQP4T1rCfTmik82zby39M8GphrM8E0f2uIoBwWHSla+wG7MFilWVemeashwHWQc+lZa3KX2PLO5e+OavbsKq9h05pMfQ0S63KcffHSnI7YCng+9UoJDA28dD19q0YzHcLzznuKVhEcdnBHMZkjCuwwxXvVxZVTGBnFRbHiHy/MtTxlcZIppCIZGMr/KMGp7eYk4OCRxUojSQHI49qryReQcpnmmBdDKx5608gKMqc8VQWZgvShDNMSpJUAZBFAE0iZhLNgbuNwHIrC8VbJtHjcdRIyn/AL5Nb0m5VVJBkYx6Vz+uIJNNMKqxZSxBxjsR/UUwPNNvmyoD90c1NEMyruHOeaaAVbB64OalXlgRz8vX3q0NnVaWTPaKQu7ywQyk9Aehq15ciMjBTJEfuZHasrRLjyLsRq21JkC9Op7V0sK8CIksEHy7ueK3toZ3Ob1jTF1PMyt5cy5AK+ncfSs/SL+fSZ447mBGLAqJjywHp9K66S0WJw3HJwAehFVNT0NLpVmgwGHOPShOwy/DqNtfxCNiueFKk4qtfaFHLEzR7VHtzmsqbQLmJVltzkAbs56UttqV7ZSrFdZx045zQ/MpGRe6LJC5yq49c1mSWDg4wcDvjrXeHUbWVN06kEDo2KwrycXEoSFAC3TjJYVk7I0WpyxtAWwOtSJDjCwruYdXPQVvNprKu4r17Zx/ke9IbaNcK/zD+6eFH4d6jnKaMq2slkff/rjnlzwg/Hv+Gau+QEPQOx+7kYA/3V6/nWjFbSzSAIhPpxk49lFXhYW9rg3MmG6+WCCx/Ki7ZFjFg0ye5f5FAUdWcfKPr61pLHFpSNHAA9yfvbjz/wAC9B7Uk1/cXkogth9nj/6Z9VH17GrcOnQQhS08S/7O8fnVxhfchysZ8Vg8souLl/4sjI4H9Mf4V0L6U01hsgkaGfIwJVHHrgfn14zVEyRxsCsqZPUqwH6ZqwdXEabIvK3Zzv8AMGT7n/63pW6koozabJLeO1h09ShBgxxIwxuPcsT3z1z3zVGCN9RmzGjNAr53kYDehx1wP6Zq0YLG6kWTVdUjkXGVhiYBFH0HU1Zm8QabDEEsYmmJG3EceF46ctihtPVis1sZdw0VqpeQjMYwBjq3Ye54/StnwjpzLAZpVYSSZYg9i3NYVrptzqt8jXQJQMGKL0z/AHR6nH5d69FsLXyYwuBuAy2On0HtWafPKyKk+VGmVwgKnp1prRB8Z4I6MOw54Hp1pYmAGPWpCu4DB6dq7UrHJchRGVy8oUnd1AJOT9eTUkaE+bIMZztBHQ1IspRyGH319e9OWBYYI0iG1FH4A/SgQkchVsHpV2OQGqgAOOKchK9s/wBPrTEaG7PU0/k9KrKwPWpUfHemKwrDHOPzpBtf7+KecGmFMc0DQ4qRwp4HT2qJgWYv91gME9iPcVKrFevQ0pXIyCPxOKBGbYapDe/aNhO62laKUN1VgcceoPXP8jV12jmQhgpJ7VwNg1xb+JPENpbMQYrsSghfm552gHruDYweDxXZ26u2EkXymx80atkKfY+nb9O3OlSHLsEXcgluRbu0chCgfdx1xWbqV5HdaddWsG4GWNgE6HOMnB9xkfU1rXcMRliOAfLQtk+vufzrOuS95bXHl43eUyRn/awef1Fc7epolocDbQTQb2g/fjHBLDdn6Vde8jtLCMTM67jzvXABPasy3u5tmIY8ntgUy/0zU5YTLI6jcONx5z9KG7AkWLTRm1m90/S7QFbdOSVH3FByc+1ewWllHp1rFaW/ywxLtAx1965/wp4fbw/oif8AP5MA0jHnAP8AD/jXTIC0ahid3eiPdhLsh6LyT79KkxTBiNCzHAHWopJJJWEcQ2jqxPcVRJNI6IhZjnHpVMTvNLtjjwqnnIqwYIzGdxOMfLg80kSysRtXy0755JoAIbY7yzk89u1TnZFGS2AoUk9qk7cdKwPFWpCx00xBsST/ACoo6t/hSeiGcxJE/iHxJJLww3iGLIyAx4zj0Ayfwrrr+Xwt4dWG3vdbg0+cLwJrvDN23FWPeovBWlfZ0e6YMTGCibj1Y8sc+2cfnXzheST6hr2qXOuXZt9RLyPOsi5ZpFJ+QDPboAew4qYxvuNn05Zzm8t/tGl39tqtv03QSKSPyOKeb6NXEcwaGQ9A4Kk/TNfKml6xqGj3Zu9LvZbWX7peF9pOecH+8OOlej6D8Z9ahK2uv2tvq1nwJDsCTBe5wPlJ9sD60OD6C0Z7ckpKfLIsg9DjFVbvS7K+zvhMUv8Az0QYP4+tWLbTdPvrK3vNOleKKeNZYXQ5BUjIOD0/Co2ttSs+qLdRg9Y+GH4H+manVbhYpvYarbbjZ3YuYs58qbnA9Ac1TfWHt3K6hYS25H8ajcta0WpW7SbHd4pO6uMEfUVbk2zx87ZVIzjg8U0xXaMmK6tbmAy288c4HBEZyQ3oR2qhdaYLxY2uNyyIcgI33famfZ4dL8RLJb4USHy5gB2ODg/Q4rYxuBbJAJ4p6MuMmZbQCLOxQoPYCoZTKEwg+b61euJVjcLkFj0AqBYXXLSDD+npU2LvcZbQeSrbnLnPJPaquqOJLu0g6guWxjP3VJHHfnFXR8v17571ka3p1xdIl3bXE0dxbncvlLkkdCMd+M0rscUr6nmjeHLWO+mvNV0++upXuUeOGJcqYFjY4PQ/MwC7euB16ms6x1LSbRNIifw3Oz28s11cRlCWaQg+WOnzKcLx0GM+telnUYQSk9/MzDBPnaa/Tr6ev5VXudV0KYKJr+z3xnchexdCh74ZcEd6tM0jLlPPdH8VDSbrR7Z9MEVraSyS3IVN8hdtwLKTyCAQPX9K1LfX9V1O6sZLSPT9OOq6wJnl3gv+7CFBKM/cGC2e5B6dT0PmeF3IzdaQwUbVD+YoA9B83H4CtCzuvDkOXifwwGcYJWcgkehz+dNPzKqT0sjkLGe2t3hfxDr8nmazeefeLbSK8PkIWCs5XJAZsAAdFAGK7/wx4jj1NIY7XR541v7iSSMvgh4kYcD+7gnnsOxNSQ6joTSE7fD7swAIjv4wWA6ZBAzirkFvo85Jj0eIsWyHgnhYg4A4Ib2HHtVpnLNuSNjT5DdapczGARMmVPBBJ4GPTjFalsjpAkZPz4JJ9ec1Rt3EEDrFYXEPy5zIvDH3YE81etWmlXzLiMRkDgKc4qmzK1iWW2huLYwXMUc8R6pKoYH864LxT8O7We2mutIDpMoLfZBlg/8Au+h9Bz/KvQc5o7YzWUoKW5pCpKDumfL97aNG7KynK9cjFZUiYPBIr6V17wbpGv75ZYvIvCOLmPhj9R0b8ea8n8T/AA91PRd0yoLm15InhBOB/tDqv16e9cs6Tjqj0qWJhLR6M4vTNUfTp2DAtBIQrr6e9dCjCGRWRgyt90qeDXNy2rd1OegI71d0mdxv06TAGC8Xrn+IflzWbR03XQ7azvGZVaMhhnDAmuv8J6ZpF1qMsl5YW9xdKgaGWZAxAB5xngYyDnrXmemyxR3B3Ac9a7zw/qAi1ezZWxl9n4Hj+tVTdpJMwrp8jsemD92u1AEA6BBt/lTCgfhvu+nTP19aXnvRXeeTcQ449ulIzYGfagg0xzjtmkBGjME345PQUpRooyx+Z27U4M+4dMnr6CqOvX39n6HdXauAQu1T7ngYobsrlRXNLlPJtauvO1e5kDZ3Ssc/UmqTSYHWqU9x5szuAevNNWbcCN2D2rz3qe7CNopGhpd88OsQksWUlhx2+U0VDpxjm1OBlZQ43AjsflNFXFaGNX4izN5t7BNHM5+UZj3f4+tU7FG2YkGwo2SSP5VNcSyw2ayo6ySo+NuOgpk2rxpdxTKiyzyLgxrzXceUTy2qrNI0ibYJFzgdSe1TadplxfnCApGv/LMdcVPo9leahKwuE8uaNtyJ2C11CiCKP903kTpwQeOa0jHqZuRWttP0+yTdEFinA5Qjg1kyXMuqXOwxGOFG/eFO4qO+1CbUpmjRcvG2GKnqKh1DVYdKi8vTWK3rEB1YZCjufrVN9yLFzUNUt9EgW304rLM5wUIzs9zVfW7SJ/FesNdOzqb2Ygk9PnOAPpWJaWjm7kM0h2S8vIe1dH4j2/25qqzELi7maLPf5z1qHdstKxQhdhLl/wDXRnC47A964jxbr9wbubSraQC3jJDuh5kzz+VdhHPJ5dzqaokkFvbuZNzYPCnGPxxXkTOZZTI3zMx3En1ND0M5slhXkAjirDnEZ9SahQEKfWnscsoHakjmbuyaMcY7VOh4JPao14FOYlY/rTJHr1zTweehqNDwKeAWIAJyTSZSWo+bhol/2RmlU4OabdHFyR2XilBBwVpR2LqfEWZMMAelUL6xW6TkDdjg1pRgSRFT1xwfeqrBkcg9q5KqtK6PQoO8EmcpPbSQMQykAd6W2jDyjfnZXSTRpIMOoIqEWUQHyDFL22hXs9TX0TWEsAFQBcdhXXWXiuVnVBnB715rJA0ZyOlS21/Lbt1oVS43BHulpqqvGCzfnV9b9cZDfjXjln4gkkKosmB15rfGuSNGsCt8zjBb0rXnMnA7N9Ua7nMit+6Q7Vz3PrSHUwZGAfJHyKPfua5D+11gjyD8iDCj1PrVSPWvJjaVsZUHH171k2ylHodF4r15rTTxbQSYkkHIHpXngcgnOevei5v3vrhp5GOSeM0ikMRzmueTubxVkTAg4z2qQYPIqMADijkHipZRMAT0qZSQnuKrxyEHFTJ1we9IZIo75px5HBphYKuBSx8jNICRc46Gng5IpqMcEU47dvXmkArbcEEDFQSWnnFMEiMdgetSKpJ56UO5VhGpoEYusacpX7REPnXhvesPPftXcCNNhDgHIwRXI6haNaXbKR8jfdrSLuBVrV0m62v5Eh4PSsqnRuYnDjqDmm1cZ15QdwGX3pn2cKd8WCD1HpUdncCaBWBB4q2vByv4isrjEQRsQCSh96ftI+4QacUWYEY5HekjhePOSQKVxkkbyA85GKtR7JBiRFYHqGGarBSScnmpEYp1FADZNMClmtHMDH+6eCfpS2uoTWR8nUVLc8SgcYq7FJuWh1SUFXAb2NF+4cpYSaO4G6F8r6irtupX+Lt2rnDpjpIXtJDG/ULniprHUbq3uGTUm2DorgcGnYk6yGc/xjIqcEOeCM1nW19BNGBHIkn0NTufkJib5vSqEXInK9entVkRl48g8+tULZ3jjCyrnNXk3L8ycrjkUCIFDI7CQ9OhNWoj+7IIwfWlKx3KbQRmoog0LbJT8vqaQEd6xYgqcmsfVLciwe4J2gKSx67T6/0rcnO6L7ox6VmXxC6fsfBRztx7GgZ5ndwGKZyyld3GPTmoLY7l963Nfg2lF4z5e7jqelc/bHE23oSc81pEC9DOUCSDgqc11cN45jjnDjBTJ5zz3rknAVz8p57VZ0W4ltle3kk3oZS0KgfdHpzWyJO2a4SeFg/zBVydoyPz/XA7CnW9wywtGq5GDkM3T8O+O/tWbZNHbxbZ7tI9pyqRHc3PQn+nXrU63lj53yCd14/i4z+PTmi4WH2txKyywoq4zuXABP0HX/DHSq99KnlMZEC8HHGCffP6/pT5tRtlYMYWB5+XccfpXM6vq5uphFCBktnA54/wH61MplJELzPdTGOFsHHzOR0/xrRtoY0+6uePmkJ3M/59BWcGW3VVcguTnaO/1p73JkGxQAo5xyAv1/z+Fc7NUrGzJcRhdu/dkYCx55NRGJYSrSAAjpGp3H/PsPzqlb3GZNsHzu4ClyOce3ZRXQ2NjAq7pJUIJy2M8n0z1NVGDY3KxmC5uCf3Z+zqTjgc/jjJFOWJFyxWRyefu43fnXWSJB9j2IVAI+VE6k1WFt5zxs5DZXkHkLjsPUmto0jFzM2109W2/ucFgSVL44/AVcTR4tvKQhs5xtJ/qK2XReQYlYBgvAxj1H/16qqVY8JLHzzjkfrWyprqZub6FMaHAQSrxjjBAjP+NNk8MwyjAYBgM4A//XVmZZo0JidJCDnaQVP4YzWXN4vgtG2TSKWHBETBv/rfrSdOPUXPIe/huSLOxHPP3lVCf1FTW+iyAZcyAZ6BAp/SmJ45091VnkaP1Z1Ix+PIrcsNdtL+BJYp4pkYHmNw38qXsYMPaSLGnaaIVBWMIAMDA5raWNUGAMAVUt7iMjCnj61dX5vmGcVvCCitDGTbF8sZ+Ud6cOh7EU15liXLkKM4yTgDPr/nvUj/ACr6ntx1rQzGMN7oO6nJNTbieeahUEKWIwWPI9KmBJbjpSSAXIOM8Y9P8/yp4Ay3v17/AID/AOvTCNxIUjcMcelIGIbn6fWmImAwOP8APtUqn2qNemKcflxk4pjJg59KkPI6jNQYPUNwemfSlVkLYVjnJxn2oEPK4POaAdpHJpc5HJpoORxwaAOe1ZbTRtbsNZjsRNNf3EVjcFW29T8j4xywwRz7Vvzoj5PTBPI7fT/PagnBwQCRzyM8+v1qJjzjd14obb3Ao3UC3FuDIoLYwc84/Oqs8629ptxiRvlXPXPc1HYTXFto0CX8vmyopV5O7YJH54ArJFxLd3Uk0uQM4QegqUim7InS0hgUlIVBHX5etXtA0/8AtCZtTuYwbeNitsp6OR1fHcen41ThtptX1BNOikZI8b7mVf4U6bfq3I+mTXZxBRHHFbRKIUARf7oA4wPapersGw8YywI9xijzApJwCegANJ5SrjexLDj0GKesKPtZlBweKoCvcuXcRBPMf+Lk7U9+OtWFSQphAA2OXbH8qkSNIgdo5POT3oZWlXD8jvQIbFh85cSbOre9T4/GmDbHhcAA+gp+MUABwASSBjnmufms7fXGkkuInbacQbSMp78g1Z125JSOxjb55uXx2T/6/T8DVqyhEUQQjoMfSspO7sF7GXDbanp8AisL4BFOVjchD1zwSCh/IVl6nbaVqU5l8TeFraaZxhrnyvLkIHT5wSD/AN9CuwYDGMUwIMEKSvqB0P1HSp1Wwcx5dqPwm8M64vm+G9Sk0y5f5ha3Y3p9FOc/iC1V9N+B2sSXUMeq6laRWSH5/szM7t7DcoAPuenoa9GutCtJ2ZxH5Dt1a3AGfqh+U/kKhhh1rS+LG5WeEHJjZtp/75fjH+6wpqo1uitDr7Ozt9PsoLO1jEdvBGsUaDoqqMAVPjgD0rlYfGD28oh1OzaJ8ZOAUbPoFbr+DGt2z1ayvjtt5g0mM7HBRvyIzVqSYxhn0y/d43MUpiBJ3x9AOpBI5/Cua1G5j0/THuUBj5MwjBIIzyq/lgn61vahFAjLborDzcvNySREDkj8Tgfn6Vw2tXJ1XVo7TOY423zY6ZqZuy0BK7Hw3L393HMykOyb9jcnPqf510i75IwHZhgflVDRLJd73DKNzABfZR0raKEAmnBaDdkZzRHZ5kbcD2yadlZFBH61aMZBOMbeuKjaIDJ6e1UxFRo6hYnlRV0r0qsPnL5XBB21DLTGECQDzAG9Nwzinqkf9xP++RTSMUA0rjJDb27ghoIj9UFIlhYlQDZ25+sS/wCFKGpy8d6pEshk0nSJJEifS7RgeSTAuP5U5fD3h9PuaLp4b2tk/wAKkU/McE89KmDmOLc2N9UiWQx6dpVnNHJFZWkThhgrGFIrTkv44mAYnn8azFXc2ZEB78/41chRS2efxxVENEv9pKzhAj+9WkkV+B19DUcUaIcgZPvUucDimIUrnqSPpTgNn3Pl78U0Ggn0oEYuo+EfD+qLL9q0u3EkgwZYl8twfXK4zj3yK8a8WeEbjw3qIQF3gb57W6A5cD19GHcf0r3DUdYstKheS6kwR0TjP/1q8m8afEaDUrSWyaINBuDKoHIYdCD61hV5bHVh6k4y8jkllYpFNkbjwwXsfT+v410GnXxswtz/AKx4iHUZ+8Rz/SuJsNTF9qi2NrbPI8ikqqfMd4BJ49MD9K6GwlidF3Pxg4HauV3R6TlGcXY6G6+Md0rBPIKsT823GB9DWNffF3WTIfsz7E/2zmuHlELSeVKwyq4WRTnbnjn6VkXKNFNhpAQejDoacZSlo2ebT5XpY79vip4jJz9sA7+op8XxX8QpybtSKxPCGi2N/FNcXlpPIyuPKDD9y3rnGCT+lbV94P07VJnu4maxJX544YQY9wHUcjH4fzrOdeMZcrbK93saFv8AGDVEYGaJJAOc5rT1Dx3L4o0DaitGsc43gkc/L0/WvKte0M6JLEPtazLICQVRlxzxnPXj0rf8OMq+G9m7LNOzN9cAf/XrZO8bp6G1KMXK9i8Zc5wee9PjX+IHkc1TBJJPepkcqvv6VB6BND5cer28oAV2LAFeM/KaKy7e5M3im2iGfLjDDPqdpzRWsVoc1R6miJrgyOfNx5owfrVnSmgWSKzij33RP+sx/WrMOhZmQ3GfIc/K4rfjtLWxiELIIyf9XMBz9c13Rj1PLcuhsW80VpB5DHbfKMh/71YmoajNqEvlKAZ0+9t6msue/uLuR7RCDKnInJ7D3rMn1MpmOxG25B+eVScmqckQo6mrdXcenjZZKft7DLAnOwep/WqsDQ5Mr/O8xIcnru9az7CzvLqfzolkLMcSEHP510kkVhoNsrJtuLmX5cPyIz60tXqw0WxHLE1laxwagrCNhm3hT7zH1JqLxTKZvFuqia4AWK8nySeFUOcVzep668W2W6mkMgJAkzlj7Cszx9qc8/jfXrbO2OPUrlQq9/3rcmk2JuyHeIvFi6hZJpthB5FsnEkg6y4/p0rmo1y4Hc81Go5FWIxiluYTZN3yOgpsZDOSO9MZj0FSRjaaZkWQRmldgSBUan5SfSkj5OTTbEkTrxVi1Aa6jH93JNVc1btz5dtPMf4VCg+5qZPQ1pK8kV3bfNKfU0+PoB6VBF0yanTGcd6FoiJO7uW4jtHWh2DDnrWZb6gHu5YGbofkNWXk7Dr61zz1PQpaRRK0eRnFQYKN7U1DK0p8ty3H3TTzMj8MNrDrXNKNjdO44ODwRUclqkoJBwaCRnijNQUZ0u61flsHtirEGrSRqcsxY1YZI5f9YoNUpdOLOTE2B6VrGa2ZPKWzqxKj5uR0BqWCaScBix2+lZcOnztKA4wvrWuo2AKBgDpSnLsNInwhHI+mKVItp3AmmINxqYsBwKyKGpP85DKRzVlTvGR0qKMbjipmAjTC8HrSYyRQAKUvnGO1Vg5FWoAHbnp60hjlPmcdxUyr8g5qs7DdtQ9O9BLRqDupAWgwUU3eC2arLKW6nilZlwSDjFNAXRJhecVFxuLZ5qkZmk6cAUGYgdadhF4SZOSapavbfaLMuOXXpSGf3pGufemkK5zY6c0VLehVum28KeQKhBqhou6be/Z7kQOeH6V0UEnJJ5HtXHn7wYDkciun0nN1bb42AkHDL61E1pdDW5rxsGPHGasMOBmqUb4YKyFT71cVw5HPNZFjXiLHcpqWLBGH605lwOKFkU8MMUXAkEBHKnIpzRMTuHBFOjbsvIqSJgSyNxSAgikKcyHB9akYxTLtcB0zzStaqWJZvl9KZFbgA7W78VSAiGmCyn+02Qwf7meKtW2so9z5dyDCwHU9DUsEkhkKsMKBx71LLbQ3KbZY1cd8iquS0WY9RV24ORnA961Y5SuCp+8ehrkZNOmhdZLKYoVPyoTlT+dTJrM5vYIdQUW+3OGBwCapIhnXKqNIWU7H64qTek5KPwRWOlxJJKrRyblJ6gg1qOQgy/IPVh1FIBQjIdrcjsaqXsIYKpAKl8/zq9E2WCucqRw1V75QNi4/izmgDlNbsvNjjPl5YpsUj14P8h+tcJIvlygk4JP1r1UxJdp5QwcA8+h/zivO9fs1t7maMDGx+voDVJjId+Ysknp0qKNgq4IBz6joPQe1R2EvmZjcqeCB26U+YGMncMYP44961Woi/a3kcabWXKqOPp6Vae5Lxh0ZcegJwPwrBLtjKk5pFuDEu0uRnt6mkxo0r/UgI9hGTjn3qhHi3Blf552Gf930qCSXaMn5pD90H+dImXfczbl+8zHuazKRaTeoe4lO3naXPX/dA7n+VETGdxkBI85Cbu3qfeoYgbqViwwq8IvoKvQW+84XkemQKcYjbL1pcCAPsVWBOQD3NaVlc3jSFg+0E8KV61Tht1Rl3FCR0DdR9K7C006E2qANnjkjvW8VczlKxjpci0fzZpQCQQNx6/lTB4rht1MSq0jK2G4284571uLo1iSwlhDH1NZt/BZ6Rdx3MdrC8Eg2TApnDDnPtkfhW0abelzJyRG/i+4HzR6c4XeoDyELyTwCfTJxWgreIJ1wILWEdSXJbH4d/wD69VPEscWq+Brm50z50UrIdi9FD4ZTjuDzUXhrxfbjR0j1a5VJYSsQlcH95kZA47jFaqm7XM+e+xdn0K/vFK3eqSbGGCkShEx3zjqKpv4Jto9yRyuAq5BZc8V2saJIqnuf1FSm1Hp1681DimHMeaz+HRabi+SCfX+lYz2q2Msr2AEUjYJZTg++K9eksY5QS8SNnrkVl3fhrT5wc2wQn+JaTi+hamnucXpPjOa3uUttSUr2Ew6Z9/8AGvRLDVQyKS4KnuDmuC1XwpdwGQw2wnj7HAzWLaand+H7gJIr/Zs8xYwU9xSTa3BpPY9S8RK2qWllYWbKL2a5Vg/Xy4l++/4A49yRWpKJtMKSoXvLFE2SKeZYsY+cAfe46jr6Z6VzOmavF5cdzHOPLkAxIzAYHXBP1zxXQ6VfvdXdzc72VBtCqTgjgcnPQnA/Stou6MJRsaZdGhWaJ0eNwGVg2QQehFTYOQuMEcVkWG2LVtS00DbbqkVzCoHEW/cGUf8AAkLY/wBo44rVQ/KNxyRkc98UxEdzA8kZaJts6f6uQdz6H1HtUOn34v7YS7AHU7ZFHY4qlr3ia08Ny2n26C5+y3LFDcxoGSJgOhGc5I549/Sq0LWuna9LcQ3KJp1xbfambflBnJLD26H8T61pGPNF3Je508Zxg4OMjNSYDcH/APXVO0laeETOjx+ZyiMMMF7ZHrjn29qtqePp0rIooQ3RTW5rCVvmkjFzAMdU4V/ybH4NR9olTXPs5x5Uieah9OMEfmP1rL8Y/abSxtNYsF33VhOHwFyCjfKysf7p4z6YzWpZzWWppa6nbSRussZ2kHO1ecr74J59xWislck0nkRCoLDJO0DPU4J/kP50GQAcYrJs7mW9ubi4ZAsEDm3gw2dxH+sfHT7w2j/cPrVoklutZtl2JjJuqKR9oLZxgZpVGK4/xZ4nGn3SaeEkjR0DS3JHyJnopPbPXPQcetIB8zRx2pt4G2wqzMgySMEknk+5NRtcJbW4mJJVQO3J54x71hR6zGWCIANoyy54/D2966nw5YNdD+17uAuif8ecT9C2eHx356enWk5dgS7nQeH7KW00/bcBEuZiZbhF5IJ+6ufYcVtjCqDjAxjb6VQt0NpEMkzXLnLs3HP/ANapDJN1A8z1PT8KEhsmkcrjeQWPCr7VYj/1agDB75qutsGmE7t8xHA9KnlJUDHO44pki/efHYVJjrSKu1QKcKAGAbjg9RTmIC5JwPejaMk4GfWsTWrqRXhsoGIebJk29k6Y/E5/Ck3ZAhkQF5qMl4FBA+ReO3b/AD71rqNgCgdOtV7KARR8Dp+tWjwKxWuomITSZ70hJpRjuKLiHq/OMDHvzSlFfPmBTTRgdqXrTTGQyWySxGFlDwnrHIN6n8DkVlXWgwY3QK1q4bcoT54wf9xjwf8AdIrdwaY5IXplj+tDS3BNnPmLVbSwYKILhmwWmeVm3rk4GW+ZcdgcisXSrObLecMXE7nfz/DnnFdLrE21Y7TPCjc59fT+v5VHpFsHBuGHzN93PYf55qFq7Gq2NKzjWNCqjGOtWHGaFUAnFKRXQTchK4HA6VWmlCv5QBLYzntirjegqJox1xzSYEBHaq7J+/LZOCMY7VcIqF0pFIrutQkYNW2XioHWoaLTIwaeTkYBqFjggDuaijaQEsz8E8D0FK4WLiDYDk0FnlfjtUKvuNOaXygWZ9qgdBVpktFjymBUn5mJxgnt9KuRkKMCsuIF2Ewk3Z6Griue5qkyWi+sgHU8UsTsdzNjBOFAqh5p80KfukcH1NSi5QuVVlGwZdicKv1NO5Fi75mflQZb+VcJ46+JFn4etpLeym33gO1pEGQp7qD656+lc345+Isq+ZZ6VM0VovytMh2tOfY9Qv8AP6V4rqepzX9wTI52oeB6GspT5nyo6IUUtZHTXPjy51GJ47lDEzdXQ5yfU55rlpUu598o3Og6svOOe/pUdraNc7yrABQTn8K3IL+6spUcX0oRUHyxqFAOOh9azdo7HQ4u10jM00XllqdvL5U0JyV3MrL1BB56jqRxzV+ZJ7WZY/tMkYKggRScY71oTa1Fd6ewuo5jHGwJaEA4Y5weee1YMcNxNOZDvaLGF8xhuHHesm3P3noYuDuE9vJHcbEIYBdwPTIFaWkaaNVvoo7gfuYzvkCvgsvoD680lsqzQFZACykjfnoaW28yG9UuTGn98jj8MVlKbtZboy1TPRobi0gsikSRRRqABGmMIPTAqC31VnkcTBFSMjnpwemPpUCWpudLjSJAskiK+4JgnGCecdf6VPBZ+ZGZyZGMTDzE6goRkH8815Um07s0UUyXUINN1K1TzLZbgH7shwdo7iue/s6x0y0ZbOVwszbxBIcle2Qce3rVrVr23jfy4plVSSAM8r+Hase/1RJ5JhbujDCxxFV9B6/Wuig6l9Hoa01aRPAhlbKkfjVlrVwQSw/Cs6GUqQQcZ6Vo+aBHuZ+PevRjqeitUZlsDZeM4omAZJFMik+hQ/1Boq+lsL7WLS5h/wBZCGXr95SG/UE0VtG1jjqxfMejSLBZxGKZgsDDKM38P41xN3qh1CSS0hkKwIeJG/i+lVtX1mfUwYpmdLaM5iXHL/WsvdNehQFCrH2HWu1z6HnRj3J77VS9qIIUCmM4aQdWqbSLO6u38yOI+T/y0deuKtadoT3OLmRALZPv+tXb3xHbaOhs9HAlLDluy1KXWQ2+iNSa6h0CFUtHVjKPmB7Z71xetX7WlvM8m5gWyu48tn0rPfWFtXlN1L5rcsFBzz71gahqNxqk4lm4A+6o7U3K5D90inuJrqXfM2T2A6Ctvxt/yP8A4j/7Clz/AOjWrBUGug8aj/iv/Ef/AGFLn/0a1Kxi2Yka/MKsdKjRcD3pzN2qjJsQDcamXsKjUcVMAAM0CAnJAqRVwKhXls1Jk0BYep5q5dfudNgi6NJ85FUoVLSonXccfnU+pTiW9IX7qHC+1RLextDSLkRpgL71LnnI7dagU05m2xSN6ITVsxSuznzI3nlwec5H1rbtbkXMA/vrww9Kwf5VJbztbyhgeO/vWDR6KN3LI4YHBFX2WG6jBK8+oqjG6zRCRTnPanLI8QJQZ9qykrlp2EkhkhJKNvX0PWmxzq5xnB7g1YhvIrlDtIDjqDUUsKSHoFPqKxaNEx5PpRgjnNVSJoD83zL61ItwjjhvzqdUNMseYQc55qRWzVcEEVIOBSGWN4Ax60gPvUG8ingggGkMuRvsXJoMmTnNMOGjU57VHzQwJw+Wx2qQO6H5KqrKAcY5p28g8UrAT+YUbnrTmkZ0Gfu1ETlct+dRY25IbINOwEplwMdqjZye/FRCQjqKCcj600hXJQ+e+KRm96gJwKiaQ1VguTNPjOTVZ7v3qORi1V5AR2zTQiC4uC0oOc4qVDuUHjmqrRnOSDRHBcGUeWrEGr5U0JOxd+VQctitjwtIUu5iGBjIGaz7bRLmfDXB2L/Oul07TorGM7Oc96ym0lYtbmzIyykfKOKREA4xj3qKNiBzUwk4wRWBoTBOASaUxoTk9e1MjYcBj0q0BlegIzUgMjVkbOPoKsYHVlw3b3pqkKfkO7605lbO773HT0oAQhnBBHFAiYrtU4J6Ukc42EN96pM4AK9aYiRIyqBTyR3oO5OlSxSqQA33qsNBvTdj8qYGe0wUA9CKi1e0j1C5so3X5BknFWrq2L20iYw+Mr7VV025llRBMvzoCOlWtCWripY3mlHzrBw8Y58uT+lTWnigPdfZ9Qge2Y9GPQ1oCVCu0/rUVxZwXabJYg47HHIp8y6it2NGG4Ur8jbkz1FQ3WoxySraghmznPpWBLpt7pqSPp8xkjI5R+oqvoV4gnlhukKXTnJ3Hr9KaVxHWi0ER2IfnAB47965Hxtp5P8ApgHD4R1966uG9igLJIxJPGar6zapqWjyouTnlSPUd6kDyG1B87AHKnB+vrV15hlkmOCCQG6jg9/aiztyNSkhbgshA+tVGQkSIOp/Kt4CZO0ZjyACOeR6f4j3qvOVA3MORzxT7Wdl/wBHl+bYPkb0Hp9KrXzeY21OPXPf6USKQxZWkfkjHrVhj8oRTkGq6x+TFuYHJHAxTELSXAAbGF+ZT61KQ7mtZqQ2SMHHXNaMcsG8b9uPXaRg1mWvD9AcKatRy+QgVXPI5XOBVpCNi1hVrmMI29CfvBOv59K6HdLbKvlk7R79K5bTpgJMpIcZyEySM10KMxUFzIO2exrSJEjTWdmRHDEk9asyQpeWkkbR5zgcdc/41nwSB4QAykrngcVOuoJZxeaZFCP91QfvnptHqT6Vqn1M2kZWl6FqFldy24lMMD7kds7V29Dx0PIAH1rqY7LTpra1RIA0dvIJUJHHmDjd7n6+tZdjpbXV5FqWpHdfjiGNJSI7ZemFVuGbgEt3z7V0Rj3AkcchhntnqK0lUlJkcqRIqYGccYxxU6lsDOQPWoolLLtJPPQZqyqiM8kMMc9qlEsVVYjI5FO254ZRQrByADtPfIqVVbOH5qhEJtVkHIC49utcn4j8JQXoa5LeXIF5UDh/au2CNnioru0W7geGQ43jbn0pNXQJ2Z4n4e1NtO1J9Nmb5XYhCf4D6V6VpN2qApnAryXxVok/hvU4GeRmE251bvlWx/UGu30vUPPtYpUYfMoyTxjisr2Ojl5tTt7PbFe3E24GSZxgHbnaBgd8nncfxq/5quwIOK53TZSMzszMem8MUGPTHer8M4IYZ46A9KtTMuUs63Yw6xoN7p8/CzRHnOACBkN7cjrVbS9Ehg020im2SyBImkAwVDIAVUY/hBAP1pXCXVvJbXKeZBJ8rITgEZ6cVoxuEUJGqqigKFUYAA7VfO7WTIcS4HDdcdc0b8VXD04MCcE0XCw950ijZ5SoRVJcnoFxz+lcyunvqEOlnTNRlg0aK2KF4Xw86HBxjHp1bIPBxW/cww3UEtvcIHhmQxup6FSMEflSrHHFFHFFGqRooRQo4AGABj8BTuKwlvBDaQRQQIEgjQIiY+6AOP0qcD/61RrkKB6cflUgOepAA6k9hUjIL68SxtTKxGegHqa4W/uVKvLcEOzHLM4yOe2O3pVjUtZbV7gSwsgs1JSPJ5Yev41wl1qFz4k1pNK0xTmVtjuvO0d8D+vvSlKyuFrm/wCGPD8Wva4VjZo9LtzukGflHP3VPue3T0r12QrG6qu1PLG2FSOEGMZ+tYmh2UeiaTBpVjGE2Ab5WGS79zj+VbEYKP8ANhj3LHrSiuo2LAskoDnDHPL+tXVQb1LDJznNRukzgbMJH6CrUYVIxg7verJJfcmkHzNTQ+7jGKeOKBC0UcUGgBkkixRtI7BEUbmY9AB1rmdP3397LfSYBkb5Vx91R0H5Vp63cFbZYEALzHb0zx6fy/WpdOtBDAAo4XjPv3rGo9bDsXI0VUAAxQ4yaCMdaQUeRmKB8tJ0HTNNbIHHWmAndSGP5709ckUm3Ip33V4oGOBxUbOiN5jnCIN5oLALk1m6tI6WUajAknbPJ7dv5j9aG9AS1MiV3vLtVIy07EkZ6KOT/h+ddNbx7IlUADiud0u1l8w3e/5SSQT3T/PP410sbiSIOOhH5VVOOl2aN9AQN5kmexpxBz14qKFX82QsTtOCOOtT4rUkYRTGFSmmkUhkDComFWWWoWXmkMgYcVA4q0y1C6jBqWUim4G0nt0qm7gEgdquTAmA49azDAxkJOTUMtD2uJFXCgVIDGkW+Y4DDnce1NC7MgDn1qjeXImYQAfu0dWkYgnofu/jSuPlNi1AihAHGTnAOQPpVgS+9Z/m478enpThcD1pqRLiTz3MgnjijGA4JaQ/wgeg9awPF+sx6fpM1hbqSXQtcHPKIex/2m6fTNas1wETzQu+RflQDqSeg/E15j40mkmuRpcEq+fI+ZpXY4Z/U+gH8hSnPQqlC7ueb6zqLXMzYIA5GPQelZgt5SqnacOcKa6+Pw/p8DvJL50zA/8ALXhR9QOf1ratfCVnq6xC3voreQ7VbhmRDjoec8+ornjiY35Yo6VTlJ+8rHIWMDLAIVTEkp2liR+vtitPUtOL6c08C7pI32zIAGHAGGH1zyMccfglxpj6XrlxY6lLAHtXCymN8g9Dkd+n4joRmu31HVdInsntLOCxQPB5OPmiM3HBbAPr35yPcUSlbVna1aKSR5YUc/6snLDBHTn0Oa0bJWkjlgcoJFXdgt375NSzWDpGt95Z8mQnKoDmMjs2enOecnpU+gi3vbt4Ly4W3SQlIndchWPQtgjjoPx6UpNSiYuhrc04PDVtf6bFc2cscT4wybsgkdePc/pWpBoHyJFIMlWGFA6fr+FJa/D/AMWS6hELPyrZi3/Hw9wuwAeoGW57cflXU6N4VvdIvjNqt3YGDZzGjM+CB94kjn14rknRqS1ucsqcU3ZlC1iee6hitm6ELh2H+c00aqLLVI7W0baMlJiXxubjPHpWvrGt6eXt/sU0UbA/IbWMF278Bfp+Xauan0a5kubiGS2MM7ZeN5TkkHHpwSea5JwitLkwS1uQ+JtFXV9TSdZre1nEewo3G854OB3x/Sss+Fv7P8NSSy6hC19HJukijU4EWeCD3P4VcuIJV1VrW6SSJ40VTIqb0I65IzwT361S8QvqenGCUOptZPuNE2VLDqrehroo1JfA9S5QjFJp6mRG68DOMcc1fklgtrN5ZMyFRkDoKZBdHULWeCFLdFG1gSuMEcZyO/JrLu0MytDJMFK88HIbHoa6qc9bM6qM+bRGl4Ynm1PxFC7ACJNxwPUqaKf4TX7NqqLHsZGZsHeCQNp60V0Jiqb6ktrBLeyqh3NN2HrW6wsdItRcNg3Q6xHmoGvbTT0H2Rc3y8Mw6LVNbC51DzLx33heZCfTvXelbY8h6lPU/EV1co8kjiC0Iw6RfKPzrjLzVppiYYW8uIHggYJ/Gtnxde6ezRWWmPvQDdOR03dgPpXNrHxx0qXuJySEVCTuYcn9anApoFPxTRhKVxy+ldD40AHj3xGSOuqXP/o1qwFXHJroPGv/ACPniH/sKXP/AKNamQ9jEzgUg65OabnLH0zTgcHrxTIJF+Y0btx2DpTd4Ue5oQYOTQMmAwMUpOBSdRQMt9elIZdsFA8y4f7sS5U+rVUBLEnuat3X+jWUVsCA7fM/1qrHUx1dzSouVKKHKKivn8u0cd2+WpgcVQ1Vm2Rpg45Oe1OT0FTjeRmUdqKKyOwtWl0beQDOUPBHpW11AKnI7GubrU0+8+UQSnp900mhkl5all86E7XHXHeo7K/34imOG9TWhjAwaydQtPLbzohweoHapsnox7G0uzAByaa8EMnQbT6iqWnXgmTynIDgcH1rR2HjNYSTW5oncqlJoenzJT0lEnTj2q104qJ7VWJMZKvUuxQAY60rElcCocyx8SgkeoqWNRJgq1SO4sZkxyasI5A5pq46Y6UpweAaTGOCKzZpwGKjB29KeJB0NAEsShzlulEojHKmmAnGFPFMKEHNFwFOG6im44NPC5FPWLHU0XCxV8vnOetHk7quiJeAcc1KLcYyAafMKxnC0JHSpEsA3UVoooVcFTmpUiymF4NTzMdirDptvjDKDVpbSKP7iDj2qUKRwBU0ZI6ipbZViOME8H9asquE5IP0qJlBNPXKYHY1Ixw3etSgl8cc00ANgEYBqYIeAp6UAAj+c57irSAgAE1CikH5iKsLkcnBFJjJVIwKmVCzADg9qrhSW4FWonAIDdaBBJap1Zfm9RVKQyxn5VyK02lPTORTBhuw5poCrCkky7t20jtVxHZRtLk0qR7SxHcU0jP1pgO85UJLtkHg5qFVVZDJHgrmnPArJ81EKqg2KODTTFYmWeMnpn61KsuG6H8KrtbgHcDg09DInXBX3oAtiU4xzVe4sbO5+eeBS3ZxwakSdWb5lx74q1Hzxxj3o1QjnrvSbtPmsblmAH+qlGQfoTSaZqktrKYNQDQEDhG+6Tn1rpGUEYOKpX1pb3kXl3EfmD1P+NNMTRxNzBB/wk7Ntwhl+QoeA2OPzrGmVUvW+TYpcgAnPc10d5otyizG2JkjzuXf1+U8fzrlL5mW6WQqRv8AnXPbJ5Fa02JkU8YU5/uknNUi5Zh6E81fuZFaFmQ/wng1SjHA46rTluNFqRSURScjbzVeGJzNJK4x1A9+auMQJVHsKcVGaEAqN5cfy/eb9BT45WHHG71PSoBwSDyT6mpFcg8Hn0OCKpBc0raU5/1iKvfHNa9syYUtucHowyuPzrnYZGB+ZVHqQ2K07Y4IKxLyedoJz+NWmSzoYbhdykKBzyxGcVfWNS6zYzICevO33HpWLbzkntj19fwrVtJQvsCeQO9aIhmzHKycyOBASC3OAoPBPpx/npWjDIoQYicsG/hwVwfcVixMsTBHd2QDH3guVNatrKu3c6kYO0nywePXcvHXH4VaM2XEEvzKQyjOODVlI9udvFU2vWjUblOQcN6H3pDfynOB+IpkmshypBxT/MUbeQKzIlurjIV2UEfeHFTpYSk5kuN2Ox7UxWLvnxrgl156HNQJqdpIxAuoSBwSZFxx260yWS10yHzJfujngcg/WsuXTdM8S2kkZ0xVgkOfO2qrE9yMf5NXFK2pDK/j/QbfX/ClzIkavdWqGe2kRu/GR6fMBjmvOvDFyrRLFKMSR4DRvwy/ga9fksLa00aCws4xHaxkKFBJx19ayL3w3Z3jidYlhugOJkAGfZvUfrXLWfvaHXQXulWAt5AKDHfJ44qVZSQeM9uOKiVXtEMNyGWQcdOCPaozcyHIUAA8qSemKhMuxcErgKxYBT1HpU0d6+4AE49aygdw+eQMD2AqVX2dGP4impEuJvxTs3OeKsqwI681h20/K4YkfWtiI5i3ADgdc1rFmUo2LURDHa3HpS5UZBqo0hBHPepd24jjPtV3IsWVIfmuU8XeJ7fS7d7YyJ0xKBzn/ZqbxV4lXw7pOYV3Xs52wArwv+03pj9f1rxHUZri9vRLdytI5O75zgc+npQ2Kx1OnalMtghhSJVByAV+YD+ld38PfC6WNi1+0Xl3NxIzhynKoTwB6d65DwD4cuNb1Jmnkc6bERI6ngk/3R9a9uWJYwApA2jaABgAdh+lSveeo9h0cMcZGOW9TyaftAYbVGfpTASASx5Hap4xnk9Sa0IYpGeSpY+/SorbZEXLx7MnnFWd6hSSelUriTeDjhO2KBF5CrrlSCKUsu7b/F6VQgEkMfyknPfFW4wd+5uWPfFADyecKMmmT7lUAN8x9KmAC5xWZq9wYbUhP9Y52gDrz1NJ6DKkTrqGpO4+4h8tP6k/59K6JVQIEHAAxWJpUHkQgY5xzWmGINczV9SlKxM8AI4qExlTUyy461ICr1PM1uW4xlsUW60mAO1XXgHUVA0RHarUkzKUGiNc0pOaMfhQ2ACTxiqJIwBJIFP3VGWrAvpW1DUNo5TdtGOy/wCP+Nat7ObayYj/AFk/T6f5/nVfSbX5i7AccD3b+I/nS3diorqXIYNsSpjC4qdGjgiJOVVfxqKadxcLHGu4Y6elOzJ5yqBGYup3dc+1dAEgR2Ak3MpJztJ7elTYOc8YpgPOO1PFAgxTSKdQaQxhFRMozUxFMYAAk0DK74zxVeVSUI6e9WmAJ3L6VGyE9aTGiiYiRjtimPFhTxV9kwMAVA8eahopMyp12xsTwAMn6Cs1RKFDIu0P8zMT0z2rZuY8oRt3f7NZl0Qqhn4x2xms5I2iytLMxBAO0etVpb8QKWeRVVRk8ZJqO4E0pIVdoP8AGTz+AqCG2Eci5bc7sAGPJP0rG7vY1srXNEXctroEup3KMsrEiBO49/r1/OvJ7vUGOoJIVkWQvmRixBI7jGeB05x2ruPiZqo02HTNKDZEjbmx9Dj9dtebWgiS8aOGL/SpV/dENn5l5wc+oH54onFs7sCklzG8l1ZQRG4fZcQSZjeOMhHjPY5B6/UV0Hhu409le4W3N1bKu91iYJcQMpOCGGDg9Mj159a83Sd5xKhjzM7bvN6DPOQa6jw/4eaS/h/4mlgJEIZoRLlsZ6Vi1y7I7ajpuL53qcprF+brVLqdrdFeWViRt+4c8j/I5zVX7Tcx5gO3L4YYIxxXd/Erwlb6XeW+p2UxW1v96tFMdzJIoBOD3BGDzzn8K8z3NnHU9K6FFNanC6uicdjr5hcW1lbxrK7m4USZfGGYgZAJ6jt1qKfRZrvQLjWLeXdc28g+0Q5HERHEg7nnjv8ApXPxXUS2YTYyzK27dnIP+FMN465wxGeoB61Kg09DadWEqfmb8Op6pYwfZ11Scq4wVRjhR3qwl/PqV/Z6bG0snzBSYx859T+Az+Vcta3Dfa0TzjFEzDcxG7b74717N4cg0L+zv+JTcBJdvlvJtCzOB1JJyRk4IGcCscQ/ZK7RxyqRULpEHhu2svD2pSyDzrq6ZTscpjy0IGQMfXBPWugu5rbVNKW4MgtZ2+SKZ1LBeeoI/wA5rEkefSy0jzxz2McgZyEUyj1YHr1qzaeM9NvraaETC2+zr+5kmQ4IA5U+leY+eer1OKcW3dGpaafbbQRLJJBCytudsrI3GWIPv0xisbV7jRbSZlutOadXU+aEBEZPJyeOvHasyz8cWbW5itvtNxcoWZYgmzB7YIzkZ6e1aeoWt5rPhW6N/dQwwvCcrAuWV8dD3YZIzj+lONKSa5lYizvc8vvdZjtXkt7MKsZckFTnj0NZX2l5TkuxOc0280u8sCHkiJjIyHUHA7c+lXLDRdQvYvtMcJEKkEu5AyPX3r2YwhGN0dFJvmL3hlJv7btvLRiW3Et6/KaK6Xw8sB1uD94p27uEIAHymipjVujuq01dGfPc2umoJ7uUQyKQfsw5Zx9KzNe8azaiklrpkBsLN12uqn5nHvXKs0s8hkmdnc9S5yTUiLjpXoJs8KUhFUDp+FSAYpcY47U4UzFyACnhc0Ac0pOKZmxfbNbnjb/kffEX/YTuf/RrVgZzXQ+NR/xXviL/ALClz/6NagOhg9KcMYy3FGBUbNuOB0FAkOUbjmpAaYh4pQaBkynirunxo0xll/1cQ3t7+gqjGrSMFXqTird5IIUFrGOgG/HVjUSfQ2pr7T2K80xuLl5G5zTlPFRquBiniqWiM2+Z3Y9TkirNxbLPaeUwGcfKcVBbrvf6VeyBWNWXRHTQj1ZyLo0bsrjDA4xTa6LULBLmMyIoEo9O9c8ylCVYYIODQpXNWrCUAlSCOo9KKKYjbtLoXEQDH96vWp2UFSpHB61z8cjROGRipFbdvcC5hDg/MPvL6VLQ0Y88T2k5xkAHKmt7T7sXaAZw44IqGaBJ12uPofSslWmsbr5WIIPHuKJLmQJ2Z1RhYnOeBxUgj45yaLGdLq3Dhfm71Z2t2QVxyutGbrUhEYIw0ZYelQTWIxuiYxt6Z4q4d46tTGP945pXGZxmaM+XMpBH8XrUiMpOVOaklCsDvAYe9V/s4IzCzIfTtTGT9R6UEKQOaqGaWM4lAx6inK7u2VOVosK5bUleh4qQNuAzUcJVuPSp1RSaljFCZ7YqRVIGSMgUoUgAVPEOMEUhkaIrn7tWUzGAuM0oRV9j7U9ThvmpDsARX5BwfQ0Yx2pSGMvC/Lj71TqoIpXGMTFSrGeTkYp/lKPmXkVJ5YJ6Y4qWwKwjYnjpU0aAgg/rU5ARR8vPrUbrt+ZuM9KLgN2k8DtUq5HBpseV+90NSbd4z2FAxwwR0Bqcpjbj8qSIIqEkZqWNd2Gz+FAh0WeafjGeeakCrt+Uc00AA/veo6UANBEf335NXERDgL1xVMQrJLmRdx7VZBZWAC49KYE4XseKjYZbHT3qTDEcnNCruYDFAiPOeCMVCYyjZU8datMF3EU10GOB0oAr+aWOFyCOxpiXsck/kgndU5RZOQPmHeoBbJHJ5nkqzHqR1FUgZfTaQBxmpkUkccY9KoxkE/IxBHY1YjmdQaBE7FlX5jkVGCD0709ZFkX3704RgfOBQIrzxBFyh4HGT6c5/pXE+INLUwXJjXDQMJl4+/G3UfgwP4EV3TKJAwbkY6VlatZtJZSY2+dChKFu44JRvY4/ke1VHRgzys8jbSx4MII7Crd9bosoeH7jDd/u+1Z4bYT2UVu0Tctu37xXPII5/CnljtRx0PBHcVWjbemN3zA/pUqvuU4JRz0x3NKwyZ14DAA59O1LgBc8kd+ahSQ42SIC3ftUkYjY/uyT6qeDTQEsZXkjcPpVyN13Z8vnoNx4/KqgB7EDHY1KjOcsyEKOpANUBsW8shbAUlB1IAAP6Vr25jTDSXI2t25yPw9a5iIkEEbixGABxj9a0bO4VUUDarscnk5q0S0dZAVeLKEYPQsvKn1wKsw27fa8SRksQMuqDDHscgg9M/pXPx3kA+9Pj8OprUEzyQruTerHGWAA/Mg/pVpmbR0cEa7iN++NgAwkDbl9Cd3P86sborQ5Zd4HPvisO3a5LAS30eM8hG3EjPUDIwe/TpmtNbNnVXW5YeoZR1q0QXv7RVwDFuA6emD7VIJJSV2k5J/i61RayugR5d0jKP4SuKsNJPaxg3BhjjYgcnIb24B/KmJkbWSXlz5Zy8UYBmlcn/vkCttY1AEcIAQcH0FV7dXJJZQiMchQ2CT6mle6AUxQbS3cjov1olJJCUW3YW+kBUQr67mqEAUzdzknLHrmnBq45yu7ndThyxsQX2nxX9sY3BVzwjr1U9sVxtzYXthcFJRGQTkSD7p9813YIpJIUlTEi7lz37UkNo4sRTMCWLHBxjPQdRSiGUH7vHrWtf201hKZFjBtipDOB930z/j0rkdF8YS6rf3MMtn5dspPlSx5O7B4GO5I5yOK2jHmV0Yt2N5jLaQtKzjYmCwBHHP+eK6KE+XGqgjpXG2M02o6oZbpnWzSQiO2VNxBAHLbRx6knGOK6yEknLrgdgDk/wCH86vlsZt3LYJNQanqttotl9pumJ52pGpG529B/U9q5nXvGtvp0LRaeUubg8eaDmJfoR94j0rzy71u6vrgzXVw8kpGMk8L7DsB9KZLNW71q6m1S+k1HzJLW9PzLEQfKwflwD3HT8TVGDRU1u/iXT79ZpJ5BiFkKyc+o6cVks887hFfczHAWvb/AAB4Qg8P6YtxPEDqMy5dm6op/h/z9KT1dkLY6HQdFt9B0qCwtgBsXLuB/rG7mtORo403MQAOacOFpoIYsdhIzwcZq0rEMWILIA5Xr09hUsjrFGXJPHTjNV0ScTkJGoT1J6fQVY5QHLbjVCEjiZ4v3jAluTilWExrgfdHQGpYlyo96ZJcRAmPdkgZI7UCGzSeYBGi5J+9nsKW2DIm1jnB4+lV3uxG5VYiTnGR0qxGXclmwPYUAT7+D0GKw5W+3aluHMUXAPqf/wBf9KsandNDD5cZzJJ8oI7ev+H4inafaiKFcYPqfWsqj6AXI12Ljv3p+6m4IpRxUiHdaUSFDTcYoPzCk9QTaLKSg1JwwqjjFPDsO5qOTsaqp3JZIQRkVUkUvKIugY/MfarSzhRlqzb24aK1aUcSzHai9wP88fjTje+opWexn3spur4qnKRnan+8R1/ma17aERQqijAxyaztOtwu52G7aSF/9mP+ewrVjSQ/Mx47L2rWmurE+w7ZjJABYjrUG12kDMxz0wOKtfWkIz+FakjduBRTqaRQAtFFFAwprdMUrMFUk9qb1AbsaQDCMDGKiklCELgsx6ACrOKjCfMSAPegdyLYcZIH55pjLxVkqM8fjVS6uY7cDdn5jjilYdylPE5l3KF2n1qnPb43HbyOhIrQ+1RSL8px61GQsnAOQORUtFRZzd1CzdX2uQcD/H2pNItC+qQeYwkdQTuK4/Sti8WOKMu/AHP1qvo6MLyWYwlAEOzPX/PFYONmbqd1Y8b+LGped4tUAA+Q2cHp24rLe3+3wQTWBMbB1aJwcMCSePrn+VM8eFrrXr+4fPyzmMU/4dWt7qGviKGOSSCBGmdh0jODtOfXOOPx7U5fDdHXQmqbtJaM6dtEg0dY9Q1Iz2yOwxbRJv3Ad5MHGf8AZ5rK1DTIr64lvI4o3iLOxTkDb64zwfavQ5NJt7m0R9Tt5ZLnJ2NA20ge5HBasi48OXEkBa2l3qMfI6jOR2J6dO9RGN0aSqJt8zOZttLXUNH1PSkk8qUWg1C1izn97GMlc98xlwPoK4e0jjnZmdxEoAycZ9uPxr03TtPuYfEFuHgkaUSxhVAVMfMBsz1II4rI8YeAp/Dt7JBHESo5R4iSGTseec44PuKqUklciD5amp5/JGTI237oPGar4O7GDz0rZuIoobgI0bBMDODz79a0YLbT4tNF0ixSSeYqeVK2ZWyOSFHRR6nGSRjPOBVNLlyw/NZpnOW6KHUndjPIA5r2Hwn4NsIbO78SSajcyWtvCx+yEbfOyMfMytyvIxjv+VeayXEciMVgRSTjAGK9T+GWom8sbjQrqSR47ldkCBQdpx056Dj8xWU5cwVKXJTscvL5MN3dy2kt20GSEW4cOwHofzPUE8darz26XsKbwiCIYUleZAfbJ5Hr2rb8WaNFo+sfYWvIC6ANIquPlz0z6H/PetXTB4akjit2Be5XrLyVZvYdCv4c1wpTemzFOrBU7RQvhWLT7aCxkubJWvHLeROIQWAX1bGfz7V05ttLurRZbWJWuIicy+YQhHZcHIGPwpq2weAyxzpK0JIKqvC9weOMZ9qrzeHdbQXF3btEwkG6KKQARE4GGPQ1i4VpNqx5z1d2E9rDdW627bY4umwYC4+vpXK+I7QWNusdtHC9uFYMynG4HpyDzjFegHQdRjtoZUgjkdlCtDnewX1OT0qKXQ7x7aSW70hnjjRhsjIOFHYAEk1caVVdBRm0zxvw7pl9ea4k1jbtJFHu80quQpKkYz69KK9NsXtLP7PGlg+ntLmaVHUoQSCOc9TgLn60V1Uq7a2N3Xkz55VacBzS44p4HFexY8psB0p4pBxihnUHjrTIHlgBk1ETuzQBnk9KcenPWgBQAOtb/jUj/hPfEQ/6idz/AOjWrAyTx2rc8cEDx54i9f7Tuf8A0a1AW0MN3x8tJjpSBcdadQVYXODSg80npU8Ee5xn7vVj6UrjUbuyLEJW2tzcOMs3EY/rVTcWcsxyc5p88vnzfKNqD7q+1M/SlFX1KqO3uomByKXOajDGpEXNNuy1Iirsu2YGxv71TkCqNtJ5Uv1rRBz/AA1xylzO53xjyqwgXP3WrL1TTTIpnjXBAyw/rWsFFSBR6Z9qlO2pVrnDkEHBorb1jS/LBuYRlD94elYldEWpIzasFS287QSB1HHeou1JTEdGNrxhl5VhkGq13bCdP9telU9PvPKPlSfcNbBGMenUfSp2GZ+k3b2s/luMDOCK6nerjKvXNXFsWcSp96tGxdJIQucSCsqsbq5cH0L0u9RkHNRbyU5pRI8bbHOQaHQZDDpWBqR5zS8HjvTWG4H6VJCAVGaBiFA6lWGaiawfAMDFSB0PSrqoMGpY1wFpoTMiG4MLbJlAbPatJW3IGzkUstqkud67vT2qq1rPbvmBty/3TRa4loXrd/MJx0HWrQReoasGGdxMwz5Zz0rWSRjGzMvSlKJSkaEW1h8/HvTmVM4X5hUMQ3RIx6HmpFU7vlrIq4uCFynzVcULHtz6VHG4FS7Q680mMQgFs9Pap4gHXb6VEsTBtjcr61YibyzkdBxSGBVo8OOgphk81ju6DtUzZJwOAe1M8kMwCnae9IQxUV+AuBTkPltjGRTz+74IzSghgvGE7GmMXAKEj8qkXAVQOtV2ADbT1HQ1ZiZVxu60CJYSc4PrSOu90bONvFIWztxUiDywc/xHNAEwHAOc0/cSOO1IpBXingKO+KAEViAc0K5zigsOgGM8U6KLc2M4xTEPChvvdKGIJH5ZpSpizvPHrQqFWDK24GmA7ysdPzpCCv3jkVJGwY89fSnlAfvDApAVniVvmHHYEdaYFaP7/I9R1FTvHg5j5HpTCwzj+dUmIaAH+ZW6U/7U6bUIytIYlf5k+U+3Q00yOpCyJkE43elUBcDJMtU7uLNvKd3/ACzPy/hUMwlRd8a7sURXry28iSQsrYNNLUR53qcBErxg44yPqa5uSb74cY29Qen1rqdchnS4Wbby6cKPbg/zrmbhftDDMfzdPvf/AFq60u5kFsx3gf3+Pz6VLHMGbaOGzjDf0qlbRSKJUkXoeM1LdITJ5i9CAx+v/wCvNQ1ZlJmgXXJDKx56gYI+tS7VIDgb07beorPhuvMA8z73TrViORoz8pIBPpg/j60WAmuJ8W7Z/wBYh3IWH6cevSpLO7gnt2kV2hVR84xnH5VGk8M4IkUMQcNj/Cmz24IeSBsAjloyefqBTTS3Bp9Cxp94kgKh1JU5XOBkHvW1HerL+7kKnjjI5Fczp0ZUM6vG59Nob+fStaLz9pDADPqOD+FU7X0Bbam9FdwoVZxGvchTyTWzbapavGBIs2wHr6VzSwTiQlGCjcOEQEda1bXTsvErzErtIwX7/wCTQmJo3Dr1mrDbDLnplgHGPcEem4fjVtNQuZ8tFACG9tiZ9s/j61mWFtBEiySPGpRm5wBwAO547Vfj8RadaxOIBHdMCqhYIiCSOCSSduOB0NXdIjlb2Ro28erzbGLx28R67ByR9T/hWqkdrp6GeSbc54Lud2R7D/CudGtXlyCEVLZD3+8w+n+TT4sDa/mFnzktIct/9apdVLYuNCUtzde/ln+6SiEcMG+Zh/T+dCuFGAMVmibPapUlzz2rCU3I6I01HYvLJu61IHzVNX9KkR8HmpLsXVNOBqurg1KpzQhWJyAy7T3H8XIrIudBhHNkqxf9Ml+Vfwx0+nT6VqqaeBVJ2IaTOLvNVstEXybplikXnyFUbvwA7e/T3rjb3xfdatfy2pb7PZdoU+9J/vH39BXrGr6Jp+t2vk3sO7+5KvDx+6t2+nIPcV4v4q8LX/hy+3OjS2hP7m4Awrex9G9vyzW0ZXMJQaEuXto08uELgnCkLg49O1ZEsRUlwMDNSrejywzKuR1qfSrK68QarBYWiEtI/OMnArRsxR2vw18L/aZhrd2gMMLYiVujsP8ADr+FetWazi6laRiUYZz7/wCFRaNpcel6bb2EYHlQIFX0Jxyfx5/SprnUorc7EjdpfuqACB+dOKshNl08uE9BQG2yAYzmoLUz/MZiu4novQVcEYJDHqOKokb84DZGBVVQ0oEvm/uGOQM/59KsXZ2WzuemMVBIrFU8sgRqozmmInMpOUVX2/3v8KiaJBF87FFz8zHqaWKZWO0g5ou4HmRVRyo3c4Gc0AOtyu3IX5SelWVViTu/L/P+eKjhjkWccgxAemDUGs3T2unTSR/6wjav48fypN2QFIsL/UTLj93Dwv1rYjXaNtZGkSQmzVhySckVrLIr4Ibd/Sue92JjiKBTsAjim4IqiR3tScCm0UhjjQOabRnAoAbIDIyxj+I8/Ssq6kN3esI/uj5E+vr/ADP5VduJzHbyyD75/dp9f/1VFp1v82T/AAcfj3P9KFqyol20tlghVB820fearJ4pAMUZzW6QMMUUtFMQneg9KDRigBuOaOnNLVeV3G0xLvJOFUdPxoAk4kbmnAY4pVXAA/Xt+FLigYw9KUDApcUnNIBpyfX8KrvaxMgDrnB79as4AqORgqEnp0pgUfsaNN5pAHoBSS/Jwq/T6+9WSjMMlmA9FprRgLSY0ZTWgYiSb5nHQdh9Kia3d2eOOdoWKH5h9P8A69arJxVRxsuIn7cg/Ss57GkG76Hzz4ptm+0agjtukW5O4+pA5qPwfc6np1lqD2Fz5IdADuOUzySceuAOa7zXPAmr6lqmoyW8cCwTTl4mklC78gdh7+tZFn4dvtA09ItStmjeaQ7jkFeBgYYe2OKxb0PUioys2P0XxPf6VdW0F2811A8u2Xecqd2MEEj5f/r+tejTQraw+czMImTeCBk7cZx+VeW3X2lLWWOCYShWB2yqD8uezDnOfX1rV1PxPd3egQwW6TYPylvLKuF4+XJ4zx70QdjOvTTkuUojXJk1+0vJHCRNKgjwCxXa4PQDqR1B7V6L8Srj+z7K21C6t1urOUCBYt20xycnr0KsAe2RjrzXkkN4/wC8gFpKlzOwVTP16f7OOOhr0vX9Vg8YeAtVsXZoNS03bcz2zMu7CH5iM8EYzgjHYHrihx5otCqNRqQZ5DrF/FdtmPTYbXBB+XJb9fX6VStr1jKU2oIeN+ExwO2eozW2tsJDFJdXG/KhF3fwjJ+XnvTRYQR3Lvat+/3BkVATux02jqT35AH8q5YzWx6rhZJoz9JsrjXNTgsrC23zzOFRc8e5PHAH4167ZeD7/wAHWdpNp+p+dsYm7S4gXZyeSmMlccd6zPhvZXOlXd9qM9lGL2Vf3cTLs2R9SwHbJxkdsV6zcIlxa+aQxDKCyg5yPYVvFKSZ5WKqtS8j5nu4Jk1C6N7IHuPOJbOSJMnO85PfP86v2mpMBjyzhMe4q78SoXg8Tu8EDRxCKNo2AwMd/wAc5rLjVZIAEKtxuBYfMPY/ielcdeDbuTBpo7TwTPPH4rtZreQlJiIri3lbOVbj5fUZwfavZf8AUhVNsCvK8HcB6V4bpGnvJo9xqcMreZYFGcg8Hc2B9DjGexr2TwzqL6roNvdyYd2HJzkt7571rg5P4WY4iOvMjTjURrtUAKOgHP602RJJoZFTKMykK4boe1NlUQAyqm4msq+a8+zPeWKvMVU5gyA31A712yehzpXOZg06GLW0uLydmkdmSJW4XhfmBHc8fpRU1jc2Wv3a3ZinBkOfJkX7rbeTx90+vvRXnxoPUtpo+ZQMdqXgdaYz4xSBS3JNeycFhxYucD86Tbgj1FKAOwpe9AAfUdaQEnrSnimFs8CgLDy2Ogrd8bD/AIr7xGf+opc/+jWrBUVv+Nv+R98R/wDYUuf/AEa1BS2MPPFA5pAeKeqksBjJPSgBUQs4Rep6k9qlllVF8qLv94+tI7iBNi8yHqfSolXjNQtTR+4rdRyZA9KcDTaCcVZiSZHpTTciN8A8U138uItjNUQZXPTrWdTVWOijHW5qCVXwR1rWgJkiUjrWJbQMq5Y5NbFrlUrk0Wx1FpVPepQtCYIzSs4WpuMUqGUqwypGCPWuV1bTRaSl4cmE9PaunDZ70kqpLCY5FDKaqMuViaucNSVe1CxazmOMmM8qapV1J3V0YtWErR0+/wBrCGUkr0U+lZxpM4NMWx05A5Ocj1qMBopAyH61U02981RBIRuHQ+orQK8ms2i0XY3DoN3Poadgr1+7UNtzHt7irKLn5T+FcslZmy1GNH0I6VIsW3DL071YRA0Zp0aAoR2pDIkZfNA4NSbl3MBjCnIFRzIkMJkAJbOOKdFA7OJFI8pxnNMRYypAYd+KQqGOF6imOrINozxRbyuZMFeB3pAEtnBOuWiXcO/Q1Tlsp0X9xIWQHJVua1F4c56GnsgIyvFFx2M60vtjCGbKHpzxWmHwhIO4DuKrSQRzLtdc++OlVJobu1jKQEyRnt3FJpMaNVJVA+YjJ5xmrcCkqGB5PSuZs5GuboJKxUjsa6WGcCYRgfdHWpnGw4u5aDED5vvVKqKw3HrUfyMOD1pyFl6cgVlYokEp2YeMEg8H2qRAn38c05BHjPUnqKCob7lAEnlqzErjp2qvIB5Z2cD0qXeYMGo5W86TdgL6AUARqPl3N2qVY9+AD19qjuYDcxhQ2xh3FTkFYAqj5lHDe9UAAmI7SOlP3eYcZqCPeV/0hgX9RT1iJYFCcd6QFpYyoBHSlDqcjGPek8w7NtKgDDpx60AIkmHx1HarCMj5xwfSoAoXHHekbIfKUCJslsgk4B71MrEDA4AqKNwByv1qUYx7GmANyRgYxUiyuuAeR70yNd5JHpxUu0FcHqKYhww2en09KjZB16r6HrTSSpz0x1qUSKwzTAh8vOWjJA9DVWd7nzo440+Qn5z6Cr5QhgR0NP25GNoBPeqTAg+zRMqnaR9DQ8Lxjlcj1xzUoZo+CARUySMTlsEelFxHnl6Y3dRGpBDMh3HJAAz/ACBrnb62EUgccHuK6vVrcW+r3KH5QXLofY4//VWHeQjLleS38XXiuzdJmS0ZhvbKZhICQ+OnY/Wo5lXayAfKOntWiIty7gM44qlKv711HSk0UZrrg8dKElIcbgWA/MVYkQZxioHQjp1qRk8k5VPNiIyD8w9RV5GWVVZeDjkHsfascAqOTmr8UgZQRw3TFD1BaMuKzrJvVyG6ZzzUv2ifAPmYP0GagjlEnBwGHX3qYAZqNTVWZMLy6PHnsPwH+FTrd3UgG66lwOMbyKqAVKoouxpI0ItjEb8vzn5mJ5/GtS3ufLwAKwUcrVuOY4pO5otNjpIroZHNXEu+QATXORT4xzVtbhjjBGM8mpKR0iXGT941ZW4OBzWBHdAYwatx3AJ5NA7G4txwOTUyTVjRTDuSatxyHA5oCxrRycdasxyc1lI4wOTVuOTnimiWjTU5qQGqaScZzVhWpkNEwNJNFFc27wTwpLDIMPG4yGHuDwaaripAaZNjzvxT8M4pkN54fAimA/eWbudknujH7p9jwe2K63wL4Ph8OaSk0sa/2jcDMjnqo/u/5+nrWvmrEFw0R67h3BrSEtdTCpT0vE0lXAHFEiAgnpikEiMgZec9RTfmYtlsg/pXQjm23HptADnByKnyAM9qrhfk29hSPv8AL2g/NmmIS5kZ8L5f7snByeTTldQgQA4xgDFJIXeYBRjaMc96VIiAzM20+vpQA0DbMoZVbPQY5q75anHGD6VXgAZSc7sngnqKtgYUdfxpiYHjpWTrETTWUqYyCvHse1a9MZARz+WKTV1YEzyyLXxbK+9ZreSPO7y/mVj7g8j86vaN40t9Q8uNbiOW4x88SnbIv/AGwfyzXU6p4XsL/L+WYpSOHj4P41xOofDSfZndFdhcn512t+dckqclsdF4SO0s9bjnyFlOVOCpHI/A8itRb3dwwP1FeQz2GsaVYTWiiXJA8prhixQD+EH06+vWqtt4+1rS2kXUbcSRlsqSuNg9Ay5B/EfjUqTQpUXuj21JEkPysD/OnniuJ0vxRBf2kF35bKkpwCeeenb6Vv2mqRTL8kowOCM7hVKomYuDRq/WmtltqrwScVEtyjDBBB7beRUnmrDE9wxBwCFHvV3TIsynePvuI7eM8RnAI/vdz+n6Vo28SxRhFGABVGxi3SF2GW6sfc//AFh+tagXArWCKA0gFGDup1aCEopaKAExRSmmFS3GcCgCGYGZTGh7/P7inxIyFgQoUfdx6U9I1jQKoIHYHrRJJHCnmSyBFH8ROKNgWuwtFZk2uwqSIImkP94/KPy6mqEupXc5O6Xy1P8ADHx/9esnVijWNGT3N6aaKBcyyKn1qo2qW+cRo8h9hgfmayI1TOTlj6tz+tWVKr2/Ks3Wb2NlQS3LRvp2Pywoo92yaY0k7/eK49Mf/XqDzGLfL8o78U4nPVyannl3NPZR7EhaTGWn5+gpu9uzSN/wLFMyveoZLmPKjcBk4JzS5mUoLoiwN2clzj0DU1hEG3Y59TVH7WjsFR8nODg02S4wDk0rsvls9iSW72HzMf6s5rF8SXkc+jXEUih9+1ETIyzEjGM96Rro3V81pbDfLxvYfdT6n19qw/Fvh/WZ7dr6G8jeygBP2aJCroRjMgOeT/QniiOpduWzZykkN1IXjhcG5j5Efm7iG7Z4/HHFZdlqs9lK1rqCPJg4lIcgMM5BHqaie606YyPLGHdj+9k3fvCOhDA9D75qrcXaGaMwZMYxmMRk8d8kk0S0Vzqhbqa6eRqWoI1jd3MSEgkhc854UjsPx7mtbxBa3WkeXILgQ2uoQm3fylX5wMHaw69u39awUhm0zQIrqP8AdSSSbUjjP7xVwfmZfx7/AKViat4k1S+CLd3UsnldPMOTnjn0HTsPrSjO6smRKMXNS6I05bO4u5IrNXK3TyBEixhH3dD7Z/Ku0GmP4RgefVrq2lv4lEsdpbsMheP9YcdvRcZ7k15TPrUtyYRIABEONowfz6/rxUsl5eT2ggjdmVmznHU+59aj2UlubyrRnrF6I7i08VeIJvEMd3MZZgzgmGFMIV/unGD+H6V694d8QWdyphliNi2T5asvDLnAIPQ89q+c9O1PxHpbmeyvnQg5fa2c/XNdLbfEGCK3xewzTTux8yCNxs59DRyTi7xZyVXCouVxse3+I/CWn+IrJo7tTn+CWNsFT6+n514zrXw88T6XOfskbzwqSUmtmzkdPnXr39663wh450+4v0VL6SKJlCiDcHKnPTB9a9FtNTi1C6ntQAGiwdyNkjPXjt/9etFZ76M4GnB+R8/W9prJv4NOltZIbydgojbKAnsT7Dr7Yr6D8P6b/Y2hWlp5iyGNMMw4Dt3PP1qzNptsZFndFZlGPMK/MPoagkMaNhVyQMBS3B96IUo03zETnz6I0JZoUUMc+6r1zWdeSXj29wLCCOOfy28ppCcb8HbnHbOKi024lbe0ypLHGcBkOfwPatC4voIWMClTMcfL9a1vci1jH8PeeulafJe6fJBdvCPPMigEyAYY8ep5/GithLyCJokeWNmfjbuAwcZ6E0UL1A+MlCj1JpxpoIFG6um5yaj+lG4DrTC9N+pouPlFZyc0L0pKKQ7D81veNj/xX/iMf9RS5/8ARrVz9dB42yfiB4iCjk6pc/8Ao1qLgkYSjLY5JPAFWS4tUOMNKf0qNiLdcjDTHofSodxJyxyam/Ma25NXuKCWbLck1KOmKiU8+lSbuOKpaGLd2L0pQCzAU1SWYAd+K1La0VFzIPmqZTSLhByZAbYNbsCO2agigC9q1ijBT0IxVAcVyTk2dsYpaCqvpVu0fa2DVYD3qSI4kFZ3KNL5lJPamk7zxTg3FKFHVetO4DQdvFPXDcUYU9etIV4ypwaACe0juITFKBjse9cjfWT2c5Rh8v8ACfWuxR2xhh+NR3VpDexbJAD6HuKqE+Vkyjc4gjimEVburV7Wdo3ByOM+tVmFdUWmYtDUYowZTgjpXR2d0l1ECD84+8K5upYJ3gkDocGnJXEmdOrlHyprRt3E0eR94Vi21ylxFvX5WHUVaimaF9yHj0rCcbmkZGwrbXB7N2qUfu5Af4TVaORZI1YVOrZAB6dj6Vz7Gy1J3jXftYZRqdEqwgRfw9qj3FhtJ5HQ04jcACcEd6AGSHB9SKdGoK5XvTWBc46EfrSI5Q8D8KAsWTgDpmoxuEnsaVZMjAxz2qaMIeCefSkMYMHilA5waXyzuP1pxXb0+971Nx2IJ9OhmXc3B/vLxVVBeadymZ4j3I5rVVdw5b8KcEZRwBj0NHN3CxWg1SOZAwO2QnGwnpUkupRxFY03F2qrfWMUt5GSu1m/jTjHvUH2W4srsSlBPGOQT1ppRaFqdPbt+7UnuOanjc7Ds55rIsNZhnDBsq6/wkYrRtrqO4RjGcEHpWbiyronDF1O4CmeSeqHI70HcW5OPapwxVduOtSMjOQMd6FYkYPanqFZcNkGmEFfu8igAK7/AJR1qSGJ0GCc0keG56Gp1JXqCaYEoRZhtUYcdKgJZJSDxjqKc5xhgT+FKwV4wcEN796YCFxMRtYce9SBWHX9KYsCgAqcGlJaPBY+1AiaNlHBGc09QUJ6EU2OMBAxPWppyiDKkcimBGJP3g2dfapEOZDvOKiiyR8oGTSKTuO480CJpiu4KvIqIjaODnnigDe2VPTrQGjOd+VxTAsxykgLjp1zSTt8hELZbrVUSPIQw+6OMjvTpo2AVgxxnk9xTETK3C7qnI9KhjJIzw0ft1qQsG6GgDkPGCFJVmzjfHsz7g//AFq5G2uvNbypG4xhfeu78VRLJpqNjOyTHPoQQa85ETLISvUdK6abvEhouzFLZAueetZby/eIHWnzuzNzuOKrShtuVNU3cEN3YB3daY2GqoZZlch2HsMVHvmLZL4HtRysXMXCmOlN3FWyM5FNR5MjMgI+nNOck9RmlsVe5abPyuMjIq1DcHgPz71nfaR5eGB4qNrkjGB2otcE7G+DmpFNYtvdSAEhsjup61pRT7wOx9KnlZopXLgNTI2Kqq2akDUjRFxZKnSchSKz99PWT1pWKTNeGfgZPSr0c54NYKSnGOxq1HcnOM0rFJnQQ3HA5q9HMeMGuciuD61fjn5HNIpG/HMe9XIpunNYCXDcAHvV2GfJpg0bsc2atRS7qxo5iKsxzn1oJsayNVhWzWZHMSM55q3HLgdaq5DRaBBpwqFHz1qTIoJZOjshG059qvR3CSHnhqzQ1LVxm0Yzppmxkheh6VHFJibbwW9KordOCPmJwMZq/aQ24kM8ZJZsAknpW8ZqWxzSpuO5NMsmSyAZA6VDZubi3XzBggkMT3q45AVs1ViVVi2xHaFOTnnNWQSK0URIHHptHWpo33ICV2n3qGPa67gM4pzK2VIOAetAicUjNtGcE+wphZt+CeD0qTGOtMBqknk8U/8AKk4oOcjHSi7EQTW8My4kiR/ZhXO6j4K069LMu6F/+mf+BrqWBJzSdOgyalxT3KU5LZnlmo+BLq0jKWxZ487x5DlGBHce9Yhude0lzG7vdL0AuCUlH0cdf+BV7fsBycc/yqnd6ZZ3vyTwJJx1YcisZUOxsq3SSOBs9fEsCqbwRTFRlJfkOe/PStKxvHmuUjmlSTkFY1cMXPbOOg9605/A2jTHcYpAfZ+Ku6b4csdL/wCPaEIT1bqTSjRktxSlB7GpbRlYxn7x6n3qemqNq8Zx707rXSkY3G/x06kAzS/gaACkJx3oYhBliB9Tiqsmo2kZ+aUZ9F5pOSQKLeyLI55zTgOelYlzr38NvEAf70nf8BWXdapd3IKPNtQ9VQbQaylWijWNCT3Nu+1uC0zHBiaXoSD8q/U9/oKwJryW7kMk8m9uw6AD2HaqckirgDpULXAA4IrmlVcjrhSjFFwzYOBTDdYNZ0l3tGSaqSX6x4dm2qDk1CZoo3Oqt5Cyg561dUdK5jSNbSeU7Au0A4z1rci1HzEywAPaqTKcGi1I20ZqlLeFc0ya7PbHNZdxdZU4IpthGLNE3m7q1V5VSUENKQp9PWsyO6kuCUt1MzDOQvQY9a07PR55nDXbuFI+5Dx+bHp+Cn60LUekdWV1uobQHacAZz71Sjh1bxLuS1ZtP088G4I/fSeoT+6P9o/hXV2uj2lq0hSEIXG1nyWcg9RuPT8MVbUxW8YWNFAAwMU3Fi9qt0ippukQaVZrbwAhVHUnJb3J7msrxAZp9NvLK3VDJcQuiBjwHK4Gfatma7OeCKoQ4muJJWwVjHH1prQlyctWeQX3w81LQ7RbqQJPhxgp93JPRu/OOO3PNUri31DRmjvYVCMOSrIMZ9MCvQfGOuyOBZxAYkAdz9DkD25FcjqN/wDarRhOgY4wCB39airF20OmCk4JmjARregxajaEpuyJVz92QcMvrt7/AI1wWsW75xNEAw5VsZ3fjXoPgw40qZAy+Qty/PJOSo4HFRa/pz3FsUitUIVuWZjvJ9Mdq8uFT2VVordWZ5TBbC6uVhIw7cKMcsewGO9blzoeu6U4WOJ0Vj8oVe+OmcYz7VV1G3W2nLR7oJUO5XDZHHPBFeza7rZ0nwbDO1wst1LbqrT5+ZpGXIIUDkfxH+Vesp8yTM2uVpLqfPtxbzwSPHOGWQN8ysMEH0qKNcONwOK6W41CxuB5d5G4K8BowMke+ec+9WU8PWccEdxdXcNrDMN0auDLNj3ReB+JFXKqorUylh1e6ZR8Oa1Homv2968SywqcOrLuwPXB9K9W0Lx7p8+vHUEwg2soSNSBuPrnkj3ryyW30GKJl+0alO/YrGkafzY1mCeC2l3wiYH3cdPy5rPSXwkuKWnQ+mIfFk+qv5VpPZq5GdqliSR26UsU9xJvGoSQIkY3kcEn1I9fpmvnyw1zVrUedbTtEDxuIU8Y7ccVs2+u6+ii5F+QCeD5ak56ccUObjqzL2Kex61rmr2YubO1ilb7XMf3ZSUKu092BGCOnHvVyzt59Kt55tT2W9rn97PvwMegPPX2ryCQrp8v27UJ2udRLB9hfIQ9cOT1PPQe/NWP+Ek1nX5YIL26Z7aHc8cIwFHB5wB+Wc4rD6wtZF+waN+88T2n9s20fmQuxL7fK5kdNp2szdelFcD4csJp/EFvLKS8rbixP+6aK2jKHVkyj5HJZx1pC3pTMk0V33PN5R2aXdTM0ZpDsPzTlyaaOmTUsUW/luEHU0cyQKLlsOjRpW2oOe5PSug8bypD488RiIZkbU7nJPb961c9Jcbh5cS7VHf1rb8bKo+IHiQ9/wC1Lr/0a1JXe5ekNEYQyDknJNJt96XvSZq9jF6u7HDinj9fSo81atEXzQZDyPuiplKw4xbLlna7B5j/AHz0HpV45I5/OoVBPFSjpiuWUrnZGNlYVQxHDZqnKmHz0PpVxTgVBcjPPSoaKRCtODENkimkHbkUI+R64qRmlGdy07BByDxUNu2V4qfOTx1FACjHrTgT1xkU3ap5xtahdyEUASBgwI6GkMRU5ByKCBksOtSRnPBoAqX1nFfwFWwsg6N61yVzA8Ehjk6rxXdOozx+dZ+oadHeRHoJB0PrVwqcrsyZQucX0oqSeF4JmjcYZTTMV2Xuc70JoJnt5AQePSt6CZZ494PJ6isprYNChA+YpuqO0uHtiD1GeRUyQ0dLa3Bgk9VPB9q1F27c5yjdKwUkEiBgeD3q3bXXlny5eUPf0rnnC+xtGVtzWDeXweR2NTBgR1qvGVZQM/L2NOKlCB2rG5qSkZYZ6DoaMA0q9BRtG7I60mxjNrI2VqZGPc4NOU4+9+dSeSG+ZalsdhVkKEFuRUwKyHPSq2wq2T0qQbSRjrUgSmMheOtJvI+9U6nC4YZHrSqqu3QYoASMRyKMkA1N5J28MCKaLdPvLnPpQyuAGwcA9qAKtxptvMwbbslP8a1mGK60eYuQ8sRPJWuhRweHXr3HWneXu+6cjHIaqUmKxQ07V4rmUjdjsAxrYJfAKtkVi3OjQzuXjAhlHQqOpqpDe6lpsjR3OJIuzjtSaT2A6ZgWKjfg96SSN1YbWqjbX1tcLkSrvHJq4kuXw33R3qLNFXJoYcglzz2NSFygIYZ96bH8yn0zUqq0gIXpigAUh0JB5pVY4w44pFh2MOefSphycEYoAglkMaBlG4elCyKwBfnPb0qWRO6jkfrUaiOZvu7T3FMCVhkBkbgdqrBj5pyTz2q7NFHDEOeTVdkHBA5pkjihT7sh59O1JAWbdyS2e9ImcknkinSPgAIOaYE8n7vay/jTVKyOWkGBUcMZwWcn2FLGhaZichQKBEqqVbAOI/SplwRhhlfSmlxt9QKWPJ6Hg0wHxARhlHA7YprAq1ScAY74pifM3PpQMpazCLvRblFXEgXcPwOf8a8vlkMMU5VN5XkD1FevMVKbGGQ3BHtXl+rWhtL+W3xwrHGfTPFbUn0Ikjk/MvpJ8Equ45GR0HpVzaQVBPJHJqWeIOAr7jjn5T0pgVlYZ+YdAe4robM0U76237HB5B5HtVR4yFwGxWsF3sQelVriBcZBqeYpIzkZ0YAnirituAzUBXGeOlAYg0PUa0JnXnioZOoqwpDYqOVeQRUoYwSGMh1PIrYsJEuVJ6YHK1jOPlotriS0mWRD0PI9R6VpEhnSLHLHtDncG+639KlAKnB61q6b5F/YK0ZBBX0+6eP5GrUNtDNE6Txg7SVbPVSPSnKnfYI1eXRmGCefalViRmr9zo8sWWgIlRcZDdRn+dUATnBBBHYjGKxcWtzpjNS2JVapFYioQT6U4NUlJlyOYqM5q3Hc8jmssE7TUqSYpWNEzbS5xznirkFxk5Dda5+Kc5x2q3FPg9KRVzp4rr3q2k/Nc7Fc/L15q7FcHqTSA3Yrg7uvFXkn96wY7kHtirkVwCBzRcTRuxzADrVhJAe9YsU/YmrkUvbNFyGjTDU/d0qrG+R1qUNTIaJs85p8Vw0LblP59DVZmIFV5btImUNkk8YxS57bC5ebQ6JdQimULja3oTVoIC2442+g6VyRnRjwtTJdPHwkjj6Ma3jX7mEsProdYoyOmAO1IE3Mcnj0rmDfXJODPIT/ALxpPtMpPzSyH/gRq/bon6uzqDGTNGwzhM8fWnszKDtUluwrlRO+fvv/AN9UouXB4kf86PboX1dnUIWZAcc96eAT1FcmLmUcCWTH+8aeLuYdJpB/wM0e3Qvq7OqIOKAvfFct9sn/AOe8n/fZpDdzHrNJ/wB9Gj26H9XZ1ZBxUYTacsce5rlTdSHrIx+pNRtMW5ZifqaXt0P6u+51zzwRj5pox/wIVA2pWca583cf9kGuVaYDpTRL6HFS676FLDrudJJrUGBsikf/AHjioW1qQ/cgjH+9k/4ViLJ6mlMwxwRUOrJlqhFGq+r3TdGVfov+NV5L25kGGuH/AAOP5Vnmf0NIZ/epc2+papLsWnkz95ifqc1AZVGT/Sqkt0OfmqlLfqIvlYHJqLs0ULF6SfFVXugM81my3ucf41Xe6Uc561LZdi7Ne457VQkvueDiqVzO2OtZ0tztz60gSRrSX2CctxWTeXZkBXOVNUZLtmJyag8ws1NId0X9Mvfsl8CpJB4rtbW9aXB7dq4uwtlknQ13NjZ4hXjmqSKb0NGK1FyuGJAPoeaZ/wAIvay3Hm3lzNLEP+XcNtQ/XGCfzqRXeAdOKin1IiM5NVczVzZgaysohHbQRRIOgRQo/IUS6mFThhx71x8usDP3v1pn9rI3Vj+VHMDhc35PEESOASck+tTm/wDOTcoOK4ue9BbdCu5s5zgcVpabJc3QJLfITncBwOORVIbikja815n2R5OD2q5Ni0siARk9TUELx2sYCYz3J71BdyefbPjoOtVYwbsVLmysvEVmtnMEt9QhXbBPjhh/db2/l1rzvVNPutLu5rS9iKSp1HVSPUHuK6b+1LY3RtGlXzR911PA9iR0rde5sdYtU07XYfMRD+6uYziSI9Mg9v5GhDp13TeuqOV8IjbpF4qkA+fuU9vuD/DFdNe6hHLZx+SwKtyUVCRnHt1qDTPCdzottf8AlSRX1pMySQypwwAU5yOx6dDg1RjaaxujGh3xty5B3bSeCPc14uIXLWk3sztpyjPVHKa9oP2okJcIFHzkE42Z7H39qwbsXbW8FrcXU00UB/dxyMTt9cDtXc6jBJOiTyOu0PzGjc/if84rIvdPiZDiNOQfL2H7o9D606eIaVuhUonAwx51z50DbDuxjIOBxVu6keV2d2LMTlj6mpr22+xam4jVmdkC46c9/wBKgjYyKzDgg16DlzJSWxg4NIpSKSCegqlLGSw4PTtWr5TzSrGi7pJGCKOnJ4FWJbK30+WYSuk91ygAJCIAfve5OOB0HfmtoSsZSV9CtNGlvp8cpnQMwAECHLL67u1dT4Zj/szQRql38ryuzW24fcUD5nH49KwdM0M383n3haK0jO+WRjxtHX8T0/Grmralca3dLDCHFpGQsSKuBgDjjsuP5VhWlz+5H5lxTRTa8l1a782RQFBIRcc9ep9TXUaXbNBazTsMHaUTtuZvlAH5/pWb4XtlutS/s5oJXmYgxFIy3Xn5sDge5r0ybwhYC2tk1mZkt4H8z7HC/wA0jKMLuccgDJ4HXPtWM6UpzUIqyE6kYq71Zk+E/D811fq0UahEzvncYHTAA9T7UV19tftPcwwQRrBaoD5caDaBx6CiuqnheVanJOs29D5azRzSUo56V3nKKPenojO3yAk0qxgDdJwPTvQ1ydu2P5R6ilfsUoW1ZK3lxD5zvf07ConleUYPyqOgFRDk5Y5NOzQo9xOXRD1xXQeODjx/4k/7Cl1/6NaudBrf8cn/AIuB4k/7Cl1/6NaruZ2MQtQoZ3CqCSewpIInnkCoD7mtq1tY7YDAy3cms5VLFRp8xHa6eEw8oy3p2q41tFIvzLz2I4xUo5HXmlxiudyb1OlRS0RRa3uLdt6OWQdjU0d0jnD5R/erQJHuKZJbRTA7lw3rSuOwFCRnk57io5h8nqaiKXNocqTLH6VMs8VwmQcUAVRjoTTsDt+NI6bW6fjScjGO9QMsxcHrzVnPGc81RUbh1xVqHcRtYZA7+tAD0cP3qdW3DB6VCFA6ADmph6CgCQKMcUm0imq+Dg8fWpgc0gItzev504bvTNPKg9BUbKxPykikUjk9cXGqvxjIBrPIrQ1zI1NwTkgCqAGa76fwo5J7m6sQEdrx96Ksy8iEM20dDzW7Km02g9LcZrJ1UYlX6US3CJDa3bW7AdUPrWspV1DKcisCrVrdNCwViSpNS0Wb9tfSQEBvmTPQ1tRv5sYZfmB7VzYYOuRyD6Vbsr1rZgucg1jOF9UXCVjdQr0wRUhUE9MiqySrINwOc+lWIn5IyK5nobJkqxhgMdqnWIDlTg1X3spFSrKAetSMk5/i+ahUiY8DDelSR7WGe9L5e44YA+9AAAUGAMj3pUAZuR+VGxgPlOfrUisrKS/yYoAkV9rYjbP1p6OwBBQgnrTNrEbh83uO1PjZwfUe9ADnUMQw4x6UeWx5Ug/UVMEVhnIUn1poDRMRjP0pIBqsW4dQSOlPEMbKcgEHsRxTlaIjJI96RYcksrE+gpgZF3oEDuZLdjDJ1+Q8GqpvL7T22XKeYnTeK3pD5aksG+uKFjWVf3mGB6giqT7isVrDUEu4srIuQcACr0N2yOQSM1mXWhQtJvsZDDL6CqkV3cWU5g1BWznG/HWk12C51aXIkIBCnPepwyEEFgPrWJbTx3Cfun+VT1zVxgJcHJU9jU2C5MXOD/dzgU1lVCNvJPpUYlPEcwAI6N2NRhZI5xKD8oPegZYZpFPzkke9KsbTDMZyw9aPM+0Od+AKUYVv3eBjqc1QiMtJDIucc9alTBO4c59Kd5gnQhlAx3pVAjGAOKAJEyXwTye4oLEOyE7ePzpYhgbs01kw+W55yKAHAc7QpJ75p4yqjAxikMpL7gOPUU4v+7znNAhvnAyY254qI+ehZkQMn92pHXGG6A9xTUjYzeZyC3U5pgPQGQ5bjFc54w04y2q38a/PHhZB6jsa6njOOmKrXW24t5bcgHehWqi7O4HkjjDelVnYh+vFaU8GDIhBDISCD6g1QAWWMOucGunfUzIc4JI71HuOcNzUsiHtUe2kUQzRDG4d6qsnNX2B2DPrVeVRmgCBCQcVLIDxTQO/pT5OdvHagCGX/V+9QtVi5G1Qveq55q4ks2fDWryaffLA3zQTttI9G7Gut1iSeK1F3GSp3AHGCG4rzlcg5BwRzXfy3Q1bwi85y0hQNgZ+UgjP8ia1izKS1uTWd+ZrQu7gOi4Oe4pblo74JNIBujG13Q4OO3+TWHYTg2zBuc4qeyjEpYSPhl5QA8Z7E+tPdak6p3RObaVYw+O2SvdfrUakE9eakW/Ub/uZAGeKY0yTctgE85UYrKdNdDeFbpIeDxThUSuAcZFSg1g01udKknsKCakSQjuajAzScigq5fiuSOpq3HdsDgHisdWqVJCB15qS0zfiuj61oQ3PyjmuYjn96vRXJA4NIq508MjHHX1q/FNhuc9K5+1u2YDn61oJcqzDmhoLG/DKTirayZxWPDMCBg81bSYhsE1NzNxL7ucVmzSkzFQeMcmnz3YSMnPJHFZglySc8mpZUUaKN6dKm34GapRyAdac8vAAPemmDRcRz1JqTzOc1REuRT/NGDzTuLlLZk96PM96pecPWkEvGc0XDlL3me9Hm+9UvO+tN86i4cpeM2KaZ6oPOQetMeckdeKLsfKXmuSOhqM3Xqazmn7DNV3uwGCkjJ6ZouPlNRrrn71Rm8APUVkPdDFQvdD1FIOU3ftuO4povwfzxWD9s4JyKBdgDORTCxum+x6U03hPQisNrsjqRSi9Hc4oCxoz3BYccGsmS6cBxu6HI4qYzB1yc4PFUblSST7Y/CgLjZbo4yDmqzXrBvvAelVZnMbcVVklyDnH1p2JcjSkvGYYJrPnnJzzUBn9DUEkhbpTSE5DmlJPWpEkwQeaqqfWp0qrEXNjTdTW1lUtGCK7W08S2/k8R4OO4/8Ar15/AqZBapWu1jk2pScS1K+jO6m18uCF4GPSsDUNVnKt8px7LmqltvkG7tWnCV2c496RRyzatIWwlpcSn6BR/X+VTwtqtww2QRQqe7Esf6D9K6FvJTkgflSpcAgAKTuOBiqQXIItOeOPzbydpQoyUGAv4gdfxzWnp+qSOfLACQ5GBUcl5DaqxndUIGdrHLf989TWpoOiNqIGoTQNBD/Du4aT2A7VcYt7EymktTR0y1fUHZ5ciBTjjguf6Vb1CFPIMYHygYC54FaiRrbwxxxqAcY2r09xVK7jJVhx83UjtWyjZHDKbkzz/UrGC1RxDEsakljgYyayItauLRikgM0I456j8a63VrfcGzzXD6jthLu3yqoPHrXO9GbxV0dZpPiJ4stY3JQn70ZOR+I9KvyPpWoyB7yCezlzkS2UgUEnqdpyv6c15PPctHGsgkMcoIYbeqj3/wAK1rTxOQVErbv9r7tNpSWpOsXdHosegLdSO1pqNneIR9yTMMo46HGVP5CqM3ha+tsB7KRdpO0qu9P++gTWLa61BOA2QAf4hz+orZtNbvIBi3vpMA5A3Z/rXLPBU5/DozaOIqRVnqcX4l0XZfRXbyLG0qEyKOOmB+FYksaxo22SNY0GQxxivZE8VaoQd32eXPBLp1px8TXBzu0zT27/AOqU/j0q44dpJNhLEt9DwaO5zdq1u5/dsHD46Ec5Fdho/g+6vytyLK6mywbmNiGzznpXpH/CWXq8RWVonuqY/pUUviLWJx/x9KgPZBWk6LatEhV32MW+8B+INSWOzVbTTtMTBYzyANI3qVXJOOwpLbwP4d0sH+0NUub+6xhktwIU9/Vv1FXZJZ5yTPcyOD1UvgUwNHGAMbQPcAfrTp0IwjypESqzky/Z3S6dbtb6RZwafC33jEvzv6Fm6t+JNNb5j5s7lz3Lms6TU4gSluRI/wDex0/Gqskd5c3kfm3TRoeuV/kD1roSMWzobCeL+0IlDDDbsc8nAPaip9JS1tbyFPLaSXaT5hXJIx60VokZtnzKEA+8wApfNVOEGfc1EeepNGKLdx81thSzOcsxNAxjpSUtBLFBpc03B7VYhtJJOSCFobS3BJshzzXVeMLIz/ELxGW4X+1br/0a1ZcNpDHyBk+9dJ4wG3xz4gx31O5P/kVqylU7GkYdzIihSJQqDHuO9S4FRqaeCD3rI1JQBnNOpgI9aeOaQIcAcZFA+am5I+lOFIYuT07DtVWe0RzvT5H9RVrkrnqBUJbccjpQBn+bNCcSrlfWplaOUDYckdqmlGVwQD7GqjW6ltyMUPtRoBOF2/e61ahkPQ9KzfPkiOJV3D+8Kv2zLOvykY9KVgLYwx680o5Pem7NvqKcGOM44pAPyGGGH40kcgViuaavzN8tPWNVk3KMN+dIB/J5BpwPqelNIG7kY9xTXZkiZyQygdelA9jkNXcPqkxHTNQwRiSRV7kgCmTOZZ3c9ya0dCgFxq9urD5Vbefwr0IKyRyTepsXg/4mJQA4SNV+nFY2rf65PQrWo0xmu55j/E5NXzYW93ZqsqgnHUdRWVSfK7s0hG5xdFXtR02WwmIIJiJ+Vqo96aaYPQtWt0YmwxJWtQMCAwxzWDVm3u3iIB5T37UWA6rSTvZkOemRV/a6TAgHFY+kXKm5Xa3DcV0ZGa46ztI2hqghbJw9PaEZ3LTEVcjNWVO04HSsrmhFG+w4Jq5FIep6VGyJJ0Apu14j8ucelAFvyw/zZIPtSqjqx3Hdn1FQRzkDHSrKTFucikMcm3GQNjemalBKrlwR6EU3y1kGSDT9jhflO4DsaLgRSr5q4PzD9afCvIGSCBilA9QVPsaTEqZwQwPqKAJvLU/eUY9qRI3VvlOBQhyQSNpFTD5yCMMR+FAA5bhR39RQqHnIGfakZsnuCPWnM+1RwaBDGVs5CkH1FNlWAqVnRXD9jU6uSOM59MVHJAJxzwRzTWgjGuNHmt3M2mMRnrGTxU+n6odwtr9fIlHAJ6GtONMqCCeKjlhW4+SeJHT0PWq3EMlKSzeWGLAc8VKjGIYyXT0Pas6bTWtTvsJmHrFIcj86zxqksV2BcKYsds8E0coXN/zUkB8t+fQ0RtIhK4yD1rPtCkrGZm8uRj0/hrat7hZMqUww79qTVhj42WT5WG09hVgRFACQdtQNACwYZ3VIZpBwTuX6UgHsVYnbwKRV+fnkGlGxo9ytn1wOlOTrg9qAFmVVUEcE9hUEmVj3Acr2HSrMgHXqKYBk8/dNMRHCxnAAByP4TVkEooRhjFRRweSxYE89/SntMvAbnmmAjjaD61GhGd2Bkd6e75UDuTioljLKVXgZoGcZ4v04Wt/9riyI7g5JHZ+/5jmuUMhi2xlBsx1Fes6hYR6jYSWbjqMqe4YdDXlVwmyV4nGGRipB7EV0U5XViGiNnVwMAc+lQMvPFI0ZRsKfl7e1JvYHmrEhWXqai8kkZNSb1P1pS2etAFZ49sfA5bpShCQoI6UJJ5skgP8AAcD6U4yAEjviiwXKdyd0px0qPZxzUrDBJNQyTIo56+lCuDDbiuw8HXK5uLBlyHTIAPY8H+dcV5/HAxWppOoGy1S1nQ4ywUj1HetIppmcmmWbQlJWhbhlfaRnoc1bjZ470bMHDVV1BzBrt58uNz7x+NRG9YNuXGTTuSkWi3+lSqAxGT0NK0yonOc1QaX5yT82Tmo5HJ6cClcdiy10wOQTU8GrshCyAMvr3FZTNzTC1Q3cuL5djr7a7iuEzG4Pt3qcEVxcAmM6CEsHJA+XrXZxQmO2SNpS8ij5mPc1DibRq9wpOlIHySM9Digg4zUmqdx28DvU8cxGMHiqZBFIGKmlYpM24LsqMA8Vp21zyORXMRykd60Le5Oc8cVDRomdhb3PFWVudxGc+9c5b3jbR6VYn1DyLYspyx4FQ0MvXd0rzfe4FRx3Ax1Nc+18x4yKkiuz60rAkdMlx708zkmsJbv5RzUi3TE/eoHY2xOccGkNwcdayVuj6077VQFjT88jil+0e4FZBusdW6003RzjIoFY2hc4OM003HuaxDdn1pGvDgc0wNd7nBqNrrOcmsd7snq1QtckLnOD9aYGo92wOM8CqcsgeRJC33c1Ra6J71A0555p2C5ee4I6k1Gbg+2Kz2mNRmYmmkLmNBrkj6U03Z21nGU+tJuJGKdhORoG6/2unSgXbZyWz6ZrOw/+RThG7YHPFOxPMa0d4owcn3BqdrlGTOaxltpu2atx2tyy8Zx7ilYLlO+kO7HrVLLt0Fa89ltAMwOe3FQJEc4SMkVSJZm7TnnrTglankEthoj+VKbJTjHH1p2JMvy/SrES9qsNaMhPynj2pBGyHIU0xBtYDgVA0E0jgqtXEmKD5kyKmS4tiRktGfWjcFuaumTW0VuFmTLgd+1TT3UIQ7cKtYzNuO5Zw4Hof51oWs6hfuKzY6hc1PLY13Kc17c5/wBEsXfsXnO1fyHJ/HFRRRatcnZLdGGNhyluAgx9Rz+tdLY6XeaqT5MJESfec/dX6mu10fwpb2MiSTxrK45/edAf93p+dXGm2YzrRgc74U8FQxmGa4iCwD5wGHMh7fh1+td3c7yUVUGD6np9KtkKpz07k1CF3Ek/hXTGKicc6jm7sqKhXeT1J6+lVpV3Bjir8inFVZBhSPWhiRzWpwHYcAZNefaxp5klcSkjLc49B2r1K8ti4OXbHpgVyWr2OA2FrnqR6nVSktjhJrWEROxjAA+Y1mrarcEytgoGIT/ax3Na99bvNcCDcVjAzJgdeeBSmFVUKFAUdAO1YqVjVxuZflbCCpIYfxDrUqXVzEciTcferEiKBk/h71XdGwDjaDV819yXEtJr1zEvO449G/xFWIvE8rdRKPwWssRF2YFSFHf1qRbcAYCkfWnzC5TTPiM4yVmY+nFRnxRcnGyI7ScAs3X9Ko29s88hAQ5HHI4rSg0lIcTzbiyrgZH+FNXIeg5NU1Cbo4QdPWrEFpLcyAzyNI2ehOav2OlvIq/uOWbqeeK6aw0WGEnbGATyTjJ/OtVEzckilYaZiMZG1e5HarkNpJ/a65CNBGvOV5U/XqSfyrROFuYbdY2MchKmRT90j2q+YFPyoBjpkda0SMZSuO0+3j85MHPX+VFXdPtxFIo+v8qKok+PaKSlqRgOTUiwlutJGQHBPSruAQCOhqZMaQ62ijXoMt71c3HkGqSkqciriHeoPfvWMrmsRy1v+Mhnxx4g/wCwlc/+jWrBArd8ZZHjnxB/2Ern/wBGtU9CjHU461KFGeKiHzfWngMD7UhkoAxTlOKYDnvTgCKQx+QaKQdelKTgUABcr8vY9aaF9OnpTGBYU9GIPNADH5GKgwM4xVlumelV2GGqWA7aGGD0qP7KUbdA21qfU0bEU7gEV88WEuUI/wBrtWghSRVMbAj2qvtEqYKg8d6qx2c9ud8L9f4c0gNAx7WzginBiBioYb4E+XONhHc96s7QwyOh6UtQFByOlUtYk+z6bKRwWG0VdVCD8w4rn/EdyS0dsG+7yaqnG8kKTsjBFb/h8CGG+vG6RxFV+prCHUVuYNtotvB0Nw29h6jtXobI5Oo63A8tV9ea2BaZKOrMpA6dqyrUb5kTtmuiwAmARj3rjqs6aaKUqtMhjnVWQ1z2paO9sTJCpaM9vSuoKoSQcjNOSPCEMQV+lZRm4vQ0kuY8/wCnB605Y2foOK6q90GOVTNbqNx5K1jFDGxQjaRxg1v7VPYhUxli0tnOkyngHla7SzvY7uPKn5u4rjc81LBO9vJvjYqe/vWNRc+ppFcuh2hO1vQ07zwn36z7DUIryIByPMHGM1cKjBHWuZpp6lbl2JgygxsDUyvzh6x2V428yJiAOSPWrVjfpeRnn514IPXNV0uK5eaMMcJQivGeRmkRivPfuKsq4Zcmgq4qXe1cGrEc6hcluD61WeGOQbs4PtULiSLG75lPApWEaYkiY4Jpxi3gNGfwrPUEkFRUsVw6uVIIPaiwXLRUqQHUj3qRUjHzKcGolvT0kGR9Ksp5MmDj9aBgMn7wBoXDNnOMcY6090HVD07VCcoCxU8+lMlsR0uPP3jATFDtPxswfWnDzNoYtwexp5kQMFbPI7U7AQLMqS+WAQTyaezJGSzc/SnNHuYcgr+tVms5ZJeGKxj170CImD30myL5fdu1Zl34bnecMZvMTPIfpXRLGYk2qoI9aeqs4557VSlYLHPNpd7ZIGt2EsY/5ZMc8e1TWN7G83kkvDIRzG/H5etdCkQGBjB9QarahpNpfRYkT5xyrjgg0r3DYkhMicZyPerCMkh+U89+K54warpjB0ZrqAdVH3gKuWGqwTSECTY/8SsMEVNh3Nc4Rt4GD/OpFmVlIChaqW95FPcGP+7zz0NWZNjHdGCB0p2AQHALN92hUDMHz34FCBXfDtkDpTpQVUspzjsKBExOEAHTOKgC/eIHbimxrK0RDH5s9KexMZG4YpgQ+YF4yM+lCyhTtB5of96NyKM5qvcuLaP5hhz0NAywW8zDqcdjXn/i3TxBqzTouBMu8H37/rXZWj5GCSwJ5aqviaxS60Z5QCWhPmBgO2cN/jVwdmSzzYNvGOh96idcZyKW5UxyHzMhTxkdjVWC8PnvDNzj7rCunl6md7EpAx700g/WpODyDxTCPWoKIUiWNy6rhj1OaTYTLuz14xUpX0qPeu7B4PvTuwI543OdnPrVIwvzkVpYIPNBOTgihSsJq5jvGy8kVPax5kj3N0bgCrssAdSB1+lQQ2yROHLFiO3StVO6IcbMu3779QkkyW3AdT04quBQWJYsTyaaWI5qLlWJPu89ajaQGoZpGwFBxuNTLEQOcU7CGck08J+dKWjT7zAe1S2yfaX6ERKct9ewpbDWrNHSIEjBuX4YjCew9frWk1yB3qiWOAOgHQCoXO2MjOSaSZfKWUvGUtnJBJ5qeG9zw449ayIOZNxZicYxVnecYxxQVG6NtXSRcqcikKe/6VjLMyHKnBrRgv0cBZThvWocTRSJsbTUiSlTwaNoK5yMHoajZD2/SpZomaUF1twC2Kjur0uAueOtZ5Yrj1FQySMce1TYrmLizjPWp45h61lK1To+BRYFI2FuMDg1Mlx71jLLTxKfWlyj5zYFz15xSi5681kiY5PNO84nvSsHMaQuiDQZ+c5zWYsuTS+Yc9aOUOYuvcFTSGbOMGqfmE8UgY9zmq5QuWmm65pnnc8nPtUOCaUR5osK45pM9OKj3E96lEOamS3yOlMm5UwxpwhJ7VfS2JOMCrUVmc/d/SmK5mR2xPUZqZLI+lbtppU077Yo2c+iqSfyrobHwZfXG0lEiQ95Dg/kOaai3sZupFbnEpZE9vzq0lj/ALOc+lenWfgazi4uZnmb0jAUfma3bTSdOsf+Pe0jVv7xG5vzNaKk3uZSxMVseUWXhrUrwZt7GZh/eK7R+Z4roLP4e38hzd3UVuhHRfnb8hx+teibieKTOP61qqKMpYiTOXtPAOkwDNxJPct6E7R+nP61bHhfQVlGzTUKL13MzZP51uk8ZoXIXj8a0UEjJ1JPqZZ8M6DKuTo9oMjsm0/pio/+ER0E/wDMOQf7sjj+tbI5OeOlLRyoXNLuc7P4H0Ob7sU8PskuR+uazp/hzpznMN5MnsyBv8K7LntSj8KXJEpVJLqcE/wygbpqH5w//XqvL8LEcfLqMZPYPCQPzzXoh4HWo5DkbAfvDBI6il7OI1Wn3PNYPhhKZSPtlqEBxuUMf6Vt2PgO0s7mITTtOg5YBNi8dic5/lXYIgjQKucDvnk07j/PejkiN1pvS5D5cUFsEjiVIUGRGgwMewoifzR5m0jPTcOcU28L+UNh2gHk46VLGmxADnPfJrRaGQxwCCvc9aQDC49KCwEmOSfQVWu5TGeMsR0A6UgHyuoyAwJx0HWq4jJQl1x9etOgZEcnyXQsO44qyyh1weR6UrFIy5It4OBWHqdiWQkJmuraNVXCiq01srKdwqJQui4zszyK/wBPkiu5ML15NZ7QORkLXpl3pS3RklWPjlSfpWBJozI5G0ADrmuSdJpnbCqmrHFiykaQu69OgqN7N57uJcfKBkj19K7X+ytwBxhR3pE0tDOSigKMAt3+goUGDmjmF05yAu05PYCrkWhYAM5H+6O1dUmnOcMkYyOOeDT5dNlmAjTYCSMsx+6O+B61rGBk6hkWmlIuf3fyj2rRWxHlrGRgyAhcD0rYgskhQAqSQOrVMm1cFlAxnaOuK1UTGU7lWy08woqvIW45yAKvM0cWArY9wMmjy5JBtXgHvU8ViuQWXdgcc9PerM2zIh+0trEnll/IYBVDR89OeewroY4AhHA6cY/WkhhfzmZuE4CgelW1Tjtz7UCH2yfvhRUsA/eLRTEfFVFOdDGxRuoNNqS7BU0U20hW+7UNFIZpY6VJFJsfJ6VTt5f4GP0qzjms2hpmkoVhkdK2/GP/ACPGv/8AYSuP/RjVzdvNtbaehPFdT4wx/wAJvr4/6iNx/wCjGrNqyNE7mCoGakHoaQpR0qSh20AcUoYjrQrU4gGkAZFHU00gqRjpTgRSAU00jjinE/jnv6UqikBGDxg1G3WrLLxkdKgcUDGCpU6UxQD0p44oAsRsR0qfcHPIFVYyBVjIC0mA94ElXEgDVAbeWHmCUn/Zbmhwz7SCamVvXg+1ILXIjqSxwsZhtZVyVNchcztc3DSscljWz4huVwkCYyeWxWB/WuuhCy5jCo76EsMRmmSNerHFas0vm3H+xEBGg9AKrWKi3ie7boo+X61Ig4APU1tNmaV2bOjxh5Gkbt0rVKkjjn6VWsrcRWoVjhiM1ModACCce3euKbuzpjohyj5T6+9PjUAYzgmmhlcjqDTijE5xWZQvMXzY3fSq11p0F78xT5j0IPSrKgjo3PpShQxyjbH7j1pbDOXvdOlszlgWTsRVPIrtWchCk8eQeprIvtGRkMtq3HXbmrUgMRHaNgyEgj0rXs9ckQhLj5lPfFYzhkYqwIIoBxTcUwO0imjnQMhzxUL2pz5lu3lzA9fX61y8F7LbNlGOPStm01qKSM+bhZB1z3rPkaegNrqb1q8ksSs74bvx1q/HWRolz9rikJPAetbyzCC3LL2xRJW0BO+o6RZBhoz9RSiUoB5gPNRxXIJHBxnrUzyxyOEYMM98VBQiXaBsLk1bjkjccEA+9UmtGi/eRAMPSpIHjZ9jLtc9M0AaKoD2U07y44ELk7KrvhAfnK+gqEpcXC4Ztqr0z3oWoNksf2maTeHwg6AjrVvzZo0JK5+gqvHNcRjDxhlHAKmhr+MZBLD2pklhL1pRtaPC/SlR4J2KxnBXg5qvFcNMRsHy9zUjyW6knoD1OKAJTDsJZck9znip0LMoOd3qMVVRvMYCGXKmrkTsAUfnHcdqAEKkfNtxSCB2bJcAegpykMcCTI7g08gAknkD060AIInXlTn2NKXPRkx7inJODyrcejUfKScnHuOlAxNwGGByD1rP1LTLTUSGeD5h/GpwRV2QggopDHuRTdu1cAlvXNAWObu9O1HT4ybOR57duoPLD6Gmafr1xFc/Z3dxngpItdLLqAtrd5cMSnOAPwqtfadYanaC6ki2TMMo44YGr5hGlA0Twg/x+lKxMZLjjHBHauUX+29Ig87YLq3HUA/MBWjpmv22qKykMki8mNjzU2C5rvITtK9T1oG5wDIetRxyK3zJhh9ak89TgMM4pANlmSH7pwB1qjIReXABJx29KSdHnlJTBQHp6irlrGi43qBTQxYYDAmxVwD61YeBJLaRJFyrqVK5xwakMgTluVHTFJKWkUMnA7UCPLdd0htOvWhfJQ52NjIdfX6jvXLvbxW18odzkLkADrXtOrabFqdk9vMmMD5JAMlD6/415XqVnNYXj211EFlTuOQR/eB9DXTCrdWM3HUziyE/I3zdhSCXnEg2n9KlaKORSOMn86r+VKhwcSJ79RVDJcA98j1FRSLJghQG9jSFDn925X/ZxTd7KcOgJ9RSAU5hAO9lX0I4FJHNvc5Xj+8Ohpry5G2M5Y9j0FOt1eJNr9T1p20F1JhgjOajZB1FPAHSm85qUMZhfelwOw5pXXbg9u9OAz2qkSVmiy2XyfSgWqA/d/U1aKcU37oyTgetU3YXUgEChgFQFz93uTWzFCIE2jrjJPqaisYD/wAfDjBb/V57D1q06b8KCcetYynqdEKdkV3bAqDJcnqMetX2jXb04AqiGEhIVTjOM0KQ3Eeq4JLdvSnUsMR+bJpxSnzBykRzSE1IQaYRiq5hWY6K6mgOY3IHoeRVuDWcsRPH/wACQVmSAk47U0LtHGaLILs6WKSC5XdFIrD9R9RQ9v6CuUbeZMqzAjpg4q7Fq19BJtMgkTHO8Z/Wp5RqRtiDnpT1gqrBr1u6/v4XT1KjcK07eaC4XdDIrj2PT69/0qWmWmQGAg8CneSQKu7RnGRmnBB60hlBYW9Kd5LZ6VoBB6/pTggz1FAGeIW9KesB9Kv7AP4acFUdSPpQBRFv7GpFtvY1fWMt91Sx9hV2PTLqTGIgAT1Y4ppNi5ktzIW29qlW2GOFz9K6K30EuT5k4AB6IpNbFt4f02PBdWlI672x+g61Sg2Q6sUcUlqM8gkngKBzW/p3hTUrsZFv5Mf9+f5B+XU11Ucllp8Z8iCGMjsqgH8TWjb3j7N8hAJwSc9q0jS7mMq0vsozrDwHYoE+2XskjkZIiG1fzOa27bwpo1uFItfMI7yOT+nT9KlhvAw4IGfSraS571soRXQ55VJvdk0MEMCbIYY419EQKP0qQABdoAA9BTFbIpc1ehmLj3peKjAy5OTxTs0wHUUgoPAz2oARhnC9qd2qNSeSaXvQA8GjvTc0tAChlJYA9KWmgDJIGM06gBOOp6d6jQMcu3c8fSnOfur1JPSkXeM+ZgHsB2FADwaWm8/hTqAI5hkKMcZ5p24Y4PtSuNy7TyvpSEdBjigACgdOvrUbRK5yR0qU4FJ0yTQBEsW3kkn60Mvp1pxYtwAfrS4AFAEez1prJ6Cp+tNfCpu9KAKqWuEYHpkms+504TOAqgDJLE1pzS+XAsihmyfujriopo5HtXDKyMRjCnJqbFKTOauLNpZmjtdxZSA7Zwif4n2qzHp+wE8knqTW7DbRRQqkKBVHYf4/1pDDzmpcS+dmOLXB6U/yNiHjJ9K02iwOlRCPzMkZHp65osLmM1omC73yx7IDgVPBZ5UNIMsR0AwAf61ZeEB8DOcct2FSW6ny1V/vAevWnYLjVgUY4pzoEwMZJOBVgR/WgJmbPPyjH4mgVxFjAFPC4qTbjtShe9MVxYU/eA0U6PmQYOBRTC58c3NstwvHDDp71lOjISGHIOK2wcVBcweepxww5rkhO2jOhxMmilZShIYc0ldBkLnHPpV2CUSLtPUVRpyOUYMOtJoZpc5rrPFUgfx14hjbAI1O5x/39auQikEq5HWui8ZsV8feIWU4I1O5/wDRrVnJXKTIsEcGnBcio7SZZ0AJ+arGz0rB6M0RAUIPFKDjrU+Mct0qNhnntSuMbSc9wKXPzgY608pzg9KVxkYBA4OQeoqQEdqEg25YE80EbfvDH0oAkUZPFRyJjqKkXOfl5FO+VzjNK4FLYeopp3Zqy67Wx1FMKgii4DVJHWrKtkVBgqOlPVhnB4oAkRjnBFOkkSOJpGOAKAOM8YHeud1XUDPIYY+EXrjvVQg5OyFKXKrmfcTG4uHlJzuPH0psUbSOFUcmmgZOKtx/6PGJP42+6PSu/RHK9dSedgDHbIcrF973NT2gJlD7SyqeQKoJxjPJPOa6zSbZIbVWb7zDnNYVZ2NKcSzDcxShdrA8Y21JgDhTj2qrNaRF90eUPqtVzLc2xyyeZGP4h1rm3NtjUUA5DKQfWhGkUnJ3Cq0F4k0YO/J9D1FK04BIBwaQ7lgOpfsp9TSNKqj5sGqLT7j61E8mB978DRYLl6S62LtHzD0NUpbnAyDs9hVSW5KZ/nWZdXRc8NVRiJhf3od/ujI6kVWSdWqIqXbqaVbVj0Bre0Uibu5Y81VB+aoWnDt0JPrVmHTGfkg7e9bemaLE+GK5X9ahyjErVmn4RUG1kDsAzdAa6xV2ICy5A7VmW9nBCq7V2kenWrv71Rujfd/stXNN3dy4qyE2BtzwrlM8j0qzFhlDEAge3SoIbhXJ/wCWcvcHpVoAKCfuk9PQmpGMaTB5HFNeON1BPHpg85qXAc7JFKueg7Gq/lJay/vclDyrf0oSC4QwlGzNKDnoDVwPzjKnHTmqsy2xG45bPoaihs0LF9zqp9TTsSy686MdisC3fFEcMRP7xlY+lJFFakkqArYwTnrTzawsdwb6nNAFhPKjXC7RTEVHcoAhHfFV1gt2far5P1qzFawQA7GIycnmgZYEEaR7QuMHqKZtKOdsnJ7Gnt5ZTBb9aYE3MCkgJFADXaSMfvUO0/xCpomymYZcn0NK3mqCXXcPaodgkOSpX370CJvMbfmSDHHapllhkTCnYfeoB+7UhZcn0ambyp/ewjB7rSKLBT0KuT0IpqoW6Nn1BqNY4pOYpGjNThZVTCsH+opoQ/yI1UDgeueQarsplk2ocKh4xQ8kpHlEbfWnqNjAL0piBAUUs38XUetZ1/oVtd4lgX7NcdpV6H2PtWwUIj3kZOeV9vWiMhT8x/cN0J9aNgONe91fRZD9pg8+DGNydvc1b0vURqDna4AHPXnPpXSScMVYI8b9yKxrnwzYSEyRCS2mJzmJuKd0I0Itqv0x9asEo4A6VzTXWqaRKftqfaLQDAlQc/U1ftNUgvRutpVYdCDwQaVmUagZtxXaStSZKqCvI9KiilwuM896fkYyOppAKJCzYz16is3XdCg1y08ptqTp/qpcdPY+1XkUDJY/MelP6qBnj1pp21EeO6lpVzpl09tdRbHU4B7N7j1FUSHUcZIB717Jf2VprNu9tdJuXqGxyp9RXmOraVJpd89vLkY5Ruzr2Nbxnfcloycq3BUg0jLx6j3pZCFySaiW5ibjfirsIDGh9jTlXHfNOwpGRz9KTys+ooGIRzSY+tL5RH8eKQoB1kpCJI+QQRx70zcEHJFRF4lPzMSfSmGZCcrDk+tWiSbzt/3FJ/Sren2TXszbxiJOWyep9KZpOk3Gs30dqjEZ+ZsdFUdSfwr0BfD1rbxRxwQHYvOSf50palwWtzm3tio4XjsPSmGBgPSuo/s0NDnbyH6A9qWTSVPasXE6VI5JoyFII7VUih54OBnpXWXOk4QkDFUY9I6tg5pWaBu7Mgpgk4pCtasmnOPWqptmU4INTqVoUilQyJ271eeMr2Oai8kKSSctTTE0UxERUfBYgDkVedML70zyRtzjBqlIhxKXl85xzUaYLNzznpV8xZ6VFJa4O5QAfWqUhcpWKZPSk8vnIyD6jirKRkryOaXyzTuLlCG7u4lwLmQAdic/zq4ms3qADcjfVapiOnrEPSjQNTQj12cnafLJ+h/xqT+25d2AULegFZ/2dXGMY9cU+O0VCCg5p2QXZrW9/PK2JH59AMYrUgm+XJrno8W4Ltkk9607SUmHc/H48UWQXN/TxskMhYl24H0rSmu5GU29s4+0SD73JEY7k/4Vzq3EkjCG2kCnHLAc/h6Vq2IFtAIwSSeWJPLH1qkyGb1nm3gWNpXkKjBkYjLe9WHuZShETFR3Kj5j7CslZjlQPwq0kp71XMZtFtbmO1tt80JRVO75iCfqferFvvvTHczEiLG5YM4yT3b/AAqkJhxnGB27VZjuMk88GqTIcTcimC9DV2K59659JverCXOO9NSIcTpYrgEdasfaAuM45/X2rnI7vbzmrNtdiRi/XsM9qtMho31I5PrS5z2xWb9rxhQeTVmKUAYLlqoktZpGBfoeKjeRQo5AJ4Gacn3eaYiTtTdylioPzDqMUdqUGgYopTTc0uaAHdKXP/66aWCg5YD3Paqjb7uORDuiiPGe5oC5MZVa4QKQcqcH1p7AkZPX2qC3jRGHXeqhcnvVjqMUBcVPuinU0HAxRnigLjqDUQk3rmPmlUybuV4oFcViOmfeo9+9s87ac5AfnkYpoXeOOF9qBi5LgYyBS4xS7cDFBHFAAKdjIwelMFSgE8igCnLIkV7DGcqrAjhcqSasY2xnI5IodUlO1vuqQ3404pk5JoAiRAEGGB45xSPhRuPSn+WEBI4yc0wAucngUAVyxcA9m6e31p/k7h3BHTFSFNoJJxuOTTVZyDngdqQyJkZwUHGOfrSxrtwOnqTVlACM96ZKQCBjigB33FzjNRwAgsrY3ZzQ25TlQSBS27bwWI+fvTAmxn6VBcTiJNxOFzx6k1OxSNMs2B1qCOQTo7shUA8ZHX3oEPtXDzlTwwGdvpRTLGNEfcikdeT1NFIZ8k7O9IVwalxSEc+9cDOsoXlvvhMij5gelZZ4OK6Qgbc1k31mYj5qDKHr7VtTn0ZEolGij/OaK2MySKUxuD2rrfGpH/CeeIsH/mJ3P/o1q46um8ZTbPiH4kUng6rdf+jWqWhlO3lMMyv2B59xW/GRIgdT8tc39Ku2N20TeWT8rdPasZxvqWmaLyrLlF7U1eKQrtO4d/SnkZrC5qRyMY2GV49alVgwBFA5BU03yynTpQBMKUITTVYEY71IretIYbOMU1sA8LUxwBnr7UfI3ekBW9c03aM8VPJH69Kj2Dsc0wIycHBGad5YPQ0/G0VlalqItFMUZzIw5x2pxi5OyE2ktRmq6h5SG3iOH6MRWDQSWOWJLE80KpdgqjrXdTgoo5ZS5mSwJl97fdXn61JkyyNI3foPSkbB/dr91e/qaeiF3VVHJpSkCWpa061a4uF4+QcmumI2jAPA6VQsoxawAfxHrU5n44Nck3zHTFWRMGIPJ4pHmHTPFVmmyKjBLHipsMSa3DEyRMUkPp0NVvOlhOJgf94VdY4GKY4DJg1SCxH9oRFBUh881E8xYHPFRSWxU7ouD6VGJMnZIuD3NMViOVmJwDxUYgLnpV1IAQNrZFWIocHpRewFSKzPBYYFXo7Rf4Rk1YSFmA9M1fgt1ZgGG09jUuQ7Fe2s2Lrxit61tVRcltre1NtocNgqTj+KrQUZyPm9hWbd2UgUZY7vmA6FalhkKN8p3oev+zUa/KcodppylHPTY/dl6VIyaWJLr5g216WC4aKTyZF3L6mm7CpG84bsy9DVnYGQCTr2YUCLhTfh1G4Yqu6s6MQAwHVT1FOiZoMEHcKlkb/lvCu44+daYGZBbr5jvbtuK9VapmdZPkbKN71Mse1vPhPBGWTHNOKrM+RjkdD1FAFGO32S4mYgHlSOlXHt12bVbg+hoyI8wyDPYE1HGjWs4LHcpoAda6QqzCV3bHpmrxtY8kZOPenEiQZDYz0xUD3LQcPz70XENa3LLhWPBpkdpKM7XOc09ryNU+Y4PYUqXoVdwGc0DJEiuUGQ5Le9TK9yo/eRhh/s02O8RjubcPwp7XSeS0kcinBxigCNpYicOjJ74pwSRVPksHzzg01LtWTMmCfpUwkhZQQcHtQBGjq334yjDrmn7wql0bkdvWmhGZ9wlBUdj3ppy0oaRAqAcEUWAZHK7yssn3mqwjY+U/gaZJbkjzk6ihSSORiqEWRKyEhvmBprDccN/q26D0pizCNQJFyOgNSDpnGUNACqdpKsOO1RsjxuPk3RnofSpn6JkbkPde1SmRYwARlD1PpQBX2hsqVyD1XsfpWTe+F7a6dpLaQ21x1Gz7pPvW40XyhkOVHp2oTc0mWxj26H/wCvQBx0k+o6LIIL+IugOVmQ5GPer0GtRzW4kRkZugVTzXRzmPBWZFZTxhhkVzt34aj81rrTW8qfrsP3W9sU9BbGrZv5tsGl4b0qfcqLtPINcg2t31hcLHf2piwcE9j9K17TWoJ3GOjHgUct9gubARRjYeT1rI8Q6RHq9mUxi5TmJv6fStbeqjKk5NOJViCTjHepuxnjE9u0UrxSph0JDKeuazTbLA5IyUbqw/hr1fxN4cXU42uLcYvEXnHSUf4151NC0UjI6MjDhlYYx9RXRGdyGijtbA+bP0NNIb1NTeVt+7wDSFKYyswb3pPKdqtgAUbvQUwIFtRjJNPCKpwOp4p3JPQ12fgHwsdVu/7RuUzaQMMKR/rG/u/Tuf8A69PcTOk8MeHl0nS0eQZuZ1DyNj7o6hf5Z9/pWy1sAjMR0XGTWykBbkrtx2NNlsvPUIvQnk+3eq5QUjnBaNbTo21TCxChRwUPr71c+yAnHHI4zW1JZ+YhVcLyMHGe9ZzwS2UlrHCgkWWRy7OfujrxS5Sucw9XheK0BRCXPRR1qSz00i0TzcFyOcdq27+3QIrM5XPAIGamhsJIoVXPI46dqOQPaHOT6cuOFyapS6UAclcmuzNn/s1FLaAAEjI71LplKocLNo3OdtZs+kFSTjFelNYK/Pas650sNE5KkhgcDFQ6Raqo80ms3Rsbd1QPC/QqQK9D/sBVTgdRVCfQyQflrNwaNFJM4kxYGKay5TNdHcaOwYjacVmXWmPDbllzx/jU6odkZ/lcCkMWa0fsbFRjvzTDasDjBNO7CxQ8k07y8dqufZ39KcLZ9wzwKakyeUqqntUoFT+UM4p4t/y71SkKxVcAKSRnAzTFhfUFjKjBHRT0HvVs2zSErjCY6+tWdPttokQDBVsZq1Ilot2NvHawCOPv1bu1aaNgCqyREGp0Q0JisWlYl0I5P8qtRz7umfrVFODVhCe5qrktFpndxtVwD61Yik2gc1QVqlEnvRzC5TSWf3qZZ896ylkx1NTRylj14p8xLiaolyuM1dgmAAA4ArCLzKwYsBAqngDLMc+vpVmCZnIxwuOT3zVqRk4m8s22RWzjbnPvV6K5PLH5R2z1Nc+kskULyEq+MsM8DHXFXLK5adVldShHAB5xWikZuJvRYzvY5Pv2q4sgIrIjlNWY5hjg5qkyOU0Qwpc1UjmyanV6oRLmk3gMF6k1GCXPBwKa0eWBycDqM9aAHlN8u8tkDoh6E0MxlkKKw+XhiPWhn2p8vzNj5RSQp5cfQAnkj3oEIpSOQ5Iy3PJqfPpVG5kaOVmji3sMZ5zx9KtxsGQNxkjt0pgSCmyHbGxB5AzRmmuNyMPUYpAOiVY0AAxT854qNWyKd+lAxGTKkbuccU5AFXGc0gbIpV4JoAcKZKuYyAfrjtTs1DK+XRCCAx4wfve1AD0xgY9OBmklLbcL344pTAGk3qzBtpUe2aXDxt8u1hjnPWgAjDRhExnjJJ65qQnjPamg5XJ4yOtRiLMpcvwRwPSgBJGd2AQLsB+ZmPX6U4sMZ6CmQyLIGUlW2ngDp+dKU804HCetADEjQSF1JYnrk8CnbdmSx461LgAYAwKhlfPy4zSABIm8/MfagSBySeFFRzkxws0aB3/lUixBlQk44yVoGODFs/Lx61CIWi82UNuLHofTFWGAK7e1MmZVQhj1xwKAIw7SIPkBwOR6UXBKQg5CL3J6CleSOBcMQvpSl1k+UEOvWgQlm7HaAxIyeWGCaKlhT588nPvRQUfJiqDilMf7wVWiuHhYJMntuHSrbMhAKkH3BrhZ1EaoxlI/hqTyldCpGQexqTGJPwpcDPHWkM5/UNONtiSMMYj+lZ/eux+V0aOVdyMOa5zUbH7HNlcmJvumtqdS+jMpR6lGug8c/wDJQvEv/YVuv/RrVz9b/jr/AJKF4l/7Ct1/6NatiDKt5zuCMeOxq0Dg1mA4II6g1dhm8wAHrUSQzYsbrd+7c89jV9U561gKxXlScjvWza3InjH94da55wtqbQlcsGPNJkqcEHFSK1LkHg1iWNCxnkcU7oeOab5fOR0qTZjoaAANg5FOAz1GKjGO4Ip25l7g0API4wD0qI4H3hilaRF+fftx1yeKwNU1otmG3PHdxVxg5PQUpKKuWdT1VbX93Ays5HXqBXNszO5Zzlj1NNzuYknrT0Us2APrXbTpqJzSnzAqljgDrUo/d/InLfxGkzt+VfzoUY6D8qbdhJD0Un5R17CteztBEiu33/5UlhYbVEsg69B6VeYegNcs5m0Y9SMls0c08YYd6fsHFZmhEB608YFKVO6l29OKLgIVzzmm7SalC8UcGi4yHyyOc800wRuPnWpyOeKAuTyKLiKv2R0GYW/A0+OZkIWRCvHWrscQ4K1ZEKTjEi/pRcdhbdoTGnJDN2rXhtiuCBlT1z1rBexnhlDxZdFOdta9nqaP8rMUkHVWqX5AvMvxRsjFo3xnsakCBQzE7X9ulUpp5Z7iIQ4j559DV/DFcMBjuR3qLWGgDbTkqHU9GHFSKkcoJTIz2prISmE4HpT4z8w+Uxn+9SGORXVcAjZ0wR1pygAbUJjOed/INSq+QVkPIP3h3pzQrIBnp60ARq+wfP8AI3vyDQjnccv5Z9R0NRyrKDtX509D6UqBnkwvy8Y2tTEWuVId8A9iKcYcN5vRz0YdKh3FGK9j2qdSUAOQw9DQwI5FDjE42uOjL0qBxLGwUkPGe4q7hTGRjKHjp0NQiE24JXLr6UAPhJiAOcp6UMkd3kg4IPQ1C7ZYGIkjup7U7AkBeNij4wRmgCjc28qXBkblBWjbeSUDFOvTmljmDYinA6dfWkaBoXLREFO4oYIulVIHAx7CmC2gbJ2YogmU9seoqYfM2R0pAQNaxdCDgUqwxvwBwKmZwRtK81FJJ5MfC8npTENMKF9q5yOvNWQsbjy2z9KzzJ1eMqX/AIuant5iBl+KdmBdWHyhhM7R1B5psgRxx8rUG6RV65pjuskZfv2oAgVjJOYWXKr3q6A0S5jwy/3TUNqjJGWcEk9+9ThdqlkzjuKYBFIDkJ8hHVT/AEpkySSriLAX+IHv9KRjFMQcFWXv3qYsURVf5l7OO31oAjhxaR7Y9xUfeVuTUmFKF0JBPY07IJAbHThqhkb5uPkPr2NAETszyhGB452//XqREOCzD2GKkgJuIxuUKynrihy0bYYYbsexoAjlt7e8jMFxCsox0br+dYc/hCEnfpk8lvKP4HO4frW6ihjvKkOfep/MaKTLnPuOtNNoVjiZNR1LR7rydThbGeHUcEVrWmqx3BJOAD0wa3LhEvojFOiyRsMfMK5nUfCk1s5m0qZk45ifkfhQBtxvuZSpOO1UNa0Gy1pGkZfLu9uFkQ9T2BHcVn2OveQwttRge2lXjJ+61bqToQDEQynnK9KW2wzyK7s5rS4eCdCkiEgqarFa9M8Q6EmsR+dblVvlHBP3ZB/dPp7HtXnc8DwzPFNG8UqnDRuMFT6f/XraMrklQr60YFSEGn21rLeXMcEClpXOFAGfxPtVCZreFPDk3iTV1tkDLCvzTOP4V/x/+tXu9jplrptlFaWcZjhjHyrnJ/H1NUvCfhuLw3oy26qDcyYM74/i9Pwrakwp65IPbvW0I6XM5SIPKHIx19KglQW8YSIMWckL9auAGGPcSTk85ot/34NwfukkRY7L6/WrsTcaISAAeopht1J3EDcOntV0r6VER1GDmiwXKEcEQn8sgZ65PSrPk85pBZjzfMZmOCG2k8Vb20WC5V8kelMeAEFfWruwUmwUrBczkhJG1xila2U9qtTjCg9x096iLnbyQMd6LD5isbRcdKhfT1btWiqMFG5t3uBTZZI4seYQCeABySaTihqTMSbSkbPy8VhappcezYkLvk4O2uyYmQ4QdfUUn2UAYYc1DppmiqtHCx6DsjHyEDHQ9RUb6Oo/hNdwbVcnioJLFSelQ6ZoqxxDaQvoaibS8D5VJrs3sAOxqpJZuThVGfcVHIXzpnGHTZEc/IcmpvsDKm6QcAZP0rqfsLA9BnvSGzweV57cU+UOY5GO2eQNIYjFH/CG6t7+wq3aWBSHlSCTk5rXmtmlvIogE8tTuk9c9qtC1IHIA+lHKHMZAtsU4QH8K1RZnrQbcDAxRYVzJMRXpUgVquGDYx4zk0pgPYUBcpbTT1Bq19nNIYCO1AFck5xU0ZwKcITT1gI7UEsmibuegqaOQ5YIMkHJ7CokTAxTsq2+NTkj72P5VSIYr3m5Cz/6leDn+L6Vq20rAdufSsowrsEaBckjcWGcDvV+P5fwq0zNokvhc3FsFiuvL3Ebm28BT6d81ftHjs7WKJWdgg27myST71Q3M8ynP7pO/qasZhEo3gNIBkAnn/61WmQ0aJnldSyNsTHBIGSf6VagkaO3Bll8xsctjGT9KxIraeW6eW7uBJHkGOJRhV/xNaQYydRx2q0yGjTjmZlGRg+lTblA3EZIrMF1HFGHeTOfTr6VbiZnAcjA7CncmxLBCsJlfPzO2T7DtipFfccqDj1NQoyvM4zymBtqwWqhDdhRywLMG689KEj8sYQEL1pyGnFwg3EjA9e9AAM0hYblQnryPwpsbhowd2c80kgOVcYyDj8D1oAfuIHA/Cj7/wApOPWkZgnOOR6UIPrn3oAkAAAA6CgnB+tGaDz0oAcBgVCyLLcox5K9KeZMKT3HWqttOGu2TaxIXJPYc0AaGeKjdiWJA7d6bJMsQy7qoHBLHgVJ2z1FACLny/mOTioSqgkHczHqBwKkDBm47VJ2wCCKAKsWCSCoXB4UDAqVDglTx3pzBR2FMK7juzQBJn3FRsuScDrRsx1J/CngjGKQFU481omOcjPHYe9SqZEX53GOgAFJJw3PCnqfWnHJUEjGfegYIc5Znz6DFQysBIGOd27Ax2qUdACRVaeWOa4ECk7mO4t0IxSGSi2Vzul+Y+nanIqRkqijPfFPLgttyMjiommjhbYoLOTzigCdXCyDiiownzBi3zdhRQB8rtGrZVgCO9VnsWj+a3Y4z9096uqyt97hqlC8ZzmuC51FCG4PmhZ1KNU7qCcoeKlkt451w4+h71BJbT2/+pcsB/A1G472JoMscMKLmxS7tWiY9eQfQ1BFeqP9YpSQdR2rQikV1DocrS1TuPc4e4gktpWSRcEH862/HX/JQvEv/YVuv/RrVf1bT4buLIGJscNVHx4pX4heJMjH/E0uT/5FauuE+ZGMo2OepyOUYEU2iqINKOQSKCODVi2nMEyv2zgismKRo2GOlXQ4YZHSokilodIjB13Kaep5+YVj2N4Y3ETt8p6VrnjHfNcso2ZvGVx24q2BypqQ8dGFRdsA/hVS4v7a2VtznzP7opJXG2luaAfPUVBdXNvaxGRpAD/czXPz6/O2RCAo/vEZNZckskzbpHLN71tGg3uZSqLoXL7VZbtiASkfoKo0AHtTgu3k10qKitDFtsEQufT3qUsPuxjA7mmjP+6D+tOVGJCqMk9qHILABWnp9gZCJZVIXsKls9L2qHm5PYVqoxUBNuAOlc059jaMBwVT049BSmM49qkCqeQcGnEMByOKwNSts7Yo24FWQqueOKd5IIzRcCoignrUhTFS+SF6VG/A60ARPwMCm4OKcoLNg9Kk2rkD3pgNVO9SRgO2KXbtbjpUkceW44NJsZKLYHlOGqaNdgAfrSIZFPtVhEEmN1SBLCTsBTnsc0k+nwXLDeMP/Cw4xViOEpgxjjuaeORub5sUrjMr7PdadISj+fF3yORWrp97HJEPJPf5kbrTwocbt1QS6fDLJ5g3RyY4dDjNO99xWsaSmOU/uyQT/Cad833CPlHT3rG82/scmRBcwj+JeHWtOx1CG+T91IpcdUbqKTQJlkKUzt5J65oeXYvynDHr6U7AYMOUbHrUWzdJtkG4Y4pDHQOJG+bII7irDojDsT2pixx+WFTg5703dtbDjDDpjoaBDTvTggsBTmwwUofqKmQhv9Ydmf1qKSNEBbBGO44oAmSU7Rk89KcHYEgYDHt2qh9ql84KIWePH3ulWo2D8Rsc55UinYBip/pPzDY/X2NK+4SEYCvnp2NPbfwCOO9SAHbhgCO2aBEPyuNjqVbP4VHNLPbnEfK+lW/JGAQ3J/hP+NIQB2Oe4bkUDEgK3CCRAFkxhhUqThX2cq3v0qGFQJCY1Ebn8jUkkqKyieMgn+JRxRYCcOAPmPA6msvUkuL940tZgiLkljVubcXEIYFH796lMMUMWFTH0poRhQaZdx3SbrkOrfeGK2gjjKFflHepYIP426mnurP8qniqbuCKZhBlUpIRjqKVlmLKgfjPNaEdsu3IpwgweKQBDcbBsYHA4zU2Vk/1Zw45pgj5w1Bh2tuUkNSQDtik4kXn1FRFZIRuU7k9DT/NZBtmxtpCQy5iamACRWG0D/gNEeNrdwO3pUYU+b+8G0jow71IHAfDcL/epiJRIABt5x27imSSJM/knOOpPpShRnIG1j0YdDTliVH+b75/ioAiKsrYfPH3Wp0UmGxINr9ieQakYuQeAQOx70hjLKCnI7o3UfSgBrAxkyKvI5ZfX6UyyvEu4C4U4yQVbtT1Kjkknb1HdaVFjiBKDAb0HBpDIbuwtb2BhNAsgPHI5Fc3d+HryxAfSbhiqnd5Dc59hXUNdFPl2lT+lPBChW2jJ5B96YHKw69ahAkoMMueY3HQ07XtNtddjgL5jmUfLOmCQPQ/3h7VtX2kWepIy3tsrcZ3KMMPoawLvQNQtYt+mXLSRL0ikOSKa0EzhbvT57WR1kTdg8OnKsPX2r0z4Z+EmtoRrl4gEjD9wrDp/tYrI8MaRe63q32S4gaNUbdcMf7ncfU9BXskUSQxpFEioiAKgXoMdMV00431Mpu2hFIRGod9zY4xjmmgZmVSOQMkVHEk9xeu7krDEcRrj7x9SakuGME8bKpYvlT2I/8Ar1uZiyYZ/KIzld3TiqelGaKA2kyMXiOBtHAHarc0vksrb1KOcHcwGB61BaYiedy26KRw6N3IoAve+aQ0vel20CIud2T0px9qcwyMUBQKAIgjbjuf8AKUlE+8akJwMdqpsjSvl0BXPG05oAc2ZWAKhUPQ9Sf8KJYI9mMcjpzSv5ipgEJu+7gZp6xAR5YEnHJJoAZErFBk8+1K0QznvT4lG0MuMH0p+3BJ60WGQiPaDx1ppXmp15XJ61DIwiZeCx9FpWC40RZzSGGrCbXGVYH1HpS7eKLDuUmt6ia0B6gflWjspNmaVh8xktaDPSoZbUbeOD6ntW2YxWdMhurxoAzRwxYErL1Y/wB2lylKTMy2s1LzSpnDt1I649+4qU2mTzWmhSUukSkrGdpb+HPoKWO3c5LgDngDsKXKPnMv7LximNaeoH5VsmAelNNuMVLiPnMN7U44GKb9mPpW59mHpUQgUjNLkGqhkG29qYbftitk24xTPsyjJIpco+cxpLJpU2q7R9yy4z+tTCDgVeKqzYVc+/YUrR4LFugHUetHKHMjNeM5Cr94559MVHb2gid2Un94285/vVfktXLqBkhh85HZR2H+f5VYWA7fu4+tFg5kUUt1RiwBDHqfWlnhneErBIsbt/EV3YHfitDyaXyR6UyWUlgPk+WXLkeowCfpU8MSArI6KXAxnHSrCxYbPf1pwQCqRDE8wqhZjtqdZgqb89cBRioAvmxAHjJAyaAmboqS5XoPm449BVpk2LsMCINwC7vXH8qtRttb6dBUSLhAB0FOYkYA6niquS0TRKqTO4B3NjcS1WQ2azkuA9zIiDPlgA1a80hQdhOTjincmxZD7VJ9KikRZ3R3BITkDPBpM7sA8e2akyAP9mmKw6MbFC4xg9KjedDMUAO5AG69c5qN7kq3yozAnnH9arhg8vmy8Nu2j+77c96AsaKMTwwp+aiLehBYelODE8+tAiTNKD1qMGnA0AQyj5yTIFGOmOtLEGLHGNueAOtQbnkuCgIUZ7jO6pgJVKqGBUctx1pgSt1Ix09e1PJbG0dPWmhCBz8vqPWpAeKAEVAi8mmkhV3dqUkYIPNVpJTgIsZakBZKGSLgkEjqKikDxmMIS5Pynnj60+KTdn5hx0qXqMdqAGk/LsByfUdjTEGBwctnnNSYxwOPak2856n3oAZIF24kGR6UgVmY7vlXHFLK3lruPbnmkgMrKGlVULfw5yfrQMinbyVUpGXdvuIO59z2rOs4nmvGu3dWdcogTof/AK386nzcXjy4EiWuCBjqcf4+pqextUhhUqpU4yFySAD2pDHragujyHcy9T61J5Slt3PPvT6ZJKiLgtk9gBk0AKjETKDwB059qKgRC9yr5whHygj5j9fSigD5FtdbwAtwP+BCtmC5hmAMcgcfXmuMpyMyHKkg+oNYyopminY7oHLCpAQx2muQg1i7gI+fzFHZhWrD4kiOBNAy46leaxdKSNVNM2ZbaOeMhx9D3FUvKubBWdMSx/3T1oXXbFhxKwHowxU6arZyABZ4wfWo5ZLdDuu5XiuhNg8hv7p7Vf8AiFYrc+LtekQYkTULj8f3jVSuDYT8iVUb+8p61e8Z3q2/jrXllZCp1K4wR2/eNxVRutUJtdTgmBB56+npSVpan9lkxNDKCx+8orNrpTurmTVmFSwybTg9KipRxTAueaB/F05q9FraxW21hubtWKRnmj+HNJ009w5mti9cavczghT5a+g71nkknJooqlFLYltvcKULSD2qQDPWi4rACf4V4pyjHJpVUkgLz7Vp2ukSyAPIuE9KiU0i1G5QhgedwqJnmuhtNMjgGc5f19KtW9vDDFtjGD71KOOvSuadRs3jC24wRso4OR6Ucd/l96mU88VIFVuDWNyrEQBwMc+9SAsB0zSrbCP7j8elLhxweRRcADxnkjBo255VqRoQ3OMVGVJPy0wHlyB8y/jTNgcZBzRk5AP5etPKj+E4PpTAjERXpSMhQg1YBZQMjNDFWPTBpXGRZwMmpomGOmPenRRg9RmniD5ic49qTYWJwpePhqkRSuM81Gg2+9WVOAMLz3pXGSoXVeOlSq6sPmODUO0CMbTj2pWKnCnrSAmIwfkGR60obEg9Oy+9QbCF+Vsc9PWpPtHl/K0f/AqAJS2arT6dBK28bopv4WTg1LE+9shqlO4v96nqgepjG/1LT7geefMt+m/271u2lzFdoJopF3Y+7UTENhGTIqncaL83n2MjQydSOoNO6e4tUbXmq/LjYR3qTHOW2sMcVzsWtXVixttRg69HHQitXTZUut0sUg54we1DTDQt7cZEbBgeoNKkoiUoxA9mqMyRRPs+636GrLKroDsVqQiITLKpUKcEYyaY0J425UjuKlKmThe3v0pxby02sMt7jmgBiuwAEmG/2qlVtzfKcgdfQ0Ex7ADwccVFEojH7sHnJOKALJCHGxgreh6UM4ICSAn37fhVVJC0ZVkI64JqRWZgvzhhjoaALAjjwABuH8qhmm8mBi5EiAdPSnxuVckduqmmSRLeTN1jPvTALIIqBlzk9M+lWmZWcA9OprOQS2MpE0m6M9D6Va3jYZEOC/b2oAdJcANsXvTxPtwqq3PpVS1j33L7jkZ6Vf2hG+UYFMBGunQZ2txTorp2GSrc809cE4qT2FADVuFaplKnndUZiDkErTHj7J8poAncq/FVng2/6lttDl0XNLBOr8n71ACC58s+XN37+tTiHYu6M7lPJWlZI5PvLSBGg+aPle4oAZFkZI55+7UiyBtw6+q96cxjnX5TtcenWoctuBf5XHANMRY44K4ZccjvTz8oBRv/AK1RJKqSfvMKexNSM2B1PPQjpTAhuIhcMrhdk394dG+tEYeJCjKFP8/pS7mwcDB/Q/SlEr+WQ4JH6igCMx7zyMc9D1pWyg9QOM1IE3AOpyB3HUUH52yxG4d6VguNB2qBnANRXyiG0whYyMwVFXqzHoB9anaNh8uFwfXp9a0PDWntdTDVp/8AVJlbND+sn6YH41cYuTsTKVlqaWhaT/ZWnlZG33MxDzyereg9h0/OrM0jyW0rxDK7SUYdWNXdu5TwDnqBUT7kKrGmSBxnoP8AJrtSSVkc17u5XtiLXTo3uGSMqgL7uMfWqcM13f36TRp5dogON68yZ747CrEtvDJdJJdBpWGShK5UVZLQ20WVUIvGFH8qYzPudMt7h3mmBeQj5c9F/Cp1hk+wLEki7wmM7fariRjGaRsA4HWgLkUCtDbRocswGCT1p4Zy+wo3TOR0FSBSBzTSeaBCHpjOaaIyDndUgIJwOtKeBQBB5AMm8sx/4Fx+VKXHRPmalIaXcp4X9acAqLgUAMWL5t7/AHqd1p3WmnrQAcDihjhc04L60jsqDluT29aAIxnHHU0oTYp2jJP8XrT1BxknDHqKR2WNSe9AFKymj3TqWAET7Cx7n+tXR83POO3pWGttvvArT+WxO9E3jJ55Y+p7VvKwI3L8w9aBiYx16d6q2l7HemYwq3lxNs8wjhyOuKluNhQxGRl8zjC9T7Ci2gEMKoqiONfuonp7nufegCnqc88UKiDahkcRhjkkZ7gD0q1HBFDGE3qT13E8t6n3prW0kmpec20xRpiMejd6nNvC/BQYxigLlS4vrazj3MSV7BBhSfr6021v4bvAThj1Hp+NR6hClwqwxqWCdo8YHtk1PplukERRIioHXPrQMtBP85pNlTYyaNtFhXKsquu3Yu7J59velWAc561ZwB1pjhuNu0KfvMx6D/GlYdys0fzAAfjTRaH+I7qvrHtA9O1KVwCfaiwXMySBYxngY9skVFHbNKwkZSvXYD/M+pPp2rSaLzYsfjSrCQp3fhSsHMZscJeRmK4Toh/z71L5WKvrFxSGKiw+YoeTR5VXTFR5VFguUdmBTViG0+5q6YuTQIuKLBcpybY0yRwOafEnyK5XkjA+lLcRrJENwJXIyAMnjntUsbCRdyggdORikAo6c01mJcALu28gf0pRkk1WeZvPRIozj5izHGBjjHr3pgOhukN66DgbQcetXwSee1ZnmR21w7ESPKFG+RhxtycfhWkrqyg5BGOMd6dyWhTkNvHHvjNULy6u2FxDDsLRleYxliDzjB6frV/BPHb19KgMZgyYo8I8gLD69TTEOEbXECbkaNM5ZX68duKsSQiVcdG65PanjjgnA7DvimHzM9ML2poQyAlDh0OW6EjsKsg/5zQo4qNjsfJyB60xWJ+lMf5u/HpTTIjrhWznjK0kZClgGO71agLCKwNwFRfnFWI2APJAJPQ1FHGPvbiHPV6V4tqswRSw+5n1piLBKIu5m4qJJxKzqgzj14qHLFRLIcKF+YdcU4zxkI0YJ3Djb1/GgdhAT9ofdIMgcBV4H4+tEEbh+P8AV/rUkcLEBnx+FSKuN1IBsaLG/wDtOdzVOaiRAHzt7VIxA60CEZyAccnsaSMsD82Mr61CsxIdhkRj1+830psVw3m7GhC8ZjXdk/U4oGJcpEZ13rvd/lj3DIAHWnzXGz92mN+MfN0/+uaP3iRtNJtDY4FVHtZ7lo/MZYolBPHJz7n1pAXN5SDaW3tj5mX19Ka6yCA/PggcAf56021+Z3ChvLT5VLd6sMDtOKYEKTZXhGBWmiEM/mMGBPPWpUVuc0/bmkMitQ5cFyCMnHFFSop8xdv3f/rUUAfEVFTzW8kTkOpH4VCRUpplNNCUUY5opiCiikNABmug8d/8lD8S/wDYVuv/AEa1c/XQeO/+Sh+Jf+wrdf8Ao1qAOfp6mmUozQA+igdKKRQoOKC2BjFJR1FAMQcjrTguaVY5DjCkj1xWhZaetxLtlbbn0pSkkCjcoqhc4UEn0Falpok0rbpvkX361tWtnbwDCxgH1PJq3t9K5pVuxtGmupVt9PgtWBSPP+0etXVQEZFCAjpyKf0HTFYNt7mmnQibAOcUmd3QGpCM0AheBQAyNNxOcipNhPcU1g3ahHxwetIAVW75x7U7GO5pFDE9eKeQfrTAafMB+V6iZ3H3k69xTySKFfOQRQMEKMMb8n0IpxGODx+NKqqTkqPzoKICTzzSAbh16HilzuOGFChv4eRUgPqBTAlhI7HA9KtKFPXPPpVRIRkFSR9asbZUA7j2qWMf5IHKHINTRrsPzjjsaZHJHjk4b9KnQ7eW5B6UgAk5B6oPWnApu3Kuc8c1HLHuYlGwPSpFYqoBAP0osBKyjcMdfekeIksMAfXmn7gVHHPagMQ+MZ+tCYEBiIXI60oklVcHGPXvU+W37cCk8ktTuFiOKUDCyfKezdqshsdGJ+lR7M53/ljmoyij5UY7qAJZIIpoz5y7h6GqD6XNDl9OYxDqYycg1cV3TG9Wx64qaKbdlUbLU07Ctcyo9ZeKTy7tPLYYGSvBrbhdZcMXZE6gryKglhEwKzICD61nmxu7KUyWMu9McxOeD7U7pi2OlRlxgHOO4pUO/dwrEVhWl+sk6xsTbXIH+rkPX6GtC3uvJDCcED+Fx3osFy4bfksWIOPukdaYrbScrs/rSG4MyBQ25OpI6gVYCq0e8kbEHFKwFeSZVT95x6Zqo32jz1dAoQ9xzmq0gnuLsuATEvbtVyKUEjCkEdAelOwE/wAxcRsSM96s5EWFl5A+63cVCp8wFm4/ve1MG9QSTvjHQ9aQBcSJIRDJhkY9aVMxsF6p2zTdpj+cLuVuvtUwiBTaTw3KGmA9VEUwK8BxU275M9xVVWZv3b8MORUg+eE8nPOaQDojJMxwQAO9TrDjkyGooP3Vnk/nTkHmIC5I9MU0BMWPRX/OkJkTqu4GmbFLE7ulK27aNjZpgIsyScEYpzQRnnbz7U5MBcOnPqKQKw+4enTNIBG3wjIyfXIqdLhSgzj3qMPl8N17ZqN4wz9OfamBPJCj/Mh2v2ZTTQSn7uXJU/xVE0ksIwOR3qZJEmUB6AHMhVOPmX2pillB29O6nvT9pg/1bbl7g007Z/unBpiFV1ePHKt6etOBzFhlOfSo+QfnAGOhFK0oVcOMj1HagCQMAoKE8ddvam7lY5bhuxXofrTMeZgg5XsVp7phURMtJIwSPjqx4FHUCbSNNk1i9lgkDpYxj9+Qfvk9EB7e/t9a7R1WIJaxxgIoAAXoFHQCm2Vpb6LpsdtD8yxjcW7ux6k1PbnzIVkZcFq7acOVHNOXMw2849uKrKTKspzgbtoarUu7y22jLH7oPr71UjZEuXQyFnx85xhUHYD/AD3rQklEagYJHHekeNZRtKggEHn1HIqUJubeePalxntQBGVLKQCQKTaBwMn61IeBURlBPHIzjIpAGO9IqnnNSEYphBPSgBpAXpzTNxc4IPHrUwXAowPSgCvG7SbiylQOACKdjceKkYY56CgAbeOKAK9zOIIg2VGem41Ba3YnbOOfXtUNzHbXcnl+dN5qngKp4/oKtw2ioQR8ijoo6/iaBkrbm+6cetRNCqyq43NI3Vu+P8KsErGuWIUepOKFww3gigQY4FRygCMswODxx61NjNVb5J54TFblVduDIwyEHqB3NAFW5ktdJt3kcK1zIvI/ib0/CpdLlnuLCOSeIxOc/KVwQKisdKiS6kuZGa4kOB5kpBye5+lauO9AxixqG3Ac+p607Ht/9anYqOZ9if7XYUCKZEk1w3lOUj4O7PUjjpUi27hCGmZ1JzjG3P5VNEhWLDnB6nFM2yyyrhikKnkY5Y0wARKRsOcH04H6VPHGEUKvQUeXufJ456CpOlACYpMNn2p9GKQDAgJzinbOBT8YFFMBCuBk0gGegNO2knnpSgNuPyjbjjmgBNvFGzJ5px6H2oiDlNz4yT8uPSgBNlBjzUuKUCgCHyhTXTirO2mlcnHpRYCv5QxTDHwat7faq7Ha7B+hIxiiwXK8iqGQEE4ORSGPA49e9WTExkBbG0DjFEi4GAOaVguUCriVh5Z24zuyMVSc3bTzrHbqr5G2VuARjvWrdW/mKvAIRtxB6HFVxM7T7EjGCpYsRjb0AH48/lRYdyOK222xWU+Y7r+8Jz8x/oKdG20pHGuE6E+mO1R3LzRTlI9pUDc24ZP4Cp4UmTe7hAD90dwPc0rDJwMD+tOCg1BKSEYk429Ksx5K89O1AhwX1oIBH0p2OKYSQc4JHSmIEBQBV3EdmY5JqUD0GfWgCmSqZFZFcoxHLDqPpTENkQAMFHORnHUVDteNS0fzknoehqS2s4bRCkSEFzlmJySfU0/7MpOS5Le/FAClmZ1QDapXk0sIlckMp2g/LnjNL5TF+uQBVoDAAphYzWNwtyFb50bqqjhfr6mrKMMMMFc9M1Y2rk4HJFUoxukk3OQiscJjkn1z6UhFln2qBnOexocNwQuc8DJqt5nJwpCjJZsfyp5LXKrs3LGT/CMbvamBP5mGCqM5OCR2NDY6l+OwpBEscagKRgdOuPemSRu5ULkr/ePX9aABiYwERPmPXceBSFlgjIL5J6k8k+1WRHj5m5OMCqM0Rk1GNN5EcX7wqB1bsDQBZiWRo90rDJ5wo4A+vemySq4dEYdcE56/Spmj8wDeeP7oqq8JnkPlSYVSMkDjjtQBYjUJGFJHrSDLSEksABgDFMVX3fMMt3PYCp8c0ANxSY708kL1701ztA4oAdEP3gopYuXHFFID5LlUSLhlBHpiqUmkwSjKHy29KsoWBIJzUo9a4FJrY67IwZtKuIicKGA7g1TeJ0PzIQa6rd6ilIVhyoI9wK0VZrclwRyOB6UYB7V1TWttIOYk/KoDpVo5+4R9DVqsifZnOba6Dx0P+LheJf8AsK3X/o1qf/Yloe7j8a2PGmkQSeOvEDkuS+pXLHn1laq9rEXs2cLgelFdEmiW2fm3cdiasDSbNMfu8/U0nWQ/Zs5YAk4HNBVl+8CPqK7KO0t0PEKj3qDU9NS7t8oMSqPlIHX60lWVx+z0OTopWUqxBGCOtJWpmWrWXB8tuh6GryuY5A44xWQDg5Bwa0IJvOXB+96VMkNM6SCUTwh1IB7j0qwpNYVndG2lweVPUVuq6soIxzXJUjZm8ZXRIre1PLbh0qB8jnP5U5HAGSazKFJNMcbuAak3AjnpSFB2NAER81CNpz9acDu4YYan9PvUkjMBlACO9ADwcDFKrdqZg7QR9aVRlevNMCXCsKiKYPAoBINP8w47UDGK+TjGKXIZwpNJxnJxn2p6Rxu45INICQROTtUgU/7O49M1KqhPf3pxkqbsdhgyoAbg1ZRZFUENkHtioAd2RwafGzjIU9OxoGSgRt99fm9RTAXRv3bbh6GlV3JOQM1IE/vcfShMQuefmyDUiFidwwQKaEJGCc+gNCgI23BDH34pgTgB/mBINIWkHbdjtUfzq2f0qZZN/BG1qQCxuXOCCG96sAKrEZPFRYK/MSMHqafGgRyQGYn1pgPLO3JTcpPDUCAAbu9KmUOM5FSMfMT5WNFwIQS3yleKUqEAZAAe9TRqFGOppxiV8jp6UrgV/MLYyM05WRuI+uehp5j8rgfNnvmlijAVgcZP50xMr3On215H/pEXzDkOOo+lZrW+o6QS8Dm6gI+ZXO4j6Gt0ybcIozx3FMVpCx/d/rTUrCsZtlfwXHyJiCVuqscVe1Q3KxxxIw2EZMinqKbc6Ra3gzLHskzw6cEVny2+o6cpEUjXsHUq3DKPSrTTFqa1tO0NmA2xk6k9xSxvE581B8p4A/rWCuq2Uk4iRHhY8FWz1rWgPnXqiJ1CIvPpQ0FzSQLH8y5OfvZ71E8gWVVXAjY/MKe8yoNzd+mB1qKKJd7Pyd3VT2qBlkL5WJANyN2PakkKrtAPyN19qZ5wjUDqnTB7UrqpIjDcNzn0oAUgMMAgOOhpFO2RSD/vCkCFWGfvAULhW3/wn9KAJyu4PGf4hkAU+Ns24x2qBZTk8cqc/hT0YBsdAwyBQA9WaVyFI44NSxwuGyzc9hVe3YCVuec5qWafy26Et6UwJmZ14xkU5cOcKQDUMc0h+8oFTK6dRw3pTASZQ37tuM9HFQo7QnDcpn71SyZKEMcj1piApHtXDqf71MRIzqwHHWmPHtXevbnFKApfI4IHQ0okO/Yy4oAjhu/MbH3T3zUzw+YQy8N6ikaFJPQH2pg8yM4J+WgCUynKxzL17ikdGQ9Ny04Mkq4JH9aaS0S8YdO+etADCNqko2ABnFbfhmymmuE1N4QUPywlv4R3YD1PaqWk6Ums3L+Zujs4m/esD/rD/dHt612okTAhttgWPAYqOFHtW9Gnd8zMqk+iHy/NgZ+pxnNPRdqgdqcoA7fKO1JhiTnAXsBXWYCE8dM1XSFoizYDEnLepqySAM+lNTLKGYYJ7elIBFBKgtwfSlwMU4ikxQBGUycnn29KjP8ArwuBtx096sVBN8n7wDkdKAHfjRinBe9BFIYw8UzBNPK5ppDbeMA+rDP9aAIpoEuFUSg4U5HzH9aexA+WmmJ2XHnMT6jilVBHtAyfUmgBIoUjB2qFz17k0/Hp1p2KDxzQBXnKkCPGS3X6VIFCgKBwBUMc0cly6KdzoMcdPzqWWURR7sZPQD1PpQAx3LHZG2CPvN6U8ghRzk+tNRT95sbjyQKenz89hQAIoVQFGMU6nYphfbwOTQArusaFnbao6mq6N5s5Lk4XopHT61N5XmA7j+FOjiWNNqjigBAm5j6VIFA4FKBRntTAaeKcBnmmkYYZNP70AGKUClApelAhjHC47npTkUhRnrSgc5I5HSnYoATFKBS4pRQA0rkEe1CDCgegxT6MUAGKAKUUdKAFpuOc0vXjtSE4BpiYhOeM03ZtXOMnPenrgjNKDnIoC5GRkg96Zt2thuc1K/yjpTQp65zQFyORSOQM+xqHBZ3IXc2QB6AYq2FI6mmyqVjJVRuJ4FKw7lKNHVHdwpnkySAOAen+FShSyKrdcAEEd/ap8AkKMnHfFDjA9M9PWiwyoMo24j5T1JHAFOt0RUIVy/Ocn+VK8MrtveRii5CqD1+tLBGQh4G7POB3osA/cAcHrTC2WKgVKF3Nnj8adtApCGgfLk0iqoBIOSfWnjke1BAUdKYAo4GaAMvTgRijYN2eaAHgYp1RO4TGTwTin5oAU/dPrzVaON/JIYglj0HHFSSBnBUHb70xQYo9qthgOTjOaAHqhUBARjHTFTKqgknluxHAqnDc/vCj5yOpxTmmkuCUhfywM/PjNArE55bJXhegz/OpcY61Cii3X7xdj1J6miRJJBgTeXxgBRn8cn+lMLDZLqPzREjfPnB5p8MccQ2pnOct6n8aRbdQoMnzMDknGKVtyREMQF7Kv+NADUkmnLKqCMZwH6mplCQxgAcKOBSR7VQBOR71E4lmLR5VAQeerD6elADopBISfWpe9QRR+XIxA4wMseS3/wCqnuXyNooAcU3HJ7UrYxzSgYPPU0jenegBsZIkHpRTogN4yKKQHyQeDx1p4JAw1R5+bNP8wY96887BeKGPFIXpC2RQAu7ApytUDzKsgUjk1KM+tAEwatzxaP8AittdP/URuP8A0Y1YABzW/wCLePGuvf8AYRuP/RjU+guplZ3ZpcdjTVXJqYKB1qRjfSnEsF4570pXPSlAI5xQMwdY0zfH9qiXH99RXP44r0EqrggjqMVyutaZ9jm82NT5THP0ropVOjM5w6mRTkcxtuB59KbRW7MjWjkEse4da09OuQR5T9e1c7bTeU+Cflbr7VoqxUhlOCaynG+hUXY6QnpSnBHPWsn7ZPHAu9chujCnxX5C885rm9mbcxpYI61KGGKrwTebHk9akxyPmwalqxVyRiDQOB6ioy208j8afGwIPpSAF+XIPSnEZ6UDBHIppAU9xSAdjHB60h47Zpwww54pCcUXGRkDrjinrt3DrmnjawwaBG3B7ii4yx5jRpkLn2oj/ekYUjnpToJw/wAhT5hUu7B4FSMckLJLlhwae0hRjtAp4mATDGoWw7fKcUAWIR5g5GDSspXHzcU1BJGuCc+lTQfOSJhmkAICTg0jIRKGxnFPFuSfkbipNjqMBgT6UXAYhBHOaU4ZTn8DUgiyAH4JphR43wvzLTTAjVmH3vyNWYpgw2jcu3ofWkYpKu1+Pek25HDc/SgRawrA7ufpQuIzhRgH1quCVOFbBokaTjPNFgL+4KuTxTGnRTyMsemKppKWyrE+2aXDiReme1Owi4VXarEdfSpmjESgk5J/So128E8k/pUhJkbLD5aQEOxmBYH8KfFwASc5qZY1YfKePSkKAKE6UwGvz93qKTnH93jrmntH+lNKdAec0CKF3pFlfnfJHiTH314NZiWt7okjMkZubY9SPvCuh2KHUVICQ54BAqrhZGBDqK6jdfu8hUHIPUfUVpicdQRVW80qK6JmtGMFyD94DhvY1lRXU1lOY9QiYjP31Hy09GB0sY8wFmGBjiljiy5DHryDVa1vIpwBFKH9ADVwyAgcYPrSaAaXLDdjDIcY9RTjsZNvUOePY1I2G5PVRyPWqsibJfOBJQ8ADsfWgCYKVbB6r1pSd7YXtyKFb+J+oGG+nrSoi7sA89Q1AB8qv5gB9G9ql2gyIwHBHWoufMJPAzhh/Wph08vp3FAFghVWkARhnFQbjJkA8jrUZZselAFlwwZRnIJ5pQNvKn8DVeOYhgSMr61O211yvBqkIVk80fe2kVKCGQBuSO9RKOgbr61IPl4PSmBGw8gg4JU96mVg656j0pmGUkffQ9qGUsR5Z47igBrQkPuTOewp1uJr25S0t1H2hzjkcKO7H2FIZgqnOenbrXY+G9GaxsjcXAxd3AyfWNOy/X1qoQcpWIlLlRd0/S7e006G1RT5acnPV27sfrVuVE8soIwN3bpz+FSn5RjsOlNxg7jXcklojmbuIEKqADwB3phJAPOce1S4zyaMY9vemIrkmWIGPOCcEkYqRc7QD1FP60lAxKMUtFIBtZ89ys+oQWkbbsEvJjsB2qTUJ5gVtbf5ZZQfnI+4vr9aNP09LOEnBaR/vMepoGW+1MNSYqNyAOTigRFNKiLk8kdgM1HHLJMMrEUHq/8ASpl2huMZ9hUhz3Y/SgCNVNNyfNAx1qXFMUclj2oAWqn72RpDkhc4U+gx2qxIWbKRn5j1b0of5E2rycYAoGVYVClgiqBnICf1qRY2eXfJ0HQdgfWpIoUgjCoMdznvmnMpKYHU0BcjA6uRy3H0FPR1YHb2pyptGOtIsSqc7eaAE5bjtTggFOApcUAIRxikAxTu9AoATBpcZp1FAhgTBJp+KMGnD1oAQCkZd7BTwoOT70/vioonBLZz949qAJgM/XvR3oyACc9qQHvQA7FLSAn0pw5oAMUY4paQimA3OBS59KilkEUbMxwB7U6N98eTxQIkFMdgM80xFlY5cKo/u5p+0KuFX8KYCCQhM4oVg2CDTSGPbAFRKwLgD5ivX2oEWGYFguakxxUSqCS1SM20e9AAxwAQM+1BUuuentRHll3MMMe1SDP0pDRXBK5LHHNRNgI2STkjBPr6VNOFALkEkdKhlXz448HywGDc0DJZ3EMDMVJx0A7moUeSVDuXYrenUVIWEsShic+opy4C/TqTSAjij2YGSQO5qX7+QOnrQq7sEEbfXNSAbVx6d6AGYGMUY9elBBJ4pdnfNAEbLu5xkg5Ap+KdjjHT3FRqoUnkn60ABAaQA9AM0/PApgGZidvVetPxQAj/AHSR1puSVx6igyr5oizlj2HNNkyrbYzyeTmgAVcIU4AwQT60+FQEAUbVHQdqjAZQCeWx1o8xliyzbRQBJLtSOSQjlBxk9TVZNRJB3whj/eifd/Oqs8j3DBC2IyM4zjNJcC2t1xFJuc9R1/Gs5S1PRoYeEoe91NSK9t5Fx5gD9wwIx+dSyIjp8wyp6HPBrlyznPBx64p8dxLF/q2ZD6gmkqhrPLlvFnSkGOLC4IxwDSKgQk5O9vvE9TWTDrEqH94iyf7XQ1et9Qtpn/55k/3u9WppnHUwdWHQnZSFJGadGpSIAFiR3qUAFcjBHsaUj2qzmatuQ5c/whR+tIqjJJU59TU2Mdj+VNC7WY5bnsaBWFjUbxRTox84opCPj1mxTlORUOeOacucV552EmeetOzimDANP4JoATaM7sZqZMdRSKKlTGcYoAcFJ7VveK0J8aa6f+ojcf8AoxqxkXPrW/4q48Y64P8AqIXH/oxqOgdTF245FKh5wakCU7YPxpDBY93Q0m3Gc9KeoK4PajIKt9KQyFztYEfrTZkS4gkjk5VxTm54NQAsrEHpnimJnJ6hYNYzlOqN90+tU67K+s1vLZ4yMsBlT6GuPZGRyrDBBwQa66c+ZamEo2G1dtLgn9234GqVKpKsCKtq5J09hMPKkikG5QOCRTRYSs24DaDyCO9QaZKJJAfUdK6KBt6rz07VzSdpWNoq6MQfabNwZEOzPBqxHdpLNk8LW/5Cuh8xQwI71i3Oi7MvbHJ/umpunuOzRbAHGGBFNZ8PtANY0ktxAwSQMh/Sra3rCNQMbvU0uQakaQOBT8/LzioDKowCeaZPOEjBJ4NRYosqQTxQWwcYqGIkKD61KvzDmpGOABGRkGpIzng9qYqnpUnl+hwaQx3zBvlwPcdatqDjnDe/eqgYpw4wKelwqtkMfoaQDpkfqh3e1OQOyAjqOo71JlHIbBX3FSICjbm4HY+tJjJrZUkTO4luw9KtkNtAyD74qmoXdkfL7jvVoM20Ecr7UACuUO3FPO1iDikyCOOtOAH40hjg3HHIHr2qQIjJncVJ9DTI4mkb5ZMD0qKUMknzZ2+1NCJGhZjkFSPpTdrL1U06Mh4y6Fo1Hc0onbftypX1piEKKeTwahlZlXCEE1ZeQHjbz7VEYQTlTz71SBlfJyGbOfrVqPbuzuycUZaMfPFn3HSnBUkOQQrd6GA5ZWY7duRVqOUEFRxjqDVXYyMCFzUhlYHLIPapAvLgDrjNOBBB6HFUBI7Dgj6Gp9xEYzx7imImADdeKQOqnb1qNGOzKkMM9qY0gJLpj0OaAHbN8wweO57U45QkYJGeucVWjukmzEuRg8nFTsgkAUsSwPJFMRCuyWVghZSvfNPdDIpjdVkVuobvVgwKgyp4pjqyt8qbue1AGJJ4ftllL2dxLaS57cr+VRSapqGklEvoFmi6CZMituTc7bScjuDwRSG3bBjdBJGw+63NNS7hYgg1CG8h8yCQE46+lXUfy48AZJ9e9YNzoixlrjTJWt5By0Z+6aht/EUtrmPUkZSOFcLxTtfYR0ZQHBzj+n1qQKAh2DKjkj096pWuowXal4XDr3xV6IYUsvBP8PtStYY9SMEEjkYD+tOKZAHTHRvSkZeCUAHqn9aajEDrkHhW/pQA44LjJxKP1qKQ7g+7hh/FUx5Ybl57EVDKu4qp6dyKYDYQ8SbXFSpkHIpDJyAeV9aepB+4RTAnSQEYYU/kDPVarL97nip0cdO1AClj1U9O1Rgqz9w1KRsbI6VJb2smp3kVnbD97Ifvf3R3JprXQTNXw9pbalf+fKuLa2YEnH33HRfw613BY5LfjxUNpaQ6fZR2tv8A6uNcA92Pcn61KCNoPrzXbThyo5Jy5mRgnO5gQT0HpTyOaMZ5PXtTq0JEpDyKaCXOQRgU7FACAYoxS0UAJjmqV3dfZwNuXkPRFPJHrVmZnEZEeNx9aRUGcnG49eO1AGetyscvmOwDsPmJOFQelOj1eF7rylcMirkyhuAfTFTizt50ffErBjlhjrWVcxQWd3AHtEhty+A27Jb/AOt7UhmgdTSQP5KsRHy8hBCj/GlgMl1bRSHaN3JOOoqSSEXUHlRnZGepA7e1TqoRURAAo7e1ACIoQYUYFBpzHHAo7ZNAEbE44ppQhjtI3Huegp7ssYyzKBnGSaFAYZHOetACIm1NuSfUnrQB8x6Yp+KaxKgkDJxwKAEIHbmgClAOMkAN3ApQKAExRindOtNZ1VgpPzHovegAxS4oHIooAQDmnYpMUAtkk8KKAF74oPBpsMgmTeFZRkjDdakAyaADGRTXB28dad3xSjr7UAICcZ70RoVTDEEkk/madjNLQBG6/LjpnipQuAAO1J1/OnUwGmnCkNLQAUHpRQT8tAipcSFXjQBT5h5BPYUtrK9whYrsUPwDyfrTZArXKE4JUE5x09KsRso+VRxzQA/pS4yaAKGIVcn6cUCGyA+Udo69x2qnHC3mbmZjjpzUhd5XyV2hegU9amVSvLYoGLGBs+9nmhSTKwIOB0qOeXyEGF+Yn5R61LFuKBnGCwzimIeB3p340Yqi12rzLHhgSTgEenf6UhodcSln2AMPQjuarvvP3xuzwBnrSXDSRksCSCcYFPX97LBvBWQZYD0WkMuRQ4VNwAIXGBSuUjBJIA9T2p5bBUZyT1pGRXcZAIHPPrTEQwSyyjJhCxZ4LHBPvipGkCsFyMMcCmzrI0ykPhMfMMcmhYk80MoPy+poAlxQBS96O1ADW4FAFHWjcpXIOR60hiDmTjsKXAIFRoC0qvn5VBxjvnrUmc+1ADRGFOVAB7nHNMeLhRkk+tSkkkgfWoky0rNtOO2TQA9EwuWxVK4ZlkPyZI+7np+NXnBZQBxg1VlUu5wo2jI6/nSZUdzJuxM3zRoJT/d3AHHtmqD3AgfE9tcxjH3jCSPzGRW5JG7DajOrqOB/9bFVduoRE7EQ46nZj+VZOJ6lLESiuXoU4tSsrgMEuoG/2SwBFS7R5eFYMpOciq88iTITdaZFMAeTtBP8qqeRovVLa4tmPXynaP8Akf6VNjqjiF1RohTThuU9KoC3t+FttZuoz/dlCuB+JGf1pTFqkZyk9jcp7hoyfx5FKxrGrCXU04rqWLlCV+h/wq0mq3K8lt3saxlvLgNiWykIHVoZA4FOW/tWYK0vlN6Sgp/OmmyXTpz3SN0awT96JQfXrUg1de6D8/8A61ZqxqwBQiQY6ocil+zkkAKeapSkYywtB9Dbt9QtncZYqx7YorLhtfKmXJyef5UVSkzlqYWknoz5WwCKATnB6UoUdjzQoJOGFcZzkiqCOtPHHY0xRhuDUw5680AKhOanRTuFMReasxj5uaAJYwF69K2/FS48Z62exv5//RjVjDGa3fFHPjDXB/1EJ/8A0Y1HQOpjjinYB+tGwHjPNMLAHg1JQ7PbtTWxxg0BhznkmmYIOeopiBhgVVE253XaRtPWrOSaaeAeBmgGMU9ycGsPXLIHFxGvOPnH9a2yN8gP6UFA4ZXXIbrVxlyu5LV0cNRjNat/p621xuUHY3Sq4VR0Aro9omiFTJNKLRXa5OFxXTwy+XIpHQ1y3NbFlc+cm1jhlGK56uruaJWOr8wGJQO4pp4HrVGyn/gY9uKujJFZlEU9rFcrtdd2fWsi60eW1HmW53Kf4TW6uB1NLId3ynlRTTYrHMWt0BJtmUhv9ql1GQPsVT8oPatm602C6yzrhuxUc1j3Ol3NuMofMX361aabJaaNCL/VoOoxT+/FYiXckR2nKn+6a1LW6imUZOGqZR6lKRejcAYbj3qXPOOo9ahYjbjGQe9LF6Kc+xrMouoDtwSCPeke3jdfekibnBNTKo5qRkKKEwrnjtVxQCvX8KETcmMBh71Gw2KdhOR/CaQySNSjccZ7VMhwflOB6HpUaZkQCQbM9xUywmP7vzCgY9XGcHg05h/EGBGOahaPnIzUycLnAOKAJrWVdmOAc1M4BGDj8aokbzuH14qwj7/k5z70CEPmSsyA7U9xxSqiQLtA3H3p4kEYZAfn9DVdmYfOwpoQeZ5cp3AkVJDKCG3gdeKhXazCVzwe1W0VJHwAN3fHamIQlc4HzZ/KkCLnD/KaG2byuVKjrzyKcJIxyGPHQEUDDEifdIcfWmhwTiRSD61J5RcZXr7cUKmI8SDJFACiLK7k5+lOAfZkEj1BpqsRypxT1mJPzCgBi7WIPKHPUU+SEyIYzwT0cUqsueME56VLDGyOdrE5P3T0oAigtDbxqG+f3qVwEORj3qcuqE54b2pmA77j19aYincxzyorRTtEc5GBwfrVgSTNsXKg/wATDpmnPliAmCO9Js2KSuc+hoEIVBYAoSxPWpXRowpIOKS33KDu6+tPLMAf4s+tICIruLHr/Wq8kEEq7JIQ6Hgg9qtpFlyc4PtTxACpI61VwOVm8PyWEhu9NZgo5aEng0tp4k2TC3vIGt3Bxk10mGVsEY561Df6dbaimyaBCf73Q0+YViZbhZFLIwb1AP609WDrwMt6eornv7Gv9KVjp9x56jkwyHkfQ0Q6/GA0d5Ebe4H8LdzSsBvM2W4Yn+lPIx8v5e9UbG8ExLygK2MgjnIq2M7iSR7c/wAqYXFRCmWxk+napBGjAkDDelIjsZcFSBT3Acd1NAxiAxk7m3j09KcCrHgkH0phdo2CkZH96pSqlc45x2pgOaTbHk52njI7/wD667bw/pcej6Y15eskVxMN0jSMFEa9lycY964ObUxpP2e9MSyyli1vFJnaAOPMYDrzwBxnB9OeZ1DU7jVLh7rUbqS5mLZUOfueyjoo9hW1JWfMzGo76Hucerafdbxaaha3TquQkE6OfyBqwi/KCeTjqOlfOqXRdtyqkZQ5Djgj6Ecj616b4E8a3Op3a6NqP7ybyy0FwfvPj+F/U4zg+3NdKqXdjFxPQKYWx060hmTf5YYbwMkDtSFsAsBk1ZA9VCDaOlLSA0UDDtUTy7iUjOcdT2oMoaUxRspYDLEH7tSY28AAYoAQLxzSngdaTPNGM9aAI4lVECg4Az/OiRFkwrqDzkE0wzKrmMZkP9xRzTTBPMoEkxiXqUjGCfYk/wBKALBbAxnJ7CmqG6tjNG0YCgYAp+KBiAAe5qOSZYsAkFm4Ve5NPdtg9z096hitgkrTOd0rdz/CPQUgIBp6zTi4vCJpFP7tSPljHsO/1NXAOPT6Upo8seppgJSHIFKVoZd6lSSARjigCNpGMhjX5j3PYf8A16kxge9KqrGgVQFUdqa7oilnYKo5JPakAtN2qG3bRux1pUPmKGGcH1p+AKAG44pNuad2oIyKAG47imjLAq3Q08AdKQ/KpwcUwFGBwMfSl6cetMiC7dwByTznrUuOc0AIBiop547dFaVgis20E9M1I5PAVckmo7hA6iPy0dycgOMgEd8e1ICcdvpQfSo4YhBAkSszBRgFjkmpBzTAUCloooAaetOpCOaWgQVG/GWPX+HNBZicAUCPYpJJYk557UAVRblZFMjbmbLHPQ+1W40Cj3qOTb5qM5I2ZPHpU6MHUMvII4oAUUhAY80tAoAFULzikJO7J6AdaRnO0mIBmB6ZxTDG0oUvlcHOAetAgZRICQAW7E1BZuyAwy7Qy9SGyTVneT8sa8j1HFNWLywW43Hvgc0wElkOCC2xSMZNUkcNMcIxY8An+lTzQxO371t5z90HvU8CpGoUYBHABPIpDIntyuCOXxwD0pY08hGaWQsx6cZIHpT2bMoA+YnrmpjtTAAzQAwZKAqOD61IvAHrUaIisSABmpcZ6UCEIz16UABeKXtSEZxTAQ8jilHTFOA4pDSAaQCduKZIoYbF+Ud8U/ljgDA9aa4dVLLg9hQMAwDCMEcDNOOApOOgyKbGmMuw+c9cdqk9M0AVgZZ5AfuRjsOpqXGXGOB6USlzxGKRNyYQnc55PtQAruF4zyegqmCxAOB3J5q5J5aLvbGRnmqkbyShmZQi4Y7QPyqWWhplhGFeMMx74pD5T52FkPXhjTQpdAWULg4yKcsaYbgbiMKc8j6VLNokDQXZkxu3r1+YBqRrcYIktV56lTjNRT393YjeI1nhP3X3dfb2NWxqQjghnmGwSc4GTioujp5KsUmluVW021lX7rKf90EVE2hqxHluvtg4NasV7bXK7o5InOOityPwqSMIzYyVPZiMU0kyHUqRdmYjaPdxEEtJjtkb6esLoNsiA+2cZ/Bq2pDKFIOMZ6q+TTN7jgncPQqDQ0NVpMx1sLfO6JYlcdCCYz+hxSPNfWh5ecx9wQrj8xzWxcRW64bySpP9xuPyNQq6p90uvsFz/Ki1i1Wb3IbHVIJZlBMW7B+6MUVYjt7aaZWMMZf1xg0U1cmdRNnyh0HSnJyOetNORwRx61Iq8fKa4zIQKAeanQLjIpgX15psvyRkjiiwy0OelTrkAZrJsp5Gk56VqqwNJgSjnoa2/FRK+MtcbP8AzEJ//RjVgBtp4rS8ZPIPGmuBOf8AiY3HH/bRqOgdSqJfmHY05tucnvVcn5VPenI4PDUIZKcjp0pokyMUxmYcdRUZO3JFMRMx+YH9KRuagEpNOypoEOA5yKGfDc00ZX6U3Ifg/nQBFc2xuoWUduhxXPPG0UhRhgj1rq+VUBO1UdWtfOthMqYdPvY71UZDRg1JDL5UgcfjUeaK0GdLbyhlVx7VthgYwy8iuO066Mb+W3IY8c9K6eyk6xk8dq52uVgWyuY99NDDAGc0chSp6ZpiLySORQhkmc8dKVVDHkdO9MGRzT4ycUAVbzT7e7Hzrhv7wrBuLG5sJAxG6PswrqsAtgVLKqOgQ4wB0x1pxlYTSMG2v4yqqfxzV+KaCWTCcEDk1DPokVwWaP8AdP2x0NZhE+nEh0YY4J7GnZSFqjogQVDYyamjGePWs21v42iDE59hV2FnkJdAcehqJRaKTuW0BU8HGKlVQ4JIGahQkHLDrUnBAbPHpmoKH7NuMGpVYL04pij0OQaeEAOQeT2NICRcMO2aaY2DbgNpHagDGCB/9apfMJG1x16GgCMjeNx+Vh6VImWTP8Q70hTAODmliODjpQAj7WA3Hn1oypJjf8qdJbrL8y8P+lRRwzrKpkxlPummhD2iRkKbhkDgetLaP5UZ/vHrRIFkYMuAQeMDpTXVt+VH1pgQRyiS8OEOAeavZTeAi5NQpEiSbucnrUhBU+bH1HUUCHssgIwCB9aiYuDkMT61aWTzl4B3DqKgcqjgbeW96AGI3zc8Gp8rg59KPLGPmUg4pmwd2NAxDGGcc8Y7HvVqBnQN82c+vaq0auCQalyFPJoETiVWbB61KqZ+6cE1XVoyAzcVKCfvIc+lABIzJ8v8fbApFDhhu5PcVIGOQzdT+lAYFz6+tAEm9DwDzUYILEMGHofWngBMnAPvSqxfkY465oELGSg+7+VICwkODwegqQnaPl49qaHLcsBgdMUwEO7PzdvakZd2CT+VO3Z4Bz9aAQvGCDj8KAI2ADADODzVS/0+01CIxzxA+jDqPpWhy3zcdKQoGTGOTTA459L1TSXkntWa4hxjA5ZR9KvaNrFkyPA0hEucskvB/Cuh5WMZHToe4rI1PRrHURmaPY/aRODVXuKxrblMSupO09/f0NC5Y5IwR2PQ1zkcmpaCgEo+12QOBKv3l/3vWtK21qzusCOUKx/5Zt1z7UgNU8x/vBkVLpVi+oanDZkkxyH94w/hQdf0qiZXOMqxzwFHXPpXonhnR/7KsPNlXN5cANIcfdHZRVwhzSsROXKjyjx1OT4pvUTaqRbIokUjCoFGAB+dcvLHNKFYAc8bemPxru/iZpElpq66kqt5NwMb1XjcP4c44PcZ68iuLjuEaJkLYYfxHBP/ANaujZmW6ILdBJOyZKsBkr3/AM5rpvBqMfG+mhNqMZT24wEOf0z+dYSSIoBV8Acgk9K9T+HnhaXTUl1jULdo7u4G2CKUfPDH33DszY6dh+QIq8rg9juEjWMZUDJ6sRyadzR796QmugxAkmobhmSB3U4KjNTdKq3aiVVjzwGBfB9O1AyppEMimR5R8xOcjvmtQnmo7dgYh0Ayaf3oAM0ZzS4o4oAQKBnAAz1x3+tIxwMCncU0csfSgAAwKUkfjQcYJ6AUyIHG49TyB6UAKF+bceW/lTqBSEjOKAEJAOM8+lOoCgHIHPrQaAEpcUAUtIYhyOlV2thNIpk5RTkJ2J9T61ZpDkUxXGqVwAOccUpIxQqADpS4HpQBEzlTyOKk7CgqD15oyMZHQUAHAPSg9uKTd83IwMZzTl+YZHSgAAzzRTvWkAoAUfz71n3VvcSXUc0U4jCkLsxnI781oY7etR7PMcOzZQDhB0+tADY5UkkdEcMyEbsdvxqUVA0TpLuiChcdvX1qwOmcUALRRTd4LFV5I60AOPSmHOOKdkE4zTWbaQuM7v0oAWMHGTTj0oAIGM0hIH4dc0AVL4sm14495b5SAauBQqhQOAOKhgcXH7wDCAkL7kHrVjFADSKTrwRxTiaBTERLtVlQZA5/Gpug4pjMFZdw+bsBTxQAm7nHNK2NpOCSBUQbEzDrgZp+3cpBJGfSgCpuSGVpQoII3Z9DSxA3R3MAQec9KttGmwrtXb6VCUEU6qkbiPbnIPFIZOFVOBSYyeabyzAYwBUpwOtAhjLkYGBThlUpPvU4DFMBFyRzSilpKAFppp1J3pANY4GPWhscD1pw4pjHDLn0oAcuPypGOSBTWfH3V3E+hqN5QnyxqWkYgE9loGTbmHBFNXgmQjntQAwfBbPHWncKpHWgCrIPMkRXI+c/LzT5MBTjvQI/m86QDPRRjoKY+SM1LLQxf9Tg+tVLqJ8BhyBV2JdyMvXJphBPyE8Umi07MqQReaTG6GS3ccqT3H8iKrX9nPFHDHHnyFGFYZrchhCjaqYHX2qdW25SQZB7Dof/AK9JwT0N4YqcHc52z09rW0uJXKhmGAR1NWLW5W4tYEAMcqcMSSA1bjQptxgMvUg1Te2RJvM2AntU8jWxo8Up3c1qPkWRMbFVgQAwbOQaGgJBUNGXx93HSsjV/EWn6GyNf3aCVwXigXLSygD+EDt05OBz1qGLxr4amYS/bxFIePnR/wCeMfrVJHPOStZHSoqvCiSD5gMZHNVJLdVfDIXHqeKvxyxy28c0TLIjDKvHyGHqD6VFI6nLc8e9U0ZqTRFDGqOCHKjpg0VNBGWkMjrkNyB6UUWByPkUE9DTlZFOAOaa6nOVpqOquN1cJ0FgAHoaRlBGCMijZnLI3B5pscjK+JOnakAixKMBeDU4BB5pmMnINKG28UASEkCtfxfj/hNde/7CNx/6MashXHetfxh/yOmvYxn+0bj/ANGNQtg6mQrgGnbyzgdqrkg8d6dux3osBNuOcUM+KgMgBpDJluBQIsDBoNRhwKaXyeDTsBKXAHJwBSxNvUfLjPrUe1XADdqm3YwPSmIlB2546UjTK5EfXzDgiq91dCKI5PJpunDDGeTvyq1NhmTqdg9hc7Tyjcg1SzXVakiXtuycb15U1yrBlZlPY4rWLuMUPsdT3FdJZ3QmiWVDg9xXM9at2F19nmOfutwRSnG6A7BWaWMMDU6LlcCqNm+fl7GtKI7AflI+tYFIj24WnpgDmlA/WkK4PFAAB8wxU0SjcWb8KaCI1yRzRHuI6cUCLABOQAMGlezikjYSKGB7HpUtuwMZ6ZpA4fNK9hmOfCrXG42U2115CnpVT7XeaXL5N3GQRxnsa6RdwOIsj1qaeyt71VW5AyapT7isc/8A2yjINi5buM1qoq3EAZWwGWsu98NtCWlsWyf7tZcWoXFo3kvlSvBBq+SMvhFdrc6hEaBSFJdsd6sW+6VA7DDfyrO0u+WWAq8mTn6GteMARArzWUotMpO44JtU4PJo7fvO3SomlVcZbnOMCpF3bsvyPSpsMeEQKWQ59aVVyN4H4d6coVRleMnoacwwu4cGgBM7B704/vQOT9aMBuaF+b5Rxx9KAIdgExZWGen1qZOeCv4io/JzN5itjPBFSFghC7uvrSAkESHADc5prKQTsIBH609E43Bhup2FZhvGW9RTTApGVt24ghh/EtLMcRqH6noy9KmniKY245OKi8p1AHDJnoe1UIdB5kcIWZixPepGUKuTj2qMsVI4Zk74HIqZV+XqGjPfuKQEKzrnaVJPqKfhOetPWMKpHY9GFRmJk+XI57mgYNHu+70pUMkZHp6VUS7kjuXidMKMYI71Ya8VRyM/WnYRaNwu3cw/CnKwxuyBntVYuJEUgDBpybsjgMKALKvvHBpQdhPGQfSm5UfeGKEBc8EgCgCwvIz2pM4YGmCXDbQOBUuVfjIFAhrAMaEk2krnPbmn7ewNRPCSchsEetAySPbk8EHtSuxwN2CPUVEgYMNx6VOxVn449R2oACm7uKY8ackpyKkUqvY0MUVjuGc+lMCuxDRFSu5cdDWBqPhuzuZDLGzWko53IeM10LEtkR4I96NOszf3nlPzDGQ0vOOM9M9qL2EzQ8F6JPb28Gp6pL5uxiLfcuARnGT6kV2b6u3G1BzyCxxk/SqDSCVyoxtQbdi8BB2GKrmMlnDfd370J4IPf/PvVe2cVaJm4J6sv3V39utpLa6t4JYZRteJ03Kw9wetcXcfDzR5ZS8M15bpnIiWRXVfYeYrEfnXWdDznHakyKzdSfVlKKM7w54S0DS72KVYpp7qP5o5LmQthvYDCg++3NdpySSfrXNE7eQcHrmtjT7o3KGOQ/vV5OP4h6114evzPlkY1KdtUWy3zYwfrQSFUk8YpcY4JpGIC8nArrMSolw1zCskeVB52j7xFOWAup3qYwTnAPJNOt2DoSowOnSpSpIwDgd8d6BEFuLeRSYZBIFYglWyAe4q1TI4o4U2RoqLnOFGKdmgYtJRmkdtiFsZx+tAhCc9KANoxTUdWyqHcw6+1OUHv1oAQoXxu+6OcU/HSjmmEgyhc84yfYUDHniigjP9aMUAFNIyacaO2KAFpBS0dMZ4oASjPNOpOByRQIOaKAaMc0DAjNRNhRgKeetTVSuLe9llYRXKLESMZXJHrQBO+TIiZAB9alCgKAOKrWkWGcylndHZQ7DkjPYVPJJ5bAEryOpP6Y9aAHkZphdYx87r7c0ATbQuV3nlio6D6VUvZxZMojT5m+9I3p9KQ7Db6/PywWo8x3OCw6KKuQQi3hSEEkKOpqkuo25O+ONnb1AwKtQTmaQFl2gjpTCxNiorqSWKAvEquw52kZJHtU56UoH50AV7d5ZIQ0oAY84Axip8cUjsEGTmlVgRntmgQjYUbsZPoKiMIkmSR9wKj7uePxqRdxLMfu/wikiPmBm55NAh1Rv02jktUjsFGTUcWcb2HLDOPSmA9EEcaoOgAFODZ6UCk3AnAoAXFNeQRLubj09zSlwM57UxQZG3HrSGNt3LAswO5ievap6Qj5geMUtAgAxQeBS0wNukZey8H60ADKpG45/OlXkDjpS4yQaU8CmA0tgE1GHkZxujwvqTUir1JpJlV9i5xkigB4xk47e1KCT2xTVO75t3B6DvTicd80ALSUA5pcUAFJnNB4HHWlHSgBKa6FwVzgGnHk4HWoJbtY3Eagu57AdPqaQyWOJY4vLGdvf1qM4W4CqHBxn7vB/GpcsFXjJJ5A7UMmWzwfegBBwPekZyvIGM+tOPAqP/AFrY/hFAIQsSeRmovMDSNHt+71PapZMhTyFUD7xNVrdxLCWXOMnr3qWUhd/lNxVkR7cMQCcA4qq3IJI5BxirKSeYgPUjjPtQW0WBPt5wPQihFD8DIB9ai2sAT1HrSqT1BzTuTYlYNEwzjb0qvdS+VH5vWPcFcjqoJxn9as7wy4bnPGK5zxHfrYrBEF3gupcc9M5PSlJ2BHk+q339ratd6m4w12QwB6rGBhF/AfqSapshOcd+fx9auXNg+n3DWUhyyjdE/wDz2j5ww9+zD+FgRUTQkKSxAx1H4UdBs2fBWoXVl4ggtIJmEV4HjZCTgMqM6sB9VIPT71egad4k+1OsNzGI3xg49a5nwNYPbXE17cxyI7R7IlkG3bH1Z/bdjj1GT6VeuNPmNumpqqiBic4OCDz2rOo2tUUrdTvoJlbaMZHYj0orn/Dl+9yvllslM8+tFVGV1clxPmMODkU0qrVEkscnKGnZK89q4nodBZh2qMZqRirDDD6Gqm8EYpwkZevIoGTFSPmX8qbvDjBBU+tR+cc0hm55FMB+SOhBHrWt4zJ/4TfX8E/8hK4/9GNWPlcfLxWr40fb441//sJXH/o1qOguplJIuMHrSF+ODVZnFNEu3g0WGTmQZpVkA6GqpkFMMlFhF1pgR15ojkwcmqQfvTWuG3YAp2A1RcDsKeHLc1mpIVGSfwpWuHZcKcUAX5mjYYbmgXIVcDtWcHNBfNFgLb3ZyPX1rLuiGl3evpT5ZSBVGRyT1FaQiJ6E4xS1XWXB55+lTxxzykBIic1TiF7nQ+HbwS5hckup/SusYZ4Y9uK47RNMmhuDNINvtXU+f5wHYjiueolfQuOw5gR0p0fPLcU0Iy8k5oYjgZIyazKHOhdvb2piSdFDAn071YgQucLyPWmR2iJePg8nv6UXFYdG+Dt5FW1g81ty8etRiEKOfmx3qQO+3anFJsCeNljYxsPxFTDD/h0qLC7VB+8e9SKAhC559aQySKMZ+f1qtd6TZai5WdAuTjeBzVhkZQWLdewqWLc6qN2OemKpOwjj9V8K3+ljzbRzPCTnjqKj07W5YkeOXlxwFPBrvUidwUaZio5rNvPC1hfSD78cp58xO1aKd/iJtbYxLC6RpGmkbJ9D2rajkWaMOpzmua1LRdS0t2Me6eEfxqO3vSaXrMcSlWbknoeDRKKeqBO251WQMZqcLvTrVGC7hmGSe3rT1u+T5fzHsKz5WXcsYZOQMrTjhz8361Eksj8NhPpQzqqszn5V7+tTYQMBG20ZzTxGGwxGSPWkj+bEm3ORgZqRZEkOFyMdQaBgG2nGBinhM/MD07Co3DKdqjcPWnIx2Z6HNAXFO8gnAJz0NKGRiFIKk9m4p6sACxpBhxxgn0agRGYmEgwxApxkePIYfp2qRVO0jJPs39KilbII6kDoetUgEV1VSw5HUjNNQ+arE/d/hPrVIQ3Ny+7aUjU/d7mr5lVowG4bp0pgVplUfMF/Ksy5Do2Qc57VpxRuu5C27Jz9KWa0DDJovYDNt7ho1wzHHoa14JgyBhkVkSwguFGQR3xUsUjxyBScinuM0Wu97FNvQ9asrKqgVmLIodmLgCpoXWXI3gH0NKwjSVo2YEEYNLtX7wNURH5Zzn8KkWTjr+FFgLiMQu4c+1KZA64cYbtiqolZMEU4zBx0wfWkBMqsRkHdijJzk1FGSD1/Gpt25cEfjQBI2G+69Qs48zByo9aUFdhA7UxxtGZMEYyB7UAPbzZSkcMZklZtqqvcnpXSQW0Wk2ax7lkkY5dmYIXfHOCePpVHRLMWcB1SVmEj/Jbx9CAx2l/1IrXmOD8s6Rrjo2AD+dE1ZIm92OiHnbZJIfLcDj5gcj6g4qPU7n7HYSSAhZGwqBiBySOhPp1qZ5Ybe3eWV1SFELOzdAAMk1x+o6m+rXEciN5domSY5MBtuT8wUjLZ2nnPA9MUoR5mEnZFrTr+9t2giBaWIyESmXHUqGG05GAcnnkZH410MF5Bcs6xnDoxDKSCeOpHqPcVxiIqPEfMGJBujYliBGOCFPbOSMZ57ZyKWwt/7UkNrFIFDrvDkbXCEYyOcnoDz0457Vc4R3REWztZztiZ9gbZ1U9OPwP8qksLswyiQBgrD5gwI/SoQpit1Te8pVcBidzNimRhRGxSIRoSS37vZz3JBrKOklYp6o6x5EUby67TyPpTB+8GSMKenvUFnm4tIJJItv7tSmTnI2jmrXToK9dbHIxMAcDgUHpxSOwUZz+FMUu54XA9TTEPHTkgGkGSaUoM88+9BYqOBkngCgQv0/XpUTOGYDOFPQ1T1CUCSJZJCIgwLqn143e1aG0ZzwSOhoGARVGABTqT8KWgQlIq43HuTQDk8CloGIBjucmlooA9aBBRwKTcBTQDIfQUASUgTDFm5PYHoKcBikz82PamAZPao0Rt5LMee1TYNITt6kCkMMU13ESGRgQqjJ9ahe7GcRgEepOMU1blI3ZmZ5GPYDgUBYsRP5qh1zgjI+lLK7JGdv3zwBj1qr9tlP3Ygo7bqrTPPOCHlKj+6vFA7FhLtbWcxSlViRAd2dzEnt/OqUd4z3HnyReZIufKH8KD+ppohRDkDmlyADxTsF0S+dcz53vsX+4nHFQPAnJPzH1NPhfLle56ZNPlXHQcHjNOwXGRqABgYq3A2JE9M1UjdXGUYMoOMj171KG2jPoaLCubBj+UGkOVHNPQ741PqKVgD1oaJvqVdpmk3YZVHB96k2hjgcAelTMDjAOKTaFGAOKkojbkY9eKacRqABxT+pPOKacNnNAiLYZJgzE7QOB2qQnuetIGXJG4DFRCQyOQoyBxTGPl3soEZUZPJPpUfmEEJCuc/wAVPcKuAx5P8NPRSUBb5QO1IBEQkEnvUg46UdqKAGsu4AA9OlALeZt4xjindKjMgRgh5bHGP88UCHSyCNMnkk4AHWlVQADgj+tNyvmZcAHHFOL4PqTQA4sF5J4qIsWPB4+lIwJYUNJtx/KgCcDimH73TJ7Uit5ig8imSF3ZVi4B6ue1AEqk7eoJ/lTqhiGF2jnB5b1qUZFMBe1NMiksvIwOp6UMCwxkge1Nl2iPaf4higB6Z2gsOacelIDx1zilpAIKAoXJAwT3paMUAFLSH9aOlADJCegoQALxStnIGBijpQMR8MCDjB6jFVmARAIwABUkpPIHGO9V5Zc8AVLKQ1gxiI52ZJJz0piPIQnl/cIw2KdkNDsHOQTu545qOGM7GjV3C54OOalnTBaaljz2wVLBVHcd6QTynkKIwvY9XqNo7ljvZkyB9z+99T2pjtOqeYYsL/zzHLe/40rha5pJKrbHAIVuQW4P1xXD+K5mN0WBLKzFeK622maRwsnyLJ0yckHtn0Jrm/Edt88i7T03gDt3rOr8JKjZmA8lvqVuI7ooXUfNujDKxwACQR1GOowfenWmlWts6Oot3Q4LBoDJjHp5juB9cUi6YJEys4DgZ2nPI9QR+PFILGRgCs4wThSo6/y/I1hHENKzL5Uat3q0NtaG2jbdK5Kkk5YkjqT6n1PWqs91JJBbRE7fLGJF7MScmq0Wn/ZpFLF5Jc7tz/h0p80ghLGVeetTOu5aIlQNfwy/lawqjADITtHbg0U3wzGZLw3BG0EYH5Giumk/dIlufNzwqT8jbTUf2qa3+WRMj1qYsSKYSMYbkGsk+5pbsLHOsnzbse1TrNwRWdJb+Xlo2p0d0MBXGD603BPVBd9S+HGaGZTVfzOM54pjSYG4nip5SrljzccE1teNZP8AiuvEIxnGpXP/AKNauaEyk9a3/G2f+E88RY/6Cdz/AOjWp8tkLqY5bI9Khc4PFBzSqM9aNihozQTzU3lg9KTyxkZouIaF4pB8pO0ZNT+V6VIkPtS5gsVxEXIJ61L5ZNTrbnOc8VMkS59qVwsVFg3dDipEtj3FXxEAO1KF/Olcdil/Z4duad/ZcOcMBmr3l9805eG5GaOZhYrQabbJyUyR7VcRIl4UAH0Ap6xE5JPNSRJnO8YAocmCRNEM8elPUkNwOKVVIGVGaVHaJslcioGSxOWbDEgelTg+X9+MlexFKhWZgxXaKfcThsInGBUjEilMYITAUnvTwFzkE7jVUgu4JPSrKkjBxyKALUSlY2yMZpFbaQMdaiadlAyMk1KCQ2CM+9IZYjZVix/E3T2qJiwGwkbqj3qpKbxu9KkiZHbBYFhTE2SReZGQXG4fWriEOcg471DlUHJ/CnqUZdyjFIROCytkMfepomY9zgVUg3kNk8VbQrkAcUwJ0cO4JxtPGD0rA1fwtbX8heICGQnO9ehrZOSBjsaeshUlTzTTaE1c86nstR0SQiVDIn95eRipbLVAxDqwRwe/Su+KI67HRWVhzkVzWr+E4nleexfy5MZMePlNbRnfcnla2HwXiylQ33sctnika4+1XQt4+Qv3h2IrmJJLvT5PJuUaP6jitLT7mOJWJbDsOGz0ocFugUjql2qQBkADvUijcemPesywvo3URSMQ/XJ6H3rUikjY/I4IrFpou5KOBxz60mEbkHgdqawJ6HBqKSRYY8Zy7dPrSAfuCnD8elSDDHJGP5VXhVwh8878+3SpWPkLuJyvpQBIz7R8361WRJXly+1o+oI602CRr1n3jCKflz3qygKnqDgdKNgFIMZyG4PSoiAeXAHoanOJh842+/pVW4LxgRbSS3Rh0xTEJExSUnGV/vCrHyy8g8VUjVVT7PGzBxyR/wDrq0Dtxt4PfimxiPDujwyj2rNezKy5JIJ6VrqQeGzTZl3YIxxSBGBPCYZNwyVzU32Z5ofMgfbIvIHrV+SBZFIx16VBGxtsgjPOKpMGjKOqTWs5jvojGMcOD8prQgvIpwGjYNn+6c1ZkSC6jCyIGB4IIyK5+Xw4ttKZLK4kgcnIHVfyq9GRqjoVn243Dg1OrKw+Wubjur6zbF/EuzoJU5H4ir8GqWZwBdR7vQnrScClI2Fk2EA81YVhjPWqAlEgyGBHbHNSLNsGBUWGWWxwAeT1rU0DR31fUNshP2SA75mH6L9a5qC9335jdCo/hPrWh4Z+Ia+G7h9G1q2VYfNLrdRA5w38RHf/APXVQUeb3iZ3S0PQtdto7fTjMo3GNkOP7qhh/SqWwGQyHBboGxz+dbHn2Wu6TI1nPHcQSoVJjcdCMfhXMaZdvJHLazgrd2beTOpGM4+649mGD+JHatMVG6UkZUn0ZoOFYbWVWB6hhnNc3f8Ah39/Nf2Mkkk+FIgyAGG4ll6e+PUY9a6HdTgcmuOMnHVGzVzhIVdgBcgQSFSf3seGMm48uD1XHI5yAOBzk9Xo1g1jZfvt3nSfeDjlFycKBnoB6f0qzPZ21zNDPLEryQEFGzg59OOo+tSu3EmzBZeue5//AFEVcp3WglGxFcyqAE2+YzdUxnI/LH54qvPEv2cWUCFWu2EKYGNu7qcHn7u4/hU6u0duzXW1VQFmYsCu0c5JwMfiKfoFm2o3y65MpWGNSmnowIJU/elI7Fugz2weMmqoQcpIio7I6hEESLGowFAUA+gGB/KkeQLlV5fHC1DcPKkBMSbpRwB6epqWKJYxwck9Se/vXqnKCJgZY7m9ak7Gj2qEGSbII2r/ADoAeXycDn1qvdXSWybmcBzwoPrVj5Ykx2FYLXVvc6l5ssi+VHwgHc+tIZbuI1XTXSM+bPORkn+Ikj8gK1ACFAPXH5VBbjd+9woB+6PQVKCzSY28etMQ8dKQZPU8UvXoaTGBimIRF28nvTsYoJ4+lML54HWkA8Nk0pAbr0xTUTuaJSFjJJAGOtMZW8ze7cgKP1q1GpCZcjPt0qiqNKqnAUDpT/JyMM5I9zRYZbaeFB80oz+f8qg+2JvykbN2Hao/JTOdopwGBgUcrFdCtczt91FT69ajKyP/AKxzTi6qhZmCqOpPAqNLgNN5RRkyMqW43d+B+B/I07BzDxGg9z70uAOwpc0hosFxrc1Gw4NSGoLmOSWB0il8qQ42vgHHPvTEI68celQRSxTqzRSB1Vihx2IPINWtpGPVeD9agKRW0UjqgVeXYAdT3NAFC9N0hja0ZFdZFZg/QoD8wz2OK0JbcG6W6WR8eXsC/wAJHUH6iq8yhgrA5zyOParindbo3qKAIYIY4I/LiUKuScAk8nvzUp5UimjhQOwpAx+0BMjaUJx75oGbVk/mWcZ9sVOelUtLP+iMvOVbv+FXaFsS9xe1NbGDk4ApryhItx7Cq6kyuJOQnv3qChwzK+7H7sfqaAMsfSnLk8kYA7ChR8p9ScmmA0oCegpyqsaHAxShe5qNn3nanJ/nSAihDSXUkjchflQj9atUiqFUDp9KWgAooprEjgd6BCn2pqIELMBy3U9zTuwzS0ARyKGIY9BTTkj5eT2Bp7kYFM3YJGf0oAYiOgwzAsaeF+bJ6DrmljULuY96aXG3LZ25xQA9TuHt6U/IyB6Uwce3OAKHQ4yDzQBLx2FFJyAOe1LQAUj8oQe9LTXIC5NADu+PSlpoB6nqadQAUhO3tnNLmigBuCZAQeF6j1p1FFAxrsFUljgCojOrKGTkU+f/AFLnOBjkmoIhGYAEGecD/GkMjVmEsru+V/u44/8A11A5O7GGzkHOOKmMZ+dd2W9+lMCsxIY4HtUs2ih/ly/ZiFDfKSW9qhjkdQpxjoT71eRjHADgtnIbnrVVkyGyQOeDmky4stifgNtic7vugckH05606X93y+cHgbRzn0qgxuInV4jgYxwuaetxjcjZMg5Uk8MOxJ+tFxcvUZOxRP36BJF+YbRkMPT61iSz/b0Oco/UIeGBA5HHpWheXbmFVUbTyQCOlVrS0iSNXjYmTP7zJOeTnHPbk1nPY0ilYxYwYui80kjMw+5h924HPAPrWvPZh3KpgHlgrVVbdCNksTA/Q8/0rz5R1GZ7yy5+4GIHUDpUDQPeXaiQAgc8DmtBVeWTAV9h4CqvJ/GrtraCzfdMcu3SNTk//XoSRL0LWj2/2eXcVAbGML0AootZ2E6n5cFjwOg46e/Siu2nsRLc+WA3HNOJ9OR6VCCMU8NioLFPAyOnpUTxq46VKeRxTDx0ppgQ7HTBVsgdjUU8zMuMY9as9famtCJOCOatNdSWmUVJBBrsPGLg+PPEnTjVLkf+RWrlZIChwOTXQ+NUdviB4kC9P7Vuv/RrVcrSRMbplFQrDNL5dMhUrgHNWkHzYwa5nua3IgCOMfjUyp04zUwiR+MEGniPYCCDxQMjESt0pyptfBpysrHKVIAM5PWkAnl5HXrTwe2OKUYP3etKB60gF/hFGD1xmkIPYg05TjpzSAApyOeKmRce9Rg7qlRuNtMZLhshjjjpTxIv8Y/Ko0YdM9KeqgnnpSAfbXKzoTH1BwQasRDa2X5zVOGAW7syD7/UVbR8kbhQwRadiSAowKaqsAzcfjSGTAABANP3ZUbgMetQAwTQJJjcMk4xU8aF2+9gd6ptZwSXIlH3quopRGB+8aYxyfM3A4qfzccKB+NVVcjjGD2pS5HXipGTR2qec05bLH17Uptk370co5754NNRmcAcgU+SCKZAGJVl5UrTuItxp8g3HLfSng7SFJ+8ahim81AAG4OMkU4oz3UfP3etIGX4gqqV7mmHJIwMYojYZ96eWyeMUAOEpBC8Yp4defU1DtHfrSrwelMRNnaFApspwjN19qQsOSPTFQOWB5JxQBFc2EepptuEBHqawL/ww1qjPYzkj+5IM/rXTLNgYPAqCa5LxshXj1pqbTE4pnCC5uYZDBPlJB1yOPzrV07VFt0KgknuD3qxqcdvJBmZdx9SMGuUF0lteCOMGRT2PUVvF86Ia5Xod/a3XmxtJK5UHgIKvIiFAwYPjkDvXFW+tiJdu3aT0z61csNUmjmdvM3A9QelQ6Y+Y6p7gQgs2AP9rpVZ1+3j5t0aDkkHgj2qha3supXIRgFhA5B53VtBQihEcKg+6vY1NrblXuIrrGiqFO3oGFKY5XljeMqU/iwaFjcsGyqj6dRULWklu73CTMFHPl+tSBPczeQu4gsR29ahe4bajuy/MeE6f/qqtC73dwHnJUfwqe1DjzNRJdv3UYwuOc07AaSRxuM7dr+hNPzkc846k9aoi5TzhGMkHr7Vcjl3Abhj3pABwwyvHpTFcgkNwKkI+bjp60jICpB/OgYjKoQkZNVpItwDDn1FDSv5vkrkf7VTngY7Y5p2ArLFtHynio3UN8pz7VaK8fKfwpmBjtmi4GcyCRGBGccVTbSbO4yHgXOeq8GtOVdrDC8HgkUgQHORVqQrGdDpi2jZt7qePHYncv05rStpJWXZPtLZ4K8cU1iIxjrQNzLkEZND1GiZgPvYBas7WLBdQtAcYuEz5bD37H2qwJtpJYHIplrqlvLPJbn769QO1TYDnNB8Rap4avjNYSmNl+WSCQZUn0K116+ObfWr+K9P/Eq1dI9gYAvb3C9Qki8EDPIIORk+tVNU0yDVYEO1Vcf8tQPmAHY+orkL3SruyBeVN0ROBKoyv4+n401JrQlxT1PUrTxzax3S2OvQf2XdNnZKzh7eX3WUcfnjHSuqhdbiJZIGWWJvuvGQwP0IrwvTNeudPHlGOK7tH+9a3Kb42H412/hrTPAfiO5U2y3mh6o3IjtbxowT6qf6UlTjN72BtxR3cVs42PuJAXbkDhh269xWTc+JNKsZRDFcNf3z4AtbNPNkYgdSo4X3yQOKntvhdoKXSyXT39/sOVS6uXdc9eRmur0/R9M0mEw6dY29sjHJWGMLz7461tHCX3Zk6/YwbPRL/V4YW1ZYrS2LB3skIkZwOiyP0x6qo9skZrrOmRge1Ape2K6owUFaKMZO+rGquPrS5+lIz7QTjPsKqDzbsbXHlxk9jyfrVEltWEgypyPUdKU8CkRVQYRcD+6BxUF7cR28B3De54CetAGdqhd5EAdgCdqRr1Y/4VBBpkRkC7/MfPJUDGe/4D/9VWUhmifzJUM1zKNox0iX61pQW6W6BUwT3OP84oGGPK8tCvHTNScA0jqpwTxjmkB3HNMQ/wB6QnPSlNIRx6UxEU0mxTtGWNEcTYDMcU4Rhmz2FSfWkA2SQJ1OPQVg6+1xPaNDC5ViOo9K25VB5PP1rM1BcxsB/F3pMqJctDutoz6gVYxVTTyPske3psU/pVwVpHYmW4ymkYBPpUpFNx9PxOKZJ5141+IF34V1WC0GlxTwtCJlle4KZOSMEBTjHB/Gut027fWtCsNTMJt5riFZfKY52kgHGe/P/wCqqup6VYwXTarJpq6je28O638xckKuThc8bi2Oax/C3xHtfE+tJpcemTWjmJnDSSBvu44xjjr3qU9SmtLnZRSeZEH798etPwT24qDcYLjJ+5Jz+Pr/AJ68elWh0FUSR7CerU0DK881KRTSBk4FAxhFRSxiSNkIyGUrj6inzOY03bS3NOPAPQYpBczIlJtI92Mhdpx7VatjutlX+6dppipiF14OGPQYHWo7OYs91GFAMbfL15460DJXcK8aHOWzj8KaTiaFuM5ZT+I/+tTbiUhrVin3pMH/AGQV60ShlWPBwVkU5JHTPr+NMDV0tjvuU44IJ5/CtE8Z9uKybDabuZHAbKZIPfmtBGdJ3hY7x96Nsfw//W/rUoUiKXIKoTwxPGOT7CnsjKrbcYA+UDk/jUnlKzuTk88VJjGM846E80hlWGRnt+mecGpEUrnJBPqOgqCKJVvGcO74yAMk4PsKssTtOfyoGMY/wjn3oWMLz3pYwdu4qAfQelOOKQhKKKM0AIW2ikA9aQfO249F7epp9ABTGcLS5qMjJ9aAFPzYpGBzuwW9gKeBxzSEZOM4oAYHTPOf8Kcw3Mozg9cYph2GVQwDOB97/CpgoDknk0DFx69aOppRRQAUopKKBC9qjY7pAuMgcmnngZ7jtSLz82MGgB2aKTFFABSj600daUjNAClh70bhTV4OM5pSAcH0oGJLhkKsOD2qAny0AUc9KkmkVerY/DNV3kIC46A5z60mVEjDFip3fN3o3YPzjH15qM7hk7eaaZMrgg59qg2TRdinZEKBWLA5wAMH6VBO2xRkYQ/MVPVRVfzPmC4zjuxzzUirHKrFZAJBycd6LlWsRPcF1wjHgfSqz33leXwPmbaFc5DZ9u3rVp7TzAW3jGOm6qf2VZXx8uM5Bz3qG7FpInEr21yDIWcSjA8qLG09vfB55J4IqQvAxMzyrC+djndxk849+MH8aVJ0aFVkTdImVbI6YokggiuhISrzyD5FwASPXPas5XaHdLcjuEjAVhtdGXgnuOxqtLceUhXdMpPTowqrfrfRq3ly/cOVVBtXHYH1FQx3zvEzzxPbnGMFg31JHpXJLRg4dUWnuXcBfMbAHIwMGmCQAdMDuWOT+ZqEyxsVUXEW484+7kD04p0aJOS4kzjjpwKSFyklvLvvkRQCMHG3gUVJa2wW+iljc7sMpbHbFFdcFoS0fLAIpSeKbjNOoGKrEHnpUgUNzmouaVTg9aTAkMdKAR1pysGHNSKoY89KlsZCsIDbiM1u+NIN3jvxEyHa/wDadz/6Nas8RjHy5Ira8ZxhvG3iE46alcf+jWoUnYTWpzXmOjYlHbg1dhc+WCwHXgilhtPMXc/zZGMGgWrxH9y/H9xulF0FiyGGOcH8KXerHBPWs17qVG2yKEI6ehpq3BeZSCRg0coXNKOFFJ2cEmhkZT8xojkH3iMe9S+Ysi4P51JQ1UZvmXoKXf8A3hSoHiHynK1KvlyD/a9KAI0RX+6cUCN1bcTxSvAylSjY+tOd2VcMBSACewpwHAx1pgdXxgFT7VIMkcDPvQMUKRzkVOp6VCq+9SA4HHakBZ3HccHmnq2Rgrn3qt8zVPE+O/TtSAkDFDk8il85N42gkHjmmOWLZxxUZYnoMUAWkkBfCjirecjFZ9uQByxz15q0rkgcjJpMZKuGOOhFKV3uvtTQw83AX8al6HOMUgHRZxirMRxJuI6dKgX1p6MS+D0pAXDKmws3B9qIsMwZe9V3Idwo6d6tRIsUW7oaAJxGAxweajkQg57+1OWXAHfJpA2Zfb0oELG+77wqU4PQ5+lRcE9KUAocrTAULt5yee1NmIYFSw3YyBTFeUzOXA29qY0tv9rEW4CdlzzSGLjcnNVp+Fxk1U1G/mtphbooLOCFaofIu5IB5t18zcEgcimo9QMjXp5mcW9mPMYdSeg+tVrXThbxCWRQZmGSfStVYobZhaAnLHO5uSx70XFs4UbelaqVlZE2M17NLiNiU+btVLfNYzCCQbgy5zW5axhI2LDPNRG0e61AGEgMI/4hnvVKWuonG5DYXzRcQyHafvKa6WxvLeUeU0oUjn5jVUeForqNZPM8ib+9H0P4Vj6no+qaaxd4/NjH8aDmhuMhWcTto5yi5LqYwOxqCOeaYu65EfauOstSdxtZmIHVQf51vWOqrDEzPOSo/gIwRU8ltgTL13eW0USLKzQM/wDy1AyPyplurHGxQI/UdD71QfV7G5DG5iO0fcXFa1tOstnH9nAKkcAdqTTQ7kiwLJJvXjHp3qxsPftTFYqVQIcHvUhLL1GRUjBXCcdqax6kc+1NBBcjOaGBU5BoACgdMH7x71GrMDtbAI/lVjeAg3ACoZVypZuPQ0ANc7s7R0qLduGR1pQ5Xg96QqQdy96Bgqhz8/608wqR1xTVK9yBTmGVB3YHY0wIGgyfWmBGVunFWg3P8OMdajkbjgigCIx+erAcH3rKtNPFrdSrtALnJbrW0F/usfypptlWUSAHzD1PammIWBvLOxGBqVYwAcAYbgjHFQ+SsbGRQVbp7VheJNceziaytz++kX96+fuA+nuaajzOyFOSgrswNZubFdSkWziAgX5WZWyCw6nHaq0c2SskTncpyCDgg1mOzZP0xTFdozuU4NdMsOmtNzkjiWnqer+GvipqOmiK11bN5aggB84dR/WvXNF1/S9ftxPpt2koxgpnDD6ivlRb4cCUY9xWlYandafOtzYXTwyDkFGxUKU6e5r7k9j6sz27j1oz2rx/w/8AGK6V4bXXLZJIuF+0RnDKPUjvXqdnqVtqtss+m3EU8bdXVs7B7j1reFRT2M5QcR0rPNeJApXygN0uOuOwq3twABj6DtSKu0dST3J6n0NNklWNGbuBVkBLKkY5JLdlHVj6Cs2G3aW6M1xIJJ8/Kp6R+2PWrmxmXfgBz03dqSG0C4MmGYHIxQFydV2qAM/WnCjkk8YFIxI4UZPpTAZI/wAwXGc09EK8sfoKAOCzcY9KXIIB9aADNNc87fWnZApuADuY5PYUCHcAfSmmTjIBNNKvJ1O1c9F6n6mpeAOOlAEEjYj3Px6CsS/mmmBiiXBPQ+nvW1KglfGCT7dqqzwJFG2xeD1JpMpCaUNllCu7JCAE+uOK0RWTpD5hYf3WZf1z/WpJ7vUF1D7Pb2JeIAMZn4QglRgHI+blz7BR6irjsTLc0mOBmo5Tt2HJA3gHHvTpXCLnBYZpkx/dbiAMEH5v89aokiu4HnVFjIRgcjI6qRgiuKuZ/DHw2tYJ7fSLgm5zGbiPDSNjnDsen0HpXeMD5h5PI/lxXOeIfDFlraLFqEsxtBP56xxnb8+0qAW64Oe3c+9TJdSk+jL+k6lb+I9Ct9Rt0aOKcEojjLKwYjn8qu28hZTG3Dp8p9/8/wCetcbp3jfQtP1iDwta6fcWpjm+yphR5anJ75zg9c45yK7GePy2M6ZBX7ynuP8AP+eKaEyY03u1CsHQOOh5/wDrUuBuOelAFW/2fZHZ/urg9cd6m6gc4yBjFRSSrJNLahWEoj3ZK/L7Y9fwpt3cPbWBuVT5kALIR0HfnI/U0xAIyvmH1csAT1yB0qnbGT+0rhGLZCjaQOAMZ/OpbuXyydrso8yJh0+bPb9KrF5E8SRQszeVJBlYjjaWDHOO+cf5FAwvpJLbSlldUZo2XBmVjjnBbgZ6H07VauVPlSFQSVUkADPP5VmMRLpGrRuROYJnBV2D4xg4Oc8Y9a0beQXdhFLj/WxBiN27t696ALlk5W+jZv41Ix71sNwB7VhRZjNu5JJUjJPet1mUgAnk9qSG9kBkEa5Jx+tRo0k25iPLUdMcmnqv7wZU5xgGnnnNSwRCxCYUDAPU0vJ5PWonXzJQpkI2jcFBwPxqXdjAPWkMX370hoNJQIDSEA96a4LfKDtz1NLjAwOtAwHApN4P3cmossz8E1ISR2oAQjJzk04DHOeaaAc5YGhnB4AzTAiuLgI2wMdxGeB0qKEyzSfIzlR95icY+lRXAjmmUSSMccYHbNaMaLGgVQFAGKQCeWgZSByKkpgkUnAYZ9AadQAtIKDQKADGadikooAazgEDBOfSnUdKKAFopKKBBiikLUtAw4FNY9+1KTUTnikCI5Wy3C5I96qG4dphGEBTPJ71Pt2s2ASx5zURbZ8uMD0FJsse8nHb8KgMiH7wqRjkVAxUvs/iqSloI6IxyjDI7Gljm5+cEZ4qPyQrbsGlkUOhBfHueKTNIy6D5EBbaoOeu7PSlQEKOpOenSq1nJKVDEbQ3Kn0HarDSTKcgqyjqWySP8aTRSHQsBcIrpgP2x37A1DMFdZJWm2yow5k4K5/l6Uw3LlyAnzjvnC/U1Itws10ucMZFwTt+7kZH6kVLLSe5ReyuJpEaORfmBAJbduH+f1rFeCXzmjD5Q8EsenYjpXQCHFxvcnOcqo6Z9cf1NVZrGQxgGchhyTjJb61lOCZSkZ8cfmKGwGMfUngHHpWnFLEhGwjkY3AdB7mqi4R0GNoJxn0+tXLaMOjogwuecjrSjBDbLltGTdq+Ouev0oqaztmaVGDZK8ZP0oreK0MJNXPkkrg4pQMcVIQDx3oMeKwuUN8v5s0bDmpVFPC5pXAYEBGAcGp4gAQpGDTPLPUVIn3sH8KTGWFXHI6Vt+LV8zx3r2Oi6jcfj+8auf3lm8tRyep9q6Xxa6x+NdeVuQ2o3HP/bRqNkHUy1wOg2k/wmmlO5GCfWjOOAdw9KFfJwCD9agZDNAGTBGQT+VUPsrWzl4vmHcGtdsHjlfr3pPLHpj3qlJoVjPS8iceWwIY9m7VLCAhOW4qSezin6ph+zCs24iu7Y4+8n96rTTJ1NqIrIDsbp1pwizylZNjekHy24J6GtdJCFqJKzKTuIXI60oAHTmhlDcn71LH8q7Sv/AqRRD5Ue/cHZasLC6gMpyDSPBnDLT1dlAU9KQArqThutOaM44GQacFWSja6HEZyPSkMenAHPTtTmfcDSDgfOvJoIwRt70hEqvzinsVx0yaiO5TgdcUCUqeRmgZI0YwCjYNSwsSQpGKYG3Dr26VIhKIeCfpSAmQlhnt3p5w2GHSqUUrR5GCM+tW1lDgAfjQBMGIxj0pxZsg5xTVIxilKg8dqQEkEqvOQDk96uI+GILYqpHtiHAzmieQrGXVdxz09KANAMh6HJqRUJGRVSB2ZEYjDDrVvzgvC9aAY5htFNiJyT+FL94/NxnvTtuBxx70xARn5R1rI1e2KCO8Rf3kDDO3rt71rM4FJhJVKsu5WGGpoGZlxaRajbq5b7wyrVkfaZ9Pm8u5/wBW33ZO1a1k3lSvYlvmjJ2L7GrVxaRTQskiqy/3aWzsx3uchreootxaTxDcUOT/ACqW08UxzTC3uoPLBGFbrml1bw5PEhktR5kX9w9qwrfSxdTmMv5cinkdMV0R5OUylzXOtwj42t8vWprILHeBx/dK1nWenXEcASafcFPGOuK27GDauG5bPX2rGVkzVbG1aZckN26VbADAoV4PFUoP3Tc1a8wuMrUoGYur+Ere+YXFowgnAwcdHrjLuK70+Uw30RAB++vSvToid/ztxjpUd3p8F3E0cqhoiOc9q1jNozcTzFZRIRswf7p711Hhic+RMvmYA5FRX/g4RRtcaZPnv5bGsCO+utOl2So0Tnhh61rdSRNrHcQXcczOscu47vyq4AVGGYZ965HR9SSG6kLFjGxzux92ulN7C0fmK6uuOmaxcWWmWGUcEKM+1M8xQ5zwaSMkoGXO49j2pCgLfOCfpUjBzucAHNBbBIIyKAoRsjcvoTTiMgk4/CgCF9rdOBUfKLz93tTyAg3dqFCz8k4A6e9AFcZkfLcY6GpmYlQvpzTnUFeRj0qL5lPPPtTAaS8szZXAHenshjG4dakADYOdtK4bGFO4HrQAiSB/4drUu7Df3aURYXj71NIJ67uDTAq390mn2M95Lnao+VR3Yngfn+leZ3Vy88zzSHc7sWZvU/54rqfGGoh3j06JvlT95Lj1xwP8+tca7ZJArsoQsrs4cRO75RrHLU0k5opDxW5ypiE0JK0ZyhxnrSE00nmk0nuaJtbF6O7V8BsK3v3rZ0bXtR0C6SewuWjZTnGcg1y2Rg9qliuHj4PK1zzo9YnTTrdJH0D4Z+K9rqIS21YLb3B4Mg+6T616NG0c8SSQOkkR5Do2Qa+RI50lHycn64xXV+GvHWr+G5l8m4MtruG+JzkGojVlF+8aOEZfCfSeOc0prnfDnjTRfE0Sraz+XcHrBI2Gz7etdCeOOfoe1dSaexg01uNctgKvUnr6UAKiDjApQtNcOeEIB/vHnH0HrTATzTnbsw3Yeo9TTwoB3Hr+gpEjVO5Zu5PenE0ANLc4zk04Lzk0iqB9afQIQ4AzTAwk49KewBHzevFIihRx1NAAeFJFZ86TSDczKqgnAHU1oHnioJx8p+lJjRl6U22SZP8Apof1Aou2js9Tluprq+8l4ELQWykrGELbpHIGQOQOCM4PB7NsDtvph/ut/MU/WFCos32W4n37YHVLlYUZGYAK5JztyewJwSM4ODcNgnuX7pyIslo3hf8A2lHHbH972qWXi0kPtnnI/nSFneJkHlr8o+Xgjp24wR2HHPtSqFNsY8qSFwfrj9KogeSG2n1H9KjmQSxPH3dTjnFLDgQQ+ygdc9jTj1z/ACoA4rUdN8OeGLqfxTqdrLc3okBaQAyCJjhRtUdPqeea1vDfi/TPFQuDp7TAwY8xZk2nDdPrT/EOif21ZT6fJO0VpdIscsiAbkwwwRnjJxj8qwrS98F/Dzfp63EkFxKoklZkZ3lHIBJHAHB4HSoWhe6Oujzb3BiPEbHKe3t+n6D1qwM78Aduv0NUluoNR0+0vLZxJDOA6SD+IEH/AD+FXiMN1x1HWrJKTKq60g/hltyD8qjkEd+veobpBceHZkZsjyiD/DnB9e3ep7kJ/atk+PmO9FPHTH59qeiZguFUgHcwOelAEE7jyWkTbv8AJRhkEfzqpeOV1TTnBARy6n1Py54+vv7VPEhktIQrRSB7fYsgz0B7ZznjHbtVfVosrp8qkHybmNskHHPynGCBk578c0AWpHDXV7EpDfIrsojACkjHX+LPXn6VX0aSaXSbZrht023DtgDJBIzgVccH+1M7AVeHDHYecHj5u3fj37dapaOgisTEBxFNIg+XGcORnoP8+tIEaMihoj7c1sRBXjV+5ANZPWM/StOzObWP6UdRvYm70Hmmybvl2kA570KpQckk+pqXuC2GuO4+90FNJwuO9Of7vvTFUnrSGG9Qoz1pjzqmM8EnAHrT9gD5XhsdfaovL8ybeTz91T6UCJ6jc44FKzFVyvPt6VDtlkbn5VoGPUY4FO5zxTN4jVs/dX+KkZ1MiqWYEdhkfme9ADz6U3bsBJGfanj5cmofOLSgK2V/maAE8kLIr4xjnipgeOme9Kqc5703cN5CjPrQA1MNyo2gHkdz9anFIBgfdpaAFNJ3oooAKM0wyIH2k4qQYPSgBBS0UUAFJ2oo7UgsIOKCajG8tz0p4GOlAxD61FMzBRtXJJH4ZOKmIxzUJk3TbMYC9TQAp4GB3qFogTzyfSpDhmBDcU4kA4pDKk7x20Ek0zhIo1Lux/hAHJ/rXGaf4xad55JLHbCz5iXcRJ5fYnPBbHJHGOnbNP8AH2pu91a6Fby4M2JbkDsg6L/wI1gW6n7j/eHG6spytsbwjdXZ3tprOmX23ybpVYnHly/If14/WmTTPcbzE2y3jy00rDI2jqB2+priSqszfu/m/g+vX+lVptUu47eWxtryT7LJkOm4kNk5IGeQPXBAPI6VdJObsiKloas2bzx3cGYLYWkH2ZTgNOGJYfQEbfpXRaLr1vq6BAPJulGWgZuvup7j9a8zGFU1YRmVkkRyjLyGBwVPrmuyVCLVjkjWd7nrDxpJ98YNL5IjEZQ4AGDt+tc1oXixbgpaar8spOI7joregb0PuOvtXVDKoUGcg+vB/wAa5Jw5XZnVGd1oQSwCIZXPmBsgt1/E/jVGRZjJuYyMD/CvatNi+OelQuVwfl59aixqp9zMULvZJAFcHAHrViKBHVZAdidGOcZ9qGjXdvYZJ5ppLE7mPI+6B0pWsXz3Na1zFIoDYB6jNFZVrLI1xGMkJzj8qKaM5bny8I9vNOqQ4z7UbOcjpXLc0GY4yOaUEYGRg0uMUY70hCjOf5Ucs+0feNJuqW1jXzfMfOAOKYFqGEQj5huz6dq3PF+4eNdeIwR/aNx/6MasheeeoNbPi5T/AMJrrzL/ANBG4yP+2jUug+pigEcjg+lLuGMunHtSBgW29DT1HGGGaQwHlsPvA+zU4fKMDkUmIs+lPXjG1gR6UgBQOuMfSnbVYYIB+tJkZwVK+4oyqn5WB+lAFeXS4JvmUmN/UVUZryxP7xTJH/eFaylm6A1IqgqwdMjHQ1Sl3FbsZkN9HccKxV/Q1eQMTtI2iqsulfP5tr+7f0oS/ltj5V1DsOcbqHZ7AnbcvAbDx+tBwDk/L79qjWVD82coaY90rSbF+ZAOaXKx8yLqxjAIPWlIK1BBMCm9c7elWkcBecEGpasO5CHJOODT1THIP4U4qrfdFNwynikMR5v3gDKQf7wpxjLnPX61IcMvKio0jO7Mb5HvQIcqFDuBJ+tSrPnh0APqKCWCbSpPuBQdpwOhpFEm6IYJxzTGxG42v19KiZSflz9KcrKcBxyKALUbEknIzT2YsOvAqDywV3IpLN3zVWaOaNH3yYPYZqkriehtQykKBgEetSnaThiAayLSZxZkF/mFWIZGdlaQ7lH6VLi0NMv5cKduNp6YqxEMgBuc9c8YqsGSULsboafLcRwJubnnFIC4kql9pH3OAT3q0pH3cg1QjAkUn1GQaW3aSNiJJPpTJLjxjdheDTDlTgdfWlSRSTluTSgYB70AZGrqsZjvVB8yE4baeoPvWhC63MSS4yCPlBqrqiNJGY4xlsciqmg3pkia3mH72PgD2qmroRrlDvJ3Ej0qhe6Tb3RLMm2TGQ6jB/OtB97IyoPnx2qBZGieOGWNssOX7fSptbYq5hf2Zd2jExXLMnpIM1qW9w6AAjtyR61anXAxgkH0FRKsanBJ6Z6UNsC0j+YinJyO1WY5MDiqaSxqAQ4xUqnHIPFIC8rbmG3j1pwf5iDgg1WRs9CM1MpXGCeapEk6LGoKqq9c7fWs6/0uz1WIx3UWdmQpXqPxq2CAcc59akj+ZTgd6pMDhr/wveWUpbTp2cY4Rh81YourizutsoaKZeqtkV6k6AHBPzDvWdqOj2WoRkXSBi3AZeCKtT7kuJz+meIhIRHOi88Fs1vGdI4y7MPLxwW6Vx2qeG73Q2M0JNxanuByo96pW2tSxupMjY6FWHGPpVOKlsK7R6BFKkygqwIPQg0HOeSMVmW2oW7WoeIAkj7o9at20hmTMh47Y7Vk00UncsPDvAUrx60EhFGBjHFAfaMZJHvTFYTMRkcUDByAy45Pc05U4yTSOAh5pyle4I96AEKZHDAj0Ipu09F+U1Ky4G5eR2NMMuDjAzQBG02wMHU/73aq95qS2Gny3TZYIvygfxHsPzq5GS0ZDLjPPrXGeL7lVlhsYgNkY3uB/ePQfgK0px5pWM6k+WLZzN5cPcTySyNud2LM3qTVQtUknNRdzXopWPMbu7iE89BSHB5oPNIelIBCwximHrSmkzxQUN5oopCaQ0AJzmrEd06jDAMPXODVbNLUyipblxk47GtbXbRSLNbTFJF5BUkEV6J4f+L2r6YiQajCl/ABt3Odrj8a8mDFTlTg+tWYrv8A56Dn+9XO6UoaxOlVVLSR9UeH/GOj+JYB9kuRHOTzC7DcD7etdABXyNa3k1pOk9rMySIQyup6GvXPCvxhB2W3iBDjG37Qgz+YqoVukhSpfynrjHA460BT1JqCxvrTU7cXFlPHPERnch/n6VYHPSt7p7GVrbhUcsnlpnaWYnC9vwqTI6+lQRhnmeVuQOEHb3NMRIqE4eTBYdB0Ap2d3FIx6YpwAFABioJlypqeoZj8poGjGi+XU29dv8iKn1e2+0xQKNNgviJcbZ1UrHn+PBOCB19fTrxVbMepxt/eDD+v9K2VanAc+g23jdrWEXCrHIowUiJCrzxjHtirCgBcYAHtTQc04cVZmQxf6hQOMHH61IacwO3CgetMw3cgew5oAGUMpVhkHg9q5HxD4JsvE13aS6nPNGlqGj2W4/1qkg/M2CR+Hcnnmut289TS0mrjTtsUEs7e00qK2s1CxWyjylHzYC9qtqQ6q/G0jNIRsmXgYk4P1xkH8hz+HpUQ3QSAIVaJn2kf3Se30/z9QBmoyyQNaOhGGnCOC+3g/iP61NCS73Ck5G/AYdQCKkZI5GDOqsVbK7lBAPTNP6Dv/n3piKkEBSCNGydgZeRgkeuMmorqwhureOK4UsEYOCrEHIPHQ1ePrTDg0BuAjQnzSimXZs345xz3/E1XwVzk5wepq0HVRg9ayNQ1K2sMvczRRD/bPP1A6n8Km5SizSXlSPar1g3+jAehxXBS+NrXLJZQSzuBkvJ8iY9fU/kK3PCF9q+qCS/uBDBprDFugi+aQ/3sk/d/n+FJO7KcbI6o89KR2KgADJJ7UMMo3UcVGoIA6nHTNNkRFAIYljk+1BNLTWbkDFSMjdjtPvxRHkKB6UkvGBT05XjmgYAYyc7qbywxnH0p2QB7etCkMNwoAayDZtprRl2VSxG2myu4VnUFsdAOaYjvc2ishMYbr6gd6AJmUldo5XoSaVYkUhgvOMUzaNqgE4Hc96l7YoAD061GilZSeoI61JTQDvJ7HoKAJKKSjIHNABng8D8aikn2P5ajfLjOwcVJvBO3v/KkSNVZmAyzdWNAEMcEpm8+eQEgYVEHyrVkcAUUUgA0UUlMYhJ6ACkcsOAcH86UnH1pAvOTSAFBCjcwZu5AxS5oNITgGgBHYAHc2BUJRVUYY80pKqd0gJB6Ck+Z2BbA9qAHqNoxnNZWt6lZ6FYT38/LRrkKW5dj91fYe/b8K12wqk+leXeNL9tc8RR6VER9nsf3kzD+JyPu/h0/E0pOyKgrszLIT3ks2qXzn7ZeN5p64VcZUD25rRRN2Y9+CPvMff8A+uKAo3NuUZAwvBqheXfBgjOMj96fUntntWNODqSsjepNQVxLq6E37uPhR1b161TyBSnjpTTXq06agrI82dRzd2IeadESVIpjAilif95VkkuMjGOtdJo/i6eyWO3vlM9umFEg++i/+zAfnXO89RSZPbrWc4qSsy4ya2PXIniu7ZZ7aZLiFj8rjnPt7H2pDBLnc+0NjgDoBXltjqF3pdwJLSZ48/eAOAfqOldfpvjPzo2W8hyGJ5i4YcenIrjqU+U6YT5jckEyA7oxt9aoTSyThozGQhGCSOorQtpLXVgJkvVlHaFOCPqOueauvCoUDb9BisrGnNbcxrSUJOieXgdvyNFasVunnrlcdaKLMG0z5RBHelzt9xSE5J9uaaGJFcZuK0gUdKTcCMimMFySzcUiyKxCIDk96qxJLFEZZABx71oFGRcBRtpEQRINpHPWhiSMgkevepKQoYdM4PpW34uJXxrrwcfL/aNwQR/10asH5mGeD71veLGz4119e/8AaNx1/wCujUdA6mQ6iROCPYimpKA22ThvWkH/AEzO1h2bvSbyeJUwfWkMmMfcHilEa7wSxFMEMincrhl9KGkBcKykEdTRYCbDKp8uQE+hpVRtgLxjPtUQXMncD1qZdyjAkP4ikA/egHAYH0qTBIzsIFRq7j+FWPrSOsshy77V9BQBKDt25wPxqOdEuI2RkQ57k80jPEhwFz9TUJeBRgkj8aEBn3Gnz24JgYle4BqOzmVXKysUIrZiCsmEfcTVe5tIp/lZQGHcVopEtE9m4MG4YBz+Bqyckgrx7VkBLmy4/wBbF7cEVZtb1ZPlzk+hqGr7DTL5k2detPJJAx3qvHcCRzGRyOzVOCI2A6g9qVirk8cUc6Bg2CBgg0xLOUD92yjmnQkR58s5yelTCQP0yG9KljDy5lHODj0ppaN8B+GHpQ1wY+GVs0itHIfmTDDpikA4xkDIwRUJQbsg/WrIiY/ckH0NDblGGjyfUUDIhcBRs79qRgGAMhyRTWhDck7SfWonQqfmJOPTpQtBDCk0kuEHyA54pn2tY2O5XVAeSKspKqcgZqCS4IYOIlMX8WRVqV9xWJ7XVDNORtIA+7x1rReeKVdspwT0IrKglguebeVQy9VxV/YzLgoAfWpluNFy0uZjNsblQOuK0FCsdxzmsmCTZhG++O/rVtbjHJ4pPULF0nnK0yWZ4wpUEn+6O9MScZ+tCLvvfO3EKBgA9KEBZt33je67JSOhqncQx2GoRXgPEh2yADgVcVXV2IkDA9FI6VXcStBJ5zBl7JjofWqTJsXWbyyGAOxu/oaduV+CoPvUOny/abNS4wehU+oqxgemD0pDIivPHIpCoAO3n2IqXG00w9yDg0gK+w+YPlXZjipvlOB39KZh8YcAHtigKUOOpNKwyRTs5qcOGxgc1ADxzQmQ3WhAWkPzZNSRsQuQe9Vg5bIA/GpkYLHgmqQhHl+fB696Uyh12YFV5FM0u4HB/nUoBUYfA9x1qhE0TmPlgGA/hIrG1bwnp+sb7qBDa3HXKjgn6VrxuuwhvzqQyBYjGc5PTFO7WwjzO607U9GYm5jZoj/GmcUltq1xCGaGYkd8816UWOwoyq6HgqwzXM6n4NjuXM1hKlvIeShGVY1cZrqS12KEWvl7UidPn7MpqxpOorPK/mOURRxXPX9hqGlsFvbZlj7Sryp/GmLdnyisbAE1pyp7Cu0doNRilnSCJhJI3JHYCrphGPlbn0JrjdCuPs2pDzFJEgwSOSK6y5vYYYwzk7jwB3NZSjZlJ3HoRHlGbBPIOaPNBfY45xnd61EoyQW2lzyEzzipVj3Sb14OOM9qkocSFhklLgLEMnntXll7dNe3c1w5OZGLD2Hp+Vdz4qvTZ6O0MZxJctsyOwHJ/SvPnOK68PGyucWKn9kic1GeelDHJpM4rqOQAeKaaXrTTUlCHmkI4pQaQ0DEx70mM04im84pDGjil7UnU9KKCgNHHeiikMckjRkFT+FXI7hJODgHvms8mkzz1IqJ01I0hUcTr9D8Tat4fuVlsLt1GQTGTlSK9l8L/FbTdYC22oj7JdnjJ+65r5xjuXj4b519KtxXKSNx8pHrx+RrHlnT1RtzRnufYJRpdp3fKeVwc5FSAYGAPyr538L/ABO1fw8i283+mWgGNjtyB7GvWfDfxF0DxBtiEhtbkY/dz8ZP1rWNWL02M5U5I67Aoo7Z7Hke9IT2AyfatTMWo5OhHepBmmSnaMAZJoBGDdELfwf9dMfmDWun3F+lZOoxlZo3J+66n8M1rR/cWiBUtiQGng1GKeDWhncUmkNFITjqaLjA0o9TTSy+5+gqC4vLe0BNxNHCBz+8kC/zpXQ0mSTLuRSvVGVh74qJLZRICA4iDlyG6seQPoOf51j3XjTRLc/LeCY/9MULD8+BWRN8Q7YEiGwnk9N8ip+gBqeZFKDO1LDrkfhR5nylgMgda8wv/HupyKyxm3s1P8QXcwH1bj9K5i+8UG7bN3qM10wGMBmf+XFT7RFqmev3/iXS7CQpNeIZQM7Ih5jfpx+orn7zx8hVhZ2Tu39+4bj/AL5H+NeZDVWbiGzlZe2cKDSm51GT/V2saehb5qh1EWqdjrrjxdrVwMC7EK+luoT9ev61izTGWVpLiUs55LSvyfxJrIay1ebPmXZVcZIT5Rj8Kt6d4Hub0ieSXKt3bJJou3sU0kObUbaBsfbIl46eYMkenvW7Y/FbU7Hy4PtdvdxxgLtkgOSPTcuKfa/DuMbRwzMcfN0X3Peuv07wZplioPkq2O7DJqlzGcpRJfD3xBfXJxCdAu03cedC42D67gCPwrtN2R2FZ1lBFbRgRIqj0C4q6tXr1MnboPzRkUhNNOSOKQiGeQKDuBx0pEl+5GgIXGdxqcKcc4P1pjqWcjgLjjFAyOYsRtXPUdKRI3B24+T681OqgDkc07pQBBtbdkcLThtZ2UDgcHHT8KcxGMZxSRknJ27VHCjv9TQA7bnFLkKPWgnHJpp5IPSgBeSM+tOAxUe7cSBj8aYyPn5JMDuDQBPSFQwwajhOIgWYEmpAc0ALgZzjrTTktgdBzTqSkMdSGijNABTc0jOAcZ5ozwaAGSyeVGWLY98VIuMcNn3qMrk5Y5X+7ijeB1OPagCQmm5zkfrS7c8ntTckvxjaO1AEZiUtuIJPbmpAAuM447UjDauc0AYXex4AzQBk+J9aTQtEnvzgmMYjUnG5yeB9O9eZaTayR23n3AJubhzLM57nr/Wr3inVn8Q+JPstuc2GnuR7SSf5yB+PrUF5Mtt8qktMeMZ6etZNOcrI2VoRuyS6vvJUKC3mYOwf3Qcjd+VZJPXPU9T61E8jtIXZiXY5JNG8mvRpU1TRxVajmyXdSA1HkmlHFamdh5pFXDg+9G6gnjikBZPSom9qcCWUHtTGNIaDcf8A69KjtG4eNiHBzSAHPSja2CwBwOp7Umlsy0+qNe2uEmKyxM0c0Q3MFOCzdOPWtqx8TalZlIrjbcnIBD9Qo4PNcasm1gy8EHrWnDqSykLcAB2IXzOwFcNWhKLvE6Y1lLSR6Bp3iOxu5hG/mW0vOUcH370Vy9jte5i3AGNSTuU/e4P+NFYqT6mrguh4KWCpgHk0HAQZpCRSAcgk4rmNCCVD1A61esrcwqJGAJPaiKPzpQcjAq2VweDTcugJa3Gh1J7j1py5B46HvTW6jIyKUJjlTxUjJGwo4X8a2/GAH/Caa7nn/iY3HT/ro1YIJHAJU+/St3xe23xtr3IH/ExuO3/TRqfQOpjHJweD6Y6incZHm5dfX0psXztkDH9an2fNuXp3WpuMiLNAw2nKHpVhlWWPJ69jUZHlrvXlD29KeuVXcPun9KGBEVljPXcKerseWQgVPwVBHIpwYAYOBSAjCh/uHBprRSkctmpCyj2z6UjMx6MKBjWgjABY4zUEtqW5OCnoKsSQM8R/eDPao0dkUAjIoEMiVIGzHn8anLDzBnuM0rbJBlMZHpSbN209x1oAPmU9eDUUtlFOSygxMO6mp1Qk4PWpNhUADGPWi9gsZsjXFsP3y70HR1p1vdsBu3eYp6Z6itYYY7eAPQ9DWfc6YhbMBMTfoaqMu4mi6jxx2/m5w5HI9TUkbFoxJnDdcVzkk1xHIEkzlT+da1nMZUAcYpyj1QKRpI/nA7jhh2xSf6s7cHdSAhGIHIPenRnzuD1H8VZlDsTFN6jHPanSzSWy+ZICV9qTdJBKMsDHQsy3TkbcqDTABOkoBIwSMjNDRqyY5yas+RExHygHFOWzQ9ZMe5qboepnGDaOCKjljBtmRWwzda0ntsHG7PvVZoApNAzGsLaPTb8PIeWH510IlDqCjcGsq5hWSVWIOR0qczJG8ce3BI45qpWkSlYvnIkGDzinrLuABpisrBSD25oKKpGOamw7ltHjGOoz6VbWTjYw49RWQ8hQqwH4Vdil3r7gUNBcvCRPunp61K2DhUwQazwFx7elSCRRIq5+b0WlqBLFKFvZIemQGAq5FdK5aPHK9Tisi6fyby3lfqxMZP8AKr+4K2AOG70+lxF4AMAe1RvHlsiojOUVAn4ip0IlXJ69xSEQsVX3p2ME4PFLJGGcHGMUqjA560xkRyelSZVE+b73YU1kIPynFK65UHqaQgRx0A5pWBx1pijBzSs3NMByZVs1Y355xk1BnCg1JHIufm/lTQDsblZulMViG3Hk9hT0b5j6U/aHxincBy4JznDd6c8ZkdeNpXv61BtK7i3K5qYSYDMW4FFgCfbdQG1njDoeSp5BrkNQ8GI7tJp0vlMTnY44PsK65ZFZiynPFKSMHup5I7007CseXTi80m6VbmFoZF+63Y/SpDqFxNOLmRvMZBx6f/rr0XULO21ayNvcoZAOVJ+8PpXE6r4TubBfOsJDND3jP3lFaqae5LT6FCDULp7oN5hZmbAJrr/t0UCRxlvMuWAwueSf8K4VJBC4UKUcfwtwRV/T7sW1w9y5DyFcLn1ptJoSdtxvjK7MupR254EEXI/2m5P6YrlpGq/qNy13fT3Dn5ncnHtVB8d664RtGx51WXNJsjHNFHSkJ5xVkDW60h6U4g0xh3zQUhOlL3pcdKaevFIaCmmlzzzSE5pDG0UEUgOKBhmjNB5ppoHcCc0lFLQMKQn34oNIaTGi1FeMuA43D19KuxTbsPG/zA5BHBFZFKrshyCR9KxlSvsbQqNbnq3hX4p6rohWC+ZryyHBDfeUex/z9K9v0bXtN16yWbT7hHyAzJn5h9RXyLFe5+Vxgn+Idq19M1a90m4W40+6eFxzlD9761mpSp6M0cYzWh9akY9h9ajJ3c4ryzwr8YIbny7PXY/LcnAnTofrXp9tcwXtqs9rMk0TDhkbNdEKkZGLg47mXqnMTt6Zq/A6mBCSBnpmqmqELbOxGSOFX+8a4W88a6zFGba0sFR48J5qruLce/FPm5XqNR5kelB89BVO81ew08f6Xe29sTxtdxn8uteVS3/i3UyfMacJ/cMpUfkoAqKLwtq1wdzzrCD12LyfxNDncpUktzv7rx5o0AZYpLi5YD/llFgH8WxWHe/EeYkCysIosdWuHLn8hgfrWVH4Inkx5lxIzf392OPoKvJ4GiLKpUbB1+Xkn60rsdooxbrxlq96zAalKoB5S1G3Ht8oz+ZrHkmnllz9mmklbku5/metekQ+GIYlVFj6VO/h+NSrbRweMdT9aWoXieYSQalwVjjXP3RyxP8AICpY9C1C4AElxKCeSsZCAD8K9Sh0NAfMMYDEYA/uj0qcaSivuCjOMdKLD50eYReDYiQzoZG/vPyf1rRh8LxpjEQzXoi6Yvt+VPGnKO1HKHOcPD4dUY+RavxaEifwjPTFdZ9iVR0p6WqL0xkj8qaiS5HOR6DAxAZOFOT71rw28cOFAG7oAK0kiGMBMAU8W6g7tq5xjJ7VSIbKsSDIYg7vWri9COlHl447DpShaZNiWMkCplJqFRipV570CHjpQRkYzimk9gaTKtJjrgUwF4UetJuO0nNG3jmkkiWRdpJA9qQyJ7lY8M+5jnAAp4leRUZIygfruPQelCwrGAE7etSgkAAnJHegBix4fcT26f41ITx06Un0pRQA1m4HFIF3Z55psgJYBSB65qRRgY9O9ACBRjGKSQsFwn8qdmkyex5oAiCsZEJBC9lx0qZnK4AWmkFe5Jp/oaQxCcYAozjg0Hk0cZ560ALQTSHk0o4oAiMe5gSeacBg89KaSd3yn60uNxxuyDwRQAxJfNGY/un+IipBEuRkA88k08AKMAYA6UUAB6Hp+FMRTmntwpJ6CoHuG2RmFNwcZB6Ejr0oAmdQQRjmue8W6qdK0C7dX2zmPZCR1DtwP55/Ctz983AfYvdgMk/SvK/GerJe+Io9Ng5ttOJeY5zvl9PwHH50nfZFRMy0VdJsYlAzPjdg92Pc1VdyzlzksepoeRncljkmmdq7aNLkWu5zVarm9AoooFamY5felIpMijNAC5FANJSE4pATwtlSPenn2Az71Xib5yKmzSY0W7JLD94935zMuPLgjGPNOf73b1/lzWnq0jT2lhpdjaCJp8Tm3AAwTwoPc9zlueawGAYYIBz61pWmpKyTRXjSLJIgjF6nzSov905PIx+PvjpyV6bcvaI7KFRKPIyleQRxTy/Z5TNAjYEmCMAk4z27dehqtu9+9bJS4sGXTNOR3ubnAll2gb88hFJ4x3z3x7Vn22l3N3ZXM8C5MBAKYOWzk8evTp15qoVly80tialJqXLHct6DfzQ38EZbfF83ykf7NFVdII/tOHAIBzx/wE0U6lNXIhN2PKAcHpSgmRtoxUbvgYHLHpir1vbiKIMR87da8pncORBEgC9e9O3evWgjjNMI55qSiTdjnNBKn5h19qZuGMHpSgjPFACkM/XkVu+LRjxtr+TuB1K44P8A10asYDAzmtzxef8Aitde+X/mI3HT/ro1PoLqY8eFzwcelPV8ng896jyOoyRSh8H5R+VSxk4PzZHAPUUikAkLyPQ00yggA8Z6VKIwORSARQYxxkqf0pGOOc5B6YpzEjn16imhQ3I+6O1AEay8lGH41Cd/mKqEk55qSdT5YwOScVIln8wcsQw9KoRMIPlxk04Wrr0fj6VLEcdalZvlqSiqLXnJIP04pdjR89RSwhpGJLEe1SPGwPXigBinA6cGpBkklAvPUHpTVyOD0p8Y5Ii5pAOVNq5ZutSbSUDcMh9aguIDLCYy21iO1MtWa2hELsWYUkA+a1iddrgMPU9RVM6dLCS1tLuUc7WFX1RupIINTIo6DpVKTQrGK2ovEu1o3Qnru6Veiv40EceCS3b0qzNbQywbZU3DHpWQ1jcWR8yBTNGOeeq1Sae4mmjakRpIyAwJxkA020YrFlVHHUd6pWeqoy/OwD9Cp7VqwhJIyygYPcGpasNMsRlXXd0PvTJiwxlS30pvzAjB56ZqaNt24EdO9QUNEjMgURN+NI8bqoyh5qRT5Zy2Sp6H0qwGGBg5HpQMyprdiAcCq8kYypZRuByK2JoVIz0qg8eZQoH51SAdBPGUKqAG78dKnx8uQc4qnIhjUkdT7UsMxGAGGO+aBD5SSAab9peMb1GVHVandQU3KQagIGwjpmrQizHcCeIGNsnH5VNbARZkYkue9ZNoos7jaSdknOewNam5WHHSpkrbAiW+h+124OcMh3D61YtZzJ5fyZUp1zVZJeSvY0mmsUWWDP8Aq34+lT0BmoQwYcA05JdpIzz6VEHRTncenOaAwYjYM570h2LqSKeduT6044PP8qrqwVeD9aI5OMg9aYiVx5YwOQaap4x2NPLArwRUO7LZXtQIc4OMZOPSmAfIR1xzTxlgSeDSqfQDpzmmBEH+UDdg+hqWNiSAaa8QnKyYwy9hT0BB5HNIZI2eg4p2QPlH51ALgGZ4yfmTqKkGCD6daaESiQuCh/OlZQvYENxTFwQCPSmlnYhfemBMAkMeR3qIt5j7h8tEq7lAOeKase9QScYoAnZuh6nHOO1JgbQck+9RBjuAPIFTZVuc4PpTAydU0G11VB5sYEnaVeGH+NczqXhe90i0e9hmW4tYz8wYYZPeu6JJ4AH51j+LrgQ+E7yMj5m2L17Fxmqg3dETtys8uYkkk96rsamLEiomr0TyiMmkPNK3XFNx70wE79aDS4pDQUGRimnig9KCeKQxO1JRSHigYU3vTqSkMQmm9aU0dqAEpD1paQ0FIM0lFFIpCUUHpSdqAA81JFO8R4PHpUVFS0nuUm1saMV5G5wRg+/IrpPD/i7VvDdwsljdMY85MTHKsPpXFfhUsVw8R4OV7g1lKl1RrGpf4j6N0H4o6LrsyQ6gpsrkjA38oD3IruV0qzkRHhCFNvysmCD+NfJEUySjKnDY6dx9K7Hwv8QNZ8MyLHHM09rn5oZTkfhUqo4u0inC+sT6I/s2BBjYMnoMU9bFRkkDGeAB0rA8L+P9G8SxqqTC2um6xSN39BXVnIPPI9q6ItPVGErrRlU2yZ2gD60ohUHABqfGB9aUADpiqsK5D5CmmLGjyHjhanc4HqfakVcLnuTmgLieUvpQYx6U/FJkE4FAXGhF9qCox0pdnzDmhXVpGQHlRzQFxgjBYSNgY4FQptkupQijCHa5Pr7VLcSP/qYGAmYZGf4R6miPyLVBCrjK9QTk59/egB4QDj+dLtFODArmgUwG7QTRsX1pxIVScZ9hUXmSbS7qMfwp/WkIkxUTzOsqIiqRnkk0pWSaEgnyye49KckaRqFHfjmgBSvJPrSghfehu3OKayjjPBNAx24bqDKC21QSfamJES2ScL6etSqAowox9KAFA55pOc/eobO3A61GCY1wOT70AS8DvQaYjk9hSuQqk9cdqAGjBfr05qTpUELAljxyeB3AqbrQAtJjmorlpViPkgGTtnpUNsJ4onaZ98rcYUUhlw9qQyAHaOW/lSJkKC5G4jnFMjhKMxL5zQA7DspBbg9qciBF2qMCgLg5yadQAUjdM9KWo8lwQfu0AA5bAIp6jHNQrFmQNkhR29an7Y7elMQUtIeB6mq8t5HHKsIDPI38KDOB6mkMndlRS7H5e9UzvnlHlgKAfmYc7B6VNMPMHlhsMcEg9Px/n+FNuJ7XTLGS5uJBHDCu9nPU/wCJJ4A70bvQHoZvibXV0HRzPGge4kby4FJ4LYzk+w6n8u9eNwRmJWZ2LyuS0jt1Zj1rZ8Qa7Pr+ofaJFMcKArDCf4R7+56n/wCtWUTzXXTpKOrOec+iDpSZpTSVtczF60HIpOlBNAxc0bqbmkNIB2+jNMFLQMkU4YH3qxmqdWQcoKTGO3U08nnpSZ5ozQMmM7yiKK4lmeBCdq7idueuM9K6O2niksg2nxRsLYhrcyBl8k4+Z5CTgnuOtcsTgUCRlLbW2hhhucZHocdRXLWw6qWt0OmhiXT36m/DpcdhNbTvcCR53YIU+4w2kkg9+v8AOil02WxvLuCd/wB0tpFsFop+8TnLAntzn1ornjUlBWnqzolCMneGiPFrKAl/McZ9KvluTTcEKAvSmPIiYDHBribuWkObay4zg0BB3P50hQE+tKTtHP4UDGkDBAwTScquSOnpUuzpSMuVwRQAxHLcD9a3/Fzf8Vtr3PP9o3H/AKMasFQBwB81bnjDDeNteHf+0bj/ANGNT6C6mWqA8gkH9KcAMc8f1qIFhxUgOOvJqWMXbzg/L705GaM4YcdqF+bI6+uadglDn5l/UUgHbt3ahVyflpgUpyDn3qdGXGc8mgA8oOpHPrU6ENHg9aYmc5Hegghtw4oACQDShqNod0PbPNSmJcbh0pjIN3lvuXp3p7TB1ABpoXccKM1XvY5QmUGCPSluBaXa44Y8danBIUEHI/KuU+3XUblIxlu+a6OGQtCpY4JHSm4WVyVK5YMivxVFbZ47p3dyyHoKkTgkjp3pxkyvSlYYsLNHlWJb3qwrAEDPWq8XXPrVpI1HzY+maTGTAFslRkDtTgPJGUwyHqPSo43YkZ454IqYoBg5x9OlSBn3Wm212C6jY56Fe1Z2y/0qQMyM8HdhXTLbo67wOR/EDinLAzR4bDZ9apTtuJx6mTZ6tb3THDBW/umtFSHGc5GORWNqGhxiZZIXMErnsPlJqIz3+lyhbpMx/wB9ORVWjL4RczW5v+YVGMbwe3pU8PGCfyqhaX1tcxgpIM+tWllG/aevbHeoaaLTLMwDx7h1FU5MoN+OakLlXyDkDtUoZZl3MNpHakgI5EEiA47c1UkhVOgz9KuKfIY7gSpobypQWRgcdRTAoLkZydoHY96co8xQ2CAama3M+eMKvOaZ5hVSoXoOKpMRFLHiMq3INQQXEkZ2vkGreSxxIPyqN4DkEDOBwaq9wLEU25eg5o3tHqCuDjzVwfqKoKZEPHSn3EpECTdGjbNTbUDdU4Hqe+acnmsoO8BgeQOhFVYpd6qw6kA1bQgLknmpGSq5X5Sw5NPAdM/MCpqJZAoJKg+9KZCCD1HpQIfEzLkjBGec1IJczsAFC9Carh0C/LnnqKhuJfJgLqMnIzTEaxwwGfwqM/JkkHrziq4mYorYPTpT4rjzSTsO0evegCfIDjBwPWmsGZicZx3FKV3LvHB/u0qNtYDkE/lRYBxjVmeQAb2GDUQJUbRVgn5ucA1C6qhySOaAHKWT6VJuAO72pq5aPdxgUwNlcgZFAD45N2c0gc7toFJtA5GOaUqApbdg07gOwRzjmjGevFRySOqqqR7mPUk9KWNm/i5pgTKQCK5/xuSvh1/myHmQfTqf6V0AIPHQ1zHjpiNAjU9ftSj/AMdarp6zSM6vwM88bGOKjfipG4BPpUW72zXonlsjPXNJwacaYaAQdqQCnAZpKChpFFBpOtIYh6U2nEU3tQMTrSd6U0UDENIelLSGkA2g0GigpCUhpaQ0ihKKWkNACUUUUhhRRSUDFBIOQSPcVahvGUbZMsPXvVSilKKe5Sk1sbUM/wAwkicqw5DKcEGvUfCXxbubCOGx1pfNhTCrOPvqP6/56V4skjRtuU4PrVyO+U/K4wemRWDpyjrE2U1L4j66sdf03VrFLjT7pJ9/G1eoPoa0UwFAVcE8nByK+TtJ1u/0iZbjT7p429jwfqK9X8O/GaIKkGs2TjgDz4eQfcirjW6SM5UusT1v59xJC4xxTPOUHbnLdgKr2d/baxYx3NlOkkEq5BVuR7Yq1HCsQ+VcZHX1rdNPUyatuIzEYx1PanovFNYhCDjJNOILEdqYhAVZ8Z6elRNItukxK75GOWRTyfQUssvlOsccQcseWzwKesYVicDJ6t3pARxRs8bNP8pflgOOOw/CmxwQM29Y0HPYck+uas5/H2NQNBuuInUlVQkkDvkdKAJsDd0xilyO1MLBELMaRDvGV6GmAryBTx1poJdvmOKd5QJy3WlbCjOKQxwHbOaqXN5HDIqKoeUnA/2fc+gqdW83gcAdaSO3iiLFVBZurHqaAFVH3EyNkdl7ChYyZjIx3HoAegp5wBxSjgUAKPQ0dKTIPSloAKTApaazY57dzQACmsxZSdtKpBUEHg9KdxigBkaY5Khc08kBc0mc980mNo559qAG7+5U+3vSguR2AzSdX69uB6U9VI5JoGO4JPvSAHvS0tIA7U3POMGlJpgMhJJGADQA/p159qgdZ5mKsPLjGCPU1OKXA7CgBAAOgpaKQ0xCj61D5yh3EYUYPztjgUjmRSVUrz1OegpyogUswAQDJzwPqaQxGmitoGnlcRxIpeRz/CB1JP0ya8n8T+JZPEF0Ej3R6fC2YYz1c/3298dB2q/4u8YjVUfTtOytqW/fTkf68Dpt9Fzz74rjwa6qVO2rMKk+iJM0hpuc0vetzIBmgmgmkoAXNJ1x70lRzSeUgYKSWbauKQxzNyRnp1pMmmxRNGhMhyx5NP4oGGaUGkpM0AOzU0bZWq+afC2OKQyelpM8UmaBikjFMzzQRRQBe0nB1KLjrn+RopNI/wCQpD/wL/0E0VnJK5SPPAOcjimNGjn51OfWlyQMDmnBgRzXiHpg3HQUZDcE0YyeDS7M9Rj3pALj0pCcdeKI8g8jinMqyEr1HegBAATkda2/F20eNdeB4zqNx/6MasgKFwM1seMOPGmu5GQdRuP/AEY1PoLqYyIUPPQ0oXJ96FBDeq+lPI5zUjFVQGAbr2p7cYJOGHTHemudwHr2PpTiAyD1HSgBuSW9MjGKFUqMDn1FKG/vdaRm+fAPPrQBahkUqB6U91J6VCgGOOtWUYbcMcGgCs7FWBbOCeop5dw4GcoR1qvqFs91gI5UA9qevyoFweBigZJBJ5G4P3PWnPMr5wwIqJmbGDjFR4B6KKEBEbeDzS4X5qn3D5VzjFNOFP3TmmiMud2DmmIsMw+6v40uAsZJPWmRpjLNx9acRvb1HpQMkiO1UB64q2rcYPSoo48zYI6CifcrqF9alsZbjTchPbtQoZJCecfpQpLAN3A5qRX3JgNj1NSA4FZTghl9weKsq0IXAkbIHrVNGwCGCk+1ISBkh9p9CM0gLEn73jzAwH8JpXhDwlWGR6PyKhVY5ABk59QMVOoKgjzMj0J4oAwrrQA5M1o5jfOSvY1BBqckEhhux5bpwp9a3wMSDIwPY8Uk9nb38ZjkjU++OatS7kuPYzLbUDelkUbCO56Gr8czN8pBNZUmk3emhmt/30JPzKPvCprS/hcENJslHVTVNJ7CTaNtWDJtbGPU1Ulk8ucRJtKE8stVF1aNn8lTkE45rStkSNfujaeelJpopO5IpLdF2Acc96iMYLFuxqyWQD5jlaaFUrgfdzkVFyip5aqCeuD601i+3IHy4xVgRorFBwScjNBwuM/dPamBUCYU5FROgljZOmR3q5IcDgCohCJOSatMmxFo1yWR4nOWjbb+Fa+705A61ioq2tyykbQTmtKFgRxkE0pLqCLQfI4FNJ8oEButR5IHFG4Y+YZ96SQEqNglhzmlumVrJ8gA8UikxEDrmq96GaF9nWgDQjAMSc04sIwcc1DbviFQ3BxUTzsLyOII21xktjgUCNOKZZQNoxnpUpzGMMM571UQ4OFA2+1TCbd8jHGOhpgSMwjHByD6ihgJMAimkAorZxzilIYqNh+tADVOxtrjAHHWl6ng4HtUUjAcScZ6U5eoUNkmkAp+Vueh6YpVZRlW6iggqeaYCB1IPqaAHM5dx1wKd0XqKqRXZlmZVRgB0JHWp9+eMDjnpQA9WO4evrXN+O5CdGgUrj/SRz6/K1dIhBycVzvjok+HYCQAPtS/+gtWlJ++jOr8DPP26EetQtnsKkY1GTXonlsb2php2RimkimAbqUYxTc0UFIUkU09aO9JQMPSmt1px70nU5pANpKD1ooKCmmg0UhiUlLSUDQlJS0UihtGaDSUDCiiikMM0lFFABRSZpaACgEj0oooGPjmeI5Vse3ar0N2ko2v8prOoqJQUi4zaOz0LxRqnh25WewuWVc5KMcqa9o8LfFbS9a22+o7LK7I5b+An+lfNkF28RAPzL6Gr8U6SqNh5HY9axtKm9DX3Zn2Im2SNXVhIp5DKcgj2pjyt5gSNSe5JHA/+vXzl4Y+IuteHGCCX7Ta94pecD2r2/wx4z0rxRZh7aZY7g/fhc4YH+tbQqp6MxlTcToI0VFCKScZOTTu4FGVxx09ajnk8mB5O4HH1rUyHA5bHp1pxpsahEA9s0uaYCkAnpSEhWFLTGGeaAHZy2ARUU8qq0cY+Z5D8o9vU07orNjGOc+lQWStKTdy4MjjaOO2f6/4UhloKEGAMUtBprEgcd6AEY/MP5U4HNRopz83JqToKAFGBS0lBOKAAnH1qB4mnDLNlUz91Ty1TH5vrSgY/Lj1oAYqkYHQDoKkxSUZxSGIMdjzTXdsDauTn1pSvPHBPelAx7UwGoOSxGD6VJTabJJtG0feI4FIB5IzjPNHQVFHnAYryf0qUc0AIoIbOad1ooGaAFopCwAyaiVnfnbtHbPU0AS0tJ/DikJKrwMmgLEb73bbHhQTy1ed+NfFgvi+j6dJutQQJ51P+tI/hB/u56+v062fGniySNptIsJgSVK3Mqfwj+4D6nofSuAHAGMYHYdB9K6KVPqzGpPohT3460maM80tdRkANLmmmgHpSEOopM0hNAC0x13Ag5GeOD0p2TSE0DQdPyxSdOlFITSGLmkzSc0Uhi0qHDim0ZoAtE9qO1IORmloBMBSYozQCDQFy7pP/ITh/wCBf+gmil0nnU4f+Bf+gmis5blRPOEYMoK8g96Cp+lUgk1pgp88fpVmG5W4bb91vQ8V4rXY9O5KG2HJFSB8nOMj0pfLyvqAaRxsx2AqRjk3MOnGelAi2vuU8nqKZFKCdpzUqsTyaAGrIpkKE4b3rb8W5/4TXXTnpqNx/wCjGrEMYZ9xHPrW54w48Z67/wBhC4/9GNT6B1MccNn17UpG4cU0N60hOPWpAeKTymMytu4HamiQZ561MGDDHemBC52sSfyojHO4dfeldOeaULxkUAWI2yOoB71I/wB3A5FVvlC4z3qVc7aQDg2G4qUAsOo/Koc4HzUoJBzmkMc47EVFx0p5l3cYFMPB5poBdnHBPNPC46NSKV704kelAB5Qfuc/WnRxEdiMd6VMVMgKDI/KlcBqy7ptwBxjFTSSLjnAPrTUYYJYc+1MkjBIcEMuegpAS20yEkE8irnlqx3Alc9SKpxwLjcoAJ9KssrrEMHgdaGFxDIqts8xHcdMipFy3J6+xzWe8SC68wA5NTrM0OMEMDSGXD8q5Y/hUfDcjimGTzgdx25GMd6qySvGwCEEdOTSGXlK565qZSKzlePbkvhu4FTo3Gd3H0oYF0PgjHb1NUr3Sra9yWCxyHo44oN0qHDGplnSZduQwPHy9qauthaHPvpFzpcnnuv2iFTwY+v5VpWOrJd5UAx7f4WrWQBECgnGMDNZ17o0Vw3mREQzddw71fPdWZFrPQtiT5eOc9KsxkGPB61z/wBru9Nfy72ItD0WZOc/hWrBeRSoDCwcEdalopPuWJFEy46HsfSk2ggK/JFKpwOQRgc1JnI6cetA7lUxZO3FDWrKuRxUzghs9u9REjJ+Y0XAo3KOblcj74IB9DU9q8uBGw+ZepPpSXZK+WwfncOMdKbcCckNCwLeh71purCLbMV56/ShWLcjp71n2925mMUsZjcdmNaGd8e8dj0FJqwXJN+QBjH41HPIYUaTqAORTVOevWorkkxScZG3pRYRpJJG8CsRgEcGnksMN27HPFVIf9RFt7KMipkkG70U9jUjLSNwMd/QUSKSRzjHeoNxU5jb8KlWXOCw5oEPV3wYweD3xVlJAAu7jjBqqeQxQ/N3qMTFiQQcgc5pgXXVWBBIIPekWExKCvK/qKZGy7AwGR6VOrb0LRuOOCKAG+UxBIbI64qCJknQuinhsVaXGMgc0GRFBDADvQBWdipyy4/lTk+fLAZGO1SSsrKBkMp64pgQRKFjJ+goAM7QBnFc/wCOcNoIxyFlQ/zH9a2Jrof2lDb7M7wdx9Ky/F6BvDdyADhdrc/7wqoaSTJnrFnnGQaZ0oB4prcHnpXpHltCkDFNIB7U4/dpucUxJDTjNJmg9SaTFIoDQBzS0YoAQ5o7UtIaAGY5pDTqaetBQ3FLSmmmkNBTaXNITSKQhpDRSGgYUlFJSGGaKKKBhRRRQAUUUUAFFJmloGGKKKKAClBIIIOCPSkooAuRXpAxIN3vWlZahLBItxZzvFID1Q4NYFPSRo2DKxDDpWUqKeqNI1GtGe1+HPjDd2MS2+sWxvI0GFkjYK4+ueteqaF4p0fxLEsljdKXHPkyYDg/Svk2G/HCzDB/vY61p2d5PazLcWszRuDkOh6VnzThoy3CM9UfXZyOCMe1MLc9K8l8HfFtdkdl4iPI4F0vp2zXq1pd219bi4tJ454mGQyHP/6q6IVIyMJQcSQhuKCMc96cemc9s8c0zO6Qr2HFWQRT+ZIFhHRz8x9FFWAAoAHAHQUnA470mc0DFzzig0mQKXgigAHU0tIpP4UtACbs5APSm+VlsszMR0yeBShcE+9OoABRSUZoAWo2bPHT608800r82TzQMcM7RzQuSMmmuWUDYR9D3pku8qqoPmb16CkBIc54pvl5k8xuuOPakiLCM7sFh6U4FurDigBynilzQOegqKeYQoGPcgYoAlpc5NGMDB6jrTSCRxQAoOTwOlKox7+5pFGBTv8AP0oAaGB6cnPSuO8W+ME04T6fZMfthXaZUP8Aqc45+uOlXfFvihfD9oYLZgdRmX5FI4jX+839B3+leSO7SSNJIxd3YszE5JJ6k/jW1KlfVmU6ltEKBgD25696TJ70maM11mItLSDJpuTQA+im5ozQId+FITSZpCaBi5oJpM5pCaAAmikopAGaKKM0DuFKBk03GakAwKAHBiBil3mm9qKAHbmoDkdeab1FN+b2pAaOkSf8TWHj+9/6CaKZo5/4mkPr83/oJoqJblR2OCGMAYOabLaRz8soDgcMOMVKrDbgj8aNpBznP1rwrnrWKnm3FsQJiXiHG8CpzcrcFQuNp71MzHaQ4yPSqr2Cth4HMbnnB6VSae5NrF1YQg3Y+lN255z07VWF5NaIUniJz0cHIqaGZJRlWDE+nahxBMlLrjoQa2PF3PjTXs9P7RuP/RjVitk8YrW8XZHjfXu//ExuP/RjUugdTJ2EinHp60xXOev4U7zAPlAoGMK7qcNwIpwQY4NHI4xmgBfMAPzU4OCMCo9ueopwXHSkBIqqckjmnZKx4NMVznpT9wYZxSAaz8YpV3cc5BowD0oCFW35OB2oGOVOacRQpy1DcnFABjjipAMio0bqMYNTL0zjNACqvNToPlOeaiChgOcZo3EttPIpAPLBkwMfWlRQFOTt+nSjHHzp+Ipc7QSDlR6UDJYvlHr+NWAWzg1RXY67sH8O1WVMsaBmYSJ7dRUsCVoQynGKjMCLwRnjipVkRxgN9ajMy+YUPWgCpOjKCR6cVWjZwcsMgcmtSVdw5GMdDVMqyMW2/UetNDMb7VILl5RnYGxitGHU5h8ohOAc5PpVO6iEEjvjMbnOf7pq1F5c8QXGGAxx3rWyaIuyK51Hl2dOvYVX0zUJWuwEBAJ6VaeFPLK7Rn3qjAVtbyPdkcnJoSTE2djEwdRyORU4XERJPPas6FwYwynkdasi4GQOTmsmigZVcFJQCCOhrFl0uezk87TJNpJ5iY8VsyMGORTN20DjIFNOwnqZ8GuqFMd4piuF4ZWHBNWNPvTduw34A6L6064tre9QrPGGB6HvWSul3VjN5ltIJlXrG3B/A1Ss0LU6dmyM/oaapOTxWNBrkbTeTPE8c2futWo9xgqFVjuHXsKnlZXMNvFBt3ZRgqM896bbqJrdJUYZxTywkR0yGyOQe1VNPUPbNGGKmNiDTS0DqStb5cl1+lNVJo/kjcYJzhqsBZIoxz5n1pHZdgYod1MCRVOz5h83tUUq/uXGQDjvTCsrOGWUAY6Glmd3Ro2iwMfeoESQkqi4PbFT7wVwRkio0X90gxjApSQpHOKQyaIkH7tTKQ2O1QByOp601g6jcGBFAE7ExtkHFSArIMNkN61WB3YDfhUgIPyk556jtQIsDMQ6/L6d6dGAuXTv1FRu5UDADD1NODDb8h2kjkUAWRPnAVcMOuaQrljuGVI/KqhWXOTIPoBU0bMgA7foaAHJGu0lW6GpN43kjggfhRGEy2F2HvUUxMu2IfeJzn2pgJ9mjkuYrlh865pmpWgvtNurYqSXiYD2ODirAUqmxfu0ocLwG24IyD3xQI8UUkAg9VOCKUsCtaPiGyOna9dQ/wADNvQ9PlbkflWWDjj8q9GLuro82as7Ck/LTc0E/LzR2qiQLelAOaOnagHnpQAtIaUnim5oAKD0oppIpABppozSZoKE7UlKTzTaCkBptLSd6RQUh60tIaQxKSlpKBhRRRQAUUUUAFFFFACUtGKSgYZozRRQAZooooAKWkozQAuT61JFPJCco34etRUUmkwvY17e7SZQGIV/Suk8P+KtX8N3KyafcuqA8xE5UiuE6dKtQ30kQ2t8y+hNYSoveJtGrdWZ9J+G/ijputxC3vG+xXpGASPlzXbW0HluZFl8xSo5H3c9eK+R4L2OY8MQ46ZODXe+FPiVqnhyL7NMhvLMf8s3bBX6GiNaUdJhKknrE+gyQiksenehD5ibl/WuS8N+PtA8QPtima3ucf6q4bGfYHpXXlT0/UV0KalsYOLW5D5hNx5QXgY5p7MEXNNkUMGAJBPcUqIUTDfMTVCFDA4X0GSfSlDhjxVQtJPMI1G1AdzEdx6VcAA6DAoAWiikoAKKKKACj2ooOT0xQBHICEJRNzds9M0yKIxoTI37xvvc1Lk42g/WgIoLHHLdaQxkfzZAGFHXPepuAOlHAHTFFACZznGR9KaEU8MN31pxIUE0iknnoD0FADqXFAppk67Rux6UAO68Vg+JvElvoFiJOJLmYH7PCTy3+0f9kfr0pfEGuR6LpouLmPezttSANgufT6Dua8iv7+51O+kvbuQyTSHr2UDoF9AK1p0+Z3InKyI7i5mvbmS6uZGkmlJMjMep/p7DtUX40dOgwKK6znClFIaM0wFzR1pKM0ALSUhNJnFAWHZpDSbqM0hoXtSGkzSZoGKKWm5o3e1MQ7NHWkHJp6rikIUDAzS96CaKYC0UUUgCm5AOM8d6UmkJyMECgC9o+G1SEg8fN/6CaKTRwBqkOOPvf+gmis5blR2OCKMOc0oyRnOPSpM5NPIHpXgnriKSR83PvSn271HggnFLvKrk0xCMcqVYZHpVU2jo3m2hGepQ96tK+9icYqQDaPlGKOawWuVYbyNpAspaJz2IrofFxH/Cb68O/wDaNx/6MasO6iinjxIOR0NXvGH2i38d+IZAvmIdSuTjuB5rVe6J2ZTdMdvxpmcUyK9SfCqck9j1qVEyx/yKVrDEVzu5qypGB0pDBwO574qJoiDxkVLGWFG7PAoKHPHSoFYqMNViN8Lk8UgABVyTx9aCQV4p24MuR696Qx4GB8tADACtSZIPNKqkHnpQrLI3WgBDIc8r+IpysvTNNZcnApAjKeaAJQOeRmjBGcUgY9P59Kl3DHQmkMQHA5qRD6nioypyBnOaXaTTAn3bVwOfamZYsOOaiOd2RUq+ppWAnTCtg4D+3Q1IDsyBxn+E1EWAXHB9qNzAAEEj+VSMEXDY5Vz0FK6FTvYfMKVm3Y53e46inglV5wy9/UUwHQSrM+OQw7HvUjxKwLfpSFEKeYnB6g09pt1oGYAN/OiwGdcw78hwAp4rNhQ207REnI5X/drbSMyx89+lVby3V1Vl/wBZHx+FUnbQTRXaQkKxjxuNVr+38yMlcZxkEVbVTPDx1Hb0qPyWRcPzzVJiaL2n3KyWcbH72MH61cKswVscVh6fII7qW3IyN25T6CtpX3xhc8GpaGmPb5elMDYU7hkU5TxtHUcU0jsaBDgSAOOlIHG7IqNsjoeKcoHKt8uehosMiurK3veZV2sejDqKyLi2v7H5o5HliU8YPOK3VO07fToaeuDkHpVKViWjPstUt5kCJnf3z1BqXTmzdXMWRkPu+uaiu9LiuPnjBimXo6d6y7S4fS72b7Vl1b+MDv71WjQrtHVMCp24K/Tmk3ouFfj0xXPW+tEXcsjszR/wgVp2bvJGbmYbST8q9lpODSKUrlxVzI79V4AxUroXiI4BxxUMbq4DhioPQjoadcSypbyMoGQvDCoGTojJEu7DYFISoOT0IyCaqQyyN5RXOdoLVaeQbGEi/KeDQFxRk9OhpQPbNVvM8llQZdT09qtbCwDJQAjSKJVUsNzfdB9qDI2x9qEv3pwTLqXUbh0OKlyp9qBDFctAoKkHHJNNjVxk78/WpGBHzdVpAy7vl6d6YyZWGCXxkDsak3YUFTmq5QPJvjOCO1Sp16YNICXOYy54AotpRueXGd3AqOZiUZFPLcChA8MYBXGKBFxCJSdp6Usib8BhtA71XgJ6jipzNuGxxj0PamBw/j+y3RWt8P4P3Mh9jkqf/Qq4YHOPavZ9S0tNV0q6s8jfInyE9m7frXi7AxyOjAh1OCD25xj866sPLSxyV4a3HDnrQeOlNzg0uc10nMLmkzSd6UkUCDNBNNzRmkOwE000UnFA0goNBppNIqwUlHSjNA7BTelOpppDQhNFFFAxKSlpKBhRRRQAUUUUAFFFFACUUUUDCiiigAooooAKKKSgBaKSigBaKSigBQcGr1tqDRgLKNyevcVRoqZRUtyoya2OihnV8SROdw5BXqK7/wALfFHVNFKW96ReWg6hvvqPrXkMcjxtuRiD/OtGDUwcLMuD03dvyrnlSlDWJtGcZaSPrHw/4i0zxLZm40+dXKj50PDJ+Fa+PTt3r5R03VbzS7hLnT7t4ZByCjHB+tet+F/i7DPstNeTZIxA+0J0/GrhXvpIidHrE9SjXaSfWnVDbXNveW6z2sqywt0dDkVN0roTRhr1CkoopgFBpOtRF5POZdq7Oxz0+tICQtxmhiQoOOtIMH5cfjQoBYkEkUAKqgZPc9adRRQMKOlLn8KYxy4HagBjqbgFeVQHkHvU3HTsKazFRwuTTArhSZW+Ynj6UAOb52A5wOeKp6vqtpomnSXt0+xFHyqvVz2AHqaTUtVtdJsJbm4kVFVeO+T9O9eP+INcuPEGoG5mHlwr/qoc5Cr7+/vWlODkyZSsiDVNauNcv2u7hwD0jiU5Ea+g/qe/6VUzUYRA+4Lg4606uxK2iOZtti5NFFLTAKKM4pM0ALSGkJpuTQMWkozSGgBaPxpM0lIaFopKWgBaOaSnKD3oJY5BgU6jPFJTAXvTqSigBaKOMUCgBpyDSkcUooPrSAt6N/yFIf8AgX/oJoo0f/kKw/8AAv8A0E0VEtyo7HDin44yaaBgc5xSk8da8A9cCOnNMMW7+KnZ4oQhjg8YpiE2si5xkCgS4HqM1IW7VGYxjHT0pAKcOelbHi+MjxtrrBuuo3H/AKMasY5T3FbHi5yPG+vDqv8AaNx/6Mamtg6mJLZwzDKny5eoK1EZbizUCaLen95KshQTuFTBiV2kblPWjmCxVTV4Sw2hvpU4nWQ5YYz3qtPpkcuZITsfrj1qoZp7eaMXMZ2g4yOlWknsTdo12i3LvGNoqEMXOxBj/aNRNctK6qhG3tirdqMAg8n3pWstR3uKAVAB5PtUiP8AOMjdT9g+h9DTChxzwfQ8frWZSHuwIwoNO8sY5GDQoCp1pu4lsZJPpQAmGB4wRT/M4wy0ilec9c0px1PNACZz04+tPVDgnn8KaqgjPIOeKeWCKD09xSAcAMBgOR3BpV5BPX6UwEEgEZB7jipEz2y2PwNAxdnYDOKa2VBp4DdRx6nNIzFiM4xnjigAU4AdvTpThLvUkcU2WI8bj+AqLBbvjFOwiZGAOeQanDZ5Ix6EdKrxvubFSIxIIzzQBcVgEKNjkdu30pqRbodhbI7GoFOe9TowCnB5FACwO3zRMmNvQ0j8EHqSOaBIxPbdjrSKSWPr70mNGdvWyu8MP3b8g+ntUt665Vo/mDik1ODzLVmUfMvIFVvOjSzjMjBWHrVx1WhL8yAKsF9DMSfmO1hW3HtJzngCuVlvpLm8SCJd+185WuliJMCtjDnrTkrCi7lhHHOKaW5pF/ur+JqKQlGOOcUhkpO5MjpUSylyU2H5ehPeljbjb+NLht+d/GOuKAJEBJXHbqKcWHIHWkDAE89ahaN9+52JXsAaQFjfkDg8e9Q7Ua9x5atvj5VhweaeNxGFwH7VG4ZL2AsCDtPSmgZTm8OrJIXtpDAx52MMjNVnuL2xlEV/CfJH8acj610PnKVyTz6jvTY2zEwlVZYz1Dc0+Z9RW7FSwuVuhuSRSvYCrNzu+zsAduV9azrjRTE4vdIboMvETwR7VUuddVbWSKWB47gjA3DgGmrNivY37aRfJVTgkAcipxGGPXP1rI0aRTZJI77ifvVp78HIbipasy07omVA3UCnqNjcdKjjlGCew71KpV0BB5NTqBIwDgYbBqFlIfDNn0AFExeJAyJuPpTo5o5B852n37GmgFL/ACYHbrTCvGUA57VISVjJYhlB4brTgAVDYGCOtMCFSyNtxz61OrlGAbAJ/KoQmW9QP0pXHBKHdkcigCQSeZcqiAkJySfWpnLYBJGDVa3Hlx5IIc88VKx3qM9KBEqxgDdu5zT9x3YI+U96jAynyMPlPOaPNP3T0FAE24Iw2sc+lebeNtNNprTXcagQ3RL4H8LjqPx616KCckggH1NZetaYNX0qa3YKLgfPC2Ojj/HpVU5csiKkeZWPKTyKOlIwdHZXUhlOCDxg0jHpXemcLQufaikBpaZImaM0U3pSAdTeaUGkoKQlJTiabQUIaQZoopAKTSdaTNBoGFFFJQMKDRRQAlFFFABSUtFABSUtFACUUUUDCiikoAWkoooAKKKKACiiigAooooAKWkooAWlpKKALFvdyWxO05B6g1oxahFJw42H35FY4pKznSjIuNSSO/0DxXqnh24Ellckxn/lkzZQ1654b+LGl6qy2+poLG5PAbOUY/0r5tt7uWA4Vsr/AHTWrb3KXC8fKe6msWp0ttjX3Km+59eRus0YkidHjPIZTnNOr5v8N+O9Y8OSKsczTWxPzQyc/lXsvhr4gaN4jRYvOW1vMcwyHHPsa1hWUtGZTpSWx1dMMYJ6cU/PG7j8KOWX0rYyGhcjG4/lTqXNJQAtJRTXIxksFFAxry7Og3etRwsZf3jZHcY6UnyupxkL0OO9PLJhUIO7+6KAJHdI0DO2F/nVC/1KG00+e9nISCIfMznHfoPU+3erFzJGke5vmKDIA7f0/GvLPF/ika3cLaWRxp8RByOkr/3vXHp+fpVwg5OxMpKKM/X9fm1u5Q4KW8f3E4yT6n39v51j4pTSCu2MUlZHO23uKBxS0m4Um+mIdSE4700vTN1ADy2aTdTc0maBj80m6m5ooAduBoNN6dOtGSOG/OkMdSdKFNKaAEFOyabTlGee1ArjlQnk9KfR0pDTExaBQOlKBQAooxRQDQIKMgUE0lADhRSCloGW9IH/ABNYf+Bf+gminaR/yFYf+Bf+gmis57lR2OHdsDr+FIBu5FNxxzTg+zgYzXgHrgwG3H8qRcEYA5HenBsvyMH9KXjPo3pQAzdtzuFIwEgXDEEH1pSW5BFKoAGaAJNuVx1rU8XqP+Ez189/7RuP/RjVkFz2OBWx4uTHjbXiTkHUbjj/ALaNQthPcxlJK/hUqHb05z1poKg4JABpwUrwOR60DJVxkletDos0bI0YIPXNNQGM59afkueOtTqgMySwltXEtodyd0NWrO7jkykn7uTP3Wq4ThRxzVe5s4bofvBh/wC+ODVc19GLl7EyzKZljB47jrU7qvzBT+BrJS0ubENIjefEBnA4YVLFqcU0e3O2Q9jT5ewX7l1GDggL07N3pGGWx+lSQKFQKWOB09vxpzIvUHj/AD3qBkGMITjcPbginAZUHt+Rp/3eHBA7Go2wTk5pgTA7lG3oOtGMDg8elRozjthacpDNk9aTAcsQc/LlT71KQFHzEg+opy4K8ncfajLMMcN/SkMYxyD8vOPvClRcIM4OaFUgfIR9DSF1MnzfK3r2pgOwenb0o8oOSEO0jqDTzhV3btw9ulNxkjk57AUCG+X5eB39aTIVuCfwqQtxgjn3HNMCcZH40wHoV25HFJubdwOKbk+lNSdS23I/OmBaVgRinkeh6VECOw/Wl34qbAPdgwO4EnGK5280ue5mZQf3fUZreMnuOaR/XBNXF8uwPXcp6TpkWnAvw0rDn2q5I5Tjj8aj3sJOBjAzmo2ZpTvxxRe7uxWsSxyuAQFH50r/AOqZifm9KrjCHHJPtUgZSPm3CgCQZVFf061MOEUZBDfdP+NRO4aPYin69qkiT91sPU0dAG4OdnUjkE1Ih8pjn5v6VDucKJQu7bwaekgUkt0YdPWgCcJnqRnrUVzJ5l1bDuGKilJ2kY5XrnvVTUjsa1kXcPn6g0JAy+IcltuMgkE/3qdEQgbdnj+H0/xp6kE7iwUt1J6NRclQo43AenVaQ+gyGQwTArzG3P0pmr2sF/Yu7IpYDg45P41JGgAwcYcZ9jUN4WgtnRSeBkA015CMeG3vbC3zCBcW4xlMYZatwaol/PFHEHiC/eB4NaEEvmRrj5JNveqt5o8F9IHDm2uMffTofrTv3Cz6F3esbAuwBI4I61MrZ5Ufj3rl5rfUdIkWWb/SolP3lPOP6Vq2mrW10gb/AFbHorNzTcb7CT7myshbgPnHUGo3CkEsACvIyKrxO0hDbeOxFW9524PzD0qNihYnSSH90dpPXPSmiR7dhuXchPbtUgdWjC8flSkZXAYAngU7hYl2q65QjHpUJTMgUEqf503yGjAcSAEDqOlFvcrLuEnDjuKQFgPuOGG0jgMKQg78E89sdKeF4yCPxphcg/KQuepPIoAZvIdkcYJFTJzlSRj1pjAKMlcA9T1BpgG04UcH+GmIW4jlMX7pmznrT4i+1RJjjriot5YcDafQ1YVlKZYY4oGeeeN9MFrqi3sS/uLjJyOzjqPx4/WuXByea9V1zSH1LRZbaNiJQ4kjLDjcO36kV5S6NG7K4KspKkH1HauulO6sclSFmOpwPFMByKAcVsY2HNxTTzSk5pp6UBYKCeaTOKQnNIdhc0E02jOKAsLSGikoGFFFFAxKWkNFABRRiigYlFFFABRRRQAUlLRQAlFFFABSUUUAFFJRQAUUUUALSUUUAKKKKKACiiigBRRQKSkAtLSUUAKBk4q7Eu1BzyKrwpuOas5zWc3c0gixFdFflfketXYZipDQuQRyCDgisuhJGRuMj8awcE9jVTa3PWPCHxQvNJcW2sNJd2e0BWJy6Y/mK9l0nWtO1y1W40+5WZD1AI3D6ivkyO5HRh+Na2l6te6TcrdafdNDIP7pxn8KI1JQ0YpQjPY+rOlFeSaF8ZlCRwa3Zk4wDcQkc/UV6Xpes2GuWguNPuUljx8wB+ZfqO1dUKkZmEoSjuXmPy8fpVWQFtpkBIz8uPWrQUjvRjJ55qyLlbf5a4KFATjjuetMUNcHaq7Ezy3d6uufl6A+gNeceLPGwlWbTNJY8nbPdA8MO6r7die/0NXGLk7IHJJXK/jTxUbt30vT5MW6EpcSqeJT/dHqB3Pf6deKpegwP50ma7IwUVY5ZSuwzSZopverEITSZpxpKBiZpDS0goAM0A0EUUDFzR3pKM0gF60YoFKKQwHFO60lKAc0xCgVIMCkAApdtAri0uKQCndelABiijtSUABz260YI69aXFHTigQmKWlxxSYoABxS0AUUAXNI/wCQpD/wL/0E0Umkf8hWH/gX/oJoqJ7lx2OGJOPalC96aMZwpyrcinE/Lz24r589cD1BPWnK4ycjNMBBHFKAR06mgCTuOetJjDUilgeD8w6j1pxGPm+8ndaQDCRitjxg4Xxprxz01G44PT/WNWS6gjcOnpWr4wgV/G2vEn/mI3HH/bRqpbCe5z5naVsInQ9auWyygZkpigKCFXHvViM/NjOaTYwfJpAWX3H8qkZTn5fxoI2nrnPapTGCuB15zTwOCwqFhtOVXjvTlkI4P3TQBIp5y3Sq13psM7M6Lsb+Flq0oXbkNxTAdrZ3NQm1qgaM+Ke4sP3dyrNH/DJVtL+MrvVqsF4nX+9/stWbc6YCGeA7W/u9q0TTepDTS0JzqKvLgc1ZjTPvnt6Vk2LQwSFZwySejVsI6Fdy9KU12BPuSY4xt6UoTnjqarm7XJVeT3NThhtH8J/nU2KuKz7eCcH1p4bgHOf92o+VcFxkt0NOKYIPOKkBwG4fOSD/ALNSsoIAKgj171FvAPPfnjpUitx1x9OlMBmx1OYzkelODqevyn0pwPcce9RsAxIYcUwHHBxk5/nTtnGV6j86iCtGMkZp6yAnOcmgBWCjG7IJ79qge2Tz1kBAI9O9TFsckZyacB/cGD79KLgMUkHJOaN25xg0NkbgOuKjRSoG4Z/pTAlI3H73SnHIAGcg1HvXoTkUhZQeCRnoRQIJWycUiA9lpdshHzOCe2KaDIGwaYDwhLksdueKljiCJwysvfdUa/KWyM1OWLdFj/GjUBoBH3NtJmYrtLU4ltvDRstNZweu5G6eooAmjRUTJ6VVGGdkXlM5z71IYGcfeqaKNVGHo2AjR9sgUjJ9KrXuWijGOjg/StG5XbA0n8Q6VnTy77Vc/wB4dOlCdxMuFAQPWnRNIrbZPwz1+hpSVVVz6CmbfMl3opx3JoGXdyeWeM/3s9qhu499t97PIw9NbgDafmU/nTL+4MVsWiG1mIBT1pAN1AAWwONjNgfL/FU6BXRVYFWA4JqC+dGtoo0O5GcAg9VxVl4gcZJCjowp9AEMpX91KRz69DWVf6JBKPMiHlyZyGXpWvuG4R3CgjswHWpSpjXJ5X69KE7A1c5mz1O5sGMN988R4WQdjXQ28iTRqUlBz6VWmtFYklQ8Z+8pGaz5tFnjIm0qdgw5MJPAptpi2OhkUFMMufcdRQgbYN2JAOh71gWGtv5wt79PJcf3zgMa3o3WQeYjHnnGc0rWGmPaRX2xIxyeoNSvACAUGG7n1qnEq3DvNINvO0P6VaJkjAwN4FAw84Q5J3JjrnofpUsbpcAMnTvTQySod+MehqEYTmPGAe1AFwphfkPHcHvUZXJAxj/ZPSlV/MHp7etLtIXpn/ZpXAYFx8h/75brRIMDCNtYfw07BO7PzL/d7rUZAZfvM386AGJKyr0y36VxPjXR0SYalaJ8jcXAHQN2b/H/AOvXaA4O44/3j1/GmsqzQPHLEskcgKkeoPFXCTi7omUbo8dzThyK0Nd0l9HvzDndE3zRP/eX0+o71l5xXammro5GrElL1FM96M0ybCkUlGaKAsGaKQ0lAxTRmkopAFFFFABRmiigYUUUUwA0lKaSgAoopKAFpKKKAA0lFFABRRSUAFFFFABRRRQAUCiigBaKQUtABSikFBpABoopaACnKCzAD8ab34q1DHsGT1NJuyGldjwgUcUhODzS5xRuzWRqIGpTz0pODRgUAOU9mqZJWTpVY8GnGTC5Pak43C9i7Ffxs+x/kb9K3NE1/UvD159p0+4aP+8uflcfSuKJy2asW169ucEbk9D2olR6xHGqr2Z9IeGPirp2qlLbVF+x3Z/jP3Hr0BXSSJJEkDo4yrIc5r5EhuYp1BVue6mu98I+Itb0qzeaO/YRt8sUTjdu7M2CeMdB1yc9AOaoynKXI0TVjGK5kz0T4geJTbwf2RaTD7RLzcleqJ/dz6n+X1rzYcADHP8AKiSQyu8ru0juxZnc5JPqT3JpoPavWhBRR50pczuOzzRSUtWIaGy2KdijFITQMOnJpCQeRRRQAw0YpzdKaOooGGaKCM0YwKBgaMUopetIBvelFIRg0DkigQ4cnFTAYoVQBx1o6UCYtOAxTRTsYoAWjNHSkJoEG4UoNMPr60nSgLkoxRtNRgmpFbigBwWlxQDThTAZikIqXtTccUgLGkf8hWH/AIF/6CaKdpIxqkP/AAL/ANBNFZz3LjscByFAjAG2nhDhmJyTTUGwZNOBJPBrwD1xcbGyPrSlgPmIyrcmgqc9KRgdmB0oAdhuDn6UqnDAkZPf3pD93CnJpTy/pxQA8jy23L91vXtWr4xTPjTXCDkjUbj8P3jVlRkspU4P9K2fFvPjTXVIxnULjn/to1NbC6mGhyeefSnYweKZtKMV/KlAZwSOo7Uhk8ZzzjkU8gvnn5hURbZg+vanJIrOD3qbDFyp4cYamEY7Gp8IQN3T1pHUIMjgHvQBX+0KvTJ9qI1aRtzcD+61SlFHOASaYu4Ng8CqETMmPmwKkUhRTI3429frUqgZ57VI0NuLK3uozvTJ7EcVnS6feWsZMMm+Mc7D1FaoJDdflp5lA69PWmpNA0mc3DcK0pV1Kt6MMc1pQ3W0kbt1Wbi0t7yEqUHmdnFYtzZz2R+cGRP7ynpWiamZtOJtRTCdQvTB61cKqyghgQKxLS7VY9ocSE/w+laMLs4yhKkfwkdaiUSkyRgemc/zpB/nFKH3KDjB7ilYfLkdaQwD9UBx64p4cBRnBHvUQAHbn360/AIz196AGmXLf3R7mnlFIz09xTcA9MUZKnGOKAJFJAG4bgPSnqARlT+BpqMrNt6GpHC4+bgeooGMMfvn6U1lYDIBx61LtKrkEEemaQSAg8AUhEG/5sMvJ7jg0rImeDtNWNgYhgc+oPaoJEUEbTjPqcincLCtHIML1X1pp/u4NLvdMZVuO4PFSiQSHLYJ9KdwIQsiZwePQ1KJgDjHzVKI0dSRlSPWo5ImVC2PxougE3xngoMe/wD9ak2KzYTKn+8Dn9KQAAYyA/twKFZQ23nd7UwJxG+ASeRwWTr+VRPFJvyZSR7jFSIrZJJ3jpn1+tP83Z1VgPY5ouIrnBRg7v8AhVa4DfZwqKduR8zGtIyxqNzOOemRTZIWnT5NoU9cc5poQycL5cUjewIoBMTMOqHuKbImWRXkHHanTuqptBG7PTNJhYlCgqrZyD0P+NQX5/dRBkxhxyvPfrT1ZkhmQdQm9M+tY+lXs11IUlw2Msf/AK1NRb1Bvoa0zeXqFu+AVbJJ6VoqQi7sZjPX2rIDebqQUDcNnCnqK0I5vLTYvzDHI7ilIaJWKohZfmjPaiNmdcwkf7p4quuYHyrCRDyatgLJH5kJAPoKTQAGBO0fIe4NPKKhDMCv+0DxUavn5Zlx2zimlpLc8HcvvzxSGNvrJL+DZNGky9ivDLWK+n3umqVtZTPH/wA8n4Ye/vXRBEmj3RsVf0zSxlc7Z1GOxPrT5rCaM2x1azmjEW8xTKMMj8Voxzxg/u2/DrVW/wBBt74GRBtcdCDgisPOqaSGDKZ4BwTj5hVWuK9jp5SjRmQNtcdD1z7U2EfY4VjlX7xzntWfYX8OpRqquMqQSM8itkHcDuAdT271Nir3ERdw3Kcj1qXzQMK3WqiRyQuXQ7oj2HapZk82MbTg9iKBku5JRnqf9mo2Uk8/mODSCGIkAExv354NTbJEXGNw9utAFc4IJBDH1FMEZUEoTg8kL0P4VPKiPtKn5zzn/wCtUbKccHaR3piMzU9Jj1aye2lOcfMrgfMjeuP6V5tqemz6XeNbXC4dRkEdGHqK9ZYHGT17MKydd046rprwFVZ48vFJjlT6fjWtOpZ2ZnOF0eYZxRnNPmieGRopFKSKcMpHQ1FXUc1h2aWmg0tAC0hozSUAFFFFAC0lFFAC0lFFABRmikoAXNJRRQAUUUUAFJRRTAKKKKACkoooAKKKKAClpKWgAooooAKKKKQBRQKWgAoop8UZkYDt60XsNEkEW47mBxVorgUoUKoA7UhrBybZqlYYaZmpaiYUIBM0ZpKTOKoB+c1DM3G2n5z7VC53PVRWpMmNoopK0MxVYqQQcH1rvtFvbe602AQtiSOMLIhb5sgck+x5P/6q4CpYLiW2lWWJyjqcgg1pTnyO5M48ysemA808Vk6LrMeqxlGGy4QfMo6N7itbGK7oyTV0cslZ2HU4UwU4VQhcU0rTs0GkA3FJinYooGMpKfTDQAmaKKM80DQE0oPFN6mlxQNijmnqtCDHJpw60EjhSk0CgikABqkqOl5oELz60lFL0oAQikIzS5o6UCEHFOFJinUxiBsGpFemHFJjigZODS9qiVsdakDZFAFvSR/xM4f+Bf8AoJoqtBqcGmahbNKcvIWCRg4LfKc/gP8ACisJzSZrGLscUOe1OyMdhTPvRjb0qRQp4Pbg14Z6YnUYzxSqAo7mlzyAFJpfmKnAOM0hiYBPcU0j5sjnFLhgvIpFBDYxyaAHoQckEVueLRv8Z66M9NQuP/RjVhqgB4Bya3vFgI8Z64QB/wAhG4/9GNR0DqYmPMBA+8vNNJIQ7Qdwpx8xXaQJnA6DvT2G5A+Np7ilcZEqrIN2SSOwpwBVcgCkX5PnToTzSyJ1IPyHk+1AD0k46ZPf0pWkWOPJyYz+lQEuFOzGahWF5FO5yxz07U7CuWvNBXEeXU9/Sngbh1pkH7kFXT5T6VMyFRuAyD1IoYDEBU46r696nU8DDhcdB6/WogTxnvTyB16GpYx5cD7vJ9KTy9/LNj2pAQvUUu7kUACfIeDxU0io45ANMeNiARg0A4IpMCjNpUbvvt2ML/zqJL2W2/dXce3HAkHQ1qF1JwR9aR4klQqVDoapT7isV45S0YZckdPrVgP5gVgMjoazvsF1aki2dZIuvlucH8DUbagqfunjdHHTd/jVpJivY0zOu/y1OfbvUgJXA6+1Z9orIhdlJJOcjtWijqVAYAn1FTJWBMRd+8kDH9KVgTycUp4PJyO2acG3YyeD6ipGNRsD/wCtSiTnrgfnQ0QD/KfzpxjYdyPegY7f6DYf73WgP2YbgT1AqL7pyOPpTl5O4DH0pgTKOu05FM2oGOcg/wA6PP3cHBI/u0quGbBwD6GgQoCN2IHqOaQ24zx83oM4NO2Y65UmpQuB8yA+4NK4ESj5dquQR1RhUgIVOcofzFMYq0u1Tk45B4oHy/L27A0DHlkb+EEeq8n8qj8hS7bZdz+h4NK0S7dwJH0qRTkYYBz/AHh1ppiIHO0+WchuppyyYGOo71MAGbbnd/vDBFMaPJID4/CmmIAVPLLke1KYyRujYr7dDUfkzRcjGw9TTkmAXkEgUwIJI4/labeGz1xUgJbmNVb/AHqmEzOMDaw9CKfGFXnYAf8AZNFwIFgklkL8KxG3GeKZBZW+n3ReMfNIMEHtTpnk84mJsAdQabEzGTdIMk9KLuwrIrwQ79SnWR8Y5Ug/pV1AFJc8OOG9qpxri4muBnhsVbkdFlWZSCrdRTYDgwe4DbsOB07MKsLtLZ+4T6HvUTxLOA0eFamtuyEcEe9IZa8wMwiuB83Zx0pwiliJ2sHX0NQDeg2uf3fY9anD7FzG2OOgGRSGIXiYEqfLlUfdPGadFOHj/er+NUbiE3M/mkOEUcle9WIoTBANv76Nuvr+VAiyN6/NG/HoTTzP5h2TxDHTcBmq0aK3+oYqe6mpAZ8EMg49DQBl32hRSs1xp04jnA6p/Iiq0Oq3GnusGqxvGw4WQDIateFWE7SoSpHAGKlkHn27x3cCBW6gDcD/AFzTuFiS3ukkjDwyBlIzxUoIYbk5J6p6/SuZl0OWBjNo9xsXqYmJ61NDr7wsINTjMMvQOPu/iaOVPYL9zeZFuVOxtrrRDcyROIZsZH3W9aiSdHAbOSRkMO9STOrtscqGPRh2o1Q9CeSJJXBxtYdGBqMJKrEFlZew9aZG3kKBISQTw1SuQevfmlcZA2VY4+U+h6VGzljgjYw6dgaseYpO05H1HWopIgfung9QaLhY53xDokeqxeanyXka8MBxIPQ+/pXnzoySFJFKuvBBGOa9gKMq4UD/AIFXMa/4b/tBDdQKFuwSXXPDj29K3p1LaMxqQvscGRjminyRPDIySIVI4IPY0zGa6TntYKKTFFAC0UlFAC0UlFABRRRQAUUUUAFFJRQAtFJRQAUUUUAFFFFMApKWigAooxS0gEpaKKACikooAM0uKMY60ZoGHSikqSOJpDgcCjbcBEjMjYFXkVUAApyIsa4A5pCKxlK5pGNhS3pSdqTFJuqCgNManZpjc1SEMJpuacw4plaIQMcVFT36VHVoiW4UUUlMkKB1oooAlhnlgmWSKQq68hgcEV2+ja/FqKrBPtjuR3zw59q4OnKxUggkEdwauFRwehMoqSPVMbepp3pXK6R4qXaINQY5GAsoGePf3966lWVhuQhlPKsDnIruhNS2OaUXEdiijNKKoQmKDS4pSKAIiKQ1Lio2FADaQ0tFADKegPU0Kmak6UBcCM9KUcUlKKAHCnGm9KXdQICc4xTh0qJWyT7Gno2eo6dKAHYxSYp9JQMbiindaTFAgp3am4paAFpvTNLmkNAwzzVfUNTg0uya4nJ9EQHl29KdeXcGn2b3NzJsiXjjksfQCvONY1WbVrwzS/Ko+VIweEHp9fesatVRWhpCF9zR0vUJ9T8WQXNw2XbcAB0VdjYAoqp4a/5GG1/4H/6AaK4m76nQbmCVyBgClRSrE+tSjgYNMG8thmAUGvOudoZJbg4PtThgcBjS/KMlRk09QGQMUzRcZEqBBgvk+9SKm4dMMaCsJILAqRUrSqq4UjINK4DBwSoHTvWx4vBHjTWsHrqE5/8AIjVlNvBD4yD1rV8YBf8AhM9ayP8AmIT85/6aNR0DqZAJXPr1x6013J7Hn2qTGX+gpXGwd8UhjFChdp7ioUBy0ZPBp5jJcOr54p4iIIf86YiEIwGwt06GnpwSAMN3qVwNuTwe1QDk/Lw/86BDxvOecr3FSRMVU7WyB/CaYpBPHD9xUgbHQfWgY8R5y/8ACe3pSoCG4O4e9LG+PudP7rVIqI7Hy2CMOxqWMRoxjrUKjD47VK7iJsPkN6joaiDq5YgimgHiQqcZqRNhPTafeqwBJzUwYE4YcjtSYD13eYfl4PrTi7ISAo9qAxQd2Hv2pQA6hlOVPagCMkOehz2qOa3jmjKTRhie+OakTcG9R/KpMMpySCpp7bCZkva3diMwN50I/gJ+YVYt7qKYAxMCe6ngj8KvlAx3KDk8dao3OmLO/mJiKUHIZOM1SlfclqxM8rHCIPmP6VHmRz5cbAEdW6iqUU09gSLyMlCciZeSK1LYxMnmxlWUjlh3+tNoLkyhlQHhv9k0oYHjJz6NTUfdyOfYUu4r12gZ571BQ4oAvuemajxheB83ucU8fLkoSR3B6EUAqwwcY7Ke1MCLcV5Zdx9uCKev7wA43Y9eCKdtXoRn0Hegpngrkj1ODQInSTI4+cDsetPUpJ/qyYz3VqqqNx9cdjwRUoZu/wA+Op6EUAP8sbiHUhj0anMjIc/eX0piyOeh3x9weoqVW+X90Mj+6etAEajad8Rwf7r05tmPmHlt6inFBK2512t696bv2qVmG5aAE27WIf5vRhQVORj50PX1FKisq5jIaP0brSph87T5b9fagQ6M4yIzn1V6QhGwAPKb0PQ0rJvHzjB/vDvSPGxULjeo7ntQBBKrQjnAPqop8T7vvnaexWpFdSSj5ce46U02wJ3Qn8PSqAXc3mE8SD6YOKVY1ZmK42dWX0quQwbALB/WmySPHHKZRu44ZaLAOsGAicOuVZjj6UrW0ceQwPlscg+lR2ErrYJnDdT71bEiSwsDx7HtSAhhSS3y6/OmelWPtMc4xt57qeMVQVpbeTCsGUc5zVkyxTLukTB/vdDTYEvmBXO0gjuhqB72OLckasGPRetJLZiVVMcvv71BErCbdNHuVTwy9aAZftJA8QKSmJ+rK3Q1ZKyOAVYROOQ46Gqrp83mQjch9ufpU8c0Ywzb0OO3IpNATDcdplA3j/lpHR5hAww3L2alGH5XB90PX8KjLxx8hmQd8jg0gJW2XMZXOxuxHBqIGWAhZfnXswofyt+7BUHHzDkUrNIn3ZUI9DTAcWjZTsYA/lmoJ7eKaHy541kU8k4BIpxVW5kTafVaY8UqyJLHOdg6rxzTQGLJY6jpoZ7KRpoc/wCqPJA9qtabrMcqrFcErOo5WQYIrSaVyC8SqzfXBrNv4Le/ULdWrQTjo4GP1pk+hrGTMR2jdzypPX3FEc4AIwWH8q5xWv8ARXUyE3Nn2ZeStakOoW92FdHGe5B6exosVc1SA+CKhkBTkGljkyODxUuAw5FSUVvtLE4EZcegpSUfnPln0NPMfktuj5qRnSdOVU465FVuI5nxJ4eW+t2uoEH2lFydo4cen1968/ZCpYYPB5BHSvXkLRnKPkehrA1/QYNTD3NviC8A5B4WT6+hrWnUtozKdO+qPPuvekxU89u8EpimQxyDqCOfxqEgqeeldBg1YTFIadRgUxDKWlxRigBpNFLijFACUUYooAKKKMGgAooooAKKMUUAFFLRQAUUUUAFFFFABQaOtOCgDJNA7DQpNO4H1pC3akoDYKKKlji3cnpQ3YLX0GIhY+gqVGaJvUU/GOAKTn8Ki9zRRsWFkVx15oOag2A9ODTt7pw449azcSiTOaQigOG6GlPvSAYaaal4xxTCM00xEZphFSkUwirTCxC/UUynydaZWi2MnuJRRRTEFFFFABRRRQACt3QNdbT5RBcOWtWPT+4fWsKiqjJxd0JpPRnq6usiqyMGRhlSOhFPHI4rz7Rten0uTy2Jltj1Qnp9K7u1uoryBZoHDoehHX6H3rtp1VI5pwaLAFLgmmg9KcCa0JEIphFS4phFAiEjmgKSaeEzTtu2gBAMUUtGKAEHWndKAKUjpQAUZAIBxz0prMoYKRjNHlrnPpQApA6jrQpDLyuDQOlLjPtQA8GjvSAU4CgYYopcUYNAhhpaUimZ5pDFpHeOOMySsqxryxY8Cl7HPAHXPauG8Ta99vkNnasPsiH5m/56MO/0Hb8/pE5qCKhHmZQ1vWptXu9zELDHkQx9gPX6nuayqKK4W23c6UrGt4a/5GC1/wCB/wDoBoo8M/8AIw2v/A//AEA0UhnRlctuxzQV3ds0gznBHFOIAOF4FeadwqMU6gAfSmuX3AqwANODMOh/OjDlgWXigBQu44YqxpzLGGyygehpAEHOOacVB/iyPSkMkVgRjqK1/FUQ/wCEx1zKhgdQnPuP3jVhEKv3VIPtW34pLjxlrp3bv+Jhccen7xqfQXUxdpWTCMcehpTI5TBQ4pwlST5WGDnripMMucnIpDKyQSNlsY9qlR9q8jIBwaF8wzKAhYH0ppRkd12kbumaBBOpblfyqJSAMdCKkQyRkh1J9/SldElGQfmHpTAidxvVtuDUpJyrDr6UzYQVRumcg1KIBn7/AMvp6UMAkXKhydpPelwGxu+8P4h3pssTDOcn0NOjAMQBOcUhk4ZZF2yDIphiAPAXPZhSDgDkY7U6NdoKtkg0rgCHAIxSEBlz3pWR1GOq54oUqzY7j0oAakhBAfPsam3AHdgc9cUkkYdf8KrhGTJJOKaEW1KuvykEUEZO1eDVVSQf7vtViFjtOcDHIoAVCUfgH60K4JY7SSOpqXzBLww2t7VAQVcsCdvcUgHOomXawBU9QazJtNW33y2szRY52HpWr8hYBhj3oZVZ8H5l9apNiaMiDUjGS14DExHysg+U1fhkWSITKw3N0wc5H0qveWwnmSMdM49gKjk0uayk32UvmheTGf6Vbs0TqjQDnB9T6UpIVQW5H06VTtL2K5mw/wC7mHG1uCKmluUE2wAmYdCv9amw7lyKSMDA6fyowVfG7I7Buv51WaeOFQzKpY9Qvc/SrSDKgnGCM4PO2k0O49kTcCRk/rTMb5iR1HrwacGAUj73t3p6DeM4OAPxFK4EDM4J4JPtwfxp6EsuckH1FPKFuGG5e3YioyrIdw3EjpIP6iqAseYQm6Ubv9oU3qB8wdD2qLdg9dreo5FDuCQxG1h3HSkBK2Aflyp9DSM/QY5pryk8MOOzDrTFjbO6Jtx9DTAtRuwIAYZ9G6U5ZXiPOASeQeh+lV1kUsBJ8rVM5CqMjevr3pWAe2JmBQYYdzTGRjLv3eW3cjoaUKJUDBwy+3UVKu7aA5DD9RQBHIy7f3y4/wBoc1Uu4ybNmjfeucfL1FaJDLEfLUEehrOv41VY/LPluzZ254NJMGhI9oVVChXUcGpAgdvm4bv71K+24Pzfu5FHbvUbq/Csfm7GqAjktNgyDn1qGRCyYH3fbrVsO8Zwy5/2qJEQjzM8nuO9O4jNkneFRGM5PAq/BcSLEoMe5R1x1qGWPeDJkEDjipbKPIbgqOuaegh00qHDKGiPqKWKTAAaZXJOORVuXymjAZVLY/Go1McYDIqtjqCOaVxkZMROVPzjuDgVMsybSJAGXH8dM/cT9QFPbaKCvyZXlR6EfyoAfHPb4/dttz0FTAqxxKoZuoI4qrlQCDjp6cURu4HBBGfunkUWAtsypwp257NUUoZAD/q3656rSGaN1HAUjseRSkHePRuq9iKAFB3JvlQYxnclNRWkBCTB1P8ACeCKTJj4i+UscFH5FKxhV/mjKn1XpTAGARQhUgEdMZFZF1pERJmsXEFz1I/hP4VriViPkfeB1HekYoeZYynuBQBjpqF5pwH9oQEx/wDPWPkVp2epW92B5MgPt6UpiDIVVwQeityKyrnR3WX7TZYinHJC9Gp6C1OgM46VE6jO+NvqKwbXVGjfydRjMMmflJ4BrZ3lwGjbd6YpWHclQhwXVSPUUxmB7Y98Zp25ZFwBtdf1podvuuAjenrQO5m6lotnqaHzAVmx8sqnkfX1rgdQsJ9Numt5RyOhHRh616HMgE4O9oyeh7VneI9Ia+083AX9/ACQf7y1tCdnqZzjfY4IqufQ0bTSAjkUY9DW5z6CdOvFLml3EdRmjCnvj60BYSjFLs9CDSEEdqBCYoxRmimAUUZozQAmKKXNJmgAopc0lABRRjPTmnBCfagdmNop+xR1P5Um5V6DP1ouHL3ECsegpdoHU0hYnvge1JRqF0O3Y+7TScnJ60UUCuFKAWOF5NA6irVmyAlSoyehpSdlcaV2EVpgbn6+lPZfSrJBNMZTisHJtm6jYrEYpKkao6pMLDlPNTjDDnp6VXHWpENKSAa8GDuQ/hSeYUwHGPerIANIyBuozS5u4muxGMEZFIRSNAy5aMn6GmCTadrAg+9O3YQ7FNIzT80h4GaaAqSffP1plOflj9abWyMWJRRRTAKKKKACiiigAooooABWhper3Glzb4jujY/PGfusKz6KabWwPzPS9L1i11Xi3ciQDLRNwR/9atIc815TaXU1ncpPA5SRTwR/KvRNC1631iLY22K6Ucx/3vp/hXXSrc2jMJ07ao1ccUBCalCE1J5eAK6DIrlMUwrVkrUZWkIh20mKlIppHFMBlIQT0paCaAEK557igZHWkDHJpaQAKUGikPUEZP0FAEgpwqMMO5qQc0r3HYfRigc0N7UxEbUwAswA65qTjr+tc54i1kW9pNBbt32Fx13kcgfQf0rOc1BXLhHmM7xJ4iWdDY2Lt5fKyyD+Ieg9vfvXKZyKUnI5/CkrilJyd2dKSWwlFLSVIzW8M/8AIw2v/A//AEA0UeGf+Rhtf+B/+gGigDoyeM0qncKbwOSeKcArLlTXmncLgZwacOOjH8aYA2ORTxg0DF3eoFIVB5z+VL26UEKB0GfWkAm1wPlIP1rV8XKT421zgj/iYT8j/ro1ZRzxh62/FZYeNNbJOF+3z9f+ujU+gupkFTgYcH2xQ4K4CsM+hpJRu5GV9xSBJcgkblFIZEbiVHDBSjd/erYmS4Taw2k9PY1DvRiQeMf3qHjDYA65yvsaAJArxAqxLe9ReUVbeDj+VW9xWLEgJPciqjlgPk+ZfTvQgsLvDP8AOQD2qQsVGXXApkcAddxHPoeopxDxpnAdPfrQxEm4qnDbl9TTRCScoRn0qvv2sGBIX0NTo5L8EA+xoGOjKk7B1HVTSl92Q3Qdx2pzNHINpA3flSoue4bt7ikAhJKAZyKa2Au4D5h6d6cQAehNN+VwTkjHrQAqybxxkMO1AkAOGbB96jMbLyoz3yKcV8zGRz70xChF2k5wfSkDcFcEfWnq235JFB7A+lJJ79ujCgBAxUYJGR0zUscpc4IwT2qAsdyhhnPQipXGAMdT3HWgRMFVvkP3qa6FFIXtTIy3X+IdDTvP3Eg854LetMBigIhLH5m6UqAj7p56E96UyK2AR06H2oKYYMpoKIbmyt5lBdSXHRuhB9ayybmwld2+dT/y1xkj61sOvOcnk+tBty5BbAHr2P4U1K24mrlDTP8ASpvtM8gaTGEx0/KtdyQAB8vv1B+tZU2lGN/OtXMMn14ak+23drg3cZEeOGT5lNN6k7GqeVGRyOdtSxzhuMfMOx4NV4JY5drrIMEdPWppCrABlAAGTnr9QamwyQPvySfxpScgHdntkVSim8wkrymflJ4Jqyp3ZPOfUf4U7AI0ez5ug/MUjLsPAKj81/KpQeScgY9ORSkE8rj6DmgREHKjAwPY9DTxtY8Eo/t0NMlXKjGAD+VMUOsez1Pfp+FAy4NrDbOgB7N601t1uv3S8Z9O1IpAwrHnHCt/jSAuJMRthe6N0NIBygE5t+O5xT0lG7Eh2SHvUa7fNzGSj+h6GppHVlxInPrQA7cwHPHoR0NU7tBPeQpKPkxkkGpwZIMGP50PUHqKroyyamcZDKvRuM0ADhogRv8AMVemOoFPEokUZOTjgjtU1wkSSiQJ5cmMZ6iomiXzBIG2ufyagYhVguH+ZT1qJpViUog+92Parrqd3y4wB8yZ61XW3SYsV4fsh4IpoTGvHGpADfIRz9atRnYoWMbgBxVdI3h+V1BHvTo/MjclACh6g9vpTENnmbkghXHUY4p2xliSXG9X6+1SM4yHADL0IIou3aGGN0IWPOSBQA+GBIT5oO4Y6mo/Mjd/li3KTzjjFMS5fyMvjaemTUZBkiRchUzzg80ASyzJnykVvfIzikjChj8+R7VIbaBBkqc/WqhktdxRXYN6AUwJvLOzG3PviljYpKFB7c+lCTARhQ5xjucUpkXaAFznvQBL5isxxkccDtQpkKckY9VqEAnADnJ9qeRjuT70APDxlslMEnqvWohNmbYsx+Xlt68U5JSCWfB9f/11GzKc7M4J780APIDknasg/wBgUwKu7rIlAPGOB7ikLMOAwx3BoAJrWG6QrOVlB7MKzG0/UNOy1hIZYRz5THJH0rS8tXHKEe6nNSFc4aN8MOozRcVinYavDdS+VKohuBxtbjNX5CWBBGD2qneWcN5GBdRBJh92ZeCDVGOTUtOOyYLdwg5DA5anYL2NcYZSkmCOxpcmNTGwzERg57Cs601m1uZvLyY2J+664NaDyKCBkYPG096VmO6PNtZ046dqMkBPyZyh9QazckV6B4k0n7bZebEN0sPTPBK+lcAwIPIxXXTldHPUjZih/WncVFRmrsZkp9elGWHvUloYmuEWcsIycEqeR71uzeFZhzb3SMp5G8bT/WpbS3KSb2Oez7CjjuorVk8OalGMiFXH+w4NU5dOvYDiW1mX6oaLoVmVvl9MUfJ6GhlZeqkfWkxVAL8noaMp6GkwaSgB2V/u/rS7/YU3n0NGDQO7Hb29cfQU0knqTTgjt0Un6CpUsrl/u28h/wCAmloLUr8UVeXSLxv+WQX6sBUn9i3Q6mMfVqOdD5WzN60uD6VpjRpOrTL/AMBzVG4he3lMcg5HQ0KSewuVkWKKKKYCU5GKnI7UhpM4OaBmsj+YgYdxzTsZHNU7SQf6vJGelXQCDzzXNJWZtF3RXkXBqIjmrUi5queppxZQwU4daSgVQrEyNT91QK1Sg1DQD+o61E8Yfgj8akDYpevFK9gsUyrRA4ORnoaZJLhCOmatylY1LN+ArNdt7Fq2hqZSdhO1Iad1pDWpmJRRRQAUUUUAFFFFABRRRQAUUUUAFPileGRZI3ZXU5UrwQfrTKKaA9H8NeLYtRYWmoFY7s8LJ0WT29j/ADrq2jwDx0614cDiu28N+NDCqWWqMzIMLHOeq+zeo966aVbpIxnT6o7Yr7UxkxV0qrIHUgqRkEHII9aiZOM+vSui5gU9tRsvNWWQVGVpgVyKaamZKiIpgR4waUUpFJg44GaAHYq7bWsjWb3NtsmlT7yAbmjX+9tI5/pUNvB/o8l3Im6ON1TZ/eZgcZ9B8prRsLgXTlI4orW8jRnhuIPl+6pYhh6EA9K5603b3ToowV/eCx1GbUplsdRb7RDKCqu+MwtgkMpHYdweCKyI271bur2KYCWCHyLiRCs5T7rc9h2yOtUgcGnTja8rWJqvaN7lgN1pDnJwMkUinI9DVPUtYsNGaJb8ufMXcIowCxHqeRgZ96uUlFXZnFNvQk1O5NpYtIuDIR+7B7DON35kV5vq1wZrnywTthyvPdv4j+f8q6a48RW1011ql0w8/wAsLbW0fPz/AO12VBwQO+APeuKZi5JY5Y9TXDObm7nZyxgrISiiipEFFFFAGr4a/wCRgtf+B/8AoBopfDX/ACMFr/wP/wBANFAF2O8ywyePSr1uwBJByp5rNuNLlt2LxAsnoTzRaXLsfLUlT3GK4XBPVHXexvZDr8pyKVkGwcciqsDGL5nOF9atCVepbrWbRaY0EnOT+FNHzNtFSBA7ZpxG3JNIZGnysd3b1ra8WDPjDXMEMP7Qn+U/9dGrFHJ57itjxYMeMtdKnn+0Lj/0Y1PoT1MpCoJHKk+vIqTeFGGGPQ9qhVw2A4/GnsCv3uR6VJRIzbiN6g+4oCFVweU702Nk/hP4GpN6xsFJ+/2FAwL7MbDuT37VFLEJP3kR5BzipQu1SV6Hk1HHkyEpw45we9CEEbyOQGUAg9SKmk2kfLw3pnilR2njIddr+lRARuDFISMfxUABUFT5q4z68VUNs6S742+XGMVpNtK+U5z6A96h8hoyCpyp7U7gIkYcYak2mIZOSoOaTKgkKeRzQlwAdsg47GgQG5Ofm6H061OQGXsfpULW4kO6Mj1psTGN8FSh9TyKBk4cKOOmMUzcNmAeacWB5cc9mHSmMdpGcYPpSAXBk4br60qloAdoyPfmncEgqakyAPUUxDIgmxnRSCeozVZ3UTo5kCr0wasAjJIbYf7w6VQ1W1JXzVTCjksO5qopNiZL9oG9o0OWPPBqVchRlePrVPSFBjZ2H7w1olAO+PWnKydgWwwEHtUu9SMFf1qMpzio8lW+alYomZQw4605Ub3NMXOMg1Kr5GQfwpMByHafmAJp5VZBgHA7g9KXbnmkAGcHoOmaQGfJpksMjSWDgDqYm6H6VXN887rbT/uCvLK38X0NbQ5b5hx2JqC8tIblf3yCTHRx1FUpEtGdFcqJV3D90p+RB1HvmtQOJBndkf3l61hyWVxbEtGPOhXrj7wFX7HUoJUAx5Z6DI7+hq3rsStDQI5U84PRl6H61JhkOc4P94dKh87Yu4kIT0H8Lf4UquzPv+63ZT0P0qGhk25M/vOCf4h0P1pzRDcDHndj7p5BFRKd0hONrenalLFDwCAOSpPH4GgdxGj4Kjj1Df0oDbBtILD0PUU/d5h659j1prpiQE5Kjo3cGgBchxkHcB+YpUaQqQCHWg5zuGFf+8KRRkkY8t+zD7rUgJFaSI7kwVP3lPaofLWW8ZlJDEdalIZwI3YJN2PY1WLSLeqHGxsYz1FCAsGaSEiOTDKepIqTHy4QB4z1Hp9KQspASXqR19aiINpzHkqe2adgHA72EanKd26EVPKVEY85SeyuvWooCvlFo/vE5IP+FS/eOVzk/eWpAYv70bOcj7rEdaik3p947WU+lWGOQAxGP4T6Gh1MuA3316H1ppgQhiwZlHzjlh6044lj2N91vU9KiO6MsASDnpSFlkRiBgk/MBVCIZeIzAR8w6cVNaW+U+dunYdqAPN4HMijgmlgnbceMMv319femBJcoWCpnGWx+FOjtre2B9fU0k8ioY5P4Q3WmXwWVV57/nUgWQ0bp8pDAdRxxUBe23YJMZz9KQRW0BGBtbGTzUMkK3DM6OrDpg00gLJEbElZUPpzjNNaNs/ewPTFNtLRY1YzIPbHakmlgjB2s4x1FMQpDFsbaJG2gAjFItwrFdkgKH+8KWRh3xj60DGfKRz1NNJYHCilO0jIpAD15oAaHw+R8n0PNSk7zyQQO4HNQng/1oAwOOtAE4cZ2g7h3pG+QEpg4/hNQmQhvXFPV1LZNOwiC8061vRl08uXHDqMHNZTC80wGO4VpYM8SA5IrdLEkHO4jo1KCuwq3IbqDRcVitbXYu0jkDo4PXBri/EenCy1FmRSIZfmU9h6iumn0sxyGayk8lyclf4TWZq001zZfZ72Py5Y+UfHDe38q0hKzJkrqxyRpKc64NNrqOccvWu+0a7e70uIsAzKNpPfiuAFb/h7Uhaz+RI22OQ4z6GoqRui4OzOt3tgbSWHp3FO3MOuQfQUEknI49xR255PrXMbkR2g/vVVh6suary2Vqx+e1hJP+wKsHzBwQGQ0EFR1yKauJooPpNg3/LrED6YqJ9LsVIBtI+PrWi4RwPaoJHKnBOQKd2KyKRsrFTlbaMe2KeIoQnEEY+iipJFB+ZfyqHcQOaLsLDgwB4+X6UwvkkYFNPXIphOaQ9R5OeNo+tN3HuKQnA600tuxzikA4Ybp19KqahaG4t8gfOnI+npVncc8cUoc96adtQaucseKTNaOp2uxzMo4Y/MPes6umLujGSswooopkjkO0g55FakUnmRhh171k5q1Zy7G2k4B71E43RcGX+o5qrIME1aqKRcisFobFeijFFaAKDinhqj604GkxEnWnMwVck8U0HjJ6CqVzNvbav3R+tKMeZilKw2eYyueeB0qKiiulK2hg9Re1BoHSg0CEooooAKKKKACiiigAooooAKKKKACiiigAoFFFAHUeGfFs+jsttcFpbEnlerR57r/hXpUFzBeW0c9vIskL/dcV4aK19D1+70W4zES8Ln95CejfT0Nb06zjozKdNPVHrLjtTGA7VW0/VbXVrTz7WTd/eQ/eQ+hFWN1diaaujnatuRNTGX0qZgCKafWmBXZCASenqadHEoiaeYEoG2qFONx6n6YHU1cgtd0bXcschtkYKzKMZY9FB7Z659KtrHBc6YIrjFikkrz2kpyyYICupPX+EYyKwqVEtEbU6berF0yWxeG5gS3ZXaIs8DvlZlXJO04+VwMkdR1rKkkhQMLaKVFYFS8rAvtPbipYwljI5SeOaXYyr5J3KAwKkk/Qn8aqY5pU6ceZvuXUqysovdDcYNIRmpKjuJY7Ozmu5zthiXLEnGT2X6k8Ctm0lcw3K2q6rDo1gbiUK8rjbDEf4z3P0HevNLu7mvrqS5uHLzSHLMe5/z/KpdT1K41W/kurhss33VXhUXsoHoKp1w1JuTOiEeVC0UUVmUFFFFAwooooA1vDX/ACMFr/wP/wBANFHhof8AFQWv/A//AEA0UAdKsgbJZcn1FVptPgmJZGMcnr0qUA8+1ICWyc9PWvO2O219zPmW6tP+PhS8X95eamt5klVWB/WrwfK7G+ZT2qnPpYZjJbYRu6irUk9ybPoWUn8yMhOoNSLcIxKucH0NYv2h4ZQkqFHHQjpVhXEg3s2TT5Ew5jWVgVwvOKsahfSapqd1fTKqTXMzzOEHygsSSBk9Mmsq0cmQnd8uauj5ifSs2raFp3BBgk4BFP4AxyR70iqCeOKUZA+YZ+lSMVUXHy8GkK/Nk/eXoaQkAHDfSo0LF8uDgUAWRICNx4I9OlRyASgMG2uDkGm5EkvHNBjCybuRnrigCfeWxvG2Yjhx0NNlVmZcKAw6j/ClO0pkdP1pwO4BX4I6NSAWNRNCc8FfXtTN0iyEEgqenNPP7t2K/Kw/h7Gq9zGzxmWNh8o5UU7XAR0wxd1IwecUJGJCWXkD1FWEHm2q5OcjmogTChx+VO4hQxUggD8Kl+0K64YEH1xxUaDK5PB9KQqR9KQx5ZYzyuQfTmoTKuSCmM0yRiOVJFTQwFhlmDg+1AhseQO5HtUoweQePegwyxH5DlfSgFjkLgH3oGKU8w7ec+veo9xJMfDIOCOxpST90rg/19RTTb+UcpneeoPQ0xMkRU3fuwFPpTJY5GXzEcEg9Kb5qknjDDinF8MAKAQ9PnXewwx7UwoA2W5FDE5wf0pjSZGD1qgY/nOe1TgAp6e9QIdwxUqDikA+K4G5kySV9qlZs42kfiKrrg528etLksfbtSGWVzzuBNMYNnKggenamrN/A5P1p/MWNhyDQAu4jGwKrng+lUrzSUuoy7HypD/Go4P1q8jAnkDNSbigCYyvoaV7Csc5FFdWMym5DTQL0K84rTgvoLo/upFYD+Fjgj6VfwuwCJT7g9azLzRYrhg8Q8mY9COBVqV9xctti9BdIzFQC+3qV6imbzcOVjO5A3Q9fwrBR7rSZWguwU3Y/ejpW9b+UIUdWDJjPmJzj61TSWxKZaKggDof1/Okdzgb2Gemf8aUuCg3kMvZxQeSM4IPRsdfY1mUIedu3C56g8g/jTmCphP4ewJ4/CoyNkuwkLn+E9Pwp48tkaOTn+YoAYG2go+WTP1K0O8Z8red4zgEUsabVOGyBwCf5GobhfKjUx8HP3ezUwLJUjjG6P17ikjIyW5ZB+lMViEG35SeqVICUHyDr95aADy8MZoiPpU0b7yGHyyDqaiQkjfEfqtSKfM6gq3ekBMvzsV2Dkd/4qaEH3d2OeAeo9qVTgKGba4+6TQx3t8y4cfxdjQMjuE3KOgYd/Wqm3YTx97mrJ3SMQevp6/SkIDgAYLDt/SmmKxW5JypwO1SvlcSpgMBhvcUzYUyxyR39qAZFbrlCODnrVCHREShosghuR7VLGjtGI3YBh0/CqYilEoaN8IDuPr9KtSSKs8Upzg8YpMBLpPMQbsBl4bHpUyWkCwYReDzkHmo5cJexO33WyCKkRvJlaM8A9CaBkTwpEpHmMufWooRAjGRyX9CR0qW8/hYgnBqwFQqNoABFAWIDcKB5cUeSPbpSEzuDv2haSaeNWOBk5xxUfmsw+VG/GgQ8o2MbUNNMXfaoPs1AE+FDADNIYmzln/KmA0x7uhOfpThCRy2Nv15pyow+6+fY0fvMZx+IoAgMQHAIqJ1OcD1qZnOcNx+FG0Ebh0+tNCI13r06elKZMcY5xTgO4II9KYy5J6fgaAFD5GDyPSmSxxzLtkRWHbIzimlTSAk5HpTA4XVLYW924AwpY1nkEGuh1+L94xx6GsILvB9R+tdNN3RzzWpGKcrYPt6U2itCDs9H1qO6jjt522zAYGf462TkZ4rzdXIIwcY6H0rqdJ1szKsFw3zgYVj/F/9esZ0+qNozvozdEg9D+NDMGFRGRTxu+Y9Kbk/T61kWD9OelQyPhcYyKGJ55qJiw6dKAGkj1x9ahEgckFW49qczdc0hYkHHGaAI2J/hNMzg4NPY8+1N+vWgYh54zQRjtSYxzzS5x1ziiwDehp2RRtJ6dKPbvQBHKolUo3SsC4haCYo3PcH2roioqjqFv50e9R8y+npVwlZkSjdGNRRRW5iJTlODTaKANOCXzI8nqOtSnDCs6CQrIOeK0Qc8isJqzN4u6K7jBplWHWoCOeKSZQlBYKMk4FNd1Qc1VeQueelaKNyJTsSS3G7heBUNJS1oklsYt3CiilA5x3piFHSkNStHsiBPfrURpJ3G1YSiiimIKKKKACiiigAooooAKKKKACiiigAooooAKUdKSloAvaTqk+k3yXMJJGfnTPDjuDXpOma9YawMW7kTY3NFJww/oRXlFSQzSQTJLE5SRDuVlOCDWtOq4ETpqR7IQRTScCud0DxXHqIW1vmWO66K/RZP8DXQOecEfjXbGSkro5nFrcntNSmsJd8W1kYbZIn5SRfQj+vWn6nJY3DLdWzyIXzvtnUt5WP7rdCvpWaWpM4P161Dprm5upaqvl5ehKBjr+NGM00HPFSKUVXeSRIoo1LySuflRfU/Xp9cDvVt2RCIZ5obS3luLiURQxY3u3bPQY7n2rgPEXiCTWZliiDRWMP+rjJ5J7u3+0f06UeI9ffWbgJFuSyhJEMfr/tt/tH9BxWHXHVquTstjohCwYoxRRWJYUUUUAFFFLigBKWiigDW8Nf8jBa/wDA/wD0A0UeGv8AkYLX/gf/AKAaKBHQg7m9M9qUhQfY0me+eKZnDZPIrzjvJNhGGUjim+YQ3ofWgSDpT+McjrSAawimUrMoI9cVnXFhJbqXtz5kf93uK0Cj9Vx9KSMup4zmqTaBq5nwzbioU4x94E1ppcKyrs69CKr3FjDPzt8uT+8O9VSlzYcsm9T0YdvwqnaRKujaUhs8EUNLHHjccE1jR37ngNk+tCRXF0xIPOe9L2fcfOapPmvgqQOzClbeigfeB4p0StFEoOW209iP4eCe1QyyONApJX73epVYbfm60igDPOGpwTd1pAN2lmyv5VIrhlKMp4phBQZJ4pyONmfU9aQyRWUhkcEr29qYVCOSON3GezfSmglSdxwD3qXkgKOQpzx60IRGhEAxuzGTwfQ0yU7gRj5fUUrJsycfKevHH5dqcp2O2eYiPxWmBWE7RpycDtU0Mit1OCaimgaNwxwUY5yKHiROgI57UxExBB+7+NPW6APlEbT3xTPNTy9uSDUSAlwShI9aQy0zumDnNDMjqW6NjtTm2qo/rUH+sbgYX1oQCQhid0jlueParDfN8rdc8Ed6jRRGcMM+lOeTOB+XtTAiuo9w2qAGHPFV4nJA45HBqyzFmqPYM8DFNCsKSfWk8s53Zz9aXPrTlye1ACKeemKlU54JxSY29f1pHXoUPPpRcCQx4Ax1oUFT836VH5hUYcEe4oD57g0ATHbtweTSI7o4H8JqEbi1TKTjBFJgWQUY/KcVKDyM43dvpVRcDpg+xqwkq7cOvA7UmMcQcksck0zOPvDd71LlGIKvknseKdhOnQd6QFSWGO4TEkYki7A1kHTrvT3aXT5T5ZOTCf5VvnMbcclvTgVEdpOG4PtVKTQmrlC31VLhxHjy5R96N+MmrK3KxAuv3c/Mn+FFxpkN8u14QW7SLwRWXJZXViCGD3ESHIZfvL9R3qlZk6o2TL5qAhd6Y+53U08FGVSckjqT1H1rJsr+Ob5fMPmZ6gfzFagdgoJID9NwGR+NDQInQqDtBGCOR2IqtdExRA4/dZztqTDMQCAp9Acj8DVa5gmnkjVm+VGyxXrQhkoZn+cK3ln+Luv4VKnLAbgD2bsaUSSZIBATswHT60mGb7oUjuOzfjSYDnQknYfLf1PQ06PzGGHPzr+tNZx0ZScDp3FKh81SA2fRhwRSAmJE42uMOvIpEk8z5ZPlK96YjgjDNkg8OKe5ONsi4z/EBxQA58gj5sE9GqF/vA/g/v705gyIA5yp6H0pCM4XgHsfWmgGAljjdx+hqFlVDjp/SpTnaU2gc/lSygtHggg9j60xEW7GCMEinKwdNrdRzUSnDENn0pGJUMPfqKYEl0wkEb5O3NSyvlosgkgj8qroBIpTnHWnKXWML129D6igCe4DPE2DThLmAFe1RSsWgyn4iorXIgP60AEG1pHYgnmnSTFfkCkt6e1JGNjsg6HmiDl3L9RQAivJkNsYYGMZoMrHohzT2kMh2xDJHftSESAfeUGgBqpcMDuYLS+W6jmbgU1vMCg+avvmhlQjLTEjuMUAIxcD/XKR6GoHDGQZA2+uash41ACxgn1IpspB4ZU9aYApI4VeKD78UgwRwOPamFgp/iFAhSc9x/Kk2DBIIB+tJvz0yfrSbwSBQBg65H+8kXrlK5Rd24Fetddq/wDx+/7y1zDjDEAd62pPdGc43GSRbl8xR9QO1QVaVirZH4j1pskIbLxj6r6VqmRKJAKUMQeDjvTaWrMzodL1xQRDe8josp7fWuhJDAbecjIYdDXnytitTT9YmshsP7yE/wAJPSs5QvsaRnbc6lkJFQNkcVFbataXZ2rIUf8AuvxU8g4z/WsWmjVNMrN94j1pAOOKGRy2Wx+FIVI7igBcZGOn1puw9ulP+Y/eUH8abtcdASPagBmDTBE24ktkelSsQeCrCkIwOAfyoAToOKaTzRkZxnmjIwaQxOoqNuM09vUGo2JpiMi+t/Kk3qPlP6VUNb0yLNEUPfofSsOWJonKsOlbQldGU421GUUUVoQKDg1pW8gaL1xWXmpoJzCScZHpUTjzIqMrGi5wuTx7mqUk4H3cE1FJO8h5PHpUNKMLDlO+wrMWOTSUUVoZhS0U5VLHAoAQDJx3q3FEEGWHJ6U2NAp55NTZrOUjWMCOUZQ1UNXiAQR61TYYbBogxVFqMopSKStDMKKKKACiiigAooooAKKKKACiiigAoopaACiiigApaMUUAKCQcg4rrtA8TuSllfMWzhUlJ5B7A/41yFKPWqhNxehLSa1PV3YAE5/MdKiMgzXI6N4l8hVtb8u0QHySjlkPv6iustomvpI1syt0X+75Lbv/ANX44rthUjJXuc7g0yzBmWREXG5jtGTiuO8VeI11Bv7P09yNPibLSYwbhxxuP+yP4R6c9TWhrviOGws7jTdOlSa7mBjuLpOVjToUQ9ye7dMcDrXEZOMZ4rnrVL6I1pwtqJmjFFFYGgYoxRRQAYoxRRQAUUUUAApaKKYjW8Nf8jBa/wDA/wD0A0UeGv8AkYLX/gf/AKAaKANvnZx0pQAU65xQVKdOlKVDkEfKfSvOO8RSCOR0pxb0NNcYbnr6U0Zz7UASlvm6U8APwDg1H17c04MB70gAI6E5pwkVmw3p3p24nvxSFQ5yOKBlK7sIsNJEdkg59jVBbma3cBzsHr61rzxm4haNjtHrSPbRtCI3TeMcHFWpW0ZLiLazjy8GTJb1qV50Rh1B9KyZrSe3BMJ3J1weopkdy008YOcr1UjmhxT1QkzoEcy8gcVPgHrx7VVR1x8pww5Oam8zLDcNrZ4z3rFo0THfdyCOvQ/0pWi2hmUYVhnGaVvmJB6mjbuAHzcUDISMLuXke9KhGVPIPpTmGxSjj5fUUvlkQAY3N2PrQIesqljnr796ayY3EDI9PWlYpLGp7rww7ikRwN+4kjtQAx9oj2NyhHX0NMkIaPr+8HUVYeMLhWU4I6+9V3UMm4cvnH1piGRwtJGrdc/pVmOMw8uVI7c02FhG2F+43X2NE2PNXJ+WgYTT5JAGcjFImwAJk5IpIkUvu9en0qXG3ORTAQqykITkdjTXRSMjhu4pwLYPpTOepoAbyo96AD1JoLDo34UEMwAByKYC7VbqPxpHjcD5Tg9iacilSOe/TvVgdT6elJgVm3LwQxpw57ipiVXJKke/aqzxAksuVJ/KkBIAcdN3t6UxoSRlDg+lICQACckdxUgl9RzVIVhkUm04fg1YDq3HX3qNwGGGGfcUzy3j+ZDxQBMwKHPUUwtvfOeKkSTcuOvtTTHwWXgd6QySPcvCtu+tTxScnd1Paq8eAfmO01Kdx4PPvSYE2c85+U9BSqF3Y45FVcuMhDuHoakhkVpAG4b0PagCyI2V9q9D2oKuZCVJyBgjrUhIA65qN2aPbg8HqaQGff6Zb3AEir5M39+Pj86o+df6UR9qBltz/wAtk5H41uSspQEYpqvtTy+DGeqEZFUpMXKVLe8iuATFhlPO0Hn8KnaVQxlJY4HPqKytR0sRP52nN5J6mMnqfUelV7fWXjKxXilZezkYH41Vr7EtnQKwO1wxBboOxpVkUbww2j+JD2PtUNvPHMAeCD2HQ/SrB2AZz04BPOPahjELjAJO4dm9KUoM5J2N2fs3tToxgcIAe4Heg5c4Cjb3Q9qQCZ2sfkx/fH9af5gReSTGehprZyNrcDgE/wAjUfm552fKD8y+lAEpkMXLDdEaawG3cv3TQrYcHG6Jv0p+ViPHKtxSAiBLL1+jUjuShxwf4l/rSygIM/wHr7U1csM4Ge3vTAZgOODzjg+tMAwRnj2p5+QkqeD+hokXIywwc80xEeWWTIHymnrJtPT8KYOpU8jPFDKwG4NjP86YAkjo5G3Izhvb3p/+pkGB8r9aiDBnG1ssOCKsoVIaNu/Q+h9KGA2YZAdeoOaaTsYMOjDmnBWwUP5+tNjyd0bjj1pICSArFGw4z1qMgFFdhuZj2NIx2Nu6gUfxKQe/T2pgOECYy6/rSMVJAjizj2ojABctkgH1qMuBwpZQaAJGYgcIBTFVizE4GRxTGcgYD8+4pjFpflEgWmgHRlpJGUnCr+ppSBJnaMKOpp6LHEuC3zdz60wuqbgMAH3oEIUAXCkk+tACKcEc+9M83zEVUIA9qRv9aFJzVWFcw9YYG/woxgCucm4kYe9dPrMPl3Kyf3hXLzcyN9aunuJjM1ZsIxNexRt91mwcdaq1d0pguoRsa0exNw1LTJLSYgrwT8p9RWacqcEV3s0cdxEUkAKnv6VzWo6U0DbgQUP8Q7fWiM7aMmUb7GNThSvGyEgimCtTLYkD4NaFrqs9vhSd6f3W5NZmaUHik1fcE7bHU2+o2tx/Fsf0arWMjIG6uN3Ed6mivZ4hhJGH45rN077GimdWAD3xQFKd+KxYddcf66FXHqOKuJrVq4wxeP2IzU8jRammXiQQSBnFRxlyCXHfiolvbWT7sq/99YqZZ4mHEqH/AIFSsx3Q0qDnpTCnpTnaPORIv51EZ4gDudceu6psx3QxhtyDTGx2pTPDyxmjOO2earS6hbqcBi34UcrYromqneQmVMjqv8qjk1JcfJGfqTVZ72VxjIA+lXGEk7kuSIDkGkpSc80lbmIUUUUAJS0lLQAlL2pQCTgCpViK8tSbsNRbI1UselTqoUYFHTpS9qhs1jGw4GnCmCnjpUMsWq8685qemyLuTHenF2ZMlcqGinEYOKbWxgJRRRQAUUUUAFFFFABRS0UAJS0UUAFFFLQAlLRRQAUtFFAgooooAMn1qSO4miR0jmkRXGGVWIDD0PrTBik70wCilooEJRS0YoAKTFLS0CExSU6koAKWiigAoApQKKBGr4a/5GC1/wCB/wDoBoo8Nf8AIwWv/A//AEA0UDRuLIQBuFOwr8qeaRwp+U5z7UKmOnavNPRDbgjdyKAhBx2qZArcNz9aZKBjAoERYbfhccVJkZyKjXOCOhFBLbME4pgP47HmjeSQKYAfWlDfOMdMU7ASnk46GkJKnvSK2X5p+A30pAA5Kn9KgubOOcbo/klHQj+tTEYPFPDKmPWjYDIkivIXDzgSRjqVP61oRanBLhQxLdsirLEOvH41nXOmpK3mRfu5B3HenpLcWq2NeOUTLztJH92pCRjIbmuejuprNxHcoQxOFlXofrUh1CdpwMgDuF7/AEpOn2Hzm55pBwVBHrUp3MuAQVxUERjkiVjn6U/kdOKzsUBjLzCTgZHzD1p/yI5BOVbkHHSo/MKkAAE9s05Tu4xx1HsaAHtJmUJu5zkZqOWJWIAGATxz0pXxvQsMnoaY7vkh8H0I9qYEJTaTsbPPNDkzgbRjb1PrTcl5Aqd+c1aSLam3uKYEYJBBwRjuKmEyFeRkHuKYCoQh8jPekEe0bgcD1pAPdV4Cc5HTNRlMDPOfQ0hbkHHPqKmjCyPhjj3pgVxgnOOlPUBm44PrUzxhWIABHrSiIKmV5NK4DeCcMCGH8QqQIcbh830oQHqRg0ozkkZz65oAjLbgQD+dHzFRjH0NPZlZTvHPqKTayrkfMD3FAEZjA6gA0x4yOgqZeByQRTSoHIJHtQgI1JT6elGQTwMU5hn2bsPWowHUnIqgJVIHBH5VL8vUNg+9QKATknFKcSAg9qQDnVWOQcH1HIoBdFwen6UkaNHHgKCnpmmtiTKjPHVD0/CgBUuEMxQOCw7CrShN/wA69R1HWsq3tUinaVc7j61dFwxkGRgAdabQFxHCEhW3Adj1psrbzuJx7VF5gf6+tVJjIDwTgnrSsBYeXYaY1xkHnHvUDs5HzEZ7EVVaC9Y5EqhfUDpVKIrk1xqUNsmZmHNZsk8mrsP3IFuONxXk/SrA0mN3DzEysPXpWhH+7UKiAY4AxT0jsTvuUINPvbR1+yyh4j/yzlODV2LVEErW1zmORT1I+U1Kd7Eb/wACKZcWS3ajzhlgMBx2o5rg49jQjKGMNG24H0P8qlADZk3EY7965tRqGkqcfv7U+nUVq2d/DcIpU89ASec+hFKwXNE4kywHUcjt+FQShx8yfwjr/jShxGxZV+X+JR29xT5SD84YKSOG7H60AMikOd394fMvb8KUMFDY5T07io1xIMhSqjqD1/ClPB6DJ6+4/wAaLAS5G3k7kPSoyAq8ZI+tOVlH3fu9xTCCuG+8h7DtQhgT5gx3x+dISNoQlsdiR+lKVCHcvK04srIQwJamIjI9Bj196a2CuO1Lu+UAZBPCk/yND8LyMEHmgCMHy8nHXtTwRIASfrTSM9CMnuaTaVGc0CJXkZXVc/MvT3FEyl3WRD05IpHIaPcBkr0pquQ+5T8rDmgB52yr05Haohy28HAHFKXEUvB4I60wSAs6bSO9AyTPUHoamRx5JXGdtVicjIOKWGTdk447+9FgAMz8lQMetMZAzEkL74qdQACMdOhqvMpLgcAE8mmhDtiHGS2BQyw4zg/zpGixwrH86aI2C4Yn86YiFCfKCqpGO+MUhlL4cdjipBG+WG/j0zUY2Rxsp5PXrVAV9Vj8218zrs/lXGSNlzXdtGJLaVT0YHrXCTRNDKyN2NaU7XJkMzU1tJ5coNQinDqK0ZCOrtboMgBPap32tngEHsawbSYrjk1qxzBgKxZSKd3piuC0WAT/AAnp+FYk9q8T4IKn0NdUxBFVJ0jkGHGfwqoyaE0mcyVZTyKStafTzjdGePQ1QkhKk5UitVJMzcSCinFaaQRVEhSZPqaKKADNGaKKAFyaTJoooAKKKKACiijmgAooxRQAUUUUDCpIovMbGQBUdPjbawPpSewLfUuLEsQwPzpjCpNxbB7GkYVim+pvp0IaKUikqhDutKD6UylBosO4/PrS5ptGc0gIZF5yOtRGrLD5cd6gYYNaRZlJDKKUikqiAoopaACiiigAoopaACiiigAooooEFKKKKACiilpiEpaKMUAGKMU6koEGKKWkFAXCkpcUUCCiloxQFxMUYpcUYoC4mKUUuKKdguGKMUUuKBGp4aH/ABUFr/wP/wBANFL4a/5GC1/4H/6CaKBo3QCzgqACOpqTcAcbcHFRiTbnFNLs7da8w9Icx54pevUfjTACGwac2cYHemIaSVYYGRQyhwc/hSj7uD2poYFKAGojq3IyPrSjO77uKXd2oB2j1PYUwABUmUknkVJkhT3qPej8YIb0NOBUcMSBSAkXjhu/Smsy7gSBgUrPkccnHAqM/dCkc+9AEmdn509nAOaYqEod1NGCNp+8OlMQsyxzxFGXIbjB7VmtYTWUgktv3oHRTV/JB9icfSpEbj5+GB5FNSaFYpW+qhiFwQ56oeMVr29ysiMSRWddadBdhnT5ZPUHFVFgvLEksPNQd1PT6ihxiw1R0KoNhIBJPr2pWbYcdM9apafq0MkZLN04INSi6W6UPEp2KeWNZ8rL5kWeCNw/P1qpK5VeOucVYVlVcqwPqKit1S6mV2zsHIA7mhJjFt4WhTcw+Y1OWI5wc1cZAxyfu44x1qCQ/KAR9CKVwImzI23timOWicqORjmpseWCeuetVXl3PTSAcAjfdwPamskiHcDn2puPmz+tTpK6jBUMp9OtDASOWRvTP90irUfOOMGoAEkb5Dhh/CetTR7lcZ5A6c80gJWwC2RTPL24c8g+lKHJLBuh9etJkAAI+MdQ1IBkqqwznmgKUA2MfoDUghRvnJbH6U8rGBnDD3AyKAIMKx6bWpNjBsuOP7wqRtjL8rcj1pFLqCSRigYxgO+CPamMuwg9j2PNKSGfKEqe6nvTmLL1GB+YpiISm4kDigKU96kLqfYe1KAeSOVx0ouBGTj7tCglcHgijb6cfWnqcdaYEbKynsaaXxwQVqfC55600xZJODj0oEMTPYihm25D5I9qNg6IcH0NNZmUYZc/SmA+JY8/X1qdf3fIAA9jVB+ucY+tIk5PGRj1piL5j3tuTb+IqRI1ZsNx7VmG8nThVVl+uDUJ1iJD5cheJv8AaXj86Vmxm15UYAIOc8YpywKT+7bafesuO6VkHz89jWhFc7Uww3DHapaaGWHiEZ2soAPUkZWsq70aKUmeB/In7Ov3W/CteK5BXLnKH24pjBARLEwwTjnoaE2hNGBFeXNjOLe/ygP3JB0rTEu8gBlKHn1B9xT7iJLlWhni3qTwp5/Ksx9MubIhrKbdFnmGQ42/Q9q0TTJ1RsKwYgbgD/C+OnsaZJtOeoHfHf3rLj1VY5vJvImgkPB3/db8a0ll3jcjdOM/40BcUByQM4YDIfs3tT1fAJC4x95B3pQWZQNvuVz+oprjo6Nh/XHX2PvSAcF25IOVbqB2pGG0DbkL1BpA2JSAuPl+Ze596eoxyp3R9cHqKAGtgjrknv60g4AU8knk9vpSFT8zLkqeeKcCpHCjB4IJpgRvArrvRs46juKTkhVNP+WMFwduDz/9enMA5Vl6+lAEG0rnsPamxcgg8jPFTscLg9up96hChJCR3HNMBzRiSErwGpu35Vzlu3WpDkAHH096BjB242dweoNAFdyqYjOcntSxh1XGGPNSlAzLuxuHfsalDug+ZBjPY80ANyQm4HI9DTWCyIVOOe9PwpUmPk9we1QngZHShARgsBtB+760jyHoxpThhnPNROARjNUSRRx78OzEEnpUhRDkIvPcmkA3YIpYyehJ9zQAKrDIlbjHGK5vWbQmQyxpx9K6U5digx9fWq15EGiK46DvTTsxHFFMU3kGr11alGJFU8YPNbJ3E0TQueOTWjDKRjk1lo4U1ajYk8E1EhGsJC3cVG/seagjfNTikgGc9zzTJFVlPmLkVPtpCmenNCYGX9hMmWTjPQGoXsbhBnyy3uDmttFI7U/nOapSYrI5hkK9UI+uaaVrrlRJP9Yob6jNQyaXaSHPlbf91qpVBOBy20UYroJNEgJ+SRx+Rqu+jBek/wCa01URPIzHxRitGTSZVGUYOO/ao0skdtrTBH9GFVzIOVlLFGK1U0gEkNMOPQVMukQD7zufypc6HyMxMUuD6VujT7Vf+WefctThaxI2VAH4VPtEP2ZhrBI/RT+IqwlierkfhWo0RHQ1EYyOtQ6jKUEjJuITFJjt2qGtW4i81MfxDpWWwKsQetawldGc42YlFFFWQXLeQbdpqQ1Sjba1W9wIrGS1Nou6GsKZTmbmmmmhiUtN5zS5pgOBoBpuaUGlYLin61G60+gjIoQmrlciinsKb1rQyEooopiClpKWgAFLRRQISg0tFABRRRQK4UUUuKYCUooooELS0CjvTAKMUUUCA0dKWigQYpMU4DNHSgBoBpcUvNGDQAUClxxRQISjHNLijFMLgBzRjtSgUvU0Cuanhof8T+1/4H/6CaKd4bH/ABP7X/gf/oJopDRtrtkXBGTQyFRgH8KkUkDDqCOxFLsG3Oc4rzD1CD5hlaQEnj0pxO5uKaVIbpnNMQ4qNuTTRgjjtR827AAGPWnq3zHcoHHGKAI2UMpHelRMhQaeuCQac2NxNFwIQoxihvl7ZH8qkVeTjvShDk7hxRcCAAZJDfjS8jBYBh6jqKlCKTwMClZlVcYy3YUxCB0C1GGZgSOinIpgt2Z97DGecVNIyiIIOCO9ADXIOH79KGl3rv8AwaliAkUhuvakKkbqAKzB4Jd8bfN/d7MKt2tytymV+8OGWoXH7rj7y/dqGEiK7E6t8r8Ovb602kFyW70uKU7428qQ9x0rMkee12xz7gg6OOhrqGUGMMeh6VFPCkqFXGV9KUZ9GDh2Mw3gNiscYHmN0YVt6darBAF3NluuawptJNvMJ7VuR82w9K07PV4Jcqx8qZfvRtTnqvdFHzNksFGMZZeCag+8+/HWmLP5w4YY/wA8U8sAhwMt61kaXI5mwSoGBjj61RI+dM9TVh5yVBxk1XyHcNnkc4qkJjlyOcZYdKmjlIwuwEHnmmJzkgZzUyoMA9P60MCT93ICQBn26im/Mo+blf1FNES7iQMDPJqVQVPXcvpUjFVSRuVvpQACctyPWhvlOUyCeoFSLNGVKOCpHc0WAZKZIdpSN3U91PT/ABqWOXcjFGBx1UjBpFLAZG4qPTpRJEkrFyhRj/GDgiloMUxwtyowfSo3QDkEg+/Q1H5jwyhXG4DnzFGMfhUpJf5o2DA+9OwEOM9sfTpUiM0Y253KfXpT0GeAceopRGVbG3K0mIYbeKRcqNrVCd0LbXGferEoCD5WxntUSEg4cZz6/wANCAYEy2d3yt/C3T8Kd5RHA/75anGAFsxttb+7TRKd+HXa36VVwGEEZIHH9w9aBLwMBv8Adb+lSE5/h/z7UxomPTDD0agBQA5GTtPvT2j2f7WagKYccbcevSp1cAf4/wBKAIGCMSMYPpUD25U5AzVxiBzx+NIPm9fw6U7gUNoO3jBFPltoZkywU+oIqd4y+MKv1WoyhTgnA+tO5JlvZ2sPzR3PlEHJUGrNrqAkYR7sjpuXvTxGGZvNMZ9MrmpURUXCKu32FO9wLQypXbkr7mrMEu1ijL8vpiqPnEJjGCehqaKcSIIy2HHRvWpaGXHRSuRkg9AP4aj2lfvHr0cenvRHMScEbWHRfWlklIxgg+qntUoZDcQQzIY5Y0kU8EHjH0NY0tncaZl7KR54P44j95a1HLAkrkpnoaZvYuu0nOccdqtNolpDLLUo7rBWXLKejjBX2+lXRK7sxEewjqOzD2rPuNMhu5SysYZx0kj7/WqX2u801yt0rSQ5xvWnuLY3VOeDkejHt7GnIcscEhl6gd6pwXsVyymJg5x+Y9KsKVbBDEAHhu6+1Ark68gSp36rTWjQkvjGR8y09CWOT8sncDvQ23cXA5H3h60rjIjtC/6z5v7zfyNNIYchtv8As/4U8LvXcNu0/eVqAAV+98o/NaYDOWOS3Xv60jAEYPWlbBZjjIPVfX3oKruGT83Z/X2oAYAVPt3qRiAox3pmzjHqaiJ+bPYcUwJACnBBZD0I7U9i4XKkFR69RTA+0jDbh/KnEDIKSAH3oAA+8K3ftQ/3CwHPcVGx+clQQR6dDUmd6bh96hCK7gAg55PamkZAb86kb1C/L/EKjPXk4Hp7UwGP8vA6dqbgmUAHBp0qkoSh/D0pnYbutAhy5QMCMHNRS5f5RUjNuAYVCzDzMimBm30H7s7utYckJDZ7V0c6hyxas2eIDOKpOwGVjFOEhVfanMuCaReTz0q73EXIH+UEVajbNUoSo4FWl4rPqItAgDmlBLHAXiolO6plOBimgDaBTthKUgxup6PTEAPzL708j3zjjFN24bP8NOLDoeooGNLbuDwfSoiPm5pzMM4PPvTcg8dfekNDW4qKWFJhiRCT2IqUkdKbQgsUwk9oSQfNT07irENwkycEKw6jvTu9QT2yyvvQ7H/velPcVrFjg9Dmm4zxVQXEsB2Trx/fHQ1YSUOMo24etKw0xWGO2ajYnHBB+tSE96jbDdR1pDIHJHpj2qjdoN29elXmwOAc1Cyq4Kt3qoOzE1dGZ3opzqUcqe1NroOZhViM5GKr0+NtrD0okiouxNtOc0GpsZGRUbCs0zUjozS8g0hpgFAGKBS0CFpT1poNOHNIY1l7+tRMMGrPWoXXmqTIkiLvRSkYNFUZiUopKUUwFooooAKKBS0EiUuKKWmAlLiiigQYoxxS5paAuNANLS0UxXCkp1FAriUuKBzTgKBXGijFOophcMGjFLmgcUCExRindaQ0AJ/Olpe1LjigQmKKWlCk9KBGp4a/5GC2/wCB/wDoJop/hsD+3rb1+b/0E0UMaZrLIwIGeDTmc7E9wc0UV5Z6oq8jmm9ZCMcUUU2AOoMnSoif3hHYUUUgJl9O1K/HFFFACEcijcV6d6KKYDWchggAxUjxKihxnNFFAEe9uuaim+Ybj1FFFADoScCpHoopgRKSTzTHjXY1FFDEX7N2e32tyMVJABIrb+cHiiioLQzJDlewqvdWMFyjM6kMBkMpwRRRThuSzFtrqeKdlEhIU4Gea1TqFwhBDDn2oorZohFi2dphlz15pg+aRlIGAeKKKyLJ89BViLLZyelFFJjHL9+rKAZxjrRRUjK8ErtNMjHIDYGasFA4O7miimA2F2VwoPFWZBgE+1FFSMhVysW8YyOlQOgUGdCUcjnb0NFFNCHRuTHuPXFWYCWUqeRjNFFDBD1UEDIzVcqCSCOAaKKSBifd+UdKsKqyRfMoJ9aKKAKVyTC+1funsafuIRff1oopgKQDjPI9KbINjcdx09KKKAIt7YPNTKcjmiimhDJV2/MCQaapLx5PXPaiigCOSNQOlIkakYNFFNATGNdmMcCqMqhCSvWiimBYhYyxjcenQipA5Kk916GiikIevIB9Rk09VCncOpFFFACfxhexqOXDqdwBB60UU0DOZvD9huRLbfuyTyB0re0q4e6Te+ASoztGM0UVb2ILZGTIv9zBU9xU6nMazH754J9qKKljQrjY25eDUUzspQg9etFFAwfhuOMgn6fSmNy4HY9RRRQA4/MvPbgVC/WiimgGbiDTm+XGO9FFAExPX2HFNb5GUrxu60UUCG9JcDoeoqGQfK31oopgJF8z7T0xUMjH5hmiigRHCSIiKa9FFMCs/Sqc4BHIoopgZ8qiq+MNRRVRBliLrVpaKKl7iZOoqXaCRRRVIRY2ApnvUQJzmiihCHgkdKZjAb60UUDE6g8UmBjOKKKQ0MJNMJ5oopDEbpQDxRRQIjcBgQwyKz5l8g7oyVOelFFVETLcLl0Gae3pRRSY0QvULAEc0UUIZVukGAe+Kq0UVvDYwnuFA6iiirIL8PKU1hzRRWPU36DGAxTcCiiqQmG0UYFFFMQoApVJz1oopMY/FJIAVooqUDIG6UzFFFaIyYhozRRVCFHNOFFFABS4oopkiYFLiiigAxS4oooJDFKBRRQAuKXFFFMQuKAKKKZIpAFLjiiigGNFOxRRQAY6Uo60UUAHc0nWiimIO+Kd/DRRSBiAdT6CpF+79aKKBM1vDYH9u2x/3v8A0E0UUUMEf//Z)

Build

balanced

business

a more

Strategy in action

Annual Report and Accounts 2025  Mitchells & Butlers plc08

Introduction

![](data:image/jpeg;base64,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)

At Mitchells & Butlers, we

maintain a balanced and

high-quality estate of pubs,

bars, and restaurants across

a stable of leading brands.

Our diverse portfolio of

brands and prioritisation

of capital investment enables

us to maximise the value of

our enviable estate.

Our estate is 83% freehold, giving us a strong foundation

for long-term value creation. This ownership model

enables us to invest with confidence, driving returns

through our targeted capital programme while

improving amenity levels and overall guest experience.

We have targeted a seven-year cycle of reinvestment,

ensuring we continually raise the average quality of our

amenity and keep each brand feeling fresh, relevant,

and competitive in its market. Each year, we evolve our

pricing, product ranges, service styles, and team training

within each brand format. This ensures we preserve the

distinctive identity of each offer while benefiting from

the economies of scale and operational excellence that

Mitchells & Butlers provides.

We remain confident in our ability to generate strong

returns from capital investment while enhancing the

quality, relevance, and sustainability of our estate.

By combining disciplined asset management with

innovation and brand stewardship, we are well-

positioned to deliver continued growth and long-term

value for shareholders.

216

investment projects in FY 2025

£181m

invested in our estate in FY 2025

balanced

business

Mitchells & Butlers plc  Annual Report and Accounts 2025

09

Strategic Report

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Our aspiration is to maintain a seven-year cycle

of investment across the estate, with flexibility

built in where trading performance or condition

justify it. This ensures we invest where returns are

most compelling while maintaining high overall

amenity standards.

In FY 2025, we invested £181m in capital projects,

delivering 212 remodels and conversions, and 4

acquisitions as well as continued strategic

maintenance across the estate. These investments

are currently delivering excellent returns. Our

capital programme is a key driver of continued

like-for-like sales growth and incremental profit.

Our broad brand portfolio gives us strategic

flexibility. Where needed, we can reposition

or convert underperforming sites into higher-

performing formats, ensuring the estate is

optimally configured by brand and location.

In addition to brand-focused projects, our capital

programme includes investment in kitchen

equipment, technology upgrades, and essential

maintenance, all of which support operational

resilience and guest satisfaction.

Capital investment –

a key driver of growth

Capital investment is a central pillar of our value

creation strategy.

17%

incremental return on

expansionary capital

THE ANGEL, ISLINGTON

THE ENGINEER, PRIMROSE HILL

THE ENGINEER, PRIMROSE HILL

Strategy in action continued

Annual Report and Accounts 2025  Mitchells & Butlers plc10

Introduction

![](data:image/jpeg;base64,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)

We are making significant progress against

our Net Zero roadmap through comprehensive

upgrades to our buildings, kitchens, and

energy systems.

This year, we installed solar panels at 93 sites,

generating renewable energy on-site and

reducing our reliance on the grid. We have also

taken decisive steps to reduce our reliance on gas

as an energy source across parts of the estate

which is a key priority for reducing emissions.

Currently, we operate 100 sites with all-electric

kitchens, and 24 sites have fully transitioned away

from gas in favour of renewable electricity.

In addition to these energy-focused initiatives,

our commitment to sustainability extends to the

efficient reuse and recycling of equipment and

furniture. Through our capital and maintenance

investment plans, all surplus kitchen equipment

is recycled, with over 1,270 pieces of equipment

refurbished and reused over the last five years.

We also prioritise the upcycling, recycling, and

refurbishment of existing internal furniture as part

of our capital project investments. This approach

has enabled us to fully furnish two sites with

upcycled furniture, saving hundreds of pieces

from waste.

Furthermore, the reuse of existing IT equipment,

including tills and PDQ machines, has become a

routine practice embedded in both planned capital

projects and reactive repairs and maintenance.

Together, these initiatives not only reduce our

environmental impact but also enhance energy

efficiency and support long-term cost control.

As part of our ongoing sustainability agenda,

we will continue to invest in decarbonisation

technologies and further reduce the

environmental footprint of our estate.

Investing in a more

sustainable estate

Environmental responsibility is deeply embedded into our capital programme,

with sustainability considerations factored into every investment decision.

100

sites with all-electric kitchens

THE DEWDROP, OXFORD

THE MALL, BRISTOL

THE TOOTING TAVERN, TOOTING

Mitchells & Butlers plc  Annual Report and Accounts 2025

11

Strategic Report

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Instil

commercial

culture

a more

Strategy in action continued

Annual Report and Accounts 2025  Mitchells & Butlers plc12

Introduction

![](data:image/jpeg;base64,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)

commercial

culture

At Mitchells & Butlers, we

are committed to instilling

a strong commercial culture

throughout the business.

Our talented and dedicated team of operators is central

to our success, and we are focused on equipping them

with the support, information, and tools they need to

drive sales growth and deliver operational efficiencies.

Our guest-centric approach is informed by robust

insight and data, enabling us to make decisions that help

us to consistently outperform the market and achieve

best-in-class guest review scores. We understand the

importance of every pound of sales converting to

bottom-line profit. This commercial mindset drives

a disciplined approach to ensuring each initiative is

financially well-planned, executed with rigour, and

contributes to profit growth.

At the heart of this commercial culture is Ignite, our

ongoing transformation programme and way of working

that embraces continuous improvement. Ignite is not

a one-off project but an evolving, dynamic portfolio of

40 to 50 simultaneous initiatives that span the business,

managed by a dedicated small project team.

4.3%

Like-for-like sales

a

growth

£330m

Adjusted operating profit

a

, up 5.8% on FY 2024

a. The Directors use a number of alternative performance measures

(‘APMs’) that are considered critical to aid understanding of the

Group’s performance. Key measures are explained on pages 189

to 191 of this report.

Mitchells & Butlers plc  Annual Report and Accounts 2025

13

Strategic Report

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

The philosophy behind Ignite acknowledges that

there is no single silver bullet to growing profit in

a business of our scale. Instead, by driving

incremental improvements on multiple fronts,

we achieve meaningful, aggregated results.

Examples of the areas we focus on are shown below:

Cost inflation

Product development

Sales

Capital investment

Productivity

Data driven insights

Our spaces

Stock management

Loyalty

Sustainability

Better bevs

Training

Key current areas of focus include:

Revitalising underperforming assets

Through systematic efforts to reposition and

enhance the lower-performing parts of our estate,

we aim to unlock significant latent value.

Enhancing delivery channels

We have partnered with a well-established

third-party delivery brand to broaden our appeal

and strengthen our offering in the growing

delivery market.

Harnessing AI technology

We are exploring AI applications to improve guest

experiences, especially focusing on optimising

the booking journey to increase conversion rates

and reduce lost leads.

Optimising table management

Using advanced software to maximise table turns

during peak times, ensuring we get the most out

of our trading hours.

A recent launch under Ignite was our new

employee app, which centralises access to

payslips, benefits, and internal communication.

We have also increased our focus on the drinks

side of the business, including optimising beer

front layouts across sites, improving cellar

practices, and perfecting serves. We anticipate

these efforts will rapidly contribute to bottom-

line improvement.

Capital expenditure projects are undergoing a

detailed review to improve efficiency and reduce

costs. This includes analysing project timelines,

minimising closure and reopening days, and

managing reopening costs such as training and

launch activities. We are also scrutinising sites that

have underperformed relative to post-investment

expectations to inform future decisions.

Our commitment to sustainability is integral to

Ignite. Environmental impact reduction initiatives

focus on lowering water consumption, identifying

key measures to achieve this, and delivering both

cost savings and improved efficiency.

Sustainability also involves changing on-site

behaviour around waste segregation compliance

and resource conservation. We support this

through a dedicated network of sustainability

ambassadors who drive engagement and

cultural change.

Ignite initiatives and the

role of continuous improvement

40+

Ignite initiatives

currently underway

Strategy in action continued

Annual Report and Accounts 2025  Mitchells & Butlers plc14

Introduction

![](data:image/jpeg;base64,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)

A vital pillar of our commercial culture is rigorous

cost control combined with operational discipline.

Ignite has equipped our General Managers with

enhanced tools and systems that enable more

effective labour management, including a

sophisticated rostering system designed to align

staffing with demand patterns and reduce labour

costs without compromising service quality.

Stock control has improved significantly, with

tighter procedures reducing waste and shrinkage.

Rationalising our product procurement has

allowed us to reduce overall stock holdings,

freeing up capital and improving cash flow.

Additionally, better access to central suppliers has

enabled us to curb petty cash expenditure and

strengthen financial oversight across the estate.

Our people remain fundamental to our

commercial success. Their delivery of exceptional

guest experiences underpins our profitability.

We are proud to report our highest ever

engagement score, alongside record low turnover

rates. These metrics reflect a workforce that is

motivated, aligned with our commercial goals,

and committed to driving the future success of

Mitchells & Butlers.

Through continuous reinforcement of commercial

discipline, combined with targeted Ignite initiatives,

we are building a resilient, profitable business

that balances growth with efficiency. This dual

focus enables us to enhance guest satisfaction,

grow market share, and deliver long-term

shareholder value.

Cost controls and

commercial discipline

A vital pillar of our commercial culture is rigorous cost

control combined with operational discipline.

2%

year-on-year reduction in

energy consumption

9

percentage points reduction

in retail staff turnover

Mitchells & Butlers plc  Annual Report and Accounts 2025

15

Strategic Report

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Strategy in action continued

Drive

innovation

agenda

an

Annual Report and Accounts 2025  Mitchells & Butlers plc16

Introduction

![](data:image/jpeg;base64,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)

At the heart of our growth

strategy is a relentless

commitment to innovation.

We recognise the importance of keeping our brands and

formats fresh and relevant within their respective market

segments, ensuring they consistently meet evolving

consumer needs. Embracing technology plays a critical

role in this journey, allowing us to enhance operational

efficiency and elevate the guest experience. Our

comprehensive digital strategy aims to engage consumers

across multiple platforms, creating meaningful connections

in an increasingly digital world.

We are also dedicated to fostering new product and

concept development, driving creativity and

differentiation in everything we offer. Furthermore,

leveraging our scale and collaborative relationships

with our suppliers allows us to develop and trial

new products.

Over the last few years, we have also expanded our

marketing efforts by adopting new social media platforms

and introducing personalised website content,

improving how we target and engage with different

customer segments.

4.6

average guest review score out of 5

innovation

agenda

Mitchells & Butlers plc  Annual Report and Accounts 2025

17

Strategic Report

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

The day-to-day operation of the business has

rapidly changed over recent years and will

continue to do so, and each of these tools

therefore still has significant potential for further

enhancement. Technological innovation also

contributes towards our sustainability goals;

this year we expanded our use of the Internet

of Things which allows us to remotely control

high energy consumption equipment in our

businesses, delivering significant cost and

emissions reduction.

Digital marketing

and guest feedback

We are also focused on making digital marketing

an engine room for the business with a consented

database of 13.9 million guests. In 2024 we

launched My Account which allows guests to

have a single portal to access their bookings,

orders and offers from multiple brands. We already

have 5.6 million consented guests signed up to

this, with a far younger profile and an increased

frequency of visit.

We continuously evolve in this space, with

ongoing projects including a significant upgrade

to our CRM system; a trial of a third-party delivery

brand and more points-based loyalty schemes to

further incentivise repeat customer engagement

and strengthen brand loyalty.

We use technology to collate guest feedback and

to inform menu development by analysing large

quantities of data to spot trends in relation to dish

choice and then make menu changes to satisfy

guest needs.

Optimising business performance

through technology

In the last few years, we have introduced a significant

amount of new technology, from online booking engines;

to auto-ordering which helps to minimise instances of stock

outs and minimise waste; to a new labour rostering system

which ensures we have the right number of team members

working depending on the day’s trading pattern, as well as

order and pay-at-table systems.

12

loyalty programmes

offered currently

Strategy in action continued

Annual Report and Accounts 2025  Mitchells & Butlers plc18

Introduction

![](data:image/jpeg;base64,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)

The Ignite programme has developed our

organisational skills to deliver business change.

Our teams have become adept at handling

change, embracing new technology and adapting

to new challenges and processes. Each of our

brands constantly evolves, as do our product

ranges, stretching our offering and ensuring we

are quick to market to capitalise on market trends.

We work closely with our suppliers in the space,

having a valuable symbiotic relationship with

them in terms of testing new ideas quickly. This

year, for example, we changed the packaging of a

soft drink from glass bottles to cans, contributing

to our sustainability efforts as glass packaging has

higher associated emissions as well as delivering

commercial benefits.

Building a culture

of innovation

We have a culture which embraces new

product and new concept development.

871

sites with Internet of

Things capability

Mitchells & Butlers plc  Annual Report and Accounts 2025

19

Strategic Report

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Caring

Strategy in action continued

community

for

Annual Report and Accounts 2025  Mitchells & Butlers plc20

Introduction

![](data:image/jpeg;base64,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)

Caring

Homes

Social Bite’s innovative villages provide supported housing

where people can rebuild their lives in a safe, nurturing

environment. We are exploring opportunities to help bring

this model to the Midlands, alongside the villages already

operating in Edinburgh, Glasgow, and Dundee.

Food

Social Bite uses food not just to nourish but to connect and

engage. Their coffee shops distribute over 150,000 free

meals annually to those impacted by homelessness, and we

support these efforts alongside local food projects aimed at

helping vulnerable people in our communities. Customers

are invited to “pay it forward” meaning that as well as buying

their own hot drink, sandwich or cake, they make a donation

for someone else to enjoy a meal at one of the Social Bite

coffee shops. We are working with Social Bite to open a

coffee shop in Central Birmingham in 2026.

Looking ahead

We are proud of what we have achieved with Social Bite so

far, but our work is far from done. By continuing to invest in

fundraising, employment opportunities, and community

projects, we are determined to break the cycle of homelessness

and build a better future for our people, our communities,

and those who need us most.

Our partnership with

Social Bite: taking action

to end homelessness.

At Mitchells & Butlers, caring for our community is one

of the core pillars of our sustainability strategy.

Since 2020, we have proudly partnered with Social Bite,

a charity and social business dedicated to tackling

homelessness across the UK. They provide homes, jobs,

food and support to empower people to transform their

own lives. Together, we’ve raised over £1.2m through the

incredible fundraising efforts of our people – an

achievement that also unlocked an additional £500,000

contribution from Mitchells & Butlers to support Social Bite.

Our partnership goes beyond fundraising. We are deeply

committed to creating real change by providing employment

opportunities, supporting the development of new homes,

and helping deliver vital food services to those in need.

How we help Social Bite

Jobs

Unemployment is disproportionately higher for people who

have experienced homelessness or are currently homeless,

with just 6 in every 100 in a job, compared to 70 in every 100

for the general population. To date, through Social Bite’s

Jobs First programme we have placed 36 people who have

experienced homelessness into roles within our venues

across London and Scotland. We provide ongoing support

for both our new team members and managers, ensuring

everyone has the tools to succeed. We’re excited to expand

this programme further across our estate.

£1.7m

donated to Social Bite, £1.2m through employee

fundraising with a further £500,000 unlocked from

Mitchells & Butlers.

community

Mitchells & Butlers plc  Annual Report and Accounts 2025

21

Strategic Report

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

“Social Bite and Harvester didn’t

just give me a job, they gave me

confidence and independence.

With weekly support from my

Development Worker and

encouragement from my

manager, I was able to build a

future I never thought possible.

Comfort Mensah’s journey with us began at

a time when she faced an uncertain future.

A master’s student from Ghana, she had been

staying with a family temporarily, but the

arrangement was coming to an end, and the

prospect of rough sleeping loomed. With only

£500 saved, Comfort was desperate to find stable

work and housing as winter approached.

When Comfort learned about a job opening at

Harvester specifically designed for people who

had experienced or were at risk of homelessness,

she took a chance and applied. What followed

was a lifeline. Social Bite connected her with

Ambreen, a Development and Support Worker

who guided her through the interview process

and checked in with her regularly. This personal

support helped Comfort build confidence and

navigate challenges she had never faced before.

Her manager, Mel, at Harvester saw her potential

from the start, welcoming her warmly and

ensuring she had the training and encouragement

needed to thrive. Comfort recalls her excitement

when she got the job and how meaningful her first

pay cheque was. It wasn’t just income, it was a

symbol of independence and self-worth.

Although she had no prior hospitality experience,

Comfort threw herself into her training, acing her

tests and learning quickly. Her positive mindset

and determination carried her through, and after

a month of part-time sessions, she transitioned to

full-time work.

Over the next eight to nine months, Comfort’s

confidence grew. With the ongoing support of

her manager and Social Bite, she learned

customer service skills, adapted to the fast-paced

environment, and began to see herself as an

important member of the team. For Comfort,

the job wasn’t just work, it was a pathway out of

vulnerability and a chance to build a brighter future.

Comfort Mensah’s Story:

how a job at Harvester made a difference

COMFORT MENSAH

Strategy in action continued

JOSH LITTLEJOHN, MBE, FOUNDER OF SOCIAL BITE

Annual Report and Accounts 2025  Mitchells & Butlers plc22

Introduction

![](data:image/jpeg;base64,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)

“The support and

investment that Mitchells

& Butlers give the Jobs

First programme is

invaluable. It’s inspiring

to see people join and go

from strength to strength.

Employment and a safe

home restore self-esteem

and purpose in a person’s

life, and being part of

that journey is incredibly

rewarding.”

Chris Kelly plays a crucial role as a Development

and Support Worker embedded within Mitchells

& Butlers. With over a decade of experience in

recruitment and employment, Chris joined Social

Bite because he wanted to use his skills to make a

real difference for people affected by homelessness.

Working exclusively with Mitchells & Butlers,

Chris acts as a bridge between potential

employees with lived experience of homelessness

and our venues. His role involves understanding

the culture and needs of each venue, collaborating

closely with recruitment and training teams, and

ensuring the Jobs First programme fits smoothly

within our business.

From the start, Chris has been fully supported

by Mitchells & Butlers’ internal teams, including

recruitment and training partners, which has

allowed him to immerse himself fully in the

organisation’s culture. This integration means

Chris can offer tailored support that meets both

the needs of our new team members and the

expectations of managers and colleagues.

A big part of Chris’s work is being a visible

presence on the ground. He supports candidates

through the entire recruitment journey, from

application to settling into their roles, and is

always available to advise managers and staff.

Chris actively dispels myths around homelessness,

promotes inclusion, and encourages teams to see

the value that Jobs First employees bring.

Through his work, Chris has witnessed remarkable

transformations as individuals gain confidence,

complete training, and develop personally and

professionally within Mitchells & Butlers.

Supporting our team

and managers to succeed

36

people employed in Jobs

First programme to date

Mitchells & Butlers plc  Annual Report and Accounts 2025

23

Strategic Report

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Chair’s statement

Despite a persistently challenging

external backdrop, our business has

once again outperformed the market

– a testament to the strength of our

offer, the resilience of our operations,

and the calibre of our people.

Performance and strategy execution

We are encouraged by the strong trading

momentum throughout the financial year, with

like-for-like sales once more exceeding sector

benchmarks. This growth, combined with

disciplined cost management and the positive

returns from our capital investment programme,

has enabled us to mitigate the impact of

significant inflationary pressures and deliver

a robust financial performance.

Our focus remains firmly on sustaining the

relevance, quality, and competitiveness of our

brands. Continued investment in our estate

ensures our offer remains fresh and compelling,

while the Ignite transformation programme

provides a structured and effective framework

for ongoing operational improvement. This has

enabled us to manage cost headwinds and drive

performance across the business.

People and culture

Our people are the foundation of our success,

and I am proud of the strong people metrics

achieved during the year. Employee engagement

is at an all-time high, and staff turnover has reduced

further to record low levels – reflecting the

strength of our culture and the deep commitment

of our teams. These results underscore the shared

ambition across our workforce and the collective

drive to deliver great guest experiences every day.

Purpose and social impact

Our purpose – to be the host of life’s memorable

moments, bringing people and communities

together through great experiences – continues

to guide everything we do.

The consistent outperformance of our brands

compared to competitors reaffirms the strength

of our proposition and our ability to deliver on

this purpose.

Annual Report and Accounts 2025  Mitchells & Butlers plc24

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

We remain committed to creating positive

social impact. Our partnership with Social Bite,

a social enterprise addressing homelessness,

has continued to flourish. Social Bite distributes

almost 150,000 free meals annually to those

impacted by homelessness, and we support these

efforts alongside local food projects aimed at

helping vulnerable people in our communities.

We have also partnered with Social Bite to expand

their Jobs First initiative, which supports individuals

into long-term employment. To date, this

programme has helped over 30 people begin new

careers within Mitchells & Butlers – and we are

ambitious to expand this important partnership

in the years ahead as well as developing various

longer-term housing projects.

Our values

Our values – Passion, Respect, Innovation, Drive

and Engagement– shape our culture and define

how we operate as a business. They underpin

how we work together, how we serve our guests,

and how we build trusted relationships with

stakeholders across our communities and markets.

Board governance

There have been no changes to Board composition

during the year.

However, earlier in the year, and after a

distinguished tenure as Chief Financial Officer,

Tim Jones indicated to the Board that he was

contemplating retirement. Following an extensive

search and selection process for a successor this

will now be effective in Summer 2026. On behalf

of the Board, I would like to extend our sincere

thanks to Tim for his exceptional contribution to

Mitchells & Butlers over the past 15 years. His

financial leadership, professionalism and integrity

have been instrumental to the Board in strengthening

the business and guiding it through some of the

most challenging periods our industry has faced.

We wish him every success and happiness in his

well-earned retirement.

We welcome Emma Harris to the Board as our

next Chief Financial Officer. She joins us from

Marks & Spencer Group plc where she is

currently Finance Director – Food, bringing a

wealth of experience in financial leadership and a

strong track record in driving performance. I look

forward to working with her as we continue to

build on our strong foundations for future growth.

Further detail on the operation of the Board can

be found in the Governance section on page 65.

Looking ahead

Mitchells & Butlers has once again demonstrated

its ability to navigate uncertainty and deliver

consistent performance. While the macroeconomic

environment remains challenging, we enter the

new financial year with confidence – supported

by a clear strategic direction, an exceptional team,

and a compelling brand portfolio that continues to

resonate strongly with guests and generate value

for shareholders.

On behalf of the Board, I would like to thank all

of our colleagues for their passion, commitment,

and contribution over the past year.

Bob Ivell

Chair

Mitchells & Butlers plc

“I’m pleased to report

another year of strong

progress, as our

management team has

continued to execute

against our strategic

objectives with discipline

and focus.”

Bob Ivell

Chair

Mitchells & Butlers plc  Annual Report and Accounts 2025

25

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Business review

Total sales across the period were £2,711m

reflecting 3.9% growth on FY 2024. Like-for-like

sales

a

increased by 4.3% with strong

performances through the brand portfolio.

Adjusted operating profit

a

of £330m was 5.8%

growth on last year (FY 2024 £312m) and a 0.2ppt

increase in adjusted operating margin to 12.2%

(FY 2024 12.0%).

We made a good start to the year with like-for-like

sales

a

growth of 4.0% over the first seven weeks.

Performance over the important three-week

festive period was particularly strong with

like-for-like sales

a

growth of 10.4%. Across the

first quarter as a whole, like-for-like sales

a

remained well ahead of the market

a

, growing by

3.9% despite the notable adverse, albeit temporary,

impact of very cold and stormy weather over the

last couple of weeks.

Sales remained resilient through the second

quarter aided by good weather in late March,

and with a particularly strong performance on

Mother’s Day. Across the quarter, we recorded

like-for-like sales

a

growth of 4.7%.

Third quarter growth remained strong and

benefitted from the movement of Easter into

the second half, with like-for-like sales

a

growth

of 5.0%.

Fourth quarter like-for-like sales

a

growth of 3.2%

reflected robust performances in mid-market pub

and pub restaurants balanced against slightly

weaker sales in London within the M25 and in

more premium businesses.

We have continued to consistently outperform

the market

b

, as represented by the CGA Business

Tracker, by c. 3% over the financial year. Across

the market segments reported on by CGA

Business Tracker, Pubs and Pub Restaurants have

seen the highest sales growth across the year,

benefiting from periods of warmer weather.

Chief Executive’s

business review

Annual Report and Accounts 2025  Mitchells & Butlers plc26

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

“Our strategy, based on

three key pillars, has

provided the foundation for

our ongoing performance.

We focus on maximising

the value generated from

our 83% freehold and long

leasehold estate, utilising

the diversity of our brand

portfolio to grow market

share with appeal across

a broad range of consumer

occasions, demographics

and locations.”

Phil Urban

Chief Executive

The Restaurant segment has delivered broadly flat

sales, which we have consistently outperformed.

Bars have reported sales decline, with the

late-night market being particularly challenged.

This is the segment that we have least exposure

to, but again we have outperformed significantly,

with our offers appealing across a range of

occasions with less exposure to late-night trade.

Cost inflation headwinds over the financial year

were in line with guidance at £100m, driven

primarily by increased labour costs (including

increased national insurance contributions which

impacted the second half) and against a backdrop

of stabilisation of overall energy costs. Strong and

resilient sales growth, combined with effective

delivery of our Ignite and capital programmes,

have driven an increase in both profitability

and margins.

The macro pressures impacting the sector have

resulted in a decline in the number of licensed

outlets of 0.5% in the year to June 2025, after a

period of relative stability during 2024. Leased

businesses were most affected, with net closures

of 3.3%. Independents reported a net reduction

of 0.1% with net closures in food-led outlets

offsetting growth in drink-led outlets. Managed

operators marginally increased outlet numbers

by 0.7% despite a reduction in food-led outlets.

The reduction of outlet numbers suggests that

operators in certain segments of the market are

no longer able to withstand the cost pressures

impacting the sector.

Our strategic priorities

Our strategy, based on three key pillars, has

provided the foundation for our ongoing

performance. We focus on maximising the value

generated from our 83% freehold and long

leasehold estate, utilising the diversity of our

brand portfolio to grow market share with appeal

across a broad range of consumer occasions,

demographics and locations. Our range of offers

is a particular strength during times of uncertainty,

with familiar brands to suit a wide range of

occasions, providing guests with the opportunity

to adapt their drinking and eating out choices to

meet their needs.

Our Ignite improvement programme of work

remains a key focus for the business. The

programme enables our organisation to be agile

in response to the evolving external environment,

facilitating change whilst maximising the power

of our scale. We have around 40 initiatives

underway across a range of areas, all focused

on driving sales and delivering cost efficiencies.

Sales focused initiatives deliver enhanced guest

experiences in a variety of ways and continue to

reap rewards, reflected in sustained like-for-like

sales

a

growth as well as continued market

outperformance on guest review scores, which

averaged 4.6 out of 5.0 over the financial year.

During the year we have expanded our guest

feedback surveys to include reviews of dishes,

enabling us to use additional data driven insights

to evolve our menus to better satisfy guest needs.

Enhancing productivity and efficiency to help

mitigate inflationary costs remains an important

focus. We have a number of initiatives in place

designed to improve efficiency, including

optimisation of our labour scheduling system

which assists General Managers in achieving an

effective balance of team to maximise sales across

day parts, as well as our auto-ordering system

which helps to reduce instances of stock outs and

to minimise waste.

A number of initiatives deliver commercial savings

whilst also contributing to our sustainability

objectives. We have continued the roll out of

remote control in-site energy systems which have

delivered energy consumption savings across our

estate. Remote control of heating, for example,

provides a significant opportunity to reduce

consumption whilst also relieving our managers

of one of their many daily tasks, allowing them to

focus on guests. In addition, during the year we

realised an opportunity in packaging, following

a market transition to exchange glass bottles for

cans in certain soft drinks, delivering cost savings

and environmental benefits through lower

emission packaging.

Mitchells & Butlers plc  Annual Report and Accounts 2025

27

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Our capital programme continues to deliver

significant value through improving the

competitive position of our pubs and restaurants

within their local markets. We are committed to

prioritising investment in our estate and this year

we expanded the programme, investing £181m

and completing 216 investment projects

comprising 199 remodels, 13 conversions and

4 acquisitions. We are generating very strong

returns, currently in excess of c. 35% on remodels,

justifying an increasing allocation of capital to this

area as we look to re-establish an average 7-year

investment cycle.

People

Our people bring our brands to life and are critical

in the success of the business. We are delighted

that engagement scores have continued to

improve over the period and believe this is

representative of the commitment of our teams

to deliver the change needed to navigate the

challenging operating environment and ultimately

to drive the future success of the business.

Pleasingly, employee turnover has also continued

to improve reaching record levels of 55% (FY 2024

64%) supported by improved internal succession

rates, reflecting the strength of our training and

progression opportunities. For a number of years,

we have been able to evidence the strong

correlation between employee engagement

scores, guest satisfaction and sales performance

and this has proven to be the case once again over

the course of FY 2025.

Our sustained progress across key people metrics,

despite a persistently challenging recruitment

environment, underscores the effectiveness of

our talent strategy – successfully attracting

high-calibre individuals, enhancing capability

through structured development programmes,

and supporting long-term retention via clear and

compelling career progression pathways.

Sustainability

We are committed to reducing the environmental

impact of our business and are pleased with the

progress we have made against our challenging

targets. We have committed to:

•  Net Zero emissions by 2040, including

Scope 1, 2 & 3

Progress: We have reduced our total footprint

by 16% from our 2019 baseline year, comprising

a reduction in Scope 1 and 2 emissions of 22%

driven by energy consumption reduction and

reduced reliance on gas as an energy source,

and Scope 3 reduction of 15% reflecting

progress made in partnership with our suppliers

to reduce the impact of our supply chain.

•  Zero operational waste to landfill by 2030

Progress: We now divert 99% of waste from

landfill and are confident of achieving our

target ahead of 2030. In addition, we have

increased recycling rates to 60% with

enhanced segregation and a focus on

engagement and behaviour change in sites.

•  50% reduction in food waste by 2030

Progress: To date we have successfully

reduced our food waste by 23% from our 2019

baseline, with progress both in sites and in the

supply chain. We are focused on operational

practices to reduce waste and have effective

partnerships in place with Fareshare and Too

Good To Go to redistribute unavoidable

surplus food.

We remain focused on working towards our

sustainability goals, with numerous initiatives

underway to support these ambitions and we

were delighted to again receive the award for the

Most Sustainable Pub Company at this year’s

Publican Awards. We have continued to invest in

sustainability capital, we now have 244 sites with

solar panels, and significant further opportunity

to grow our production of renewable energy.

We have made good progress in the electrification

of sites to reduce our reliance on gas as an energy

source, having removed gas fully from 24 sites

(FY 2024 5 sites) and electrified 100 kitchens

(FY 2024 60). In addition, we are investing in

technology which allows us to remotely control

high energy consumption equipment across the

estate, opening up the opportunity for energy

consumption savings without requiring

intervention from our teams.

Our teams are vital to the delivery of progress.

We provide support for these types of initiatives

through our dedicated network of sustainability

ambassadors, as well as centrally developed

online training. We know that our people are

passionate about improving the environmental

impact of our business and are pleased to deliver

continued progress in this area, further enhancing

our employer proposition.

Current trading and outlook

We traded strongly throughout the year with

like-for-like sales

a

growth of 4.3% built on strong

performances across the brand portfolio. We

remained ahead of the market

b

in each segment

reported by the CGA Business Tracker, supported

by broadly flat volumes across the period.

Combined with disciplined cost control, further

Ignite efficiencies and strong returns from our

capital programme, this delivered growth of 5.8%

in adjusted operating profit

a

to £330m (FY 2024

£312m) despite well publicised cost pressures.

Over the most recent 8 weeks like-for-like sales

a

have strengthened from the final quarter of

FY 2024, growing by 3.8% despite uncertainty

ahead of the Chancellor’s Autumn Budget.

Looking forward, Lumina Intelligence forecasts

the UK eating out market to grow by 2.4% in 2026

(UK Eating Out Market Report, 2025), against

which we expect to maintain our outperformance.

During FY 2026 we anticipate cost headwinds of

c. £130m, representing slightly less than 6% of our

cost base before mitigation, driven by annualisation

of labour cost increases, plus further increases in

the statutory thresholds, and increased levels of

food cost inflation. This includes our preliminary

assessment of the impact of the Chancellor’s

recent Autumn Budget, pending clarification of

further detail. We believe that our strong market

position, together with the success of our Ignite

improvement programme, should enable us to

continue to outperform the sector and leave us

well positioned to mitigate these increases.

We remain focused on strengthening our balance

sheet, which will enhance the resilience of the

Group and deliver further value to shareholders,

principally through a transfer to equity. The Board

do not feel that it will be efficient, particularly with

regard to break costs and new debt issue costs,

to consider a reset of the capital allocation strategy

of the Group within the near term. Over time,

and as the securitisation matures, the Board will

however continue to monitor the position and

shareholder returns will be considered alongside

investment opportunities.

Phil Urban

Chief Executive

Mitchells & Butlers plc

a.  The Directors use a number of alternative

performance measures (APMs) that are considered

critical to aid the understanding of the Group’s

performance. Key measures are explained on pages

189 to 191 of this report.

b. As measured by the CGA Business Tracker.

Chief Executive’s business review continued

Annual Report and Accounts 2025  Mitchells & Butlers plc28

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

Mitchells & Butlers plc  Annual Report and Accounts 2025

29

Governance Financial Statements Other Information

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAXwBG8DASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD3+s/U9C0fW/K/tbSrG/8AJz5f2u3SXZnGcbgcZwOnoK0KKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAMvTfDWg6NcNcaXomm2M7IUaS1tUiYrkHBKgHGQDj2FalFFABWfqeiafrHlfb7fzvKzs+dlxnGehHoK0KKmcIzXLJXRUJyg+aLszA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+isfqmH/AJF9yNvrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FU+LwfoMMgkjsMMOh85/wD4qtyin9VoL7C+5A8XiH/y8f3sKKKK3OcKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACisvw1qU2seFdH1S4VFnvLKG4kWMEKGdAxABJOMn1rUoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWjxT4w0/wjBDNfw3UqzBiot1ViNuM5yw9RSbSV2NJt2R0FFeSJ+0P4SeTYNO1vOccwRf/HK0E+OHhpxkWOrfjFH/APHKTnFbsai3sel0V5qfjd4aH/Ljq3/fqP8A+OUH43+Gh/y46t/36j/+OVPtYdx+zl2PSqK8yPxy8Mj/AJcdX/78x/8AxykPx18MD/lw1f8A78xf/HKPaw7h7OXY9Ooryh/2gvCiMQdP1rPtDF/8cpU/aA8KSHjT9a/GGL/45Vc8e4ckux6tRXl6/Hbww3Sw1j/vzF/8cqQ/HHwyB/x46v8A9+Y//jlS6sFuwVOT2R6ZRXlzfHjwupwbDWP+/MX/AMcpU+O3heRwosNYz7wxf/HKftI9xckux6hRXms3xv8ADUBG6x1Y59Io/wD45V22+Leg3SBo7PUgD/ejj/8Ai6XtodyvZT7He0VxX/Cz9F/59NQ/79p/8XUdz8VdDtYDNJaaiVHpGmf/AEOl7en3D2M+x3NFeVT/AB+8K27bX0/WSfaGL/45SW37QHhS6uFhTT9aDNwC0MWP/RlXzxavcnkl2PVqK4YfFXQyM/ZNR/79p/8AF0f8LV0P/n01H/v2n/xdQ61NdSvZT7Hc0Vw3/C1NDP8Ay6aj/wB+0/8Ai6X/AIWnof8Az66j/wB+0/8Ai6Pb0+4eyn2O4oriR8UNEP8Ay66h/wB+0/8Ai6R/iloiDJtdQ/CNP/i6PbU+4eymuh29FcL/AMLX0L/n01H/AL9p/wDF0h+LGhD/AJdNS/79p/8AF0/aw7k8kux3dFcEfi3oI/5c9S/79x//ABdRt8YfD69bPVP+/Uf/AMXT9rDuHJLseg0V5fdfHfwvaTRxyWGsFnOBthi/+OUlv8ePC9zcmBLDWAwOMmGLH/oyq5la4rM9Rorz5fjD4fZgBZ6nn/rlH/8AF02f4yeHbdlVrPVCW6bYo/8A4up549x8kux6HRXna/GXw8wz9i1QD3ij/wDi6qyfHTwxGzKbDV+PSGP/AOOUc8e4crPTqK4G3+Lmg3MAlWz1JVP96OPP/odOb4taCoz9k1I/SNP/AIunzx7hys7yivOW+NHh1CQ1hq3H/TKP/wCOVE3xw8MKObPVf+/Uf/xyjnj3DlZ6XRXlx+PPhUf8uWrn6Qx//HKIvjx4Xmk2LYawD7wxf/HKOePcOVnqNFcl4X+Iek+LNTksLC2vY5Y4TMTOiBdoZR2Y8/MK62mmnsJqwUUVz3iTxjp/heWCO9hupDOpZfIVTjHrlh60pSUVdgk27I6GiuC/4W3oP/PnqX/fuP8A+Lo/4W3oP/Pnqf8A37j/APi6z9vT7l+yn2O9orgx8WdCP/LnqX/fuP8A+Lpw+K+hH/l01H/v2n/xdH1il/MHsp9juqK4cfFPQz/y6aj/AN+0/wDi6cPihoh/5ddQ/wC/af8AxdL6zR/mH7Gp2O2orj0+I+jydLe+H1RP/iqnXx7pTdIbv/vhf/iqPrVH+YXsanY6miubHjfTD/yyuv8Avlf/AIqkPjfTB/yyuv8Avhf/AIqn9YpfzB7KfY6WiuXPjvSwM+Ref98L/wDFVSn+J+iW5w9tfn6Rp/8AF0fWKT+0Hsp9jtaK4qH4n6JP922v/wAY0/8Ai6up470uTpBd/ii//FUniaK+0Co1H0Ooorm/+E103/njdf8AfK//ABVNbxzpa9Ybv/vhf/iqX1qj/MP2FTsdNRXHzfEjR4Blre+P0RP/AIqo0+Juiv0tr/8A79p/8XWkKsJ/C7kShKOrR2lFcZL8TNGiGWtb8/SNP/i6rj4saCX2fZdRB940/wDi61szPmR3dFcaPiXoxXd9nvsf7if/ABVZ958YvD1kCZLPUzj+7FH/APF0rDTTPQqK8lb9oXwkrFTp2t5H/TGL/wCOUv8Aw0L4TP8AzDta/wC/MX/xyldF8rPWaK8m/wCGhfCf/QO1r/vzF/8AHKen7QHhR+mn61+MMX/xyi6DlZ6tRXmEXx18MTOFWx1cE+sMX/xyte3+KmhXK5S21AfWNP8A4uncTTR3FFcovxA0lsf6Pe8/7C//ABVSp450uT7sN3/3wv8A8VQI6aisH/hLLHbu8i5x/ur/APFVUfx7pSEhobvj/YX/AOKoA6miuMf4m6JG+wwX2faNP/iqr3HxY0C2Tc9vqB9ljT/4uldBY7uivMJPjr4YjYqbHVyR6Qxf/HKlt/jf4ZuWAWz1Vc92ij/+OUxtNanpVFcrH8QdGkiEirc7SMj5V/8AiqpN8UtDErRi21Bsd1jTH/odBKaZ29FcT/wtDRM4Ntfj/tmn/wAXU4+I+iFN3l3g9ii//FULUb0Ovorif+Fo6Hu2i3vz9I0/+KpknxV0OMEmz1I/SJP/AIuiwrnc0V5pP8cPDVvnfY6tx6RR/wDxyqX/AA0H4Tzj+z9a/wC/MX/xygpK+x6xRXlcfx+8KyHC2Gs/jDF/8cqR/jv4XjXJsNY/CGL/AOOUuZD5Jdj1CivKh8f/AAof+YfrP/fmL/45Qfj/AOFAM/2frP8A35i/+OUXQuVnqtFeTt+0H4TTrp+tf9+Iv/jlMH7RHhA/8uOtf9+Iv/jlF0HKz1uivJv+GhvCH/PlrP8A35i/+OUn/DQ3hDH/AB5az/35i/8AjlFwsz1qivJ0/aD8JyZ22Gtcf9MYv/jlSN8ffCqgE2Gs8/8ATGL/AOOUxHqlFeVwfH3wrO5RNP1nPvDF/wDHKkufjv4XtVzJY6ufpDH/APHKLAeoUV5D/wANGeEM4/s7XP8AvxF/8dq9afHbwxe48rT9YH+9DF/8coA9QorhoPipotxjZY6mM+scf/xdX4/HumSdLW9H1RP/AIqmk2JtI6qiuXk8d6bGM/Zb1voif/FVmXHxW0a2Yh9O1U4/uxR//F0WaBO53dFeXXfx38NWX+t0zWvwhi/+OVR/4aN8IZx/Zuuf9+If/jtIZ6/RXksf7QnhWU4TStdP/bCL/wCO1q2fxm8P3mNun6tHn/npFGP5SGolUjH4mXGnOWyPRaK42L4laNMwWO2vmJ9I0/8Aiq3LfxBbXKBkhuAD/eVf8ayeLorRyRf1era/Ka1FVBfoRkRS/kP8axdW8Yf2SpZtA1m6QDJa2jib9DID+lUsRSf2iPZT7HS0V5i/xz8NxsUl0zW43HVXgjBH/kSq8nx/8KRHDafrX/fmL/45VqpF7MPZyXQ9WoryqP4/eFZThdP1n8YYv/jlT/8AC9fDH/Pjq/8A35i/+OVa12Iem56dRXndr8ZvDt2paOy1QAf3oo//AIusm5/aG8JWtw8L6drZZepWGLH/AKMp2Fe561RXkSftF+EHOBp2tj6wRf8Ax2t6z+L3h++iMkVnqYA7NFHn/wBDpXGd/RXmr/G/w1HO0LWWrb16/uo//jlTv8ZPDqWRu2tNTEY7eVHn/wBDpXQ7M9DoryU/tDeEgcf2drf/AH4i/wDjlJ/w0P4R/wCgfrf/AH4i/wDjlF0Fmet0V5KP2hvCRH/IO1v/AL8xf/HKP+GhvCWf+Qdrf/fmL/45RdBZnrVFcl4J+IekePPt39l297D9i8vzPtSIud+7GNrN/cPp2rraYgooooAKKKKACiiigAooooAKKKKAOf8AAn/JPPDX/YKtf/RS15f+0Vqcthb+H4o+k/2nd+Hlf416h4E/5J54a/7BVr/6KWvNvj/ZJef8I7v/AIftOPx8qoqNKN2XC/NofOtoS1yCe5rqoPuj6VXTSYkcEDmr8cOwYrjqVFLY6YQa3EIpGHFSsKYwrE0KzionHB+lWHFRSD5T9KBGHP8A601Lbfepkw/empbYfNXT9kUjQiHNWWHyiq8Q5q0wytc9QKfUoSD56faDNyKbJy1TWK5uhWi+En7RZvh+8QV0OmTLFAoPpWBfjFworatIyYFPtWHQ26mut4lVtaukbTGAqNYjVXWkK6axrPqaJnC6kcupo0UZ1aH603UOq1JoQzq8P1r0Y/Acz3PTI+MA+lIw+anquQD7UEc1502dERq08CgLTgKSGOUU2YZUU8U2ToKtbkT2K5WmMKnxTGWtLmBWYcVUmHJq+y8VTmHWqQmcnrQ/4mVqP9oUmjjdqzfU07Wf+QvbD3pdCGdTc+5rsj/DMvtHURj94DVbUyu9DnkHpVyMfPVG/Gbhee1c9zaxZRlKADHTpXOXbF7mT0BrehwsbN3FYN6375z0JNFyWdTYtiwRR2FRyTFSRng1TsdStzbKnmAMBgiieeNlG1hn607jRXuWPzYrKdgTzVu7kwMbqzZCTzQJj2K9qLYj7YpqA5xUtlG32oMwwBVIVz2P4Lj/AIrO7/7B7/8AoyOvdq8I+Cpz4xuz/wBQ9/8A0ZHXu9dFP4TGe4V5F8ZJCmoaUAesUn8xXrteM/G6UR6lo+T1hk/mKjEq9Njo/Gjz1ZT6in+YazFulHeni7X1ry+U7UzUWQ1Ir+1ZYuxjrThdj1qGi0zWEuO1SibA6Vji7X+9T/tYA+9UchaZtR3eOlWUviB1rnReKO9Mk1HaPvU1BibR1i6mOmatQXJlPXiuCh1Eu/DV02lXJbFKcXFDg0zfmYLGa5TWJgoPNdJO/wC7NcfrG5icdKKLux1VZFrSpt2Dmuot5QF61x2m5UCugikwvWsqy1Kp7Gm12FyM1UmvgM81l3V1tJ+ase4vzlvmpQpNscpJGpe3gZTzT7CQOoxXJXWoNgjNbuhTeaFGa9jBU+V3POxU7xsblym5Sa5u8kMEm/3rqJT8prmNWxtb1zXo1JWRw043ZA2tlQVBNYeqag04PNDjDmqF30NY8zaN+RJmOxzITTx0ph+8frTxUs3QVagFVgMkVbi+Vc1RJIkzLMu3rXZaLBdzqCrkVxKZ8wEV2Wia99lRVZRkDGc0r2DluddFHdLEqswyK1NOilDhifwrmx4jjlK4xya6fRSb2HfnC5wCDWcpW1Y1HyOgWMunpxWTe2DLlhyKmvrmTT494fcoXJB7Vyd/48gCMucN0471k6rnsVGnZmH4ivTZTHDYPtXKS6u8w5Yml1nVW1K5eTBCk9KywtbxbsS4K9yUymRiafDcPC2QaYi0pWtEyWjWt9alysZkYJ6ZrrNKnilTLBunHFed9D0roNG1ZbVgJJCoq4z7kSp6aHVXjLt+QMDWcHk3Y8xvzpsuuQTHbvye1PhzPkp1qJu7FFWWpZjR8gg4NF80yW5w2Tj0okvRYqvmhR9az7zxNA8RX5AfrShOwSg2zkNTvHMrKwOayC/NX9TuFuJWK9zWYQQapu5aVkX7RvnFaExBTmsuzPz1pScx1mtzVfCVvk4qM4LYBpZozjIqtGHDjNNvUzNCWBTDk8cVmxRBpSBzzV6a4AhxntVGCUK+4iq6E21LhtFI+6Bmo/sPoopWvExxk1IlwSveqRDuEVqVOAOKlkgIXr2qM3JU9DmoZbqWT5QMUBYmsPknP1qTV5dygUljGeSag1TIYCrJtqZBXmt7RZZkIKrkVh8kge9dp4chjEahgCazk7DUrHS2F3dxxK2zitca7LCo3Jz7U+zkiWJQYhxVgxW0wPy4z3NOFznnWszOl8Wog+dcfUVh33i6B89PyrU1PRFaFmXBPXIrmYvDryTlmU4zSnUjBe8ehhXSrR21M6/u31Q7YYjg96Ww8NRqBJPyeuK7C10Xy04j5HtUktiV6ivOni76ROmNCK3MNLKFBgRr+AqwkWOgxVtoNtRldvQ1ztuWrNk1HYv2EjwsCDXb6Z4ja3RVc5AFeeJPirsd/hQpNc1Si3saqorWZ6vaeK4ncKWxXRWd9BeAA7TXhiXhVgwP61uaV4jltJF/eErn1qF7SHmiJ04TWmjPT9W8J6PrUTLeWUMme5UZ/OvKPFfwTVUkuNGnZe4hk5H516ZpfiaO6QZbmtkXSTL2Oa6I1o7wdmczjUhpLVHyHc6PfaPdtBewPG4OM44P40ma+k/FPhyz1W2k8yEFsHBxXhet+GLnS5WMYLx5r0cJjIy9yejMK+HbXPDVDdGP+jyfQ1wurnOqT/71dzo4/wBGkz6GuF1YY1Kb/er0GzjSKY4Oa7rRLuVLIASkBl5rha2Le4kjs/lPasakmtUbQSb1NrBN7LITkvzmodWnmeFIEYhAOQOlRaRI11yee1atxaIyYC5Y8VlKpy77m0KfMtDksHOCMD1pu35jiti50yWMghSKryae6x7yTn2FONRMJU2jPC84/WlKnNWVtHUgup29+KtLDFMDjaCOgp8xPIezfs3jA8Tf9uv/ALWr3evDP2deG8TJgZX7L0/7a17nWsdjGaswoooqiQooooAKKKKACiiigAooooA5/wACf8k88Nf9gq1/9FLXA/HL/mA/9vH/ALTrvvAn/JPPDX/YKtf/AEUtcD8cf+YD/wBvH/tOsa/8NmlH40eQ/wAQpTR/FS1553DGpjCpG60xqBELDmopB8p+lSt1qOX7p+lNiMK4OJDUlry1R3P+sNS2oAIrpXwkyNGLrVk/cqtH1qyfuVz1eg6ZScfPU1q6xTB2qNvv0gFaLYjqXbuRZplZfWujsh/o6/SuWAO5frXU2X/Huv0rnexuty0vWqmvf8g0+9W161S18402supfQ8/vhlxUmjSJBqccjnCr1qO8Pz1HB98/SvTjrGxzS01PQV8S6d082tOGVZ41kTlW6V5OFBfp3r1HShjTIP8AdrlxNJU0rFUKjm7MugU4CingVzJnQIBimsM4qTFGKtMznsQlaYwqwRxUbCruYlVhVSYVfcVSmFUmJnIauM65AKd4eGdQc/Wm6tzr8XsKm8MjN5Ia7Y/wzJfEdMBgZrNuiWuFPoK05eIzjrWRN5zy7UTPHWuY1LEHBbd0rCu1aa5kESMxHpW1GCgO48+lOt0WF2eMDc3UkU0Jo5uDQ72YNJxEv+0cGrp0cQwGVrhtoGck10DyMybWwR9Kw9XV47AoGOCeAKvmuKxzM1zI0h2yEr2qxY3AL7JSSW4FUWGDjvTojiRT05FbOKsZ3dzfwg4wKcJAkbN+FSrDHsBJzUF3sjjjVerNWCND1z4KDHiy5/7Bz/8AoyOvdq8N+DAx4tuf+we3/oyOvcq6qXwmFTcK8Q+O/wDyFNF/64yf+hLXt9eKfHRc6no3/XGT+YqMT/DY6XxHkIIFODZpxUU+FA0ij3rymzrOg0DwtJq7guzJGe4Fd1beAdGhUCaOSVv9pz/Sr/hu1WGwjKjHyitiRsA+grxamJqSk3fQ6FFJHnPifwrY2VuZrNWjI7bia4qNMnBY16F4u1WLyWt1cFz2FcTBCCc4rsw9SfJeQuVN6ES2TSnCk1dh8LtcDLzOq9eBWzptopK8A1r3DpBD5YABIpwrValRU4M6IUI2uzghpC213tjd2Qd3xz+VdtoVjHLED0IqnLprPGX4A68UaRqTWUxhk6Z617eIwjdP3dyYwj9k6OfT12kFzXOajp6LkZJro5L0PHuHSuevrxHc814i54SsyZ7WZVgtEVM5x+FThW2HbUMUwc4FacMWUxitIpyepKdkc1eiTeRWXLayvnBNdlPY7myRUP2JMdK7FojF6nB3FhOR97j6V03h6AoBmpNRgREOBU+j4AFd+Ek2zjxKsjZmGEb6Vy2r42n611EzfIa5XVhnI96662kTmo6yOfk+ZyaoXf3TWg4w5qjeD5TxWC2Ol7mIfvmnioyPnNSDkUGi2FX71WQflxVdRzUy9qBE0KksDWgi8VUgHT6VdSlIumKpKMCD3r0PwxdTwwDEmFI6HmvOzWtYavPaptXp70oxjLSRVRu2h1PijWJjA8W77wwTXnEvzOSa17+9lu2zI1ZUgwabjGOkUTC7V2VmXFCrxT3oQUAx6LTimRT0AxQaaJaINnNPCcUZ5p4ORQwQkETPOoBOc11umGSGMsRuGK53TEMl6qr1Nej2mlK9iSBz61rCi5rQxqVVB6nBeJb0yeXGmVz1rntuV5JNbvim38jUEGeq1i44rHk5NGdEZKSuim681E6VbZeajZeKolobbDD1cmcrHVaAfPVi4+5SDoVDcknBFBlDdBzULx55pm1hRyolMkckiodpwad83vTgpwc1VxMYgwRWrbKH44rNI6VegbatMVizJbqRnNVmiCng1BcXUm/apqs08p6mqJszRjuDEarXs/nGqZlf1pMlqCWhY/vj613XhyNAFDd64eFT5yj3ru9IjYRKw9Kis2oXRDTk7I9E06ytZkXOc+tWLywtY4+JCD6VlaUDHZ+ZJKUAps92ZWJZvpXJ9ecY2tqdCy2Ld5DgucqXJT0q5bxW6rk8VjNc7e9RyXbEcE151Sc6ju2d8KcaatFGxeapbwKyIoJFYM980jZxVeRixJySaYoycVcKaQNjmcvUZBqZVFIwya2SRDZXKYNKFNWFXPanbR6UyblfLAdafHKy/Sn+VmlaIYpNIakzU0zVngcAPj8a7bTfEwRAJCCPXNeYGMg5FWIriZRgMa5p4dN3RtGrpZnqs/ie2aIgEE49a5LUNQtb0lWUEGudDyP1J5qcQkgGpWHs7t6l+0S2RVm02KMyG3OA3bFeUavHJHqk6yLtYN0r2HynHc1y/ivw8L2FruFcTIOcDrXo0K7i+Wexx1qMZLmiecVYjmdU2DnNQFSDg9Rxir2kwfaL9ARlRya7525bs44J3sdLoln9ltA7k7m5rVTLNnGMetQqQAAKlR8GvMnJydz1IRUVZE74kXYwyD1qJrGOQkcDjsakyxwelWIlJxgE5oiaNJlO60xZbYRxjnHas1dJa1BLZZj6jGK6ZjtjwMA1WZWdvm6elUptEukm7noPwDgML+IyVxu+zdv+ute0V5T8GAFl10D0t/8A2pXq1d9F3gmeZXVqjQUUUVoYhRRRQAUUUUAFFFFABRRRQBz/AIE/5J54a/7BVr/6KWuB+OJx/YP/AG8f+0677wJ/yTzw1/2CrX/0UtcB8czj+wf+3j/2nWOI/hs1o/GjyLPzUuajB+akLV5p2jmcDk1TmvkUkDmkvJdicd6yuWbJ71pGN9RF77YWPSnGfepqmoqVeBQ0gsU5oHaTOKfGfL6qavIGkYIilmPQAZNd54U+HF3qsiXOpK1tbHnyyvzv+H8I+tN1eVahyXOCt3MjBVUlvStFrWUKN6OmeAWXg19DaZ4b0jSoI7e109CBwCkYJ+pY9asXuioGMkOnQvgZO7GD+nWsZ1ObVIIpLQ+ZTbyGRwqEsmdy9CO/eozgNgnkda+gr3T9NubcLc6MxOSCYxk56E8YOe1cnrHw1sLlWudLu2ibr5UgJA9jjkVUa62YOkzzHqyGuotOIF+lZeqeG9U0aVGu4Cbf5v30QLrxRbazbqgVm2n3pWutB7M3R1qhr/8AyDxTotSt3IxMn51V164RrEbXU/Q1HK7mi2OJvP8AW1HF9449KfeNmQVHAfmP0r0YfCjmn1EUfvB/vV6npq406D/dry+MZlX/AHq9TsBixhH+yKxxuyJwu7LIFSAcUwVIK4UdgYoApTSqOKtGU9hpHFRsKnIpjCqMyq461SlHWtGQcGqEo61USWcXqfPiFfZTVrwsM3Ep9qq6kf8Aioj7KadoOpW1hJIZ3xuruX8MyXxHYMikYaofIU/dYiqDeI9NP/LYU1fEOnf89hWHLI05kXxaQqc7iTTtkajCms4+INOP/LYUw67p/wDz2FVysOZGiUTk7uaqPZiYHzWyewqD+3bD/nsKP7bsP+ey0uViuik3h2N5Wdn4PYVFL4bX+CTFaP8AbVh/z2FJ/bNj/wA9lqveD3SgmiXKjBnyKll0mR2hPmcIcmrP9sWP/PYUn9r2J/5bL+dHvXDQ9O+DYx4tuh/04P8A+jI69wrwn4K31vdeMrtIZAzDT3OB6eZHXu1dNJe6YVNwrwr4/wApj1PRMEjMMv8A6Ete614H+0MGbVtCVQSTDL0/3lp1I80bCg7S0PIftDf3jQLmTPDnPsa0NN8Oz3pBkYoD2ArqLfwva2sBJ5YDqa8urWpU3bdnr0cvr1VdqyMKx8aa/poCW+oyqo/hYBv51NcfEDxDdIUk1A7T/djUfyFc5qICahMi9A2Kit4jLLjJwK6I4KnNKXKjgqVXBtN7GkL+7nkLtKzse5qzHqNwjYLAY9qZDCFUYFRXgEcin1FazwK5diKeKXMdFZeILuFQQUb2IrQOqS3bCWQKAOoFcjZxzTn5EYj1xXQRI0dvhgQcd6xw+GjTndLU9nDz5o3Z041aJrXaMdKyhF9olPvWRHLtYrmtDTrzZOFYZHavVtYt0lBNxLsk91bW7Rjkeprl7u9uYpSSK797VLmHI9K5a/0wvIVA/SsJ0IT6HM17VWW5R03VGeUDb3rtLCXfGDiuJh0mW3mBXPWuv0kEIoYYNedVpKDMEpLRl24YgE5rKluSuRmta6GENYU6M77UUsT2FOKTM5XMvUrt2Uip9HkJxk1cfw1dTx7mBGfarVh4buIBnJ/KuqjKC2OarFyJpGyh5rndT+6x966Oe1mjymwk/Ssu40W8ulO1CAT6VpXqwcbXJoYeonexyMv+somtQYs+1dXH4MkY5d2z9K0ofBLuvzSEL9K4Ktdctos7o4Wd7s8fnt2F2ygHFIY2Qc16veeC7a3BcsSfeuM13ToLQHaaKeKUmond/Z69lzpnMqealzkioAeamh5cCuw8pqxowjgVZTkmoE+UCp4eQac9gp7jj0qWIiomqSCMtzUJ2Npaokdc1SkGWrTaPHFZ8ikNihMnYqyCiLpTpRREKoknReKRlxUidKGXmhA0ViOaeBT2jpMYp3JsSWEvkXyv6V6Jaa7GliwNedW0TST4HrW5JbSxW2cnmuijUcUc1ampNGX4jvBd36svQCskdKlucmXmox0rGT5nc6IR5YpETCo2XipmqNulIY2IYan3DfJimx9aS4+7SAgA4o3AdRT4iCeamEUcnFOS0IW5AhQtyKupFDJFk4yacNIR03ByKhewmt87HJHuKzhKNwnsVbiIRuADUsYwtRNHIWy+c59KtpFhOfStt2SttSg+DKae6JtHSo5T++IFLJ92gbITtyaaSB0p6Q7880ySIqaaM2LCxadcV6Dokbm3BPYVwul2zXF6qKCa9PsrFoIEU+lY4msqcLdTXDUXOd+xZWVggBJ46Coy7E8VbjtCxAHOa1rXQTJy2R+FeJKaWrPX5TCigaQ1LLZmNckV0n9mR2tZGoSjeVAojNyehMlZGM8eKiZSDVlzk0wjNdcTmkyIZxT1TNKo5xiplTFUZsYseD0p5SpNpNPWI96ZJEF46UxkJPFWvK44oWE55FJodyt5XFIsHOa0ltdwpTbbaEmPmRUjTHWrCOOhoMRApnlmpLTJd4HehkWQFSMgjBqu6NjI60RM6NzSbKR5x4w0E6bd/aI1/dSHt2NQeHbfarzkdeBXp+q6ZDrGnvBJ1I4OOhrjIrD7DCLfunBroVe9Ple5mqNqnMiRFyamRcNkjpUKnb2qVWycE4zWJ0otKMJgjg9CT0qZXVTgEHHcVUWXouBwMcVIuPxqkMlaTJI5IoDYBzwfeiKPJ7irDoqLzzQFz0b4KMWbXs8/8e/P/fyvWq8k+CbZm8QDbgD7P/7Vr1uvRoq0EeVXd6jCiiitDEKKKKACiiigAooooAKKKKAOf8Cf8k88Nf8AYKtf/RS15/8AHT/mAf8Abx/7Tr0DwJ/yTzw1/wBgq1/9FLXn3x1/5gH/AG8f+0qxxH8NmtH40ePZ+akNID81LmvMO0z9QboKqLU1+czYqFa3j8IupKtSKMkDOKjBrV0LTH1bVYLUEqrt8x9F71MtNSkei+AvDsFpaLqUwV5ZR+7Y/wAI7sP6V3MV4LlhBA2IVOCw7+tcveXgsrFbe3AjD/u4lA+6opkd61vZyJHxtQIhz3PH+NcUouWpTkloej2moRsAEb5VHX1Aqw97ufyx0I7V59Z6gyyiFTj7qk+w/wD1Vpz62IVlbPIwo96lTktA5YvU65bi3K7VXbsOB657fjUFxplvPH8p2McEFGxtPsa5CDWTPIkMbBzuK59f7zfyH4muh02+86R5Qw+zRfLvPGT0/LqfxrRTvuRy22MnULG7s3T7S+Pmx55GVYf3XHp71wvjTwG2oRC70aOCC4J/fwFgNw9VNeu+bb6xbsSBs6YPpXE6pJf6HqjQWZWa2UAhZRnaD2B9KpNxfNEtLnVmfO8ym2uHhl3I6MVIPGCOKnBLx/6wlfrXf/EHRLe5L6jDbxxHiVigwXBIyGHr8wOR15FcpLp8Eenq6LhjXdzxlFSMU2pcpz9xKrScdqn04wSXO2ZtqnvUclsofPqaiES7vxrdWtoS0ztrbwtbzKkqS5HXrXUwxeVCkfUKMVyGlzSrbxKHIFdjFkxrnrivOruT3NaUUtiQCngUiingVkjQCOKeq/LTe1TRj5atGc9hm2mMtTlaaVqiCpIvBrPlXrWwyDBqo8QOeKaJsebayTFrckhUkYxwKxChJ5Vvyr03ULBHbeUB9eKzzYRf88l/KuyFW0bGThc4LYf7rflRsHo35V3RsYv+ea/lSGwh/wCea/lVe1F7M4bYPRvypRGGOAGJ9MV1lx9it2Kts3jnAFY08+ZT/APRB0q02yGkiibbaPmOD6dajEceeWI/CnyPyeOKrtIQuBVpE3JxFETgSD8eKQwqOc8VAHA9qespznOOaLMLknlx/wB4/lR5cf8AeP5VrafPBckRSoiydj2atP7DF/zzFZttOzLSudh+z0gXx9f4P/MLk/8ARsVfSteC/BK2SHxneMqgE6e4/wDIkde9VrB3RElZhXlXxb06O91LSpHUExxOB+Yr1WvOviXj7XYD/pm/8xXNj5uGHk15fmehlMVLFxT8/wAjzmCFYV2qMYp7ZMcnpViOCSeXZEuSa3YvD/k2LNKMuwyfavn6NOVSaPrMTiIUo+8zw29gLX07HvIf51Pp8Cq7A9a09UsHg1KZCp5YkHFLb6e+Qehr7CE4Qirs/Pat5zaQ6OABc1Teze7uljRCSTgCuo07QJrvGcha9I8O+Cra0QTvEN+O4rOrjIWtE0pYOad5GD4a8LwxWyeZGNxHety88JW08DAIAcdRWpegWbgIOnYVasLozRBmBA6YNc9HV3PQlUcNjzUeCjDdF5WJj7CtC30G23YEQ49BXW6uxZNkQGTWZY2hikBLE+ua70tDGeKqS6lObSngty0YPTpWCqLJIdwww6g16YYElt8YHSuC1m2FjeiQDgnmkdOFq8zaZRNuofkcfSrsUaKoI4xS743hyMGqX2kCTbmuepT5zqlHmRLczGaTyolyxrZ0bQgrLJKm5jznHSpNBsIZJPMfBOa7JI4YoxjaBXk1VKLscjVnqUBYIqbdgo+xRhfuirE95BHn5x+dQrdpKflINQpvZBy9WVG0yN3yVFSDTowMBRVsED0qSPBYcVXs29yvaNbFKPS1LcrUs9qsURwvT2rTBCjpiqGo3aRwMWI4q40UHtpX1PNPFeqvZKwbgdq8h1fVJL6dst8tdf8AETWFubjyY2HDdq89xmtqNCMHzHTXxjlTUIig1Pbn94KgAqe3UtKAOtdS3PLky95narluSV4zVix0OS4wzg8101loKIgBTmuavi6cHY78NgKslzPQ5lLaaX7sbH8K1NP02V42JjbrXcQaRBFAMKowKmt4YFhyijn2qadb2jsjWphuSN2cRNaFHww5xWPcRgPiuu1eL/S3kQfL2xXJXjhZD7mt43OKaS2M+fC1HEabcyZNNgatGjNMvRmnE81EjU8nmpKY5ulNxxQW4pgYk4FMRp6PHuuxxxuFdjPao9oM49a5PSiIvmJwc5zXQG/ZoQijIralVitGc9alJtNHFajB5N1t9RmqnGK19Yizcbj121iFsEg1m9zeL0sI9RnpQWzSE8VIBH96lmGRSRkZomOaaE2RhcDIqPey8in7sDFRkg8U2Si3HqTxqAWwB2q9BqcUijewxWHKnekhg3570lFCk2dF5lsynhap3M8SghSKz/s7L0LD8aYbdj3Y1pYzuRbt0ufWpJD8tAgKt0NJLwKB7jrYEg025ODjFWbIZWkMBuL5YwO9D0VxJXdjpPBml5kNxIv6V3vlg4wKytFtxbWaoBgmt6CPIGa8HEVXKVz2qUFCNkWbCABgxFbguUjTAxmstHSMgZps8uDkHiuVrmZo9Bb+53E81zty2ZSc1oXUu/vWTKxLmuqjGxhUkR8E0uBmlAp6jNdSOVsI1GelW0i3DpUKxkGtG2UMuO9axjcylKxEtvx0p4gzxirqRVIIgO1NUxcxQW2NSJb8jirYTnpUqgCrUEQ5FYxhO1Rvg1dZNxqFoRnpSlGw0yqYwwpnke1XVhPbpUvlLispRNYyMvyc54pwtOQcVo+SvtS4AFZWNFIoiApyBXJa1bGO8Y9A1d0cYrm/E0A+zeco5XrU2saxkcqqZPNPMfy8Cqwvo4iCx5q3HqtqygHGadpGvuiIhDd6txruwDRHPbTfKuN1WUhCjOOK0SYtCWGIDvT5VQcEZpiyqnApzSb1z3rSMSWz0L4Lxslx4gJBAb7PjP8A21r1ivMfhDz/AGwc5P7j/wBqV6dXdT+FHl1/4jCiiirMgooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXnvx3/AOYB/wBvH/tKvQvAn/JPPDX/AGCrX/0UteefHg4/4R//ALeP/aVY4j+GzWj8aPHQfmpaYp+anZrzDtMm8OZ2qJTSzndcPQoFdK0Qh4PFd/8AD+02JcXxI3bdif1rgkjz1OP616X4dUWXhgOuN0hJ/wAKxrbWLiSXlz9q1RyGJWH5V4/H+eKmMiosMYP8eTn2rNtiqtM7c4Bb/P6VFLcMbyGLP/LMsfxOP8aqEdDnnLU3Ip2F3Hj+JyWJ9hVTVr8v8gY5b39+v5CmrK32/wCVuiN+GTWPfyl9WaIElUVQcdSaj2auNSdjbsLqT7yHEso8tAOw/wAOv61p3+vtCsemxtujtxtYg/6yQ9f5muUGpTWsgjtirXbDBIHES1Pp6BZPMdyzZ6n9T+NKVJNlwk2d7YapLb2kSO37+YZJ/wAPYVZ8+PUjJctyN23DHgrjArjZdQaWQt02jYgxwo6YrY0eRxb/AC5x/Krp0ktzf0OH8d6leQNYaNcTKjHM88ajHG47Afw5/KsK6P8AxLlrK1Sf7X4lvJw7Osly7KzHJKljj9MVp3nFigrWUVGKSORSvNswJGwfxqN8cH3p7/fI96iIJPPrWqRodlpKg20Vdagwi/SuW0lQLaGuqTG1fpXBW3NKZItPA4pqingVmigxU8Y+SohVmJfkqkZz2EK8U0rUpFNIqyCFlzUZjFTkUxhSAqS26OpU96qHT4/U1pEVGRVJsLGedPT1qC5tFigZlVnfoqjqzHoB+OK1itUb+RoYmItXmDRyRh1bHksyFA5GOQCfbHXtVwbckiZbHm2oRz2l28NwhjmGCVLA5BGQeCf51QaXcB39qjbKtgDDA4/KozIH3FsCvSSONjmbceelRE80EkjjBHtTM+tVYQoNLu4xmmbj0zSZosBYWQjByR3zXe6BcpqWnhnX99H8knv6GvPAx9K6fwXcFdRkgz8rx5x7is60bwuXTdpHt3wkiWPxVdFRg/YX/wDQ469mrx74UDHim5/68n/9Djr2GlQ+AdX4grg/iBYve3unhCRhWBP4iu8rnPEm37Vbbuu04/MUsTBTpuLNMLVlSqqcdznNP023sYVOPm71PPKsw2YG2ppIxtOTWDfXy28pGRXNGlCEdDeriJSlebMTxHoUUh82NfnB4rJ0vTYprkJJjg9K6gXi3sR2kEYxT9I0SPzmmydxOfavPxHtJK0WKNFSmqiNGwsba2C4AGK6SO+iWMKpHSucuIniYYHFEcxUg+leSsTiMPKz1R1ztI0buNZ5dxFKsfyhRxjpUaXSsMMCKswt5kgweBXsUcyjJKMNzmnTb32Kk9nls5NUZIZFlBQ4x7da0b+5Kvj0rHutWigUk43VnXzuVOpyR1HSwsZK7NiCVlUB+vpXIeLFlnQrFHk56itjSryS7Ylx8ueM1rTWkDpl8Zr2sJi1Xp85nyexqaHl9tJIn7uUFSO1MuyYzuBrrNWtLVSTgZ9RXG6lMikorZFbuokenTqp6mjp3iCe0+4QR6E0mseONSii2xIufqaybaP5M0stqsxwSMVx1a9F7ozqcj2Mr/hLNfvJcEqqk+hrvPCeo3c8amduT2zXOQafGoworodBgMVyAM4HrXL7SEtIo52mtWzvIgWUE1ciUDmqMT7Yxk1FdapHaQszMBj3rZU2YuRfurry1wOtcl4g+2XNuyxPtyKRNeS6udoORmtpBHcx8LWFapOHuxHHU8F1PwxfXGoMzsxP0qGHwReysAM8+1e9nR4Xfd5YJ+lSxaTDGw+QCsIV8Q3ZbG3JC12eNWfwwnlx5srD6Cuq0b4XWdvIJJCzsP7wr1CG1RVHyipRGq9K64uo92ZtxT0OFufDtvZIDGoGPaoEjhjGSQMV1mrInksTjpXlGv639ileMN9K5auHbnc9rCV1OGrN6/1aKKMohyfaqFpftKTtiOAelUPDdk+rpJcTZ2KRjPTmushs7e0PybQcdK3pqNPbc5MXX5/dic3qG913Ihz6YrlL+0Ync6keleg309uSwG0c1x+tyoHURkEc5xXbBt6nmSOMvEKN7VHC9Wb4bgeKoxNitGQjRjepc1TierAapKZJniprW3aY/KpPNVt2TgV2GgWiNZoSBnuTUznyq5cY8zsZMdrIh25Ix3NTQXLxsUc/iDXRvbJIzEKCD3FZ39lg3hJxgDpWCld6g00YWqPv2yd8Vz0h+Ymux1ixQwDHB9K464QxyFTXUtjPqQluaQtxTWOO9IDxzQMejU8AO2KiXrSlthzTJZZltV8rINU1iIbFTC63DBNCuC1Qr31HpYimG1KjtpxHnJxT7pvlqoBxWqMzR+2qTgEClF2ueoxWaBlgDWnBZCVM96q5LViGe6U9OaqNIZDgVamtPLYg9qh2KvpUt2KUbl/T0OzmtHSbUTatnsKyIboRDB6V0vhcebM8vrWeInaloaYeF6mp21qqooFaAcKmQayVcqKka4ygANeHy3Z697Iuy3R3cGmPcnHWswzkNzS+fmtFAxlIsSTVVY5bNLktTOhraCMZMeBViJagU81aixjFbRRhIkIwM1ZtPvdart92n2z4etluYvY2ExxU2Biq0TZq1nC1sjIaVA5pABSGQdKb5nFO6FqWAuRSGP1pImJOKsMoC0mroadiuBtBqNj81SHrSEAnIrCZtAYWppGRmnkDpSEZ6VizZEOTWfq0AnsZFPpWsEqpeoRC2Ki+pojx6+gZXYMfuk1SXYnJJ/Ou5vdD+0K7gDkmuR1HS57KRSQGBP4CumEk9AqRa1C2u/KcMshB966G21jeAr4+orm5bwWcqw3VskgK5DJU9xaSRQJcrHLCjjKhuhq+RtXM1USdjpGusn5SG/GpYZWY8niuWt551Izk1r287NjcDUXtobLU9s+D7bhrPOf9R/7Ur0+vKvgu+9da9vI/9qV6rXZT+FHn4j+IwoooqzEKKKKACiiigAooooAKKKKAOf8AAn/JPPDX/YKtf/RS15x8fHCf8I9nv9p/9pV6P4E/5J54a/7BVr/6KWvN/j5EJX8OKTj/AI+f/aVY1/4bNaP8RHjayDd1pxkG081XmTY+1CTTcSBgpBya8/lPQUE9mUXOZ2+tSodpOOuOKle0BkyOtQlfLkIJrZNPYUqbiTQrlsZ6c5P+etekQZg0K3iPBCA/nXAaZaNe31vboc72BOO+K7+++SOONRgADA+n/wCqsKmskhdCiMrbSMT1O33qsWzrD89Io1A/HJ/SpWYi129MvnNZsMpl166J6AKvsBxW8Focs9zejk3Xk5HOB0/GuevLry9ZlV5RHuVeRyenbtWxbSf6Xd+yVzGs2rPqayjjKgE/jRa7KgtDZtlSRNkK/JnLHOS349600jZU4AzWbo7EkqOQK21x0NHKkzoitCn9nkncCVzDAOSc4J960NLvbGSeazspJRBMDCJyxJz0yKhXTYb+dVucvEpyI88E+/rVaSNLe6kjRVRlfhV42/hT30Ls0echSL8qeocjn61t3/FklRa9p7ad4olTGI5iLiP/AHX5x+ByPwp+qZFmgFVPVI5Iq02mc+f9YSajZwSAPWlYndj1poXDqD61okaNneaSjNbQ4FdMqkAfSua0+5mgtYwqBlxWpDqiDAkDIfevNqJtmsNEaynFSA1DDcxygYZW+hqyAp74rNMoAatxj5BVXZ6GriqRGv0q0zOYhppp5Bx0qMhs9DVEDGqNjT2DelRMrUANJphNOKtUZU0XACRWxpYsrjSr2ynXbLcRlVf6dBn06fWsUqa1YdDu5rawvlZy7T7ETdwI+7H9T+FVHVmlNanmOveDmgdjbxeRL18puFce3pXFXEMsErRzoUkU4IbrXtWs6sJwY5U8zYThhya5C9Gm6snlyxneOjEYZa9GlUutTGvRV7xPPwcevtilDZ+9zWpf6FcWxZov3sQ5yOoH0rJNbpp7HG4tbi/KfUUED14+lNooEOA5weR61reH78afq0cpjLq3yYBwRmsgdK2vDNobrXLdduVQ+Y30FKduV3Gt0fQXwp/5Gm6/68n/APQ0r2GvH/hSpHim6J/58n/9DSvYKxw/wF1fiCuQ8Z3P2a5tGyB8jdfqK6+uW8Waal9cWzsfuIw/UUYltU3YmLaehxNxr5Cso4465rjtU1bfMx3Ek12l14X+1Pw20D0qq/guBFLtyR61y0oJ6yZzuVT2ic17pzVnqXkWy7c7u/1rq/D+sCUBXIDDqK5LUbLyJWVR8o6isyLVX0+fcjEhe1XVw6a93c+koRpzp+4euXk6sARSLErgHHWuQ0nXf7UZdoI7EGu1hicxr9K8v6vOVRpo48Q1B6sYtv6GpEcQ8E8+1Nu99vCSoyapRmZ8M5AGOlehTwVOnHma1PP9vKUuVFi7jZ4mbvXLDTZri6JcEgGux81ZV2Ac1NDaIgzjrXkzwCqVbxPQjX5I6mNDbvawFgOgriNc8a3Edy1rApMnQCvVZYVaFlA6ivNr/wAORQ64L2QAqD0r1sPQWHhyR2MFX55XZW0rTtY1MeZdykK38GK05fB6FdzAkit/T7yLYFjH3RzU898GG0d+KtxlJmiq2RxNpojtd+UudldTaeFIGxuTP1q5ZWyRtv4zmtiO5WJee1ZSoq5SqNlGPw5bQr9wVWktIrV9wAHNXp9TzkKDWXeM00bYzmt6dJRMpTbKWp6/BaKRvGcetcNqmvS6ixhjYkHjrVXxNbXAvN7OSufu1V0pUS4R29a7nGFOnzs54KpWqckEdV4c0WYOJXc/SvQ7SAogxXKaffiJAVXIFdBp2rRz9AQfSvHhUhiKvvHqVMHUo07o2VjIGakRM9qElBUcdaDMqLXaqcVsji5mxXOwcVVluCo61FcahGpxkVTaR7oFYxjPersugkmY/iLWFggZc844ryS+sbzWdQBSNiC3JI7V7BdeGDcuHnYEDnGKWHTbO04UKCPapcW9kbRny9SrZ20el6QTEFESx4GACDxXMWovJnY3O7cw5Pc+ldsqwSMItoALc1aGjxyksqj2rjhhpqTubSrRaPN9SjkhLDaSD3Nc3efvBz1Br2LVdAia0ckAHFeU6rbi3u3jHIrvjTlFanLGUZPQ5W8TFZR+V63Lxd2axZ12vmhh1JIm5qwG4qlG2Kn31Iy5aBZLuNX+6WGfpXokflRWL5wF29f5f0rziyceYTXU2krSKiliQOQM1hWi3ZmlNpXNmG5McILdRzg1n3WphN7Aksa2rXSJLqEY6sPyrN1XwzdW4Ztu5R3FKE4NhODRztxqckoKuc+9YN5Jubd3rS1C0ltiQ6ED1rFmJzXSmraGPLZkLNzTd1NY803dTsDZPE3NLNyKZEeafJzQJ6orFTnihXZW5OKl6U3eueRQxIViXHPNN2YXJFTRtHkZFTymLyvehSFaxn4AYVrWsxSPB5xWURluKvx5EfStERIrXd0zykAVUMjHrUkgzOfrUhjXbmgaZVLGu78ILiz3muGbAOK7jwqf9AGPSuXFfAdOF+M6dpBjiojIfWmZphNebFHoNkhbPWhTzUWacr7TzVmRbTgUxm5NNEwxwKrvIQxOKcdyJLQuIcmrKNtrMSfHapvtGe1bxRzyRoSS/LRbSgSdazHueMUsNwd9bIza0OqilXA5qd5vlrEgmbb1q/G27rWhlYfuZmxVmJDkVAu1SKsrOqkU0u5LNCCId6dMMcDmqovQBgU9JS/XmrdrWRGtxjZBptWdgao2j21z1Is6KckRYBOaTHNPCgU4Ada5WmdKaGAc1FdJvjYVJI4SonkBWpZaMGaIpA+DXM30JkUhu9dRfzLHG/fviubaRZ8sOB6UtVqdejRzz2LvIquiSKpyue1a29njC3BL4GAp6D6VIIctgVIloA4Z2z7VftJNWM/ZJO42CCFhjYAPpV63s4uQBTUWPHAqZJAg9q0hFkyaPUPhHAIW1nH8Xkf+1K9NrzP4RyiT+2CO3kf+1K9Mr0Kfwo8qv/EYUUUVZkFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv8AsFWv/opa8z/aCkWNvDhYnpdYx/2yr0zwJ/yTzw1/2CrX/wBFLXn3x0tYbiTw+ZjgKLnH/kKsqztBtmtFXmkjw+2mP2ZyqFmzkGnWt863GXh3dsVYiureymlQAMvaqi3aGdmCgCuJa9DtvbZmhatDmW4uAAD/AA5qntt7q9Y9F7Cq2+SeQxluCcgVZtYxHdrCFMjt0UDGTn19aXIlcHOTR0fh+xiimluIiGkUbEOMbSe/4Dmta9lAfbnO1Tjnpx/jV+wsI9N037q70B3Y7Mev5DisW5fczSZzu5rCLvK5ctIkDyF7aLPXPJrGs5PM12cdB5grWJxBD75NYemktqkx/wCngDP411Q2OWS1OggOLm9941xVXVIdyZxyc/zq5Aubq5B/55oP1qxqNr/xLUmx/FU31NYIo6QnkIQTlm6mtpBnFYdtJsceldBYx+cyADJNVzWOmMblqxgCObmQkRR8n39hVS7tIFsrvVZcbw5Yh8qMHnqOlN1/U7qxvltYoFls4uJFRtrl8ep9yK0NPeDVdGksLizliguT5bSSHPzsPlKn0DY+uam7tccnZaHmOq6y+uazFcNF5SRxiKNN2SFBJ5Pc5JqTVTi2jzVBbWS2v/LkUjY5Tn1Bwaua1xBGK2ktFY4ItuTbMJRukY0gGZV+tSRDhjSRj94n1p3NDtbMZt4x04q2YXHfI9DVezI8uMe1anGOlcM3qXHYo+Xt5Csp9VNTw3lzEeJgw9HFWBGCKa0Ge1LR7jZOmsSJjzLYkeqHNTf8JJH08ib8qzGt8dCR+NTLaXRUEEY+lNRRErlz/hJI8f6iamnxGn/PvLVb7Hdf3h+VNNndf3h+VPlRN2WD4iX/AJ95ajbxCv8Az7S1A1ndf3h+VMNldk8NyegxT5Yhdk58QD/n2lpp1/P/AC7SVNb+F9fvCPs9hcyZ7iI4/M1t2vwt8UXBAl+zWy4zmSQH9FzVKmS5GFa6pLfXcVtDZzPJK4VQp5rtPFniP+z7ZdKsAFJTyzIp6DpgVY0n4U6lYX8N22twqUPIjhJJBGCMkiud8T+Ho7C/dWuWlDbiGPB4OPxqowUXqdFCSd7bnIXcDtbONxDEYyOq1BIjPFF9ri3yYGZo+DmtmO0ke2+fG5Tj6iqrxbVIIro06FcltWZn2VkyQ4cepHP41maho1rchpAPLkPJK9/wrcdtoINVJ8eWc01JomUE1qcbPpUsTEKQ36VSaJ0Yqy8iu1jtkdTO4JAGeKlSON0kljQCNQRjaOffPerVVnP9WUjhFU5AxzXVeGFl015LqS3Zi6BUB4wPWtFdMTzhcRxBSUHQfxc5NSizn/vmlUqKSsZez5JHp/we1FrvxddxtCUAsXbJP/TSOvba8K+C9vJF4xu2diR/Z7j/AMiR17rV0UlCyM6juwrmfFM5hmtgOhVv6V01c34miV7m2ZugRv5inV+Egxbe6OenHvTri6RoyAR6UkSxuGVPvetUTYMLxpUBIPDZNc6irgynd6XG0TuVBJzzXkniK1ltNQd1U7Cele7Pbbk2jpiuI8VaMjITsHXrXTFpvUdGvOjK62OR8H6ulrcbJABk8Zr2exvI54lZSMV4TcWYsJFkBwc9q7/w7rUS20CF8dzzUTtTdzXETjWtI7m7j84AdKqTWpEJwcU2G/F2cRMuSanu5yikAA8YrnqzckZ04KLuRWKqpO45rRWZScCuZjvJjcOmOAOMVbiuGjlDFjk9qdGjyq7FUqXdkdBnIrE1WyE0ZwOa1LeQyIDSTgeWcfNnoexrVrQmD1OYtIDDwOven/ZZd7FicZyKu3DRwws0riKNecg4P51hXXinRoCQdTRmxyEcsf0qUdJtiXyhUyzb+M5BrlB4q0iTGL5Qp5/ettz+BrZ07V9LuHj8vUIwW+6GdQD/AJ+tZK97mvQ0mh+WkktwsZPtU9w4EBYOjgfxKelRx3CTR7CecdKU5NDSR5r4tZVkIzg54rlLa6xKFDcg11XxCgdIvMjHOe1cFp4dpcnOc1rK9SB0YRxpSuz0WzvAtuMnkirmg6mBqJRm+UnjmuBu9Ve0QYaoLbxA0cyyKSGBzXDToSp1OZHvOpSrUmr7n0RBMskQwahvJ/LiJJri/D3iyKWBRLJhsdDV3UfEVvLHtSRT+NelfQ+elhpRnYkS7E12Ru4BrpdPkhXGSK82TUkWUkPyaG8STW1zH+8JQtjFRFtysdDwj5bnq17KotyVx0rhvtpe7ly3RsVaOviey4bnHrXNRzEzu+eGbNehGNkeRLc6e0/e3cQ6DrXcWcSeSOK85sroLMrZ6V2FpqhWDORtx61rBKxz1m76C+IWEdq+04yK8a1UM1yxY5rt/F3iZI4CgOSTjrXm1/fmU7getZ1WtiqN1qZl4oDPjpWBdHniteabcDzWLcHJrlkjpi7kanBp5fAqEGlJNZ2Luadhgke9dfpUayTxrXGWBIIrsvD0oF4m49sU3T5kEaii9T1Pw1Z4RC3IxWtq1hE1k+8dvSotEdPKTaOMVpaiwa2IIzxzTjgFbUznjlex474ssEigkbAwEOPevMbkYFemeLb1d0seeqkV5rdd6iFNwTTNpVFKzRRY5pueKU02tEQyxCadIaZD1FOk61PUa2FA3LSxWyuRzQh+WgSlG4pyWhKNGPSEdcnNV5tNaNyFzinQaq6HBIxVoaikhy5WsIqdy9CmtgwAODUkkRjQ/Sr4vYdo5FUbq7jYHB7VtG/UhpGK5/ek04yNjFNbmSlYYrQkekBdc12fhj5LTb6VyMDYTmus8On9wTXNivgOnC/GdATUZ5p/akC5rzkd7GE4NJmnNGRTcHFUZEsLDODT54wORyKp4IbI61Mkr7wjDinGF3ce6Iiy7sZxU6LletJdWRdd8fX2qnHLJGdjZyK6InPOLRbdKdEu2mJJu61KEY1rcxZdhn2jmrsd0MDms2OMkYp/lSL607sixqefnvTkkc96pwKx4NaUMXSqSbIehahQsBWhEm0VBAoUVO0m3pVpEMnXABNQyycUzzsriq8j+9ZVHoXTWo4y0gk96rljQrGuRs60iSYlhUX8FPz60xulS2aRMDVrWVle4TgJ1Ga5m3uFaRuRyelbfiOa5T5LfJ3dRmuUhSaGUmUYY1SiuU3U3ob6sMA4pJCSmfSqKTFe+RT/ADjgjNOEbDnLQk87aDzULXTAgckVBIzFvb2qMN611JHLJns3wRlaX+3Qe32fH/kSvW68d+BJJPiAH/p3/wDatexV0w+E4KvxsKKKKozCiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UteaftB+YV8PLGCSftOcf9sq9L8Cf8k88Nf8AYKtf/RS1578d7mK2XQWlA5FwBn/tlWVZ2gzSj8aPA0ISTD8+tWYI4Xjkc8EdBVdHimvWJPymppIHmnWCyRpHcgBEGST+Fcj1djrWmo+3t3e5RgQquQAa77QNDktmS4MCiduIkzkn/aY9hW14S+HWoGCK41GGGIgAhHYH8wOfwr0Ow8P2dsXW5Uyt1+bhSPXA/rUuE56JFxcVq2eZ6xdMI47C2G9VyJZF5yepx/jWFKhEZHQ/yrt/GDRWWqrFDEqxEAjaAMc8jjtXJ3saqzkcgf4VLo+zSG58xnSIFSMegrnNIJbWX6YMpbH0P/1q6a6XbFu/uoa5nQyDruPR2J/X/GrhszF7nWW6/wCm3A9YwfyNbN1EJtH2468/pWTDkag/+0hFdBHH5ukMo+8FI/Q1k3qaxRyEMTZGRxXS6XNHZxh2G4jtVDyEjUu+AO4rEs/Eb3OqvbJaxCFGKhmJJOD1od3sdKajZM7W1so7+/aWcEmRsso716ZpvhzT7jToC0Cx7OUC8YweteeaBcj+0xCFXaE3An14r1TTpwbJTuPTGAKqjJSdmZV78uhwev8AwUsb+5n1HTb1ra8kYyGNl3RuSc+uR+FeNeLNLu9KujY3kRjmiO1lP9K+tVmyoxzx6Vy3jbwhZ+MdIliaONdQiB8iZh0P90n0NdkoK2hwwk09T5OiXAakjH75PrWhqdidNvJbbDgISvzrtbI65HY+1UE5mj+tZJ3Og7O0Pyx/StXNZNn/AAfStWuOe5UNiVDUgNRIakFIoftBHSrq8IB7VSU1bB+UUESFqa2tJr26jtreMyTSNhVA61AK9N8CeHTZ2/8Aal2hW4lBESsPuL6/U1pThzysZTlZFXTPhrGu2TVLsv3MUHA+hautstE0rTAPstlBE397aN35nmrks21W2Fcj1qtHJI/Mzpk9BiuvlhHZGPvS3LhIA/pUUk6RLubtVWOVvmjY5PUH1qrLKiamzK24Yw4ByOfWne4+UvedM5H3UVjkZHJHc1478R7ieO8huYo1eAF45EBwwbOQa9buJ1iLHGQIiQcV5b4uSGa6S7QJJDMMEddrev4ispP3lc7MNZXOJsdUEz4SOTAHzKy9Pxq1dwKfmWpR5cLjAHPYVHNKi5y2aTlqdCehk3Me3mse5czSBFOAe9al3IWBCjArORMSrhc49qpMym7l5rRms1iSQRqRl+M7vatHRPDGpa5FImnwloo1+dmIUAf3QT1JqOwt2ubkbskZ5rttB1N9M1S5TIMI8tNnbkf/AF6pX6CnPlWhx95YXWmyiC7t5IHA4V1xVcGvZ9VvtK+wRrqqpMknAUjdgfzFctqXgG2uIHuNGu/m+8sEhBB9ge341m11Oa/UX4Qn/irbr/rxf/0ZHXtVeN/CqyubLxldx3VvLC4sXGJFI/5aR17JXVQ+A56nxBXDeO757a/sIR92SNycHnqK7muL8b2guL2xc9URsfmK206mM720MC3unV1zk1tQ3CSHoAaxltT61LhkGFyB60nGJjzSN7clZGtQRzW7cZPpTY5ZDwc05R5snzHj0ojTvsTOdtzxnxXbXtqzMYz5YPWqWnX0oiXa5zjg5r2XXtDgv7JkKA5FeHm2l0rVXtZB8ochT7VhUupam82qtK0d0dxofix9PwJ4yw9a6KPxVb3jAtjB6fMK5W1sYp7cZAIYVn3WkywEvDnHXg1EZQkzz3WrU13PTrOW3mffGy56Zq69uvDs4GOa8q0/W7vTn2yKQoPJxyKm1jx7ui8mFVYkfNvbgD0OOvPatXNbI6aDlV1O/vfF2laTbmW5uAY14+UHDn0Hr+HTvXG6z8X7h4Smnad5TNwJbhxkf8BH+Nec3mp3N9M888rzPjAkk6KPRR2HsKphTs3H7zd25P8A9ak0ztjBIuan4l1bUJzPc3rlj0VTgD8Kx3urp1A82QKOwJFT+XEGJyXb1Y5pjEbsFxn601TaKc0UmMjndIWYduelB2AEqzKc/nVsx7xgsT9P/wBdQvEq8Y6enWmwLFlrWp6a6vb3s0eOflkI/MV2OlfFG/t8LeRpcLjkj5W/wrgGCg52n8aaEyc4AFJxi9xptHpuqeMbPXbby8tGT/z0P+RWBEHikDKAynuDXI7mVvl6DoK1LTUNsfyExTLwMfdb6ipcXFWQpNy1NS/ie5UqoIPc0zTdMBmzKeB2otNT86M7o/3i9Rmty0hN3taLoemKVOTi9QlmDoR1QydFjRVhYq2exp8alF/eOx/GtddGCxeY+Sa53WHaLKIxx7Vv8RFDOKtSoos0luY0GR1+tRCU3Fyp7A9K5+33seSST710OkWztMvFNJJno1cXPlsdRaQytAEHcVP9hZOtaNnCsEIL44FZWpa1DDIUBGa6r6Hl3uxbmVraItkjFUX1m4VQBK+D0waZHepqOo2tsTgStj9Ca7a28Gw3Vqd2BhePrVKHMrpmNSuoOzR5ZevPfSkyOzHOATVC7geFRur0XxLoEWkWLTdwRj88VwOsXCNGADWDhpqaQqc2xhSP8prOmOTVmeTbxmqJfdWEtTpWwClNNBp3aosVcvWQ5FdBpzulymDjmuctX2mtvTnM10iA4ya0i9iJLQ9v0W+jNmhU4G0c0anqzMjqgbArB05khs0XdgAetaVvNbzx5yD1Fd129Dg5Elc8u18ST3jEk5J6GuVvYCmSa7zxcYI9SVY/7mWx65NcRqUmRgdK5KiV2dlJ6Ixz1pppxpDWRuSRGnPzUcdTqobrUN2ZSWhGrbRSE7jT5ISOlNVCDT5iUiB1OetPihZxxn86JTipreUKgzV9CBhgdR1/Wm+TIamkmDNgE0LJxyTQIrrE27miVdopzSkOcVGzFzQhkkWdtdf4bG+0YDrXLRQkpmug8MzGJnRvWsMSrw0OjDO0zp1BUYPNTRgGoC4JNTRHJrzrHoE/k5xUckO0E1aRTiiRSRg0XIaMaY7W4qXOYlfHNSS22W4pVgIQg9K2gyC7ZssqAEe1VtT08xESpgipbJcNjuK1zCLm3ZD1xWsUVLVHP2qpMo7Gtq308MgORWPFC0Fyye9dBaSYQA007M5ZxFTTwPSpGtAB2qysmOlBcGtro5mmVBbgdKniG2o3k2mlWUdc0XFYvCXFDSZqqHzTw2aXMCiTKTTH5pwPFNaolsaR0Y3FJjBp3amt0zXLJHVEGBxxURJ24p+6oieDUMqxz2tuEcMRxnGfSuevTnDCtvxFKY0OVLKeuBXLxXPJRjnnqa2jG6uVzW0HLKamD5HWoZEHUU0kha0iKTLAbGeeKru4ycVBJcsowB+NQo2W+Z+tbIwbPbfgGxJ8Q5zx9m/9q17PXjHwCGP+Eh/7dv8A2rXs9dEPhOOr8TCiiiqMwooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXlX7RieY3hle3+lf8AtKvVfAn/ACTzw1/2CrX/ANFLXlP7RzFf+EaYf9PWf/INTP4S6fxI8OXEM4717Z8HfDk0VtN4hvYynnDy7JCMfL/E/wCPQe1eZ+CtHi1/XYbaXmEHzJj6IOv58D8a+iIdQihiSOMBI0UKqL0UAdB6CsYxuzpb7Fu/urm3iZ7dlWQcpu6FvQ+x6VLZ6jFqcMF7CCu9SrRnqjDqD7ioYJYdStn8uRJB0Zc8iuchll0PxIYWz9nvGyueAHAwfz4rZRuvMm5heO7lRrEW3gtGSp9Dn/8AVXN3cm9Bt5zitDx1drJrYVG4jhA/Mk1gLNvjGfauevH3Uy4vVk+of8e2fcCuQ0KQrrgJ/ikIrrL9s2TkdsGuKsn8q/jk7ibP4ZrKGzFLc7+L/j9iPqpFdDp7ZspPXBP6VgRjFzCfr/Kt/TkLW06DGSpAz0rmlujpjsc/cxvOn2eLJkkbArkti2OsXMScfMVzXqFjpMVkj3M0u6Xb8zHog9q8v1Zs6/JIvCl9wPtXWqdoMzc7yTO/0CfGoxSFuDGBg/TFetaLNutEwc/LwK8T0ebZGsmeYyGGRXrGiXeyCHsrgDd271xQfLM3krxO0BCxZz2rNTzppN0bAFSc+hHpUss2YAAeTVa9uRpWhzXB4bbx9TXrxdzgtY8W+MWmRHXBfw4BuIkZwB97qufwK/rXlMQzcIPevefiRarceFdPvnU7oj5DkejgN/NR+deDQn/TFHo1cslaTRutjr7Ph1rWBrJs/wDWLWrXJLccNh69alBqFetSCkiiUVcH3R9KpKa0raCS5migiXdJIwVV9SaLakSOl8D6D/amqfap0za2pBII4d+w/r+Verk1n6NpcWjaTDZR/wAIy7f3mPU0i3vm3zoD8i8Y9TXdTjyRscrvN3JZ2QQuSFIz3FReaBGTxkdAFxTLm4aG1mkO0AZI55NZ91cMdLRwcPMflx1GaLXLSLQnaTJ5DDpkVn2AWS4uGJjRyduzHB+lSaa4kldSHVlXB31XsIRK8rhiCp+UjsTVJAaCISxQnBVduOxBrh9T8OW1008RneF1dnBHIZScj/Cu5uZhHbxFyVCtkkCsjWLIT2TywHLgFlI/iU9aipHmVzWlPldu55TeeFLyOciG9jZQepBBqjdaFewKA90hHqq11rXG+JTnkdarzuJIiDg1hqdnKjif7OCNl2Ln37VJ5YXAA5rUnT5j2FZzyLGxJ7VSJasXraZLC3aVsbsZ+lGhSzXMElw2d085k/AcCslo7jU50gQMEdsM2OFFdklrFp2npHEuAFwBXTTg3qctWethVEup30CO3yoyoM/rXePAlrYAxjaWcBSBiuU0gJbSKWAJGOTXRXeqJvtojgKz59+lVOna1jFSudVocjNespwQIj0+oroK5fw7MkmqSBGyBCefxFdRVU/hMqm4VzfieIyT2x7BW/mK6Sue8SMwlgCjqpoqtqN0Slc5xsKcCnAxhfmINMnVlyxri9a8Uw6fMY2bAHYGpjTdryZk227RR2RdSQF61Zihx81eYaV45W+1LyjGyqP4mPWu2l8S2kNru35OPWuuMo20OWvCUXeZrXNykSHe1eKeLZY5dY3x4+8a3NZ8WS3DukQKr2JNcxYwNqOojdkgHJJqKji1c5KeIbnyxOl8Nl5NofIArrh9lMTzSNHDbxqd7nrkDkD6dK4vUNctPDccIkTc7Z+VTg8e9chqvi671PTWtUHk25YkhT8zZJOCfTkVwct9UexTpK2pN4l8ZLeTyRWUYRT8pZkBPHoa5WJnlctjIHXceKgJ3yfvMkd8d60IZUKhFiOSMKOw962UVE2Stoh0TNMzEjcF6Z4/HFRzXGCVzlqkQ+TGYiwLclsVAkKspP3V6lm71pFdxS2IfnbknA7DHNKYl/i3Z9zirSwp5ZbdgAZye9QEM2NgA9zVt2IUbjVRSfuvj1zUgCH5d5z6MKlWxmkQuCpx1HNA055AAwIPYn19KzckWosryEKMbVDeuKgMTvyoJ/GtUabMFIYbsfwEc1a0y3tptwIG9ThlYcispTSV0axpuTsc2yshxtYHrzSruJx3rtLjT7cW7ER5HQHHFcxMFhucAAlWx160QrKexUqLhuLZS+Qx3HBxyCK9L8Cz2U1iiXgRU8wxiZTzGxPAPcDnrXmc65/eggnGeO1LY6hc2DEwSsqvwwB+Vh3BFOO9zCrSUlY+hr7TQLcxMoLfwsP4q8/1fRf3pK4xTNB8bSyWDwXj+b5TAcnDqPUdmA/CukWJdS2yxk7W7joK3lUXL7u5wwounPmOUs9IAYHaK3rOFbdxwK2odFZUyCDn2p50sg/MMfhXg1sfiactYnpwUJdTPurtzCwTJJHauRu9NuJLgyynjPSu+azWFcnFYuoSoQVAya4/7UxE5WN1Rgcj550+8guB1ifNemaN8QNPNmFnkCOB0NcDcacJ1YsQK5fVIPsrEqRxXvYHMb+4zixGFjJ3PQ/GXiyDVY/Jhbcmc5rzq9n3Gs4XMh4zQXLck13yk5O5EIKCsiKd8mq4NSy1DmosXfQfTgaRFJqTbQ7DVxVfaa0dOvDFOHB6Vm444oUlGyKkep6DH4iZoVjBxngmt7TbhfJJD44ryX7a6ev51bi1y7jj2q7AfWqhNxd5EzgpK0TovEEqC9BByTnJzXK3sm6klvpZX3OST7mq7Pu61MpXdzSEbKxEaYTUpFQtwaSGx6daf5pQ1GtIxyaVrspPQtxzhh81EjKelUsHtS5cVPJqHMElNU4FKST2pQhx0rRGYsbDdzVpIzIOBUMUBJFakR8uPAGaTYJGebU55pyW4XtV0oXOSaUKq1Nmx3SI0VgOKsWpaCTcO9IHUdBS+b7U3G6Fz2ehtR3xYDJrQtLwZ5Ncp55FSxXxX1rCVC+xvDE2ep36XaFByKeZ0YcGuMh1Ugd6uR6pmud4Zo6FiIs6PeCakh2nORWNb36vV2O5AzjvSVNplKaYyC8CamYc8Zro7Vvn4PGK5BbZ31ITr3rqtOYs+D2FbXWw47GfM6/2gwPrWjCMAVl34xqDFT3q3bz4G1hUtGcjS3YFKGzUSuGFSAZFOLOdoa6bhUO0rVgg0hXNU2TYYkvapkeovJpyrtNIC2hzUm3JqsjEGrQPGabGhrdKjJ+WpWFQsKwkbwGAZqN1xUqjBpJKzZsYmpSRxKfMVSD61xGppGJvMhx15A6V03i+NzZbkJGMdK4nzSqkHmuilqiKkuhfjnBTmmSuCvUVlNdFOATgmkNzwcGtVEyc9Cw7Zfb1zUfywuG4qs1xgep9qikuQVxirSZk5o9+/Z9uPPPiPnJX7N/7Vr2yvCP2b33/APCTcY/49f8A2tXu9bxVkc03d3CiiiqJCiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UteW/tFIZE8OIvUm5/8AaVepeBP+SeeGv+wVa/8Aopa8v/aDBkvvCcK53SvcqMepMNRNNx0LptKSucv8P9L/ALH0Oa9mUCe8b5fURjp+Zyfyrpl1l7CeCeZPMtZWMb88g1hz3pRFhiO1I1CIPYcVQ+0yOkkBYmJznaemfUehrop0/d1LlJX0N2/vbjQPEv2mymIhmCzQv2kQjv69x9a2tU1a21vTY7iIlLlCZfL/ALrKM/0P51xK6g8+nvp12fMEIJt2PWJs54/2T3H49qjsruRBvUkOAVYfhg1fs7+orkev3Au9XnkHdQMfQVl2znZknpVlR5l1ITzyRVKINGzL7Yrmrw9y5UZe8aNy5azI/wBmuTtYDJcLsPyk7sn866GSY/YZGzypx+v/ANesuBfKSSVeB3H5/wD664Y6G7OxgfclrIe+P5V0GnSbEmYAEqDwfpXK6e+7SLVvpXS2P/LQkZDg8fhWFvfRstjOnv73VXW3RGYseIkGFHuf8TXI67bNFKJdvIOD7GuiR3Qko7KSuwkHBIPUVBe2yz22xhkYr25U7wsjkT1E0B/MCKTwTtY+1elaGZ20tCGxLE38Q4OCeD7HB/OvLNJLQqVyQ2eo9RXrXhp43JikXKSNyp9COn+fWvCrR5J6noQd4nVabN9oA3Lheoz79q5/xbqJufsumxnczPhwD1wcVJaTyadNPatn5GIjyf4R/nNYFqJp9Qub6YHeX8uBT2J716GHktU+hhOGty94pj+3+BtXiUH92olGPRGXkfhmvnQSvLqIaTbuGFO1Qo447V9R2aQNYajHMR9nWBon/wB3aSx/rXyrAc3Cknv1pVFq2R1sdnZuDIoHpWqDXP6YSbkc9q3ga4ZLU0SsSipBUa1dbTb6OJZntJliYZV2QgGpukFrkI6GvSPhzowmlk1WZciL93Dn+9jk/lx+NcavhvWBGsh0+XYwyDxXtul2EWlaTb2cKBVjQBsd2xyfzrehFSd+xjWbirFpjwfWsdwqSPLuAKnI461X8ReLdI8PoHvLpVfOBGpyzfQV5D4h+KF7qMpj0pfs1upOHdQWb/Ct5SSZnCLPXtQuF+wOqjdu5JJ6ZPasT97ayRgSg/KGGDkf/WryKPxXrUkZWTVJsHtxipLfxhqdvMPMut+OMMB0pRqpFuB7hp1y1w8juOVjPQVR01wbmQF2BxkAdDXBaX8TEtfMS6tyVdNu5D0NdLpesRXQ860lVtwwe/FaRak9CWrHTam4On7uozWfY3waLyJD8v8AAT/Calv5S+hhjwS/asUHERx1HNaRWhJh61pEmnad9st9zxKSs6nloiCRn/drlxf5HPQ+9ej214Flnt3UMJV3qT78MD6isS+8M6VcRnyomtZMk5iPH5HiodJM6IV3FWZxVxdgRkjvWWkU11MFUEsx4Fde3hOBW/e3MjqD0AC077Ja2UT/AGeNcgYye/8AjSVKzCdZPYi0uySJkijGVjwXb+85q3qD+ZcxwjseatWcItrQu/LY3MT61QtwZZXuG7nArpStoct23dlzBwOefaomnZb0Mx3bRzmp1GRVFG3zSt74q5ako734fytNqlw3RPJPHvuWvQ68y+HPGv3Az/y6scf8CSvTaztYmW4VxnjbVY9PvLJHbBdGI59xXZ15N8YMfbdNyefJkx+YrGu+Wm2XRjzTsUdV8WWkFk7bwXx6145qF0+oX0txIc7m4z2FR6o8wuCG3bewJqCJ8gCueVSUkdlOjGm9C5bKYv3inDdqsXGpTxRnLsT7mtfR9CnvdhZCErV1nwQ0tlmIFWA6gVp7RU7JnHjKUquxwYv2kySea9A8CaYJo/tDry3TNcNBokouTA4O/OMV3r69BoGhtFbgqyx4VhkFz0+XjgeporT92y6nBhsMlPmZxHxBlju/E0trbtlYD5fB4yOo+tc0ln5SEtKuHHH1FTyI8sjP5oUk5O4nJJ759ajyD8jMcdj1FCbSsj0+VEIiVh0P4HNPEiwgGLhj6jkU3yJQWKR7/oelMa2n5OEBAzyelUvUGvImEqRhmc5zzjuT71Gkkt7MEQFYwep6VGLK4kOT+ZNa2m6JeztmO3lcA/3Tiqc4xW4lTlJ7E9vp7S7Yo1JY+prp9P8AC6RIpfDSHkmrmg6MI186Rf3g45/h+ldFHGVXaOB3xXFWxN9Ed1HC21Zinw5b9UUIScjFSR+HIwpU4I+nSt1U29qUnPtXI60u50xoRMA6JGCQv61z2r+G7kzC5sSIZh3XjdXdyKGOe/aomjycEURryi7lSoRasedSWvim4Uq0MYyNu/5QcfhVeHwteRKTPtB7sWzj6D1r0eRB6c1Tuow0JrVYmWyVjL6vHq7nld7E1rOyZwoPymq4IeQKQMnviuj8S2iRyKVGQw5yKwUg3qPuhsdNwwa76UuaJ51ePLKxJFI1rMswHHR1r0rwJq4mZom3Dnhc98Z/lx+FecSKw4wCcdfWtHw3qBtNTizcPBz8kg/hbPGR3HatopXOaorxPoSDypgpO0kgEY4J/Cm3ypBbNJuIPuOlc/Za3cpiB5oC5bI3IQfwxkGn3eoNK6mSVCvZEHy/X3qpwjNWaOSMnFjZVeVckHpzXM6tLHbMSSM1qajrkVpCfmGcV5dr/iE3U7bGzziuGpl9OStFWOuniJXNS815UJVW5rnr26e7brxWV57E5JyakWetaOEjS1RcqrkWFjp+2q32n3pGuCe9ddmRckkXJpFiFQmU+tL53vQItqgFDLxVUXB9aUzkjrU2L5tCcKKCoqt55Heg3BzRYXMPZaFHFRGUmk82lYdyY0lRedSGX3qbMfMTE8VCw5ppkqRTup2sDdxAMUjdakRSxolTAqb6myj7pEGxTw4PWmbaURkmmyVcnjCE9Ks7FIAAqGGE1dSMKKjqDGJGBzUmcUGk6VokZtiluMU0mjcKbmrSM2xc0FqTNNzV2IbGsxpu5gacaaaqxNyRZDU6TkYqkeKcr+tQ43LUjXhuyPatS3vMgZNc0sg9atxTlelYzpm9OodhZXQB561vWDqAXzXA214VYZrprO+DW+Aea5XBpnbCquUSW483UX9AcVdjI4qhbQ7pWc9Sc1extNDE3c0YD8tWUOKp25yKtryazIZMuDTylMUY6VKDxVpkMZxTSKcaYTTuFhyDkVaFVUPNWgaYCkVC64qc8io2GaykawIAcUMMinlMUY4rFmyOb8UIRpEr/wB0Zry+a8DHivYdbt/tGlXEWOqHFeJTxmKVo2zlTg11YZJqxjiG42HPJuOTTPMIBFRM3YUHkcda61E4+Zi7yTmmsSeaCMCm98VSIbPff2aenif/ALdf/a1e+V4H+zT/AMzR/wBun/tavfKokKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/YKtf/AEUtcf8AFfTYbzW/Dd1NMifZI7uSNGPLufKA/Lk/lXYeBP8Aknnhr/sFWv8A6KWud+JFtDJqmizysm5IrmNUbvuMRJH/AHz+tJu2rKjueTXUTwyfOpAPIPrVVjtORXXy6ZFIhWJjGCMFfvL+R6Vg3WhXcGSm2Vf9k8/lXTGrFqxRk3aE7J0GWHUDuKbbyBpg6EHdwwpXZk3QyArnjkYwayxNLb6lFG6YDHHmD7rfWqvZhY2YIsTSn8azpl2zEjoWP8zWqEcgbnJyOdorPutq+UoyDk9fqaVdfu2EfiKTNuspV/2h/SqNuQ0Fwh9Fq4rfuZR7r/Ks+0P76RP7y4/EV49zssdTpPOlwr6N/ImuwsgBHj0B/WuP0X/j3iQ9SCa66BwIZfRUrnvepY2S0MHZgkY5zSkdsVIRhcnqTSquRk8e9fQLY4epTt7NlucqpKsw6epr0PwpFISfMI3xsAfXmub0aINc7iOFZSw9vX8K9E0zTgmrArgI4VyB7f415GOp3OulKyI/EFrL9uilhjzG+RLIOqnGAcfXrWSWdR9pZdzBdsar/ePX9c1tawyRaoJJ28sMuBhsZwcg/wA6j823iuWIQOVJ5C9D1rNT9nK7NIrmjYSBJdO8M3k1ym51hlk8ru3yng/yr5UDGNt1fWfmfbInib7rqVI+oxXyZcJ5csif3WIrWFT2jZlUhym5oF2095tPYV1gNcT4X/4/2PtXaCsqqtISbaJwcj/Gur0vxZf3La9oLlHaCzSa0MgztGAGH6g1ySmpNEYr8UrWPBK3lkYSPXKH+oFYTjf7jWm9T1b4Y3N/dWE8F45kit2Gxz7/AMNZfxB+IUluZNK0aUrIhKz3A6p22r7+9dFI0XgLwOWO03TDJ/2pW/w/pXzvqGoyNK7s+4sxYn3NbpckVCJjNqc3U6BPKZJmluJmkYnO5zkn86q3V2uzagA9DWZNcNI5Oc1GHYkhuRVqJm5Fl7llw244PWpoLkyjZJz6GqAyhwwypp6ZicMDlaqxNzTaNtpIbOOlafhrVrrT7wOjnapyyk8EVmxygqCDweCKnhTy5tvTdxQgbPfF1CK/8LRTxMCGbJ9jVNDmFvpXI+GdTkgsv7PkPyn5hnsa6yBgU69q6KcroTRSml8sxTf8832n/dNWZ3Hl7s4qnIobfG3RgRTIZzNbBG++OD9RxViGvmdjnIQfrVV1FxeLEB+7i5b3PpVh38tD+lPtLfyotzfePzE1SRL1Kuqy+XbrCp+ZziokTy0SMdhzUEsputTaT+CPgVbUdSacdXcGtLCyNsiZvQVm2xzGT6kmp9RmCW5UHqKqwsFt8n0ob1BLQ7f4dSA+JpV/6c5D/wCPx16jXkHwwn8zxhOvXFhJ/wCjI69fqUZz3CvOviPp0d7qmmtI2Akb8fiK9Fryj4uahJY6lpexsBopM/mKxxKvTaNMO7VEziPFGh2psz5YXd2x61jaF4TaUiWYVpxXr3yhXPBPeup0mNY4kWTGO1ZUqdlZnRUqvoXbC3htYlRVHGK18xSQ7CtZs0kQkXGSM44q3EVkbC9RW8qUWtTmVSSOb1DQlW8N2iAbeTivJfEGqPMPL3ACRVBVSeg//V0r6JkhUwtuA4B/KvmbxNYPp2qSRSHIdmcN6jPpWapWYX6lEEFcF9o9CTVq0hW4mCRIWK8lm7CspZPL+6Tn2FdN4ehSQeY4+Xdg9ue1FT3I3NaS552Ol0nR4xZq0iIEzliWwW+vFXG0S3vGG1ERepVV4/Op7fEahW5AxgGr9rJ85JIOBXkyqSve57CpRtaw+x8OWSMpdGf+6CePy6CtiXTbdcBQ3vvOajs5+AG9eM1pSAS/MBisrzky+WMTONoqL+725zk5FKYRgDn6CrYiYHpUixA9c/jW8KbZDmkUPJbjtSGA5NavlYx15pjRL6VfsRe0MgxHd0qKToeK1JIxg1RuQApx1rKVOxSnczmPWql0T9nbFWJGwKqzHK4zweKEgOZ8SQqbAN39a4qKTEW0rypLZz/D3A/nXXeJ5CLQQqw5bGDXJCJQQeucqPyxXp4XSJ5mLs5E/miSM/N1A2n+lVxtLHfuU5+8vrVdHJTg9DyPSkL7jg5z6102OO50tnq88jxZlCyrwXVOmO4OeprRPiaWK2l81zJLuID5+9+FclAzSsBHGS3TNTXcDxwfOSDnGKSbuQ4RHahrVxdDYXY+vNZgyT6+9IaUGtSUrChaXApc0CmgExSEU+kOKAGUUUUhoOKXikopFBSYpaKBCYxSUppKAEoxS0UhiVYh6VXqxbnmplsVHcswJljxRdDaBUsbhahuTvFYLWR1J+6MiUPV6K3GB0qlbKQa0o145NKe5KHhFXoKQ0ucCo2arijOTFJFRk01nxTC2a3jAwlMcWpMmkFLWyiYSkFFFFOwrhTSKdRQCIiKSnmkqShAcVKshFR4paTRSZaScitXTr3a4BJrCU1Yhk2NmspxujWE2j0awKOoIPWrE0e3pXN6TqIwoLV0scgmQc81xVE0dsZJkls2OKvJiqMa7TVxWrIGWV5qSoEbpU6mquSIRTCvNPNFFxjVXBqXdgUyl7U7hYlU5FOBGahBxSg1DNIjzzSFaUUbqyZqivNGHUr2IxXj/i3S2sNTZ9v7uQ5yPWvZX6VxvjqwE+mGZVyyc1dGfLNE1o88DynPP9KGGOaXA3e9I2cdDXqHmDS2RiiiNdzgd6klTHShu2g0m1c94/Zp/wCZn/7dP/a1e+V4F+zQMf8ACUf9un/tavfaaJYUUUUxBRRRQAUUUUAFFFFABRRRQBz/AIE/5J54a/7BVr/6KWuN+MeN+iHHOJ//AGnXZeBP+SeeGv8AsFWv/opa4v4yn/kC/wDbf/2nWdX4Ga0PjR5/b6ldwkBZSy/3W5/nV7+3iFxJDyOpVv6GsKM8ZNJK2BXOpNI7HTiy/e6jp94hEgUP/tjB/OuQuVW71FrdG/dAjHOQf8akvpeo/CqdkMXSdeWrroSb3MKkEtjqraFI0CheAMVQ1MrHsPdVJ/z+dXImIQAEsDxzWRrUv+kKnbgfgOf6V0YuVqZnSV2U0bEUxPQvx+AqhASLhcdc5qeWULaoO7E/4mqsB/flv7q8V5MVc6W7HX6S43qB2XiujWbEUi9jXJ6c4jZR6DH5Ct2OTMY+hJ/Gs6MG6qN5S9wdks2O1TKMj2qBeelTKwAxXvW0OBGxoMnlaxbejttNejLMtnC8kZ3OPlTJ6dzXmFnJ5V3DLn7jbvyrsLfUTdkH1JOK4cRByZ1U0rGn4rRTotreDgwsFb3BGP61iWd159tJcE4LPz+VbWuWV7qfh1ra1jLvI6DgcAZBJ/SuPuZJ9KkjsXtJ4Ik6PMpHmn1rzsQrs6qDSXLc67T5twHPp3r5b1aNoNVvYW6xzyKfwYivo3TL0bQD1NeJ/EjSG0zxxqaIv7u4f7VHgdpPmP65p4WSu0TiotWZl+F/+Pxz7V2INcj4YjZblyylfqK6xTVVviOaGxOprb8JaDcax440fUrKVfLs1LTSj5gu0kbfqc4rDjBZ1VQSxOBjua9Q+G9nL4c1nXNAutvmskWoRY/uuMMPwYfrURjdjc+VephfGLxAzahb6YuQsSb2wepP/wBavFLiVmcsehrr/iFqMuoeKdQlkPKybAB2A4xXFSNlB64raCvqzKT5VyjRjqKmRQetQINw4qWNgODV2IbJhGGGDzSKhT5TytLuVVznk1EJGLY7UEpliM7TtBrSilDwrnh1brWfHbu+GQE1LNFNCgyjAZz0pWtqUtTtNJuBMA44Za7yxkJiUnuK8p0S6ZHCscgmvT7WUGGPHHArWnuJiznE7CqUuYLgyqCyPy23nB/zj8quXJ5D1Udz1yfwrWWiuOC5nYdDm7kD/wDLMdPepNRuhb2zKg3O3GBTrQ7Du3YX07Cp7q3t+XZlJPIKmo9q7bF+y1OaMj2GnyXJglmZfmMcY+Y1lL4vlvZ4rewsS0hb5vMbjHUke2OcnHXpXRTTFN21iR6HvWXFY2dq5litxFJIu3KsTgZzgelNztoZyg73I764Mr4yeTTpZtlvgelQTQnfvD5x2xVa+mKRfh2pqaHY674LXP2/xVeXW0oBZPGFPUESJn+le5V4H8D1mtPHGsWc6lGNmbhVPozR175VLYwnuFeL/HCYRano4J6wyfzFe0V4R8f5Cms6EOxgl/8AQlqKvwMqk7SPPrLUxDNhzlc9j0rp4/EAMYWJsfLwSa4yWGJbZXK4JHB9aWzuYI1wz49jXLCpc6Xqep6dfR3EO/zQGPr61vaYoxksG968x0rUo0bIce9dNZ+IlRwNwx7Vr7dbMzdI78hWUg9CK+b/AIk+YvjG5jlVlMaKoyONvavaU8SwHHzH0rzbxfaWet+I7aYsFknjK52n5iM4H17U1WgyHBnmQXAxg11vhh99ukfQK2TWBqcEVrqEsETlkQgZByPfmtHw/diGTyc8sQRRW96ndGmGdqp20UhfLY+6cVoW2UUZ/nVSHbwSOtWkAHWvHZ7aNK2uPnGfWt2G5QnBz9a5eNWZht/Kta1Dd+K0p2RE2bisjD3pykcYxVCGDbKZFZ+R93PFWgMc88V1I5ncsEtjFRM2MilVnkXccAfWo3Tgg9abEivPIQD2rLnkZs1pzYCEY/OsuYnnpmsZmsCjKOlU5zwetXJixHA4qlOSBmsTU5HxNLChjZwTliP0rnWP7+MrwOgHtg11Gu2f22MAHDI24VyDysLpum5TgAdK9LDu8Ujy8UrSbK8aEM5P3ec/5/Goepq6wGxvLBOeSMVBGoEgY5x6V0pnJbQ19Lk8i3IYbVPX1JqDU70THaKiEpbKgnA6VC9sznIpRi73FJordaKs/Y3Jojs2d8E1pqRcrAmnA101j4X+1KCrcn1NaH/CBzsOD+tAHE7qTrXV3Xgi8iGV5/GsC706axP7xcUXHYqUlBNJmgYtFJmjNIBaKTNGaACkoNFIYUUUGgYlSw8tUVPjba1J7DW5eVTxTthY9KgE/GOanhkyawaaNrlmGHA6VYIxSxfcoc8GoSuPoRMahd6WVhVctk11U4HNUmOPNFJmn10pHM2FGaKKZIUuaSikAtFIKWgaGNSCnGkxU2KTCinAUYpWGmIOtSrTMU4Umiky1bztE4IPFdZpWpb1ALVxYNXrC5MMo54rGpTujanOzPSIZBIuasp0rB0663qME1tq/wAtcElZnWndE6HBqdTxVRH5qdW4pATg5pQOaiDc1IDSGhxo7UoGRSYxRcobShscUcnpSbGzRYEyUHilCmhOnNSqpb7uPxqWi1IjZeKq3dpHcwMkgBBHep5ZSv8AhUD3G4bRWE79DaBwFx4JEl7IIx8h5xWmPAVpNp5TBWUj7wNdQG2mpFmMZDgZx1AqfrFRdQeHjukeZXXw9vrRy8Lb17A1hXej3tqcS27gdzivd7e+tbs+XnbJ6NTrjTreZCJYVIPfFbRxc/tHO6KWiM/9nCPy/wDhJuCM/Zev/bavdq8++Gek2+mzaw1ugUTeTnHtv/xr0GvUoz54KRw1VabQUUUVqZhRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWuK+M6sV0QqCcGccf9s67XwJ/yTzw1/2CrX/0Utc38VBi3018AlfNIz/wCoqfCzSk7TTPJoLG5kjDCIgHuxxRNps205lhUjsW/wDrU0anbSMBdSShFYn92RnmrKR6JdEsNRvEQg5QqpP51wuWp6K1RkxaBc/bDJKbdo9rYDOByRgcH3p+naJJA5W48lwx+VUXc313Dp+tbl1a6KZ3kWN7lmA3fMQcYA+gpsYa3EccNu6JtxHvIyQOn1rWM2tjKST0Yo0eETmLzCrj0YNj61sab4G0i8CXM9tPfl+SzSbEA6cKCCR71y+kyo6a3OZgJJZhCir1wByR6CrkNzPBCViubiMHACqp5x2qK1SpL3Wy6MYb2NLxj8OLG4s0udCge0uYVYG32s6TDGeDzhv515W9he6bLtv7O4tZGPyrPGUJ57Z616HJqmoEKqvdEDoxfH8qfdatBemFvElnbXcUeRE1xKyFc4Jx82D0FKEuXRlzpqWsTiLGY7xuPNdHDLiIZNJro8PXgsx4btBFPvInjSQtu6YwCfX0qh57J8uCCOCMV24eC5uY5qkrKxqicLQLketZcdwrSoJH2oWAJz2zXSX/AIbkS1W4052uVAy44BA7EDNdFTEU6clGTtciMJSTaRTS82t1+lb/AIXvY73VUinmCQpgkFsbyegFcS7lSysGBBwcjGKt+EHin8U28MzEgtuCjqxHQVGJlam2i6LvKzPc/D+rHU1uT5ZjFvKYSO2RxirE8lrq8t1pdzAksSopcHtn+vFV2ltNG0mWfKxIXedh0LEnJ/WuStPEDQaZdagXC3l5OSE7qo4FeRd2OnkUpXN6LwPb28iSWd1IYweUkJJA7gGvOPitZW9n4o0mWcB1a3ZNx7gNkZ9xmvSNK8SpcW4kDHzkCieM9uwYf1rzX4z3S3OpaOVOU2SH8SRUx5b6CqOpZqWxzQmsX/49UVT3xTwc1i6YRuYitVW5xVWMkzr/AAFYJf8Aiq2Ei7khBlIPqOn612niHUGs/iXol1BbPgxyWNzI33Sr/Mh+gI61zfwwdE1e6Y43eUAD6c103icR3Ely4b95bsJVGcdPf6A0lKxXJzM8a8cW0kPijUlk27mlL5U8EHniuMkHA/KvSvHs1tq+vyy2mzmFCNg4PFebyRup5Heuml8JlVjqVY5Cr+1WNxPNVc4c9qsRSD7prYxZMgDrmpVZVwCBmoYxtbk/hUpGTgCluQddo8UKQqSASeatXF7ZZeKVkJxjHvXHR6pNZZjyeRwazXmkMnmMxLHvW05RUUkKm58zfQ1be4mivZGiPyBuPpXrOkXBmsYGJ5K15Lp80buC5we/vXp+j3ELQRhGBwvAFYwkrmxsuSykVWk+9gdq0LKA3NwqDp1Y+grUuNOsnONgDY7GnWnb3S6empzL3JhtCiRyO7DkqM4rMjkZLIl8qQ569a6GXSAHYxSltzcZX7oA9azbizuiSroJI+pBOaTd0i+XUpmQmFcms69unjADAhOcMPWtCZJFAPlMF7YHGK5jUNXWKZlVdxD4Azj60NOT0G9FYvQ3DuhDdQeDUV0S8ZxsyDn5jj8veq8V9FMgZHHPUcAinyAyqAhXd2ywH86iSM0d58JLSSLxvNcMVcy6ZJubHIPmR4GfTrXt1eO/CuZJPFrRpIrGPTHB28/8tI+9exVvT+EwrfGFeBftDMo1jQQ3/PGX/wBCWvfa+ev2j326xoH/AFwl/wDQlqpq8bERdmecjZKqRhgwx8o3dKzr5THMADyOtQWc/wAwGetTXUeVLgV56jySszpvdEcN7NE/ytWhDq1yOd361gByDT1uCpraVJMcZnSLrVyeC5/A0X2oNdRIfuyxtvRweQawBc+9OF3z1rP2Nnc0bTK94zy3rO2Msck4qfTWCajCwPG4LT3MU6heNx4BzUEUE8NyUZcPEfmHfrXQnzQ5TnUXGfMj0iAnitKOMyLxWVbNuCkfxDIrbglhhQGVwueg7mvHkmtD3Iu6HW6srDP0rZhUACqMFzasSd65HUE1fWWHja64PvVwuRJo0IRuUZqcR/nWfFchGwSB6VbW8QgncDmuqOxhIsbCByaYVBJ5qE3YCkg1Tm1VIwTnkelVdEali6TapGMk9MVmNCx6jFZeoeL4oFkJI3KBtX1NcveeO53k2xLkemcGpdJzege2jDc7G7MMEe52AH1rJu2jZMpIrA+lcfLqWqanI2InZT0DE4FNhgv7e4SRwww4OM0pYe3UccRzdDblXcTkVweqwbdVkVOA/PXoa7ueTYpcDkjIWuFvY2e/lkkJAZ8Age+K1w102Z4uzijodG0uFlBdMN5Zx7sRWR4i0p9Me2YqAkiHp6g9P1Fafh2OS2vomkZjjKgMeBn0qz44lBit7c43B2fP4AVcZNVkiZxj7Bs4tZCgrTtCHWsdjWrp33Pwr0InlS2LQxu6dqpzzNFIxWrefmFULv7zfhTZKNvTPEb223eAMe1dxpvimB0Bbbg15KT8tPiuJYRhHIHpWbRomevXniOzKHlc1534l1CK4bEeOT2NYTXUzkkyGoHYsck5qeS2pXMJRRRTAWikpwoASilpQKAExSGnYpKAEoNBpKQwpy9abTk60DRKDU8B+aoAM1cgiORWMmkapFxJMJSNJkVHJ8vFQl6dON2TN2Fdsmm0nWiuyKsccnccKcDUWacDVED80U3NKDQMdRRQKBC0UUUDA0lLRUjF7UlFLQNBS0004VJQ4U9Tggio6cDSaKR0ukXWCATXWRy7kGK8/wBOkIcV2VnNuQc1wV42Z2UndGorYqVZKrBsimmQqawNTQV+asRnNZ0MgJq7C3NJjLqLxSsvFIrcUjOMUAMZwtSwW812rmFQdnXJqnI4Oam03UxYtIHUsrcjHY0uYUr20LVjEl0rhs5Hp1FVRM1tcSLkMFYiqX22RJWkjYoWz0qEzEnJOSaVioxd7stSylyST1qMVF5mT1qQEEVDN1oOJp6nio+tOGawnG5vGRVvrVinmwHbIvIINVrHxk9m4ttRBGOA1aMrhVNc3qdguoAqU59aUV0YVFzK6PZvhtqdtqR1M27hgnlZwfXf/hXeV498CtKk0z+3w5JEht8Z9vM/xr2GvboRUaaSPEqu82wooorYzCiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXOfFX/jzsfpL/wCyV0fgT/knnhr/ALBVr/6KWuZ+LTbbKw+k3/slTLYa3PnmaRvtEgycbjWjpeqz2QdIym2TGdyg/l6VlSczOf8AaNORsGuG1zvTO5/tKN0jklZ/MfH+rUY445q9bXitHI5jDSJkhwvTr2rF0jVD/Z6wrDE7KerAZq5JqF3a2lw4iGzy2yVPtQk2Nsx/DjNJFPLJ83mTO2fx61syxXEwaONwikdVX5v/AK1UfDkF7FpFuu3AKl+T61qlZ7hdjvGNx53tt/lTlfmZUWuVXKp06dYCZZ5GRByzk4H5VyPiq+Ml9BYJDsS3bcXbq5YD9MV1Oo6jaabK9u8xkkTH7pSTnjjNcjdE3961xNy7HJwOnt9K3oUZTlzMmtUjGPLEZaxkw5ycE+lagnjmULdK0pAxvDkPj0J7/jVVYwq4HSn7yo4Xj2r0/ZpI4ru5o28+k27pJHpbSOAQxuZ9y59gAP51pzakkmmGCMyeY2AQCdqgHjH5VzSSZbhe9b2k6PqGrt5dnAX7FmOAPxNc1ajRklKq9EbU5zTtEzpw7q7Yyx5yTUuk2c2kTW+rTubd9zeTgje4II+Uduv3jx6VevNNvtMkCTQhXz8rBgy5HuKxPEiSS6ZLdySfvEKAAHAUZ6D055qK8lOyhsVC8bt7noV94kbVtDsLN4hFPGMStnIcAcDP+elZjXLeU1pAqtIzBg5/5Zj2rzbTbmfy97TSMe25yasr4rubRyixqSD1L9a4nRkjohiIS6HpVg62kgbzCXPGSeTXBeMdfXXPEeImzb2qeUhHQn+I/n/Ksy68TaheRGMMIlPB8vOfzrMsY99wynrUxp8t5SCrU5lZG9ph4atMHnNZ9lF5QIq6GrO9zJaHT+EtV/s3VN5ICOMGrGpeM4bjW7/ycAnfbvvzgjJ5HauXichgV4I71z9vORqVxKwB/ek/XmhU73ZrGeljonjCzK6kEdAR6Vz88amV1x3NbiXIkUgjBHOB6VkyxsLotjjNb03oZVNTGntwCeKpn5TxW3ew9xWQ8fJrW5ztFiFgyk98UC5WMnNV42MaNzVWZznr1qlqyGW5JftE6AetTSQnbUWlQFpPMYcDpWtJEPLyBWdR+8XDRFG3+VxXVaBfPb3SRO5wxAFcuCFcD1rcslEtuJBw8ZzU2KTPatEKi2Z+rt1/2QKjuZWF1J+83u42gdlFcjZ6vepbp9mIY/e2tkA49xVs+KLe4kRbiPyvlL7kIJH1zRvK5tBaHUWcIS1wzHLHmsDVr4yXZsIpFjRhguTgtxnr6VDrHiq1g0KWWC5R5Zl8uBQe5GP05qSddNiJuJ2ErBQqR56ADgAVhiIzcb3si4SUXeRFql/DpugyXETKyRqI4iDnLdB/jXlbyMXLMSWJ5z611Pi3V11B7e0tY9lvAu50Ufxntj2GPzrGt7KOSJZXOSTmuzDuLje5POpNsz0maGTcORnBrUjlWWE9wR0zVeWBFt4rnaGVfmkTpkAVTiuRDdlEDBGJKqeoFXNKe25D11PVvgtj/hNSQAGOlT7sHrieLFe9187fAx3/AOFk6hGSSg0uRlz6GWKvomqjscs/iCvnf9pM41jQP+uEv/oS19EV8/ftGWU1zqWhyRrlUglBP1ZacmkrslJvY8PhlKsuK0hOZIgGBrLjRkf5lxirwlUr3rmqJN6G8b2K7RYzVV8q/FW5PMKlgrbc9cVWbBBNaQFJDd5xRls5zSIjO+FBJ9q1fssNug8w5bAPNEpKI4QcjOXzA4OCCORxXZXJsb/TEvT8s7RkEdCGHX8KwJ7u2dlZByFwc+tRrfKoIIyDzWUnKWyN6fu3TOt0S8E2nxIWIljXaQe+Oh96z7g6lLdMEm3c9GOKxY9VZGGzAx0xXoczaK/hSG4gnj+1Oq8g5YN3zXLP91O7W50xvUhZdDnYoNVI2IioT1IkGadcWuuxjLSgAdP3uaqy3dwkiqtwzMxwFKnn8v6mo11m4kIjDqshYKFEAJJ+pPFdkINnFUnY0bXU9RtyvmS7uxAOf61vWXiFcBHZg3TmucvILm1umt7u5VmXHMaqw/Q0r28lqNxnQ4G5QY8Z/EE/ypTpIcKrPQ4LhpYyRk5Fc/q9zJESNxqzouvaYLILLeIs3TYc5z+VYd1dRazfzLE7mCNMsBlSxzj8hisIxdzobTRjXc8bMTMcgdcnFT6df2CrmO2Zm9fJJ/mRVmSwhSMSQxRB0YMcpnI9M9f1qhdaYmoXjzl2jEjZZI0+UH2yeK6o8ttTkfPc0pvEIVMrvVSOC0IUfnmltri8vjkqHXruTb/VqumOS40+3skVRDCoVVwM49zV6005LaARoqgn72BXLUnBPRHbShNrUybhols5pRuPk5DqwwQcZrldZjZBakrzsGQR36n+tdjNYxyCS4dVZR8gX3BJyfXqK53WusTYBZX4zU0mlLQdWLlHUvWMRvZ4XgQhYwC7HtWZ4ul8/U3x0RQtdPpFidLsP3nzPIu4nOcDrXJamGuJppGUguxNaUW5VG+xGK92mo9zmj15rV04jb+FZki7ZGFaGnnj8K9GG55Uti1/GKo3f3m+gq6T+8/E1Tuup+lWzNFc9KSlP3aaelTcsaajPWnmmd6ljQUtIKlSMnk5xUtlIaEY9qf5ZXvVgbUX2qFyzt8o4qUymiOhck4pSjDtScoc1VybDjGQM0wmn7y/AHNNKFeopIbGUUuKKYCU5OtMzT0PNJjW5biXJrTgj4rNjOMVowyDbiueV2zdDJx81VG4NXZeapyDmtaehnMQGlpmeakU11xZxyiNwaKfSEVRA3NOBpMUuKAHA04UwU8UALRRRQAUUUoFIYYopcUuKGNDcUopcUVJSYYpRSUopFF6y4bNdRZyYjBzXJ2zYauks5AUArhxJ10DehmB4pZTxxVSE9MVYOSK5UbsfDKAavwTAHrWQpw1Wo3IpsDZE429aRZBJ0rK+0ZO3PNWVkEaZY44qXqFx8mUYkmoGkzVS91WGMH5hmuduvEkaZww/OqjTb2G5pbnTtKq85qNrpPWuHn8TE9CaqHxDKW71qqEhe3iekQyBzxVsHiuF0vXGkYA5rWk1kw9Sa5pQlzcpupx5bnTrnFPwa5y38RI3BwK1rfVIZSBuFDoTWrRk8StkWnjLdaj2KnRatJIjDg5pzRBxwKqFo7owqznNbnZ/C05bV/+2P8A7PXolef/AAzj8ttV4xnyf/Z69Ar0oO8UzkSsgoooqxhRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWuT+MLbbHT/cTf+yV1ngT/knnhr/sFWv/AKKWuP8AjKcWGm/Sb/2SplsNbnz8332+tLTScsaUVxI7i/YT7HI9at3l2Y9Pn2swLABhng81kwsRIOe9S6ixCRx5PzMB+tXBXZM3pc6Oe5jRLOGRpIEeBQzHIXPqKrpmK5jxL5gbo3cj1q3dq81va/dk2xbQXbAGOwqxoGkJqWtSRTMIfLi8wDOdxHoauLSTbB3bOY1gGXWbpsnlhx+Aqui7enFWNX/d61dKG5D9a2PDnhSbXmRpNTsrGJzhTPIN7f7q/wCOPxr0IShTppyOaSbk0jC34oaQ7etey2/wi0ZbcCW9uriXHLZVRn6Af1NY+r+C9I8OXtoZZI3eaQiGFlYs5HJ744rCpj6ai2jSFGUmkczo3gu7vLBtRvbj7Lbhd4UJl2Hr7D612SX9hpVvp32Nj5UaBDGf4sfxfjzmp3v7nyVutLh+0JsKXUIGcr9O4x+Vcje2cslzNPa26xwO/wC7RX+7x09s8187WxFTEP33oepTpwhsdSkdjPNcTWEqTi65msrnAy3+yenf/wCvXGeJdL3+HdVeOCaOOIZaOQfMmCMfhSveMkwjLGKUcMGG1h/jWvpurOm6G8Rbq2ZdjpIN2V+h6itKU505XW3YJpTVmeX2UTrYrIEby/u7scZ9M+9dnoFlZWugxOy2MV/cEv51xb+b8vYA87fyrv7bStBe0HkaRZS2T4Z4o0wMgdcDvUkGk6dcW2Bpds2OItzsoQHoAA1dEsdGS1VjkWGlDU4aC311p1EGraeu7hdpVcn/AL5q7Z2l+5cakbCeQMd/mKjZP4DNdlp3hjQtUvBE9u8NzbKCXjYryD3B4pLnwBc2k01xZXQudxLbGG1uufpQpxqRuhXadmeeeJdOs7JbOa0iWJ5lPmKhOzI9AelYakV32v6Pc3mgx28Vsz3sVyzBRgEJgZOen61zEfhLXGP/AB6KM/3pkH9aPaQW7G4yfQzVPIqG9tLf7KLiNNkmSHx0J9a6RPBessOVth9Zx/Suc8SWd3pN2tlcOgZkEg2PkHrRGcZOyYOElq0M0GHzLG6uGyWlk2p9FGT+pqaSL5SSKuaBZeRbRys5ZCh/dk9GJ5NR3KSEsyxFU5PNaxmudoHF8tzNmhDoQfSueuoWic+ldZGqyLk1nXsCbugNdC2uYNanLNluBnmp4LIsA8h4qaRooWJwM9qryXTlepxVJszaNS2KI2xakEoaMj3rMspTnJPWkE7BnGf4qloEWJR1x1BzWnpN0oDKejDmsF5yWPPWi0uGSYcnGaaQHoVlcN5Eaq2OcfWq+qvLJ5NvAoGQWY9c4/8A1/pVfT3L2gcc7WqKSG4/tBpfOIjiAyQemRUXszeBlX3mT3MMZiETqxyo7ZPJArXkvp1fAcrwF68VV2StIXnVTKTlGToQeKGJ9R6461zYifNaHRGNRu9hfMfcz9NzEs3qT1qW2lkyyDHlqDg+hqrgZBIyD6VBeO6WoVeA7YOPQ0qDtMikrzSNBriJJFthtClSfm6Hvge9c5dXYS9DRfKg47de+a0b2BLMI8S7ShBDk5LH6Vhyo7XBUAs7H6ls16lHbU6alkk4ntnwIs5W8ZXl+xJT+zWj6dMyRkfoDX0FXgHwElT/AISS+ha2jWYWbgyAYOFeMY/M17/Uw2OarrIK8I/aD1L7Ff6NFhSJIZM59mWvd6+df2lf+Qv4f/64Tf8AoS05xUlZkxk4u6PGJLoOxbuaatwBxVbB9DT0gdzwpqeSKRpzybO58M6/pENm1nfxBWYYDsuVP19K53UktpdTm+yACHPG3pVaKwcjJqzFbBcLmuRQhTm5Re50Sm5xSZAJUtmGxcnvVaaRpZC7Z5rTa1AYcfjUyW0ZHK/pV+1jHUWtrGB3qQEAYrTmtI93HFVpLFiCV5rRVYyJSsUhwcVNHNJGcBjj0zTDGygh1wRTlRnKkKTVuzKhdbHRaYv2u3MsjkMuTx61tW1szKJPJQn++yr/AIUnh/SJBpcjSQsdykjArovDNpDdWW2RBuQ4Oa5PaWlZHR7O8dTHt9PeaQEtwPSqmo2dwm9o1BRQWY9gAM16AbCCJcjGKzbiytpl8n5GeRtuN3IHc4+lN1miY0L7MseFNMWHTY3YiNnGSqjFZHi3STa6lb3ULlIpx5EjjI2EnKnj34/Gu2s4AsXC4A6Co9QgSaFo5V3Iw5BrnVZr3jpdFNcpxulWINqIpW81wMFiOtSvoUZcOh2n0xxUk0qWMqiR2Cg/fC5BrQtZIZPmEu7PtiuiLurpmDVtGiG309YACwB/4DSTKIo3Oef5VqtLbInzAt7Fv8KpX11AAPLEYJ6ADJrmqaO7OmndowrxGgskjP33BkYemeR+mK43V23zwpgnnoO9ehHSbjUtzNKqseRu5JFc/c+C9T/tOOUNCyqcldxBP6U6dSPNdk1oy5NCfTGS4SOCLJBGCTnpV3VNCg+xM4AGBmmmw1KOQmKzbK8ABl/xqvfNr0kDR/2bP+h/kTSU7S91nLVU56yR5lqcIgvXVelPsDirep6NqyTtLPp9yoP8XlHAqpZqVYgj6161OaaWp504tdCck+Z+NV7n+lWWUh8kEDPeq86M/wB3B+hrVszSZW7CkI4qcW0p6rtHqaeLQE4Mw/BTU3Rpysok0w9a1Fs41ySN/wBeP5U9LSNjuMKKO+STSbGoMy4sFuavEqsQ4q19li7QofpxUUtmrDCMyEdm5BpWHy2M53y3HAqWORR1qOaCWLl0OD36j86hJOKLCuWzKpPHSmSsCtV6Mn1pcocxbtwvRqfMF6DnFU1kINWFyy80rWdx3uiE8U2pGTmmbaq6CzGGrEFvJIeBTEjywzXW6Dp6Tooxk5rOpUUUVCDbMePS7h1yozThbzQHDqRivSIbG2tYt0igYHOa57V1hkZhHjJHauZVLnQ4W3OYZuKhcZqWUFGIPaoN3NdcDmnuNK0Din8Uw9a1Rk1ceDTutRZxTg1amLVh+KMUq808IT2oFYjxThUwt2Pani0c9jRcLFegVa+xyH+E0fYnx9007oLMrUtTtauOxqMwuOxpBZjaUUhBHUUA0rjsOpDS0hFAxKeq00DmpFqWWh8XDVuafJnAzWECAQa0rCYCQYNceIWlzrw71sdNBIAeavqQy1lxnIyKuxSYWuJM65RFbCnJp3mAJmq1zOqDLECsa71qKJCofmqSbJbSNiW8ji+ct0rn9U8TkZSM5rIudRluCfmIX61muhY1rCCW5jJt7DrjUri4YlnIHtVVmYnkmrMdsTyRTZYDuCopJ9q3jNLRGUoPdkK804AE9av2mj3EpGUYfhW5beGiSNymrlVityFBtmVpeRMtbV0mU561vWvh6GNF4GasT6AJR8ormdROfMbp2hynHInephNJFyrHit0+GbgZ25qpPoV6inERau2FWm1a5ySpz3SILbXZ4WG4nFdHp/iFJCA5xXHz2U0X34mX6iooy0bDaSDTdGEtjNykj6L+GdwtwNUZTkDyv/Z67+vIvgdO0ya4rfw/Z/8A2pXrtSo8uhcW2rsKKKKZQUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilrjPjS22y0v3E3/ALJXZ+BP+SeeGv8AsFWv/opa4f43ttstJ/7b/wDslTP4So7ngp6mlFRu2KcrAiuM7B6nDAjsa07mSS/n021Pz5fOAoz0rKzzXW+DCtx4nsXZVC28Dc46k0X5dQeqNV7S5eBLRUw0ZGFI4xV2xnSwuHjdQlwY9o3pgHHYVtag/wBkvRqIVtw65HWp4g/ihIEuVjWJjuRYwNx9yaxcubQpPqcDeaZor6n502oLHO0gcxNIp3cg4Ir0bOh6raGXT7SCW4h5MNvgOpx0Iz0rlNV+CQe6uLm01oBpCWjE67dp9yK8t1LT9U8Ja5Lbm58q7hP+ttpchh2II/rVKm5rllJsHNJ3SPe7TV21GZbe3e+tLqJfmgwoYfgw5/Cm+K9Cj8SPaXV5f3dr9hU7dsGcHOSxIPXgdq8n034r61bIsWow2+oInAaQbX/MVu2/xfhlR43aeyLkfN5YkC/Tmp+qyWwe3XU2bS+uNPuS0bqXjwDJtKq+c4ODyCetWLmW21mYTXUi2lyDl5I1+V/94evvXK3+rJrQcweKrK5805YXMPkuD9elMt9O1mGD9xdx3Ix91blWVv1rOWBe8DWOJi9zoryx065tniVfN2jHmyknb7gjgVy9vcGykMUjkqp+Vj3HtV5m15Igq6M/I58tgf61nXC646bX8O3OPVVqFhqm1ivbQ7luO/ns9QjNu5VHIHXIYH1rsrfUBZ3E1q+0xghlYqCPoa81jj1hLuAHRrpVVh98YwM11GpXEFhMZL22nlDAOGjm2mm8PJqzQvbRvoeiWGpl5RNaxxJKVKkHhj9fat+DUvPBRivmKPnUcBffNeQWnivRWE9ylteLLFGXOZwpbkDHTrzUkfjnVZiU07Tkt426vsLsfqxqI0akHvoKUoyWiPUrd0/4SUMANr27b/fkVkeJ47PT7iJ0jAMwLNGo6e/tnP6VyMmvazp9kk1gou758+Y7Lu8sH/8AV0rL0rU73UrqYat5jXC/MWkGMj0NTXSdOxVLmU7nYWF9G6tiFgPpxXBeP4V1bxTpdnboRKYwZFzztyWJ/IGuwtGjjOQVC+3Ssi8sPL8V6jrDSBkbTjHbkMD83AYfln86jCKKnc1rv3bFC20tmctBqRiRgdsYi3AEfjSroFo0wa9vbi5x/CPkX9M1UF0lohnMmzbyig8tWxp73F5GJbhRGD90d66YUK9d2gc86lOmveMXW4ILeeNLWEIm3oormr0SRqXaNgPcV6c1tEeSik+prifGL4xGMAY6CvYjgnSpe87s894lTn7qOBMbOGlPSo2hfyN+OK6i70oW2mQD+JlDGs6WIfY2AHSpcXHRi5+bYyImKKKYzYkb3p7DatROMkGpS1K6DS3INOjbEgIqMgk4p8SljjvVNaAtzsPDd5G++BzjcOKnvbqS2NxhWyjgfe656GuYtXeCQOuQRXTxSJqdlIjnbIy8n3FY3V9S5JuLsyib55LV2YFT91SO3So3uXtrho2CSqvAI4p5VrONY3j3BlYuD25H+FU/JUWom3DO/aVzzinKEHKzWgqabiubclkllt5UuMo28YCddtS2qyF2iu1wrpuFZ6JvlCk7QzfePQVehuZIr9YpCXULzIR27VFanGC03NL3Lq2iGYO58xE5RMcZP86xroKbkPEvlSRtt2g4Psa2rlDcQhUm8sE/fHf2FZ1+0byxKu1pCw3EDrTwt3eUht6HpfwCuN/jnUIio3fYZnLeuZYuK+iq8B+BekpB4wv72K4VkTTzCyMcMzM0bEgegKkE/Svfq3ha2hzVN9Qr58/aMi83WNB/64S/+hLX0HXhfx9i8zVtDPpDL/6EtKrLli2FNXlY8MisgDyKvQ2oDDAq4YwgzihCM5rz5VXI61FIa0Gxc1VKkSj61bmmGDzVAynePrShdjZdDLgDFQmXGQBQZBtDVUeeqjC4MlLhn5qRfvdaqq4JyaDLiQc1fKQWpLeIyo0v3Mjdj07118tzolx9lhtoo1EZzkLjA964uWbcBzxRBNg8Eg9jWU6LnZtvQ6KWIdNONtz1i2eFoMQhVwOqjrVfw1OLa8uISAQWyK5fRdXaJ1jdjjPetCzufL1hiD8pPapgmmbSqKUbo7a+vgIG24GBWTo2myTKdRkOFLHyx6j1qveStMixq3BPIqaDXhYWscFxG6ogA3BcjH4VVVSa90KEoqV5M62FtzKgXORyfSi7TZHgg4PaqFnqKOiyxyKVI6g9aL/VUlgGSF2DrWaprksauXvGDe2a3cdxGfvYOCexrnrG8e2lEUueOKsXHiES3DxwMMngv2FVLzy3jyHAcd6qlGUdGFaUZao1pruN1AOfzpdPU3moRhfup8zVyrX5Rtrk5rsvDwS0h3TNtmlwxX0Xt/jWdZO5VKSsatvC8Mhfd8vvxUv9oREkKDLt4O0Z5qKZm1K4Fpat+7A3SOvZf/r1YjtxbokEahYV6Y5z7moe1kNau7F+0faFzFGquP7x6UQxuqlZBuJOWYHr+FTRxxrIHOFUdzxinG5id8Q/P/tHhf8A69Yyi+pSa6ERt4W6r+Oax9V8OaffofNiUP2deGH41tyK5kBYlvYcCkMLM3zcL/WlFuOsQaTVpI8q1TwXcRO5tJhOB/yzkO1vz6Vzs9te2GVmtHgPTLr1/HpXt9xZwysFPB/2RWdc6eY87SGXHKnvXZDHVI6SVzlng4S1joeNNIVXDEFyecCnD5Bt6u36V3mo+FrC+bzIUFrcddyD5WPuv/6q5W90DUdNcvLFvj/56R/MPx7iu6liqdTyZyVMPOn5ooZ2sF9OaezfKB+NQA7pM54NOZv3oA7V1JdTnJt3HWmb8sB60hIFJF8z7j2piJ2KlipC4xggjg1lXVqgYvDwvcHtVx5d0oUHqcGnygSArigTVzG2YpMVNJlJGQjpURpGdhverUZ4qqOtW4hxSkVAR6jzUslQZ5pWNGWI8Eiuz8MHBT61xUR+YV2nhjqv1rkxPwm1H4jf1qU/ZzHnG6sWOGOSNnY/MFq3rcxNyiD+7WQ9x5SFc9c1nTT0NJ9TGv8AH2hsVQZsVYuXLOTVRzk16EFocM9xwf3pd1RUma1sZNkpagNzURalQ5PNUiHqaEC7q0YYM44qnZjNbVugwKTZSQsVrkdKtx2Y9KljAFWkIFK47FcWQ9KU2Q9KvAin5BFK4GQ9kPSq0ll14rcYVCyA5pXZVjnJrPHaqMkBU11MsAI6Vl3NtjPFCYuUxhSGppoyrGoc1aZDQZxQGpOtKkbO2FGaGCFLcVHb3ZhuBk8VO9uyLzWPcsVf3rKaurGsHZ3PQ7OcPCrA8VcM4SIsccVzGh3wktwrHkD1p2q6qI4mjU89sV5fI+blPUck48xFq+t72KR+tYPml2yxyagJJOTyTSg12xgkjicm2WxJnvUiFc1SUmtKxsZbhhwcVE0ktSk7k8MbSkBen0rastIBIdl/MVdsNLWFQWHatPAC4FcjnroataakUcSRABVFXIl3OoqsBzU0UuxxTV3sQ2lua0cPzrzmrYIQ5qhFdHzAKl372quSXUw51fQvLPnipQUYYZRVJWAqVZKlx7GimOm063nByo5rBv8AwtG+WiG0+1dCr1Or1UZzhswajLc1PgvYS2L66so+99nx/wCRK9Xrivh+qg6iV7+Vn/x+u1r0Kc3OKkznlFRdkFFFFWIKKKKACiiigAooooAKKKKAOf8AAn/JPPDX/YKtf/RS1wvxx/49NI/7b/8AtOu68Cf8k88Nf9gq1/8ARS1xHxsANvpCnuJ//adKSuhp2Z8+SHr9aSNz0om+WR19DUMbc1xpHXcthq67wHKkeqyM7Ip2YXcetcYGzWrolz5N0Tk49qU1oUj1DxFqStHHaiRSW5IQdvrWZf2txpdhFJp80m+6KgBWIbn0Irn/ALfLM7qkZ6/eNXX1u4fT1t5RuMTqY2HBXHvXN0KVjaTwZrs9otwt0pmIzJBIxDA/73II981Xn+GN/qALXQt/MPcynI/ECmaf46u9Pfbet5tu3PmE/Mp9/UV0Np48tLlNyyZA9KpQvqmDm1ocpL8Epiu9dVjQDllZS35GqifBS7dQ39tW4/7YscfrXbr47tp5Taod0jfKAeBXT282YVk2np0rZTkupk0meTw/AqeRh5niC2C/7EDE/wAxTLr4Javbn/QtWjmHuuz+tetNeIGxnkdsVKk9ySPLQgdcmqVaRPIjxxvhd4jgISO+uvMPonH5hqydZ8I+M9GjMn+m3EIHzNGGO33IBNfQ0UsgjHmHLd8CpRJ7/rVe1YuRHyI1zqcsgJnnc5B+8TXtXiDT7fU9F0+5bcoNsqttxwQPQ/Wui8SeD1vA11pOyC5OS8QGFkPt6GuT1S7+w6FBBc7zcTb4mQnaYZE/veuR/KsJ1JT0taxtCMVqY66UlrYIbCOKWQj5/OXcwx3B7VDLqb7BuLBlGGUH0rFtL6583CykENkc8Crv2C8lbEMLS7mwHXHJNcbi/tHWnbYmi1u5i3rEhEbdc1astZaN23QCYuOWzk/hWBKk9tMqyI656lh19qvyNcPEvk2xAXoEXJP5UnCK0sNSZ1CCG4sWuluAMH5Y93I+tMgFtLqzx6jdEQzwCJH/ALpHK/UZyD9a5Gzv1a9KumZGP3QOf/rVoy2jyyOJLgrGy4RF6rWlHD1HO8URVqRUbSNyHQrWBwSXODnDHIH49x9avCZFJ3HaO1NsbZ4rNFkYnauBk5JqKWAuxPBr6PDQUFZHjV5OT1HTagkaFlLNgV5xr+pPeakqkbVDV6EYcqVxgelcRqmmE3Vwqj94DuUVeITcVYilZMfr15thiXttFUdPj+26dO3eq2s3P2qC3UfewARTtKuXsbeSFwQGHWudtOd3sVZqNkZd5CY881VClkNWrmcSzsO3ao4l/dn2rnbszdbEIiLEGpxGFUSjt1FSog8vd6UwNuWRPbIqW2NE6OuQw5B61s2MTKokjPFc3bOdxQ10+iyq0DITioasyriX37wYJIbHFZMp3TACMoBgY9a1dW3xOhRA4PUZwar2k8c0u0NtYHJV/lP603V5LNK4k5IsQWRe3SORgFDbjnHNTBSwOcDAxwMZ9qk8+NFILpt6j5gMVB9rgUEmeMZP94VxVK056JWLG26SRrtk25A4K8VnfZU/teKM7jG0g3EDJxntVtr234IlHXBC00SwSXMexjxknGQeB61dKc4t+YHsXwdltB4uuYLSSR0/s92IlAyuJI+B7c17dXgPwRmR/Gs8aknGlyN83J/1sWefSvfq7aD9wzrfEFeKfHNc6lo/tDJ/MV7XXifx0fZqWjn/AKYyfzFTif4THQ+NHj1yWwfaqkc/BGaLy7AYqKz/AD9rVy06bcTqk1csyuxUnNVPNP5U158qcH1qsJCcjPWuiFPQzc1c0/NBgznmqe4mk3lY8ZqNXwacYWByRYU8ZqN3INBf5eKjJppEtkxlyKkSVVTJODVboBRyRQ4oDRivcYYHDCtS01U/bEct0rnEU4qSGQrICKzdNdBqTR3P/CRYJkyB6VTuNYubiExKhdpP7oJxWFFG0zrj71bNo1yqrHHMEwDk7cH86rl0GpamdpWo63ZzH7OJGQ4JjwSPw9K2NWuNbudPBjjcRsP3u0YK+1OSwu2j+0CaMkc8tg0twmo3Emy4vI9q9S75A4z2quVX2LUWluzmPs9/bE/upQDz+VWJr66jCplskZC9zVyW23MUSVpZOgCDqK9P8J2GnaRpEKW9u0966B5pBAzuWPUZxxjpWNaoo9Ls1pUr7uyOT8F+Fb3VJBqt9ZyNbxtiOJhjzGHc57D9TXUauyLCwgiKzh9qoRyWzwBXe6fMz2J3W00afe5iYM31GK4i7k3+J986On2f97tZSvzE4Uc/54rmlG69o/uOmm18CNjRtM/s3Swj4a7mO+Yj1P8AD9BV02qopeTaFHOTUVpeJIwJI9+ayPEWqSXbJptm2JZThmH8K9z/AJ9qmELasU5dEZ97fNqeoeVboTZQkl5OzMO3uBWhbkNln+92FXLLTore0SCNAFC9KrX0sVj2G/sBVSipbhGbii+s0NtDvnkVV96rPd/aJcRDy4h1kcfyFc9LHd3sqXUxKQp9xD/6Ea0vtqKiBmACjuaylTstC4TT3LxSNOU3Ox6sxyahCncd/Ofaq51m0RgqP5rngiMbj+lWXuiyALbzGQ8j5CD+VRyXLc0jLurXypiAPlPI9qiMbEc/rV+6S6iZHu4JLdDyGlQqD+dEkasmRjjuDWc4WZUZKSOE17wwzObywi+fq8Sj73uPf2riwcTsD245r2tAD1rhPGuhrbyDU7ePAc7ZwBxns39Pyr0MHinf2czixWH054nIO3zcUobYh9aiJ3TEjsKSV/lJPevTZ5wtvzNn0HNWF+Zs1XiGyEk9WqSI9KQ0RXsGR5oHI61RNbYAdSD0PFY08ZilZD2NImSsMHWrUf3aqL96rafdpsmIyQ1BnmpZTUIPNIpssRHkV23hnhR9a4u3XJFdr4cXCCuTEbHRR3LGqDfqQHoorIuIGYk1tXYzqZ/3RUDoMHiqpr3UXLc5aeEgniqDcMQa6G7hwW47VhToQ9dMGclSOpDSYzTsHFNrVHOxCKVeGopBwaok1rJ8Yrdt2BArm7RsYrbtn4FSy0a6EcVOp4qjG/FWUbIpDLQbipFaq4NOzxQBMWzTCRTN/vUbSVLGh5OarzIHBpxanDkVBdjCvIcZrKbIfFb18ODWEyl5sL1rZGLFAz0Ga0bOPZGCV5qW1sQqZ6k1Ljy+McUrlcjY2SMPEciubvLYtIdo71uyTuX8sDCnqabNbApnHasakmnob04aamJDI9mw7ZqO4mM0hY1Y1CLa6fSqLHis4pPXqW20rCE0LlmwMk+lLFG8sgVQSTXVaRoI2B5B+YqpzUUQotmVp2lzXMilkIXNdvZ2Udsg4GcURwxwDYi8+tWhwBXBWm2dFOKFBFITzSE4FN96yiipvQlGMU6KAySioVJq9Z5U5rZNrYwcb6ssxWhDDrVxYQtMhZi2asAZ5NNt9SVGPQZspQhFTBRTsAClzD5SNc1KuRQAKf1pisdx8Pumo/8AbL/2au2riPh7/wAxH/tl/wCz129d1H4EZS3CiiitSQooooAKKKKACiiigAooooA5/wACf8k88Nf9gq1/9FLXAfHS4WBdCDHG77R/7Trv/An/ACTzw1/2CrX/ANFLWL8Rvh03j7+zdurf2f8AYvN/5d/N379n+0uMbPfrSd7aDW+p8u3WGmYg9aiSL3r23/hnST/obf8Aynf/AG2kP7Okv/Q3f+U7/wC21jySNvaI8bSNcckVat2jhcNuH516yf2cpT/zN/8A5Tf/ALbTD+zfKf8AmcP/ACm//baTpN7h7RHna6tBEM7xmoZtehIxn3r0g/s2SHr4wP8A4Lf/ALbTD+zQx/5nA/8Agt/+20LDpE+0PI9Q1dJoyq/zrHTUbmIFY5nUH0avc/8Ahmb/AKm7/wApv/22j/hmb/qbv/Kb/wDba0jTSJc2zxnQ72T+27ZpZiF35JZq+idO1zTksY919COP74rAh/Zr8qUP/wAJZnHb+zv/ALbXQQ/BJoYwg8RZx3+xf/bKyqwk37qNISjb3mT/APCS6Sp/4/oifY5pjeLNJQf8fJb/AHUJqRfg5Iv/ADMP/kl/9spP+FNvnP8AwkP/AJJ//bKw5Kv8v4mvNS/mKzeNdOUZWO4f6JioG8e2ynCWc5+rAVoj4OMBj/hIP/JP/wC2U4fB04517/yT/wDs6Xs638o+aj3MR/iCrO0KWcgfbkfOK5PU9TtrnTriO4hJvHyylscfQ16FJ8F/MQj/AISAq38LCz6f+P1Wm+BzXMYWfxJuYDAYWOD/AOjK19lNrVDVSknueC/bBBu52sM4Bq/Zah55Xkpj7xB616rcfs4+fIXHisr7f2fn/wBqUkH7OUtu+6PxeQf+wb/9toeGuiXiEcJFf2Jh8i7LjuAOV9s1fj8QJYiOO1f7IcbCyLyQfQ12X/DPc/mmQ+LySRghtOyP/RlTP8AHdEB8U8r3/s//AO2VhLByZUcSlueP3Eiy3n2kt5Zj6Ljlveui0J/tRNxIwIU/KB6V6RH8CgExL4i8xgMKTYjgfTfVq0+CkVjCsUGuEKOubXOT/wB9104eE4O0tEZ1qkZao5NZ1ZBjNNIBP9a7yP4Usgwdbz/26f8A2dSD4W46az/5K/8A2derGpBLc89xkzz5zjryOxrG1a0JZLqIZZeor1tvhduGP7Zx/wBuv/2dRH4UEgg63wf+nT/7OiVSEla4KMkz57vNMfzo5duAz9KW+VYLVoXX5v4TXu1z8GBcKo/t7btOR/of/wBnVG/+BH27b/xUewjv9hz/AO1K53ypPlNdXufOkkexgx9am4VD7ivd5v2dVmVR/wAJRgjv/Z//ANsqJv2cSwx/wleP+4d/9trCUWaKSPC4n4Ze2KbDy5z6EV7sv7OG3/ma/wDynf8A22kX9nArnHiz/wAp3/22k4sOZHg+AkoNa+lTgT7c9a9eb9mwt/zN3/lO/wDttSwfs5tBKHHizOO39nf/AG2hwY1JHmF5h4lYjJWqTRwTACSMN9a9vHwJ+QqfEmc/9OP/ANsqH/hQIzn/AISX/wAkf/tlc9SjNu6NoVYpWZ4i2n2rcqgU/TNRG0Cj5Qpr3M/ALP8AzM3/AJIf/bKT/hQH/Uz/APkh/wDbKlU63UftKZ4SUYfwdKfaMRc9OiN/Kvcf+GfzjjxRj/tw/wDtlEX7P5ikL/8ACUZyCMfYP/tlaRpz6oTnDuYnwMH/ABXtx040iQf+Roq+hq8+8EfDH/hDdfl1T+1/tm+0Nt5f2by8ZZW3Z3n+70x3r0Gt6aajZmNRpyugrwj9oGXy9U0T3hl/9CWvd68A/aJYLquhEnH7iX/0JaKivGwUnaR4lcP8+SaqvJk0sz7jxURojGyKnPUcGODTFOGFHSlH3hV2M76k7twBUY60rEECkqUtCnLUcDgU4EYqPNOH3aTRSkGeakXpUI65p+7ik0NMmShflJNNiPrT8ZBNQy73L1pOUw3pWoboMglUkMBxWVpdvJeTi3iAaVzhFJxuPpRIzW00kEqlHBIZW4wakcXqXW1nLACNtxPAXnJrsNL8G3t1PAdSjkV5FDLZQsDLg/3/AO5+PPtWh4E8AzefHdzxn+0nw6I6ZW1jIyHbP8ZByB2HPXFe26VpFnotvsgQGZjmSZuWc9zRGEqj93Rdy51+Rd2crongme1gEaQW9hEQCwQAufTnr/KtweGLKNB517MQPWTANL4svdTsfDN9faZJbx3NtGZv9IUshVRlhgd8CuOvvG2pwySxeTaSBI9O+8hPz3H3+/YdK3hh6celzilUqT1bsdkdB09Q3lXZiyckpKVI/HNcPrl1E2omylvJbgw8RvI5YjvwT1qSPxfev4huLOXTbBrE3N3bRPHkSgwru3MOhB4/Gq9te6f4k8PedE8W5owxC4Jikxn8CDWOIpJ2UVY68HKzbkzIupX0y1ll8zIxnn09aqaDcNJcvc3C7ZZME56AdhSX5nuGghkikdRhpfLUtjHbiryrb3FuTA657le2K53GyOpt7M35dThtrZpSQOM/SuXsbtdX1KS5Y4jU4jB7+/0rO1oXkiCMKzQ8M/qV9R/ntSJbzbQbMllUDoemen8v0NJLqxyOqvLtLeLkgu3AUDJY+wrlNf1LSLa0RLp5DfZJe3jYNj0GOg+pP4Vh6x4jaJPsmmz75iNs12Ov+6h7D371hR6Pey6bc6gkJNtbOqTyEj5WY4AweSfoK7sPgnP3p6I86vi1H3Yal2bxITlYYZQo6AzYA/BQP51p6ZqcqKk72UM/GcTM5H/oXHNVU8B6+81vELJQ9xbNdRgyoMxrjJPPHUcda2LHw14l/s5JY9IjKmHzUjaZRI0f94JnOOR+db4nD2S9kVga1Jyl9Y/L/Irp8QdVs2e3E93HGCR5azmSPHpsk3KR+FSW3jDz23GCAOTz5P7hj/wHlD+QqtqPgfxHbn7TcWMUEbhGDtcIF+Y4UZJ6n0q/B4Rk0vTNTbxHps9rLGIzDfiZDHCx7FQfmB9skVFTD03TV1qQqjVZ8j0vobdrqUFyd0cjOigBi0ZQox7OvOPr0NTahHHeWUtvLgpIpU/jXm9lq9xpV+JIbokLlA68/KeCMHqp/unj6V31vqlhqaRyWKtFlP3luxLLGwOMq3dDngHkHIPavIxODdH34npYbFqq+SR5PNDJazzQSjDo5U5HpUB+eQL2HNdZ4z0xo5xfxIdpGJfb0P8AT8q5ND5Yy3U16NGoqkFI46tN05uJJI2AB3p8QIGTUKAltzfhTmfJwOtaEIto2eaqakg+Rx9DVmI7U560l1F5tuQOo5FMJK6MhB81XVX5app1q2HwtRJvoRBEEo5qILzU7nJpgxTT0BrUt2qjjNdp4eGF4rioGAYV2/h0ZQGuLEaI6qS1Jbw41Me6io+ppmqSiO/Q/wCzSQvuGa1p35UOW5XuotwPFYlzB81dJPjaTWNOAzVrexlKNzLaDjpVWSIo1bnlBhxVeW2JPStoyOacDHpKuS2pGcCq7ROvVa1TMWiSB9prVt5sYrGXctTpKV602rivY6GO5HrVyKcYHNc2lzjvVmO8H96ocSlNHSLOMdad54x1rAW9AH3qeL0f3qVmO6Nkze9M831NZX2setJ9rHrUuLKujXWQetP81QDWP9sA7003o9aOVhzImvZQQazrYAy596Se43ng1FbsQ/41drIhNNnS27Ap2qC4mX5gnJ9fSoYpHZNq8UvkOBnHBrK52qzQy2j8x8nmr00QEP4VHbDacYqW8lVYcDrWctSoKyOZ1UjegHZeaoxW0lw4VFJFa66dNfXGdhIrpLLSYrVAWAzWDqqKshONzP0jQ1iw7jp610W0RrtXgCkQ8egpsso+6Kxcr6sLCqATmpDTI/u5NOJ4rC92bJWQ0nFNL44oJ5ph61rFaGUnqSxkk1r2wCoOKy4lBIFbMW0IBVqNzOUi1EQB0qUGogQAOaXdRykqViTJo31HupCapQJlMn38U8PxVXdUivxV8hnznf8Aw6bd/aX/AGy/9nrua4T4cHP9p/8AbL/2eu7rqpq0UF76hRRRVgFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv8AsFWv/opa6Cuf8Cf8k88Nf9gq1/8ARS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXzx+0kf8AibaB/wBcJf8A0Ja+h6+ef2kRnV9A/wCuEv8A6EtA0eGUuzinFMjNSqp200Ig25FIRg1MFwx4pm3JNFgDGQKTFSItKFyaLCbIcYp44WnMtMJycVLRSY0U7NBGKaDzSsUmTKcVZGNlUwasxtkVlNGsS1p7bL1SDg54Oa6DX4Y77XtJuV3M98U8/OPv7trH8ev41y8cnlzK47GuiFyr6lo5J+5Mv6sKzk7alJan0n4SgaLRftkpzPeO0sjHrjPSttRn5jWZ4elWbw9ZlOgTbj3BrUzhB6V2U7KmrHLLWbbOP+I+t2+m+GbvT5Fcz6haXKRFQMLtiLEn8K4O+TfqlxERnN9o0X5JnFdf8RvDOq+I105tN+z/ALrzo5vOfaFSVNhb3wM1WvdG8MjxLBqitd3t/GY8W8EmY3kRdqsR6gD1pynGHxMqFKdTSCOO0iOO78VXT6ekkmomXVDdbM/cIKxg9uST0rf0/Sb218L6Va6w9to7ae6OqW7CSWcBSDvHTJJ9+P06EC7VPKiW20mGWcJ5cCgyO55OSO/OTWJ4gsILOaFoZJX8xCzGU5bIbGf0rmq4nli3FfeejhsApTUZy18hLfU7KfUp5IwY8t8ivwSPas6/ihXUJJI3UeYB8o7nuaqMuQSQKSBP368V58sS3GzR7ay6CldPQzvGt1Np2hRXNkdgjmAG4bv3bjO38CP1rnU1W7h8Iy3Esmbi+YIpHBC98enAx+NdH8R9sXhGMEDL+UoJ65yT/KuUubYz+ENMkiyyoBux2JJH8xXVQtLk5u58/XvFzUehz8a5A4+U8dOtepfD/QrTxB4V1LQ5r+O2murlJACRvKIAxKg9a8zjjKbtwIIOM9Rn0r1L4WtHNpepQ6fJaJr/AJivH9rj3K8IxlfoeQSOmRX0FSyhc8KN3Ox1K6x4fLWuoLq9sXg02SwS0MgEhkYrwQf936d6bHDpXjqKwaDVWikt7JkNnDKFm80YypB+8PlPfB4NXPAmmLH4e+y39nGt1d3F00ilA23DbcZx0HaqXh+wjtfB/heNoYxKmreWzbRlsPIME+nFccpRVzrjGTGeLr7TvEfh6fQbS+tXvFtFuYiJVH7yM5ZD2DbQ36+lch498Txav4H8OQR6jDPcMoe8ijcFlcIANw6jqfxrtfGenQeGtN1rxFY29szyyWsnlyRhlEiyYPHoQRn3Fc/8SNalh8FaQqWdiravb7rgiAAqcI3yHtyaKdm1Yc7pO55pbaZbagj3aTQW8Uau0sZdsoBnAXg5456noe5Fa8OpxG6tL37X9p2bI5VVBGRHgJggdxgHPfA+tcj5bfeYhVz1NX9LXMWocn5Ylxk9DnI/lU4ymnBtseGk1JWO9vYUu7Vkcbo5F5z3BFeX3tnJZ6hLBJ/yzPB9R2r1KBf9DjVuoQA/lXM+JtMN3bG4iX9/COmPvL3FeDhKvs58r2Z7uKpc8Obqji3fHA60+JdvJ5JqNF53NUoPftXr3PLW5Mp5qdCG6dBVRWycLVlPlU/SmijLmj8u4Ze2cinA8VNdLudGHcVXK4qWQtBGpopTSqOaNkMli++K7TSbkWtlvPXFccgAYVoteMIBGp61z1KftNDVT5NS/Ndm6uN57cVet2wtY1vxitSNiFq7WVkKLvqya4k+XGazJDzU1xKRVMvlqBtliM1PjcOlVozU6NWkTOSGPACOKga0yelXl5qVUBq7mTiY7WXtUT2Z9K3/ACVNMa3B7VSmQ4HPNbsKZsdeK3XtfaoHtOvFaKZk4GT8w704Owq61qfSm/ZvanzInkaK4kagO1Whan0p4tfajmRXKynlqcsbNV5bX2q3DZ8Dipc0UqbMj7O/bNTQQEdRWx9j9qabcKaynVNYUdR1pEOM1cdABjFV4iENSvJmsea51qFiFjsbiodpuJ1TmiZtzhRnJOK3NP0wNeA44VRk1lWmooaV2SW1qlugwvzUsgJOBWlPBs5qkV5JrhjO+pclbQhdgkeKgjQyPuPSpnXe2O1SRx46CiUtNAURQvGBSMCBVlUAGTUT88UobimysaTFSlaZg5rsitDlk9SWHO8VooxG0VnwEB6uhhuFbwijlqS1LobjrTw1Rw4bipChX3FOybFzNIeDmlpi9aeDT5URziGlQ5OKRuDSKcGiwKR6J8Nxgal/2y/9nru64T4bnI1L/tl/7PXd1pHY2jsFFFFUUFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv+wVa/8Aopa6Cuf8Cf8AJPPDX/YKtf8A0UtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV89ftIf8AIY0Af9MJf/Qlr6Fr54/aRz/bGgH/AKYS/wDoS0AeKIhzVhU+Wo4mBXFSp8vBrRIhuw3Z81RFeTVzGTTHTDZp2J5iBF45pwXAqQkDig9KLBzETL8tQhOSasFc1G2BkVLRSZAetNPWnsuaYeKzaNEKpqdDiqwqaPk1nJGsSZV3NVuWVlMcik7oyCvtio4xtGcUSgmMms1qzTY+jvhz4itLzRjGbhVU/OoLdOOfxHQj2HrWzqHi+3g3LaQtM3Tc3C/418u6F4gu9CvVlgdjHuBePccH3+vvXtPhzXdO8UwqYpViuP41OBz647fTpWNedalDlhsdOFhh5VHKqaGo61f6jlZrgiM/8s04X/69dDp89jDY6cqy26uDGzDcoOcHPuD061hX3h69tRvEW5MZDIcj/wCtUNk8VqD9os5nkJJEiEgqMcDg+vNcVKtOM259e57dWjSqUl7LZdjcjYJFbKfsaKL8vIBKD5YyMFTnvWR4kuFubm1dXVz5PzFSCB8x9Pah72zkj2NDfMhA3KWJz+vryetZn2GaR3YRMkeSQW4wO1VWr3jyrqLDYdRmpvSxVfkhRVu0s/MfLEIoHzO3AQdyfYVOlrDbxCaaZFGcAt3+g6n+Vcd4q8d29vbvp2jAPLn5525wfX3I9OgrOlSlVdkisZj4Uo2i7syfiZrUV5eR6fbvuhjbfjuABhQfQ9Tj3qLwPd215ZXuhXbhfOjYQnvz1A9wQG/OuMkLSMzuxZmOSxOST61ECySBlJVgcgg9DXr+wtDl6o+Z9pdtnR6ppM2j30lpeL5MijcjjlJR2K+oNdL4Q8VXWgwzRadpVvfSKxljeYYkhZl2nGOq4Ht1qtoviqw1rTv7F8RxiRCcpJkKQ/8AeVv4W9expmo+D9Q08CfS5W1G0LfL5QImT6r3/Cu2lilJck9GcdSg0+aOx1+mfEnXtNgshJocrRQCQ3JwczMSW3H5flAJJ9Pyq5H411FobS3i8NPi1vWucif5SdzfLnHXLV5UZrG2dYbi1vEkVdro5KEn1wcYrWe90v7P9mtzqCsY9/zSggPjpjP3elaTVLcin7V6G9rPi3VtT0bXNMl0mZIb24+1Rlyf3ABDMoyMNnbnHuayfFPiK+1rRdJtrjSXtI9Oi8sOxJ8zKgZ5Ax92sS7vrGMPGsF00uCQ3mHB4GDj680mn6FrWuvH5MDrH0EtwxAA9s8n8KOenBXC027MyHBkOCGLE4VV5JP0rptP0eTTtMiW5QpNcuHdWPIQdAR+P6n0robfStJ8FQebKwvNXcYBIG2P6D/P17ViPfTXt2Z5m3M1ebicV7Rcsdjvw2H5Wmzehl3LtpJEyp4yD61WtGJPpWjkFcDmvGnFpntxaaPO9f037Beb0GIJDlR6HuKyRl/YV6NqlhHewPBIODyD6H1FcDcwyWtw8Mow6n8/evUwtb2kbPdHmYijySutmNjUL0qR3whqNOtAPmShR0HWuu5zj5gBGhPpVM81oygGOqe3JNQ9GCRBtJ6U9YGJqZIyG6VcjPAOKV+wnoyosDjk08D5h7Vbk4XpVToTVQWhE5XLtuRkVqqPkrDtX/ec1sxtkCpkaQZWuM5qsoyat3A+Y1XAqblND1NTIaiAqVapEsnXpUymoFNSqaq5NidQTUgXNJGMirCJRcLEPl57Ux4R6Vd2DFMZKq5LiZ7QA9qaLfnpV/ZzTljo5hcpSFtntUgtR6VdEfFPC0nJlKCKK249KtRRAAcVMFFL0FQ5GiiQyYUdBVKZ8E4q3N0qhKNxrJu5okQebhqf5nGaBCCc1WuJAgIqkhN2Ho+65XvzXe6bEI7UOfvPzXB6PbNd3qYHyg816GPljUDoABXDipXfKjSn3GzfMprNmABxWi7cVRlXkmueOmhW5XC4qVBUSks2KsqMCqfYV9AZgFqueae55qMit6cTCpISl2ZNOCH0qVFx3rpiuhzSfVkCrhjUxYgmkx8xpjn567IKyOGpK7JorlkcelasF0jjBNZIQFc09UKnINDhcmNVx0NooG5FRspU1TjuHTr0q4k4cYqbNF80ZbBnNROdpzU5HHHSq0uc01qS9D0X4YvvTU/byv8A2evQK85+FRONWHp5P/s9ejU0rHVTd4phRRRTLCiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvnv9o4Z1fQR/wBMJf8A0Ja+hK+fv2i8f2voOf8AnhL/AOhLTQHhhBRxVlW3AUjIGFNQEN7VotCGy0OQKWRSwpiHNWSvyZq7GRQkU76dmpZEzzimBfWgBCeKgYVMw4qJqhlxI24FRGnuajwazZqgHWrMa1AoxVmM1jM2gWFJIwKkYHZg1GhwRV65QCBSBWdP4jVr3bmS8AYntS2sl1YXC3FrO8Mq9GQ4IqwcU3iumSXUzSPQfCnxU1qC6gsLwpKjnaJAcc+46flivTU1m4v1LSWLxOqFhIh+8PY5OTXzxpyk6pabBlvOTA9eRXuunO1vawRDHyIo5HoK86vSimrOx1UpSs2jTSSaWDfHFPg4wHUqVzngjA9K5fxL4nOg6f8AaG0+RmZtkfmuPmP0JJxXTLdvJyxX8Vryz4oSySX1mrH92C/HbOF/pRSwkJS1YVMVUUbHMap4m1XWXcz3BjifrHGTgj0J9PasU9OKexphr1Y04wVoo4XJt3YAZzUbDqaeO9MfpTaC5CRz710OieLdV0N1EUxlhHHlSHP5HtWCgy2fSjDO2FUsT0AGaxqU4yVmVGTR7zpfieXWraGS/sraeOSMMpljVxz0449+oNR3mhaPeai8P9l2vmCQfvIFCxsT6MFxiud8JRyDSbYHtbqOfQszY/I/rWzcH+EHPODXjylUhJxUjujCEkm0QX1vpWkwG9/s5QqoGLBh8o9PUHjpXKXXxCu52EFjbR2kbHG/q34dhU3i0sdKKq3yrIARnrXBFtrrg9DXZRo80eabuZVpKErRVjqFeSeQyzOzs/Us2easwxhXBNUoH3W+4dxmrsEodAe4qZxsaUpXVjWt2wcA/nV+Jh71lxHOD3rQiIKCuWpE7IMkmU/eArnfEGlfa4PPiX99GOP9pfSukJPA7VBInXmsITdOV0aygpxszzPJAwBzUluhTJbqa1Ne097a5NxCMQyHLYH3T/hWcOFr26c1OPMjx5wcJWZOhBIyMjNQyIokbZ0zT1OADTlT5j6Gpqq2oLcarAEVKqlRk/WoJE2SA9qkacFQorOOrCorCs24VUkb5sVaJwvNUSd0ua60rI5rlm1H7ytqEcVhwuFcc1tQsMDmspo1gE6/PUW2p5ucGmgVidFrjQtLTsUlXEzaHLUyVADzUyGrMy5FVtDxVOI1ajNMZN2ppFGaWkFhNtOCigYp1MLCgUuKQUZqGy0haaxozTWPFQ2WkQy85qhM4Q1ec9TWJqM2zPNJK7CTsiQ3iqMcVmTT/aJxGvUmsmS9dicHvW54X02W9uxMVJUGrqPki2zKMuZ2O00GwFrZCQj5mrbJ+WoUARVjHRRipCwArx03OV2dbVlYjc1TupsLgVPKxrPc+ZLjtWsYdTNy6E1uh257mpZHCLinZWJOo6VTL+a/tVQi37xMnbQkGWp4AFRlwvGaY83OBXVSpuRy1qiiTtIFHFNWXmqwyTz0qUDArrhBLQ451G1cn6jNRY+fJpEfnBNK47iuhLQ43J3Jg3y4qZGqkrGp0YEUE3LRYEUqHbyDVcH3p4Y0aMNVqi/DcdjUsyB0JWsl5SvIqxZ3yuCrHmolG2qNYT5tGei/CoYOr/8AbH/2evR68/8AhkoB1Ujv5P8A7PXoFI7aStBBRRRQaBRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFfPP7SJI1jQMf88Jf/Qlr6Gr54/aR/wCQxoH/AFwl/wDQloA8UWQ1MrA1WXmnqcVoiWi0jbTUxueMVSzkU9W5p8xPJcn8096aSDzTd6nioy2D7UucOSwrtzURGTTmbNRlsUNjSsLgUhxTS1Jk1DZaHcCp4lquFJ61YjByMVhI2gWYlzMoPTNaWoqEtlx6VVt48yLVvVTtt1H0opr3kbNe6zFY+9MyetKxx0phfiumRzo1vDambxJYRnoZQemenP8ASvcLbFxLsiBcA4bbyBXhXhyVItftnkk8tRu+cDJBKkDA9ea9asDeaPawu0hW3mIMX7h1aRc8kAjOfc159dQ5057HRCUuRqO56QnhaaTT0lV1AYbgrcGvGfihYyWwjdhkGRQD/wABb/AV7DZ/EC3FgbebTL1vLhO4rHlsAddpxXjPjbU4tR0JvJu0uY47hXUg8gHPBHUde9dNKVKT93c55e0Wkup53TGPFKaRq6mQNHSmMeKceKjPJFIB6qSoCglj0AHJrpJYYPD+iJKpinurxQYpUYFoWUg5U9dvPscrjoar+GdL1u+1NLrRLYSzWrB97gbFPYHPFQ6xLd3/AIsf+04I7S4edEmjA2qnQfljmsZu7NI6K56pp0UrxgbW3HBcon3sADPA46V1WjeD11u2kkh1GNdi5xtyM+h54rmLHWYEgvprHzLi2U7N6xHBPrk8betdP4X8ZR6PZLCLETNLhQEYqGOeuSuO9cUVQSvLc1m6/NaOxwHifRnltm0+xZLm4eUInlkfMT0+lWb/AMN6PLFp+g6h5UF3aQwtILeLDFmJB/edwx7djVbxZp11DrUiWgMd3OwEUO7a4ZjlR257Zq940cy3cFzpzxzakPJ+0r5g8u3WIljvbovJxjrxXRTcZQfJsKV7rmOEmijstUvbCPhYJmRMnnbnj9KLN8SsppuuanZ3+pGeAxm5diZzCreWTx0Ynk8egFV7eQiTNZTWljWm9dDo4z6GtG2G5M1kW8m6MGr0E21cZNckl0O2LL+4fjTWPr39KjWTnrS7wM+lc0o6nRFlS5iSaJ0cZRhgiuJvbV7K6Mbfd6q3qK711B5H1rH1vTzdWwaMfvE5HuPSt8LW5JWezMMRS543W5y68jNP3lVzTF4OCKGIzg969Vq6PM1QSy7qgU5ekkO1sUQnLikopGbk2WJThMVSHU1ckG4EVUIw1arYzGB9jZrbtJd6DmsZ0yKs2ExRtpqZIuL1N4jclIBSxEFaDwa5ZbnWtgximHrTz0phq4kSAVKlRCpUFaoyLUVWkNVI+BU6nigCwDT6gU1KDxUlIdmlzTM0hbFAyXdTd3NRFqAc1LGibNDHimjpSms2WircPtQ1y+qz/e5rob4nBArktSDb/mHFVDcipexTt4TPOqAd+a9P0GNLCyVSPmNcd4d0/wAyRXYda7S8heC3Vl7Vz4qfO+VF0IWXMaytk5pXbBqnpk/nRc9anuZRGprjhB3sXOVlcq3lwEQgHmobP52LGs66nMku0d61LUeXbEnriuupG0VFHPCV25MjvJsvsFNDeXF71ATukLmgsZHArXkUUomPO27jl3Oc1ME5p0abV96fjAroi7I5pq8hFHNP9qQdacelXT1ZnWdlYYq/NVjaCtRqMU4NzW5xDGTFKp21IeRTSlADlbNSVCowamU54pMpMRkDA1nXKNE25c59q1gtQzRblIIpJ9GDVtUej/B26NzBqwb7yeTn/wAfr0+vKfgzH5cuvDsfs/8A7Ur1ape56FB3poKKKKRqFFFFABRRRQAUUUUAFFFFAHP+BP8Aknnhr/sFWv8A6KWugrn/AAJ/yTzw1/2CrX/0UtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV88ftJf8hfQP8ArhL/AOhLX0PXzx+0kM6toH/XCX/0JaGNK54cDg08MWOAKi2kmtC1t8JuIqZT5UVCnzMhCNjpUqKoTk81OVAqlO5DmsVJzN3FQHyKMZWmHJFMjcnipkGDWq0MXqyM5XrUbtVuVQUqk4INUpXIcbDc05TTKeozTYIlTk4q9EmMZFQ20eWGa2rexkumEcSbnNYPV2R0R0V2LaRBpFNQa0/zqgrTitpbRikikMBWBqMhlumzniqpp8+pc2vZ6dSmTkVC2akIIqNgc81vI5kdF4Fz/wAJNFJ+7zEjPmRQQBjBOD1Izn8K9UPiS+1vVALRvMs7PaM7TvZcDt/CteK6TN5N5gsV8xGQEHoSCK9VV5fDGkWsVojRXV6nmySqNuV7Lj1HNeXio3ldnZQdrGl4h8XaloV/DPp5ItlO2WN2DfMefl+vNc38R9J0xdJ0vXdOuFd7/JnQMDzjIOBUeoQHWdOnd4yZ4U3yEHGcY+auW1S8jTR7PT0Yl0d3Ydhk8D9KnDpucWv6RdflSdtEYhphPvRyaacCvaPOEJ9KZ1NOIwKtaVb/AGjV7KDGfMnjUj1ywqW7IaV2el6ba6notho8Wm3sUYjkje/tVxvbf1ZvYdK5XV4v+El8Q6rqsMka28M0cXXlskID/M5rrjeSXeueINJtYGtLhGlZ7wSED5ioTj19/SqGvW40vTEOpOpvruDyZZIlyJZEYMpIHfHGa422rvqdOjsjpL/xOdE0caLbW1uLiVl220abUiCgAOw75IzyevNMg1y5ls7KKO1vYriRxE1w6/uJST6enQDHHeua0mCLVDqGqSN5YAEZ3LnaMDjB9CK0LPVpgyWrfNabdqowzsx0I9xXmTsk09zqS0UjW1yX+0vD+q3l9K0Wp2jIiKz4cEMBkZ5yO30rzjVb261nSLm6ja3sNOt5QFskk+aRj1Y93PPJNdD4hvFtdCWCS4Mt3HI25yPmYMUIH4bTXM64X03SLPSGEkcp/wBIuFEwaN8/dIAJ7fSu7ARfIzlxL1Vjn7Xm5Rc/eO3NbMO5GG4Vhbtrhh2Oa6low6K69CAw+hreurMmiy3ay4AHatGN/pWNDkGr8b5XiuOUTthI0lkzwDUmRkDPNUo5OanV+fesJxOmLLQbsKZOARxUe8k08fNjmsGjQ5XWbJ4JDcRL+7Y/MP7prKyHA7Ec13U0SupUqCD1HY1yN9ZCzmI2nYTlTXpYWtzLlluefiaPK+ZGZOCJM+ozTbc5epbvHlgjrnFVoXCnmu04HozQzUE64IIpBMM9alDB1xTJK6nIpVGGyKVkx0oQEtQ9gW5s2cm6MZNWj61QtFIArRArkludkdhlNIp7DnimnrVxJkAFTIKiHWp1FaoyJ0FSCo16U8GgCQGnDpUYqQUmUhwNIacBRjipuMjNKOKCKAKTGiRWyakPSoVyD0pxPas2XFakD28lzL5cMbSOQSFUZPFc9qtnM9ysXlMvPORiux0yBnvQFlaIYJdgf4aqapDA14RFl5HbJdjkmouk7ly2sSeHdP2orEcAVvXkavEV68U+ygFvZovQ4pkxzXFJ3dz0I0kqdjPsITAx4wDTL6bAbmrxwqGuf1OfkoDyeK6sPG/vM8fEuzsR2y+fc57VszMI4NtUNOj2RbjT7yU7DW9OHPPmZy1qnJDlRCG3NhatwxbVDEc1VsYycMa0hSm/esXBe6HakJ4pSM0EYFavRGNveEUc1KF4pq1IK2pbXObEvWw0jjikAxTyKaetanKOBqTjFQ54qRTkUAhxWk5FPFKRkUhixt61I67lqAAg1PGfWpaLi+jPQvhKu1tZPr5H/tSvS686+FgAOrEd/J/9nr0WpO6j8CCiiig1CiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAr5+/aMTdqmhH0gl/wDQlr6Brwf9oNQ2o6Ln/nhL/wChLUVHaJdP4jwVU+cDHetMYjg96okASjHrU07/ACAZrCd5WOmPuojabjrVSQ7zmntTK1jGxlKdxF4arXYVAihjVxE4Fa2uY3sxdpMdUphhq0cYXFV5YwahqzKvco4qaJCaNgB6VdtIgzClKWhUI6k1vCRg4rf0y7exuFdEDk8YNVYYAAOK09JijbV7dZfuFqwU+V3W50OCasyxqLvJcCWYqpbjArm9a0ma1xdbSYmOM46Guh8d6Xd21zBLFG5gK4JXsavq8cvw+kS6H75YiBuHPHQ01Vaane9yOX3eWx5mwzUZPPvUrfrULdc11yMUWNMUvqtquM5mTj15FfQWpaHb/wBjSa5NvIeTZbIxyyrjABH1ya8C0SRY9csZGBIWdCQO/Ner6j4lmvLW10hW/d20juQFxtJY8e+OufevHzBNySR24Z2jc19K0OaPTjrNv5mDL5IVVDFie209ea8Y1gAatdKAQolYAMMEcnrXsWka7ex2rWSJvTzlmweo256fWvHNYkEurXcgGA0rMPxOaMsv7Rp9h4v4SkT1qM4JpxoAr27nBYaRkVLZXJstQtrocmCVZPyOajbio2NJ6oWx7J4l8Q6bqulS23h/y7nVNUVUIgX51XjJc9sdKittHubWOK71y9a8vIUIUvgJCO+PU+9eRwXdxaMz208sLMMExuVJHpxUkmrajLE0Ul/cvGwwyvKSCKwnTbVkaxqWd2e2+E9Fg8R+H7qW0lZ2kupZHRRt+UD5Tn3NSeFfDkV3rTWcuN4RsEnjgVlfD/xQdD8JmMbULQuqk5yzEjHT8fwBptjrlxb6xbXsR2MhPPVRnivnq6fO+x6cH7qMLxkjaNewXrpFMsoykUq7lkUEowPp3rz66uGubh5WULuPCqThR2Az2HSu++JiTRjT0nGGEZP3cEgkn+tedmvdwDvQTPNxP8RiGuo0yTztLhbumYz+Fcuelb3hty8N1Cf4SHA/Q/0rbEL3bk0H71jZhRW7c1YWPb0qCLhsg1bzgVxNXOyLsRkbOc1Kj8jNIcFeaiVuaykjohIuA8U+N+1Vw2VzSq/IrBo2TLhOV561n3tqk8RRxwe/pVxW4psoBGKhNxd0U7SVmcRqFs8O+Mjkc/UVlYOMiu01S0MsIkQZdP1HeuQYbHdMcA8V69CrzxuePiKXJIhyR3qWOVwehqfT7YXN0EI4rsItCgVANnOKc68YOzIp0ZSV0cgtx/eFWIpEY10E3h6NuVGKptoBjORQq0GtA9jNPYLbBFXMVDBA0PytVnisJPU6IrQjIqJutSuwqEkE1pAiQ5OtWEqBAKsoK2RkSr0pRSLTxQAoqVajFSrUlIeBQaKD0qRjDQBQaAe1JlD6b1PWgniowDJIEHU8VDKibFosUWnvKx+ZzgAegpmn2JuLkzuvGeB6VbtdOlFsiv8Aczx9K1kiWGMKoFc8pXVkddGjzS5mQy/KmPSs6V8N+NXZz1FYtzIfOwKwsddafLAmnlxGTXNFjcXhHUA1r383lQ4z2rN06MlzIfXNelRhyw9T5yrO8230NLIjjCjrVO5cu23PWpJpcGq8X7yYfWulRUInDzOpM1LZNkYqwOlMHQCpBhRXCtZHot8sRTwKYxzQTmmj71dEtEc8NWTR1Jio14FSZytbU/hOOu/eEYjFMxk01ic1InStDAMYFCmg0KKBEoapFqBR81SqaTGiQjNN5FPXrT9uR0pFWPRPhS25dW/7Y/8As9ej15v8KV2nV/8Atj/7PXpFS9z0KP8ADQUUUUjUKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0UtdBXP+BP8Aknnhr/sFWv8A6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8K+P6b9R0Uf9MZf5rXuteH/Hr/kI6N/1xk/9CWs6vwmtH4zwmaHDZFRSKStac0eegqq0XWsYu5tJWM9fvEGn+TmpPLw1TIAOtdaVzkk7MijiwcYqZm2U7co5zVGeXLcGtNEjPdlzeCtJjIqCHLACriR5rGbN4IiWIE1ft4AMHFNjgGauRJgVzSZ1QRYj4FDOU/eKSGXkEdqBwKr3sojhODzWcU5Ssaydlc34/iDL9j+y3kCybOAx5zXOaz4hfUFMUQMcR6gdKxzg5Jzk0wgYrsjhKcZc1jkdaTXKRP8AWomxipGzURq2QXNEB/tyxw20+emGxnHPXFes6fpU2pauZb24eOJp8b9pbAJyTj1Jryvw9E0viLT41+806gfXNfV+j6Csekqn2dGkEyfMcZG3qK4cRTc5pLsbwmowbZxmjpeJqdz5MhVoLSRULrkhADwB9fyrwLUiW1Kc56vk19Wa/BDpoup5TCszWUqxZkC9Tk8nqea+U75gbyY9fmowdF05u4VKqnErbaXgDijNNJAr0DnGOahNPY5qM0hMKSg0UmB6LobXNx4e0+zhmIVnYELnKgkZB9c4rqpLI6dpNp5Vwzi7UeeoQgIQcqD69RT/AIb6BLeaDZTrEZPO8wKuR2GPw5rutV0z+xvBqR6hDGgGEOZBu+8nI/75P0zXjSoSm5WWlzu9rGNtTyb4yJNHqNgtw5eQWsWSR04PFeW16l8ar6O78RxxxYEdvGkS4YNwAe469a5nw14Mk16ye5DkYzhR1Nd+HkqVFczOepFzlocma1PDkwi1TYTxIhX+v9KuXXhkxytHFLiRTgo/BrLazutLvYnljK4cEHtW0qkKkbJkwhKEk2jq2BjnK9uoqdTletRTHfGsi/XNCuCorji7o7ZLUlLcHNRk5FJnORTTx3oaHFkiOcgZp5bDZqsG2tnFP3bsDuawaN1LQuRyGpQc9qpRsQMd6uJkLms2jSLEdecVyWu2gguw6qAr+nrXWOxLdayddRZLJmxkryK0w8nGaMcTFSgzI8Pgfbxur0Nol2Ar6V5vpb+XeI/bNd59qzaqVPOK0xVOTndHNh5pRsxJnKVnzXmM81WvLuUE96yZbl2JzkVpSw76hUxC6F6a6yaha5A71ntIx71EzH1rsjQRySrsvvc5PWmrPz1rPLEUglPrWipJGTqmzHce9WEuKwFnINTJdHvTcAVQ6BJwasJIprn47vnrVuK7HrUOJambakGpVxWTHdjHWrUdyMDmocTRSRd6UZqBZwR1qQODUMpMXvSUo5oI9KhloaelNtW/0wCnN0qusiW9wJG59qznsUkdxbbfsyENu44qQtk1zmmaqbiRYlG1F6VulsHNYKJ6lBrkIbs7ELH0rCU75SfStLUZsjYDWeq7Itx71MlY5sRU5nZGVqblmC+tWIAIrUepqpc/vbrI6ZqaaQgBR2FerRV0j57Evluu5BNLufrVqyTnOO9Z55cfWti1XCU6zsicPHUtKcmnMaReBQetctPc7Kmwvamjk0p6UqCrkzKCsiVelSKeKh3VJH1rqhscFX4hpHNLnilem5qjEcOakUAVGtSjpQMTHNKBzSjrTwMmgBRwKmRsio9vagHaaTKR6X8Lhj+1f+2P/s9eh1558LW3Lqv/AGx/9nr0OoZ6FH4EFFFFI1CiiigAooooAKKKKACiiigDn/An/JPPDX/YKtf/AEUtdBXP+BP+SeeGv+wVa/8Aopa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArxP46pv1LRh/0xk/mte2V4z8bo2fUdI2j/ljJ/MVjXdoM2w/8RHjrwBV5rOmA3HFas9rJg81kXKtHnNc1No66iM+ZtrVH52RTZslifWmBM9K7YXSOGaTYpmI4zUIOW5pXQg9KVE9atszsTpJtIrTtm8wCssDirloxXpWMzeBsLHxmpE+Wq8cjYqdXz1rBnSiUtxWNfTeZLjPArTc4Rj7VgyHc5PvXRhormbMq8tLBTD1pTwKYTXYzmQxmFRMae1RE1iyi5pLFdVtmU4Ifg19I23iK6tdKhto3YbSnzZ9q+a9LP/Ezg/3q9z00GW2nVycxhGHPt/8AXrzMXVdOomux10KSqQaZmeJdautRmfzJGYRWzn5m7ZzXkl22+6kYnq1eq3xE2heIrtwokhiihT15b/61eSz/AOvfnjNaYObm22LERUEooaetNY0ZwKjLV6ByiE02gmikxBSUtGKlhY9k+H2r3Wm6GptZSr7hjnkcdvxqDxRr+o3llbxXN28m/DEE5yfX8sVQ8GMq6dblzhRcrk+2MVb8QxLc+I7LT9mI1cKv4kV4brzVVw6anqwoxcVJo5DxWJJb6GOQ/NJ5Z+gK1614V03RtJ8JXWs/aJBHbR7IkJA3yY6fnj9a868S2q3Hjy6ijAWOKQgYHB2jFWLktHp5RWBCqXI7ZrpUlyxTMHFuUmtCHWtbsdVIaSIwzhjlxxmsm3s76eZY4wLqFjj5j938ay7pd7AHJqayuriwZmgkZc8EZ4NdEKSjEzlUvodVH9hnE1qitFNCMMGPcdaotbyQ4JU4PQ9jVzR54tRvI0mtmdx88uwhRsXk8/hT9W1VdQ1GS6gCwwkBYolP3VHAodOyuivaNuzM4cGjg0hfcSSee5pMilythz2FwPWnAgVHuFIXFJ0ylVsWAwHNTLMAOtUDJTTL70exuP6xYtzTisy9n8yF19Rillkz3qjK1ONGzuRPENobbIFIrcjuG8kLmudMmKVbp4zwT+Jrrir7nI5NbG47bzzzUDQK/aqKX/PzCrsNwj9CK3ikYSbIJLE/wmqktvJGeVOPUVvphhT/AC1bsK0UF0M3UZyxH500iullsonByg/Ks2fTSCTH09KORoXOmZVLzU728ifeU/hURHWlYdxoOO5p6yMO9JijFFkO5YS6YVYjveBzWfg0tS4pjU2jZjveOtWo7zjrXOgmpFkYdCah0kaKszp0uhgc1OtwDXMJcsByTVhLs+prKVE2jWN6SYBTWW8+92HvUTXO5etJEQWHvWUqTRqqyZ0WgwkPvxW5dX6Qpxyaz9NdEtOMZpwjSSTLc4rlStLU75Jxo3iRxM9y+9uB1p1ycLgVIXCEgcCq0zAk+lKsuqOGnK+5QVPmDH61XMm5zzVq5kCxMRWXExJJr0cOvcPLxbvOxOvzTD61tQ8IKwoSDMPrW5u2xgY7VFbV2NaCtG5YDCl61FFkrmnk7RWMEbTYMcClQ8VFyTUo4AqupP2R9TRc1AOanj+ldSPOqbiuKj6VKx5qNjVGQ5akBqJTUq9KAJAKcMCkWgDmkMkBpduTUZNSRt0zQNHo3wq4/tYf9cf/AGevRq88+F2P+Jt/2x/9nr0Ooe56FH4EFFFFI1CiiigAooooAKKKKACiiigDn/An/JPPDX/YKtf/AEUtdBXP+BP+SeeGv+wVa/8Aopa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAryb4w7Re6Yx7RSfzFes14/wDGkkX2lAf88pP5iufEq9No6MM7VUeTXk2chTXP3xzmtiYdSaw71sPWNGFjprS0KDLuFOWLikVvnwelWVAxXoRSZ50m0yAxbl6U3ysCrZA7VC6kU+Wwk7lRshsCrdqDUYjBOatQx46VlU0RrT1ZajNTo9RwxSTMFjQsT6VvWfhLVrtQUg2g9zXP7OUtkdXPFbsyZBviYDuKxJLd4zyDivTbX4dai+PMcKD2ArTX4YF/vyMfwrelCrDoY1J059TxkkDvg0w17Q3wkgc5LtVuD4UWEcRDruOOprpbfUx0R4OxqFjzxXqGt/Ci5gkZrNzt/unmsYfDLV9pORn6Vi5XK5WcrpCltVtx3Lf0r2rTpilzcxHHzwq2PoteY2vhrUtH122N1AfLDH5x06GvRImEeoyP/wBOh/8AQa8jMEpSS8j0MGrRfqULiQHwd4lc8s80AH/jxryqckTOD2Y16QXx4A1YtyZblMH0xn/69ea3h/0ubHA3n+ddGA+0Y4royItTSaM00mvQucYtFJTqQDqSnAEjpS7DjoaGykmd/wCHX2aA7f3ZFb8ua0NRuQ/j20IJwsqcn6g1jaPKIPDsuepYD81NRT3ZbX0nJ+7tP/jorxI0earJ+p6bny00XrseZrGp3Ycf61+c88mqM+oMiOo6Mm3P61UurzdLKVY/MxJ/Osue4Oa9Klh9Fc4p1rEssqkg4AqJZAD14qlJMSetNEhrr5EcrqO5uW9+baOXZkPKu0kHoO9NW57E1kLKe9SLKQazcC1M2knzUm+syKXIq0r8c01EOYs+ZTTJUWaQtT5RcxIXphemFqbmmokuQ52zVWQmpyahcZquUnmKr8GoS1TyCqx4pWC4oepEcg8GocUA4q0I1INQli6/MPetGDU43OGO0+9c8rU/dWqbRnKJ1SzI4yGzQSGrmI55IzlGx9TV2HVCoxIPxFWpmbibDRK3YVBJYxuPu0kN/FJj5xn0q0sqsOtVoyHdGTLphzlDxVV7SZM5XNdFwfSkaMEUnFDUjmCpXqMUmK6CS1RuoBqtJpyHJGRUOJfMZQFKBVt7Bx905qFoJF6qfwpMaaGAU8UzkdQacDUsseDUsb7SD6VAKdmpeu5S0Ny01IKoGauLfEyDbnBrmUYhhWvYygkZrmqU1udccRJrlZus+QD3qrPISpxUhOVGKrS1hbmVjN+67lOSQsGUmoVG0UswKnNICCua7aeiscFZXdxLdv3/AONbO/dtFYkH+u/GtqEZasamjudFJXSRfT5UphO5qQtkYpQKzjoi5asVRk05jim52jNNBLNSjvcc/hsiVCc1Zj6VAoANToc11QPPrKxJjNRMMGp+gqJzzVmIxetWE6VXHWpo2oAkB5pwPNIQKXpSAdjNGCDSKeak60DPR/hWcjVv+2P/ALPXotec/Cr/AJi3/bH/ANnr0aoe56FD+GgooopGoUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilroK5/wJ/yTzw1/2CrX/wBFLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFcZ450O31iS185AxRGAz7kV2dYPiLHmQH/ZNXTipysxObgro8S1zwWICzQZA9K861bTntJSH5xXv2qgFWyeK8U8YzbbtkznJqK9Dk1RtSrqaszjpHG8j0pyTcYqs+S2akVcilC6In7zJfNxU8YachB1NU2BxU9rMYZkf0rRPuRY6bSvCtxdsu4HBrvdM8B26BTIgP1qfwgyXVvG20ZwK72NFUCvQhh4JXOKWIneyM3S/C9lasGWCPI/2RXUQ20Ua/LGo/CooSBU5fiqcbbEc7e5JtX0FGFFRBiadmoaLUmOOBULkHpSSP2FRk4FZzWhtC7YyRh6Cq5YZ6Cnsc1ERzXHLQ7YkFxa29whWSND7kVzGt6Ai+ZdQcMInUY6fdNdVIwVSScAVzWs+I7KyR45ZVGRjk1yVYRlpJHRCTjsebXEhh8GahbHhhJGSCP96vOZm3TyH1Y13+s3kFzbX5hkGH24UHr1rgpIJNzHHes8IuS9ycQ+axDRSlGHUEUmK7LnMKKsW9s0rDjinWdo88gyOK6G1sNijjFYVayjojelSctWU4LAY+7+lSvZhV6VosFhX3qpLcE1zxcpM6GoxHpL5di0Pqc/oaoSzEuTnnGP0p0kpNVWPNdVGkkctWpfQUuTVWXk1Nmo35rrRyvUr7eaXHtTsUGgQzFOBopMUrDuTI+D1q1HJ71nip0fGBRYLmgrZpxNVkfipQc1SQrjs0lGKXFMm4UhFOxRigCu6VUkStFlyKrSpSsO5TxSEc1KVwaaRTSC4wGng5puKUcUwH4ooU0/FMVxopyyOp4Zh9DRijFArlqLUJo8AncPfrVyPVVIw4IrJxSindk2RvJexP0f86sJIrDqK5upI55E+7IR7U1IXKdHgH0ppRT2FY8eoypw2Gqympp/ECKfMLlZca3Q9QPyqtLapg4UflUq3sTj7wpHmRv4hSdhq5Ra2weKaLZieKtkgnrU8IHtUWNLlEWMvarMFvMh6VpxoMc1IFANTKOhcZCwM20BhSSip0dQKjmdSO1c3JZlt3RQlQMDVRQVYg1cdhniq0mM5zWiOdkcB2zD61s253EmsOMjf+NbNpyprKob0kXVI704OScCmBCamRVQVm2WkKE4yaQsFpHcnpUeDmnBdyJu2w8MS1WoTVUDFTxtjiuqJwVEXRgionWnxjIp7KMVRiVulPU0jjmlXigCZDmn9TUa9KenWkA7vUiDmm45p4BFA0ekfC4Y/tX/ALY/+z16HXnnwuORqv8A2x/9nr0OoZ6NH4EFFFFI0CiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACue8SnDwf7proa5vxQ22SD/dNbUP4iM6nwnF6wT5DV4V4t3f2ixPPNe7alGZYWxXifjG3Md4xx0NbYpaEUHqcfjJqVOlNVfmqYIDXKkbOVhEG40qoAcEU9V284qzbw+fOijuaOVvQOZHo/ge4eKJVBOMV6Zbu7AE1wnhmzW3iQ7ea7WKYkACvXgmoJM82esma0cmBU6sWqjAGbrWjEuBUsaRKowOabJIAOKR3wKrM2TUFp2HAknNI7UA4FRM2TWUlc2g7CGmscCnHjms7VL5bO2d2OMCueUToUjJ8T60mm6dM+8bgvArxDUL6fUrppZWJBPAzV3xZ4ll1O/eMSEwqemetYBucJhcZNcFW7eh1RehIXO7A/SpAoYY21Asixx5P3qsWzKQWb8KwldIq1xGt0bjbzVux8Lz6g+UjIX0xXQeHdDF9IJJU+XsDXdqltplvhERWA6is5VnFGsKN9zgk8Kzaeu91wKZOEhj963NW1Z5Qyhzt9K5K7uC5PNZU06ktTeTUI2K9xLvY1TdqWSTJqBnzXpU4WRwTqXYM2aiY0pamk5roirHNJiCmsM0uaK0sRcjIphFSsKYwpWAZS4pcUlFgG04HBpDSUAWUbirUbZFUENWo26VSJZapcUinIp4FUSJilxS4pcUBcbjNQyJVkDmkZciiwXM10xUJFX5EqqygGkO5BikxzUhFNNBQA08GowaeDTJY+gUzdTgc0rgkx4FG2nIM0/ZTQmRUmakMdNKmmIbmlzSYNFAXFzTg5HQkUyjNIaJRM46NUyXkidx+NU80oNIpGomqyjstS/2u/dPyrJ3UhY0mNG0uroeoIpG1AN0NYu6nKcmsnqaI2EuA3WiUgrnNUIWJbFaCxFo+aaMpopxyAOPrXQWBGwmuWbMdxg9jXS6d80dctV6nTS2NESbjgCnYOaagxzUwHesuYpoTaAKMU4jNRs2Olaw1MKmiAmljJzTOTUiDAya6YnFPU0Im+Wn5zVaEk/Sp84FWYiMBmmE4NPzTSKBDgxp6tUa09R6UATqamXBFVwBip06UMaPRvhcMf2r/wBsf/Z69Drzz4Xf8xX/ALY/+z16HWb3PQo/AgooopGoUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXN+KF3SW/+6a6Suc8TNiSD/dNbYdXqIzqu0Gzlp0/dkeory/xvpu8M4XpXqEzgkiuJ8aYSzcn0ruq0k4nLTrNSPFT8r7T1FTIOc9qhnx5jMPWnxSDbiuCPY6prqTOwAq1pUgF4hzWZLKd2Aa1PDdu11qCgcgGrjrJJEvSN2es6E5kjQV1tvHgCsTSLHyIkOMcV0MeMAV6eyOHqaFutW84FVoeFFSFuKyZogd81FnmgtzTSaQh5biod2WodwBTFI61ErGsB8jhFJPavKfiL4l8mE2sLfO3HFd14j1VNP0+R2bGBXzvrepPqeoyTOcjOF+lc1V2VjohvcoM5JLHk0qNjk1H7UH0rjsjoTJN5dvatbR4Wu9QhhA+UtzWbBAznpXZeGLEQ3CzsOF5rGbijaCbPQLWOHTbEYwGxXPapqZkYjdxTNS1UudoJ4rnLq5LE81wSjzz0O1PljqF3d7s81lSyls0TSk1XLZrvo01FHHVqXYxjzUbGnNUZPFdaOR7gSKD0o60dqtESGDrThTT1pRV2IFPSozTyeKZnmk0NMbjmg0veg9aQDTSY5p9JQO4Cp4jUFSRnmmSy/GamAqtGasg5FUiBcUuMUCnUwAClIGKSlzQBBIvFVJFq+y5FVpE61LGUXqOpnGKhbigpCZFIW9KaTSDmpbKSuSqcmpkU5FRxrnrVlQBUJtlPQkjXpmpQuaYpAqVSK2RzyeobKYY6mBHrRxTYkVWj9qiZcVdK5qF46m5ZSPWlHNStHzTCMUXKsJRmmlvSgAk0AOzmgnijAFMLZPFS2Uhc81InJpiLmplGKzZaLFuAHXPStbcAtZKDoatqzEYqOaxXLcqXK75iR61v6ZhIRn0rL8jcc960LdvLTGaxqRuaw0NJpegFSpk9az45Ru5NXUmUDqKyasNlnIAqMgE5qIy7uKkQE9TW0NDlqK44YFAYdqNlKsZJroRySTLMB4qUmoVG2pOTVGA4GjOabmnAmgByipFqHcRT1emIlzipo2BGKg3A05GwRQxo9N+Fw/5Cv/bH/wBnr0OvO/haQRquP+mP/s9eiVmz0KPwIKKKKRqFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXJ+MJfKktjn+Fv5iusrkPGaF7i0A6bW/mK3w38RGVf4GcZd6l5fIzXD+KtXjurd4iecV29/bBIGYrnivHvElyDeuqnAzXbXk4xOWik5HMTqMkVAUdTkVPMpJyKRHAHzV5yO5sjKF8flXo/gjSVj2SsuSRmvPRKu8YPevYPCiA2UTDA+UV2YWKcrnJXk7WO0twoQYq3HyaoREqBV6A5Ga65M50i8jYpzPUAagvWbNYkhao2kI71Gz8VCXyalsaRKXJPWmyzCKJmJwAM1HuwK5/wAT6utjpsx3c7TWcmjSKPOfHviSS9uDZxSHHeuSsdHlvMYBwavafYS6vemVgWLtnntXqGgeGkjVMp+lcOs5HQ7QWp5jL4TukiMiqTiqMemOJdsiYNfRg0CEwEbByK5jWPB0LZaNcN7Coq05KN0XRqRcrM8xtbBUI+UVqm5FtBsTjPWpr/TZ7HPykge1c7c3LZKng+leY4zk9T004paE892WJ+aqMkpPeoTKSaaWzXVSpWOepUuNdjimZzQTmmE811JHK2KajNOJqMmtEQxwpaaDS00iGxD1opTSVoZgaYacabikNCUtJinAc0DuJijFOI9KD0osK4ylU4NIelA60gLUbVaRuKoI2MVajamiS2vNOpq06qFcKWgUUAIelQSCpmqJ6GBRlHNVn4FXJRVOXrUstEByTT41zQEyasImB0qOW5XNYVeBTt2KaeKTmrUSXK5L5lHn471AxqMk0ybXLwn96kWf3rNBaniQigfKaYlzTtwIrNWY561YSX3qWNEsiiqkntVkuDUTAGkiiFVz1p/AFBIFMJzTEIxyaVUzSqtSAUrDBRUyJTUXNWI1qWi0PRMVOuAKZ0o3VFirlpGzUmeOtVY2qcHipaLTEZyvc00XTAgbqSVsCqJfL1LiM24br3zV6G5zisGFsLnNTi4I6GptYGkzoVlBGcipFdc9a5z7a69DT4r988/zq1Kxzzo32On3r7U8EGsi3ujJitGLcwpuqkY/VJE/FOCg0+KEsRVtLQkdDQqsRPCzKWwUbK0Rp5PalGmMecGq9oiXh5opqg204Jk1e/s9wO9ILJx2o50L2Ul0O8+FgwNV/wC2P/s9ei15/wDDKIxf2pnv5X/s9egUjrppqKTCiiigsKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACub8TqGmt8j+E/0rpK53xIB51v/ALprow38VGNf+GzktRiDWrgDsa+e/Fu6HVJB7mvo65UGNh2rxv4g+HXMpu4V4zyBXdXg5Q0OSjJRlqecJc9mqJ5MtxTcYbkVMIw4yOtedY7tiONWMqj1Ir3TwvbGLT4s/wB0fyrxexUfaEDDvXuWhy4sogOm0fyrqwulznxCukb6LuwKuRrtWqUT8irobIrobMkiUNxTGaoyxFRs+e9ZtlpDnftUeaYW5prvtGaiTLSEuLkQxMx7CvJvGGrPf3f2WMkgnBGa6nxVrBtrdkRvmIrk9B077ZfLPcguWbPNYO8nZGl1BXZ03g/QRDErOnJ9q9MsbJY0GFFZunW8UEShQBitIagkXGa25FFaHK6jkzTVML0qldxoynNIuqRsMbhVe5u1deDUNFxbuc5q+nxSq2QPyrzXX9GERZ1x+FekajclM4NcRrN2GDg1x1UrnbSlI4N1KEg1ETVm8dWfiqhOaUUXKQuaaaTPFNLGtEiGxWNRk80E5pDVJENgDinA5qOnKauxBJSGjtRTJG0UtFACUo60UCmAp60GikakAnamgc08CkI4pWGKtWYz0qsoqeM80EsvRnIqTtUEZqYGqEOFLSA040xDSM1Gy1JSHpQBTlXGapOuTWjMM1UZeallJkKR1YCYXpSooFPbpTRDd2V2HNMPFSv0qFjQNEbdaNtKBzTwKC7jNtJinmm0BcQLShiKd0ptKwyRZM0pemBe9Iamw7js7qcq1GtTqM0CACpAtPVPapAo9KAGqtTrTMc1IKllocaYTzTieKhZuaRVyaNuasg4FVIvrUjPhalopDLiTGeaqxnc2aV8u1SRKFGaVh3Jwdq1G0hHemSy44FVi5PepsFywZeetOSYg9aoPNt71Cbo5xT5A5zp7S6AYc10VncqyjmuBt7ohhzW5ZXjZADGsp0jWE0d3bODitKJsmuf02bzEUk1uW5yetc1rM38zSiAParaouOlVYasqeRWiJZIqL/dpTCh7ClWlziokwSR1vgZFT7ftHXy/wD2auvrkfBB/wCP/wD7Z/8As1ddXTS+BGFVWkwooorQzCiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVh+C4JrXwL4et7iKSGeLTLZJI5FKsjCJQQQeQQeMVuUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFc/wCJB+8g/wB010FYPiEZkg/3TW+G/iIxr/Azm5hvQiua1y0WWzkVxkYrqmTrWFrgzaSY9K9U8/qfOer2wt7yVVHAY1TtZNr4PStTWUZtRmzz8xrN8naM968h3Uj0tLF63hL3SbfavY9B3CzjDDsK8f0QPJeqACcYr2rSkxDGCOwrrw+zZz1extQAtirinAxUcCYUcVKa2ZCGNzURGDUp4NRsazZoMOMVQv7kQwMxPAFXHPBri/GOqi1tHUEZxWM3ZFpHLapd/wBoatszlQ1dbpdvFBHGwGK8w068L3TSMfm3ZrvLHWUNsFY/MBU05xjqyatOUnZHVza2ltwG5rmtY8TyAnyXOazb27ExJU81kTjqSa5auMu7ROmjgVHWRoReLNQhfcXyK04fHBYYckGuKnbGcVRkk96yVWRu6UOx6LP4jS4T7361zWp3Xmq2DxXPJcyKcZqR53ZcE07uT1J5UiKRstUZPNDGo2atoozkKTTDRnNGa0SIbG80UUUyBDSikpRTAeOlFIM4paZAooNAoNMLiUopKcKAuFIetLSUAFHaiilYBFqVDzUfSnKeaALiGplOarRnNWUpom5ItONIOlBNMBKO1GaM0AQyiqxFW5OagZM0gGg8Uh5FPCU7ZTFYqydKgbrV54s1XaHBpFIhUU48U4oRTCpoGNNKOtGD6UE4FAwJ5oUZpo5NTxrzmkD2DbxUbLVggUwrk02SmRKpJq3EnApsceatIgAqS7iBcClxTsUhosAgFPFMzThUtFIDUJ5NSueKiAJNTYZKnC0x2JOKd2pnQ80mirigYpkkmOBTHl4IzUJbPeiwXFLEnmonk7UrNgGq5yTTSENdi1RMKsbeKjK1QCwuVatzT2LMKwkQ7xW9pgCsM1LWhUXqdnpWRGK37eUCsDTG4ABrUDbT1rz5xadz04pOJ0MDAjrVtB0rDtbrBAzWzBIHA5qovQylFplntSZoz6U0tzUSYROx8DHP2/8A7Z/+zV2Fcd4DOTqH/bP/ANmrsa6KPwI5qvxsKKKK1MwooooAKKKKACiiigAooooA/9k=)

Our markets

The UK eating out sector is

leveraging brand strength,

operational efficiency,

and innovation to drive

performance in a complex

economic environment.

The UK hospitality sector has shown resilience

and gradual recovery in the years since the

pandemic, despite continued inflationary

pressure. Lumina reported sales growth in the

hotels, pubs and restaurants market of 2.2% in

2025, demonstrating the robust trading of the

sector as a whole.

The hospitality sector continues to navigate

a challenging macro environment, with the

persistent inflationary environment putting

pressure on both businesses and consumers

during the year. The resulting increase in prices

across the industry has made eating out a more

considered choice for many households and has

emphasised the need for operators to deliver

quality experiences which are difficult to replicate

at home. Value remains paramount, not solely in

terms of price, but in the overall quality and

memorability of the experience. Digital

engagement plays an increasingly critical role in

decision-making, with consumers relying on

online reviews, menus, and social media to assess

value and experience before visiting.

The CGA Business Tracker reports on the

differentiating growth patterns across the sector’s

key segments. During the period Pubs and Pub

Restaurants reported the highest like-for-like

sales growth, benefiting from the period of warm

weather. The Restaurant segment of the market

delivered broadly flat sales and bars across

the market reported sales decline over the

financial year, with the late-night market being

particularly challenged.

Despite these pressures facing the sector, Lumina

forecasts sales growth in the eating out market of

2.4% in 2026, with managed and branded pubs

and restaurants expected to exceed that growth

rate and with brand identity and loyalty identified

as key growth drivers.

According to CGA’s hospitality market monitor,

macro pressures have resulted in a decline in the

number of licensed outlets of 0.5% during the first

half of 2025, after a period of relative stability

during 2024. In the year to June 2025 leased

businesses were most affected, with net closures

of 3.3%. Independent net closures of 0.1% was

driven by food-led business with drink-led outlets

in growth. Managed operators marginally increased

outlet numbers by 0.7% despite a reduction in

food-led outlets.

In conclusion, the UK eating out market in 2025

reflects a sector that is adapting to both economic

constraints and evolving consumer preferences

with resilience.

Our response to this competitive environment can

be seen on pages 40 and 41 in our strategic priorities.

Annual Report and Accounts 2025  Mitchells & Butlers plc30

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

15

5

10

0%

-5

-10

-15

Oct

24

Nov

24

Dec

24

Jan

25

Feb

25

Mar

25

Apr

25

May

25

Jun

25

Jul

25

Aug

25

Sep

25

15

5

10

0%

-5

-10

-15

Oct

24

Nov

24

Dec

24

Jan

25

Feb

25

Mar

25

Apr

25

May

25

Jun

25

Jul

25

Aug

25

Sep

25

15

5

10

0%

-5

-10

-15

Oct

24

Nov

24

Dec

24

Jan

25

Feb

25

Mar

25

Apr

25

May

25

Jun

25

Jul

25

Aug

25

Sep

25

15

5

10

0%

-5

-10

-15

Oct

24

Nov

24

Dec

24

Jan

25

Feb

25

Mar

25

Apr

25

May

25

Jun

25

Jul

25

Aug

25

Sep

25

Pub restaurants

Restaurants

Bars

Pubs

Like-for-like sales by segment

Source: CGA business tracker

Source: CGA business tracker

Source: CGA business tracker

Source: CGA business tracker

Mitchells & Butlers plc  Annual Report and Accounts 2025

31

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Financial

•  Long-term transfer of value to equity as debt

is paid down

•  Strategy designed to generate sustainable

growth and to provide flexibility in uncertain

trading environments

Financial review

Go to pages 62 to 64

Structural

•  Our diversified portfolio of leading brands and

offers caters for various demographics and

disposable income levels making us less

susceptible to short-term changes to industry

trading conditions

•  We are a predominantly freehold business

with well-invested properties

•  As one of the largest operators we benefit

from economies of scale driven by our

central functions

•  We understand our guests and have the

systems in place to receive and react to their

changing needs to evolve our offers

At a glance

Go to pages 2 to 5

In this section, we outline the distinctive characteristics

of Mitchells & Butlers that enable us to create value

for our stakeholders – be they financial, structural,

environmental or cultural.

Our business model

The Mitchells & Butlers difference

Annual Report and Accounts 2025  Mitchells & Butlers plc32

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

Environmental

•  Our sustainability strategy is designed to

create a positive effect on people and

communities and to reduce the negative effect

of our operations on the environment

Our sustainability targets

Go to pages 44 and 45

The Mitchells & Butlers difference

Cultural

•  We have a defined purpose supported by our

PRIDE (Passion, Respect, Innovation, Drive,

Engagement) values

•  Our people strategy encompasses a

structured approach to recruitment, retention,

development and engagement

•  We have a team of dedicated, knowledgeable

and capable people who are critical to delivering

outstanding experiences to our guests

Mitchells & Butlers plc  Annual Report and Accounts 2025

33

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

1

4

5

Our experience and

ability to interpret

guest feedback help

us understand what

our guests want.

Creating memorable

moments generates

value for stakeholders.

Suppliers Guests Employees

Amenity

Safety

Choice

Hygiene

Environment

Value

Occasion

Everything we learn about our

guests’ requirements is fed back.

Our business model is driven by our understanding of our guests

and our ability to evolve our brands and offers to reflect changes

in their needs.

Our business model

How we create value

Critical to the delivery of our offers is the quality

of our people, supply chain, estate and central

functions, which provide the infrastructure

through which our brands deliver memorable

moments to our guests.

Our success in creating these moments

consistently, safely and profitably creates

long-term value for our stakeholders.

Annual Report and Accounts 2025  Mitchells & Butlers plc34

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

2

3

Everything we do is…

Run by our people…

+50,000\*

Employees

\*  As at 27 September 2025.

Local community Environment Investors

Supplied by our supply chain…

+1,600

Suppliers

Realised within our estate…

1,718

Pubs, bars and restaurants

Supported and

managed by our central

functions…

•  Finance and Technology

•  Human Resources

•  Legal and Risk

•  Marketing

•  Procurement

•  Property

Understanding

what our guests

want influences

every element

of our brands

and offers.

The combination of our brands, people, supply chain, estate

and central functions creates memorable moments for our guests.

Mitchells & Butlers plc  Annual Report and Accounts 2025

35

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Our annual supplier conference

allows us to communicate our business

and sustainability priorities direct to

our suppliers

Our centralised procurement team

has developed strong relationships

which have enabled us to minimise the

impact of any supply chain disruptions

Donated unavoidable surplus food

in the supply chain in partnership

with FareShare

4.6

Online review score of over 4.6 out of 5

across the business

Over 99% of outlets with safety scores

of 4 or 5 out of 5

Our suppliers provide the products which bring

our brand visions to life. Our guests’ tastes are

continuously evolving and our ability to meet

changing preferences at scale sets us apart from

our competitors.

We build long-term and collaborative partnerships

with our suppliers. We work closely with suppliers

to ensure the needs of both businesses are met,

and to ensure relationships are maintained.

By working together, we can develop new and

innovative products with suppliers which help our

brands adapt and evolve, building both of our

businesses. Through these partnerships, we work

to maintain transparency about our payment terms.

We work with suppliers to understand the

environmental impact of our supply chain and to

minimise the negative impact of production and

transportation. We are working to ensure that all

our suppliers can support our sustainability

ambitions, including prioritising high animal welfare

standards. Further detail on our sustainability

strategy can be seen on pages 44 and 45.

GuestsSuppliers

Value creation story

FY 2025 highlights

Annual Report and Accounts 2025  Mitchells & Butlers plc36

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

The satisfaction and enjoyment of our guests is

critical to the success of our business. We always

aim to exceed guests’ expectations and continually

evolve our offers with that objective in mind.

We collate guest feedback through online

channels and via our brand surveys which is

reviewed centrally and used to provide valuable

insight to both our operations and brand

marketing teams.

We have always strived to achieve high safety

and hygiene standards and have used this strong

base to evolve our ways of working for the

challenges we face. We focus on ensuring

high-quality, consistent practices across the business.

We constantly review the new procedures to

ensure that both high safety levels and guest

satisfaction can be achieved.

As ever, high-quality food and drink, served by

an engaged team, in an appealing environment

remain key elements to providing our guests with

memorable experiences, alongside the highest

safety standards. We regularly assess changing

guest preferences across these areas to position

our brands for success.

Guests Employees

We are proud of the learning and development

opportunities we offer and strive to provide

progression opportunities to all our people.

Over the past year we have increased the number

of people promoted internally, particularly at

the frontline.

Regular development catch ups are held

throughout the year to support employees’

progression and personal development.

We have two formal feedback surveys a year

providing the opportunity to gain insight into

employee satisfaction and to highlight opportunities

to improve our offer as an employer.

Employee forums are hosted by the Executive

Committee team members and enable all employees

to raise issues via elected representatives, giving

them the opportunity to directly discuss any issues.

The welfare of our employees is of paramount

importance to us and we continually review

the support we offer to employees across

the business.

Dave Coplin, an independent Non-Executive

Director, is the nominated Board member

responsible for representing the employee voice

at Board level.

We are committed to providing equal opportunities

for all our employees. Our employee Diversity and

Equality Policy ensures that every employee, without

exception, is treated equally and fairly and that all

our employees are aware of their responsibilities.

Growing and developing our internal

talent is a priority to address talent

shortages

Innovative recruitment and attraction

solutions ensuring the right people

join our business

Employee wellbeing has never been

more important

The following table sets out our diversity balance

between men and women at the end of FY 2025.

The numbers in brackets show the comparative

numbers for FY 2024.

Men

FY 2025

Men

FY 2024

Women

FY 2025

Women

FY 2024

Board

Directors 7 (7) 2 (2)

Other senior

managers 31 (30) 13 (13)

All

employees 24,249 (24,346) 25,942 (26,462)

Our people are central to our business, bringing

brand visions to life through engaging interaction

with our guests and preparation of high-quality

food and drink.

Through our open and inclusive culture, we aim

to create an environment which allows our people

to develop and grow. Recruiting effectively is

important as it ensures that we attract the right

people that will thrive in our organisation.

Increasingly, technology can be helpful in

supporting our recruitment activity, and enables

us to market our job opportunities effectively in

a very competitive environment.

Mitchells & Butlers plc  Annual Report and Accounts 2025

37

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Value creation story continued

Developed a nutritional roadmap

focused on enhanced information

and balanced choices

£187m

Tax paid in FY 2025 (not including

tax collected, e.g. VAT)

Worked with Social Bite to help

provide employment to vulnerable

people on their Jobs First programme

Over 18 tonnes of unavoidable

surplus food donated to charities

via FareShare in FY 2025

Investment in FY 2025 in

energy-reducing technology

99%

of operational waste diverted from

landfill in FY 2025

Target to reduce our absolute Scope 1

& 2 GHG emissions by 70% by 2030 vs

2019 and our absolute Scope 3

emissions by 28% over the same

timeframe

23%

Food waste reduction in

FY 2025 vs 2019 baseline

Committed to achieving Net Zero

emissions by 2040

We have a long history of providing a central hub

to many communities where people have met and

socialised for decades.

Many of our brands are long-standing supporters

of causes which resonate with the brand and its

guests. For example, All Bar One supports Shelter

with selected dishes including a donation, and

Toby Carvery supports the Armed Forces.

We are actively looking to enhance the positive

impact we can have on local communities,

including supporting charities, providing career

opportunities, encouraging responsible drinking,

and supporting health by enhancing and

providing information on the nutritional content

of our meals.

EnvironmentLocal community

Annual Report and Accounts 2025  Mitchells & Butlers plc38

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

The natural environment provides the business

with the resources it needs to operate. We take

our responsibility to protect that environment

seriously and have set stretching targets to reduce

the negative impact of our business.

We have aligned our objectives with the UN

Sustainable Development Goals in order to focus

our efforts on the global priorities. Our aim is to

embed a sustainable way of doing business within

our current operations such that it becomes

business as usual and we are doing that through

a Board-level committee, steering committee and

focused workstreams with representatives from

across the business.

The food industry has an important part to play

in climate change, as food supply chains are a

significant factor in rising greenhouse gas emissions

and in the reduction of biodiversity. We have

measured our baseline emissions and have used

this to create a roadmap for reduction which is

one of our priority areas. We are also conscious of

the food industry’s significant impact on biodiversity

which is another area we are balancing within our

future plans to reduce the negative impact our

organisation has on the environment and to

enhance the positive outcomes wherever possible.

Further detail of our sustainability strategy can be

found on pages 44 and 45.

Environment Investors

Board-level committees ensure that appropriate

time and focus are allocated to the key areas of

governance of the business and, where necessary,

expert third parties are consulted. The Board

provides a healthy level of challenge and debate

on key areas and has been successful in moving

the business forward.

The Executive Committee consists of members

of management from across the business who

have a wealth of experience both within the

hospitality industry and from other sectors.

Their biographies can be found on our website

at www.mbplc.com/investors/our-management.

We recognise that it is important that our investors

have transparency over the operation of our

business and the full details of our governance

procedures are set out on pages 81 to 93.

Robust financial management through

challenging macroeconomic conditions

Equity raise in FY 2021 gave strength

to balance sheet

Reporting on environmental, social

and governance issues enhanced

Our investors are made up of our shareholders

and bondholders who play an important role in

monitoring and safeguarding the governance of

the Company.

We aim to demonstrate the responsible stewardship

of the Company from a financial, strategic,

governance, environmental and ethical perspective.

We have a highly effective Board, with Directors

with various specialisms and backgrounds to best

govern the Company. Their biographies can be

found on pages 70 and 71.

We maintain an open dialogue through our investor

relations programme. We update investors and

bondholders on financial and strategic performance

through regular performance updates and facilitate

discussion through meetings, roadshows and our

Annual General Meeting.

Mitchells & Butlers plc  Annual Report and Accounts 2025

39

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Our strategic priorities

Maintaining our consistent three strategic priorities

Consistent progress against

our strategic priorities has

been delivered through our

Ignite programme and our

commitment to continued

capital investment.

Our strategic priorities form the foundation of

everything we do, guiding our efforts to deliver

long-term, sustainable growth. They are central

to fulfilling our purpose, to be the host of life’s

memorable moments – bringing people and

communities together through great experiences.

By building a strong, efficient business, we create

the space to focus on what matters most,

experiences that our teams love delivering and

our guests love being part of. We are committed

to embedding sustainability throughout our

operations, including within our supply chain,

ensuring that our processes not only support

growth but also foster connection. Our three

strategic pillars are:

•  Build a more balanced business

•  Instil a more commercial culture

•  Drive an innovation agenda

Focusing on these areas through our Ignite

programme of work, a wide range of management

improvement initiatives delivered significant

progress, generating sustained like-for-like sales

a

growth and cost efficiencies. At any one time we

have 40–50 workstreams live with cross-

functional groups developing initiatives which

enhance efficiency and productivity. We have

had success in areas such as automatic product

ordering, enhanced labour scheduling, reduced

consumption of resources and cost-mitigating

procurement strategies. Alongside efficiency

improvements, we have a number of projects

designed to drive sales and enhance guest

experiences. We remain confident in our ability

to deliver long-term and sustained efficiencies

and business improvements through the existing

Ignite programme.

We believe that our three strategic pillars remain

the crucial elements of the business which will

drive long-term growth. Through the Ignite

workstream and our capital programme, we will

continue to unlock value in these areas, enhancing

our competitive position in the market.

The table on page 41 outlines these strategic

priorities, our progress against them in FY 2025,

our priorities for FY 2026 and their link to our

sustainability strategy, risks and KPIs.

“The systematic progress

we have made across our

three strategic pillars has

delivered sustained market

outperformance and

efficiency gains providing

a stable platform for

future growth.”

a.  The Directors use a number of alternative

performance measures (‘APMs’) that are considered

critical to aid the understanding of the Group’s

performance. Key measures are explained on pages

189 to 191 of this report.

Annual Report and Accounts 2025  Mitchells & Butlers plc40

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

1.

Build a more

balanced business

2.

Instil a more

commercial culture

3.

Drive an

innovation agenda

•  To effectively utilise our estate of largely freehold-

backed properties

•  To ensure we are exposed to the right market segments

by having the optimal trading brand or concept in each

outlet, based on location, site characteristics and local

demographics

•  To maintain the amenity level of the estate such that we

operate safely, reduce our impact on the environment

and remain competitive to guests, alongside meeting

cash flow commitments

•  To empower teams across the business to make changes

to facilitate sustainable growth

•  To engage our teams in delivering outstanding guest

experiences

•  To act quickly and decisively to remain competitive in

our fast-changing marketplace

•  To provide training and development opportunities

which allow our people to thrive within the business

•  To enhance processes to address Modern Day Slavery

threats in the supply chain

•  To ensure that our brands and formats remain fresh and

relevant within their market segments

•  To leverage the increasing role technology can play in

improving efficiency and guest experience

•  To execute a digital strategy to engage with consumers

across a variety of platforms

•  To facilitate new product and concept development

•  To utilise our scale and position to lead on environmental

issues which impact our sector, finding innovative

solutions to pressing issues

FY 2025 progress

•  Expansion of our capital investment programme with

expenditure of £181m (FY 2024 (£154m))

•  Completed 212 conversions and remodels, and acquired

4 new freehold sites as well as the purchase of two

freehold interests in existing sites

•  Expanded our competitive socialising darts concept

Arrowsmiths, across a further 4 sites providing a strong

return from secondary space

•  Integration of Pesto Restaurants Ltd, delivering Italian

Tapas offer across its ten-strong estate. Pesto

complements the Mediterranean theme of Ego and

together these brands provide further diversification of

the estate with a low meat offer which appeals to the

health-conscious guest

•  Continued to grow Ego and Pesto brands through

conversions with strong sales uplifts following conversion

•  Committed to seven-year investment cycle, the capital

programme continues to be a key focus for the business

FY 2025 progress

•  Further progress made by our ‘Guest Obsessed’

programme to enhance the skills of our teams and

provide exceptional guest experiences with a focus on

driving sales, delivering record guest review scores

•  Implementation of automatic ordering system has

improved menu availability which has a significant

impact on guest experience

•  Continued to train and develop our people, celebrating

695 apprenticeships completed in the year, and internal

succession to General Manager roles of 57%

•  Focus on employee engagement resulting in record

engagement scores

•  Donated £1.7m to Social Bite through employee

fundraising and a £500,000 donation from the Group

FY 2025 progress

•  Development of ‘My Account’ across multiple brands,

providing guests a single platform to manage their

bookings, orders, and offers

•  Used data from guest reviews to more accurately

understand satisfaction in relation to dishes used to

inform future menu development

•  Identified opportunities to reduce glass packaging

of soft drinks realising both commercial and

environmental benefits

•  Christmas pre-order system provided guests with a

more streamlined and efficient experience, while also

reducing operational complexities during a busy time

of year

•  Utilised newly adopted new social media platforms and

introducing personalised website content, improving how

we target and engage with different customer segments

FY 2026 priorities

•  There is a full capital programme planned for FY 2026

•  Focus on enhancing asset value through remodelling

sites where we believe increased value can be unlocked

•  Make selective acquisitions where we feel they add

value to the estate, and disposals where we feel we have

extracted maximum value

•  Realise further conversion opportunities within the

estate to the Ego and Pesto formats

•  Invest in technologies, continued investment in solar

panels and expansion of internet-connected control

devices, to improve the energy efficiency of our estate

•  Maximise the utility of the secondary spaces across the

estate via a dedicated Ignite initiative

FY 2026 priorities

•  Adapt to the changing environment within which we

operate to maximise the profitability of each business

•  Deliver a wide range of cost control initiatives across the

estate under the Ignite programme

•  Continue to unlock the benefits of automated team

member scheduling in every business

•  Further investment in internet-connected control

devices for heating systems and kitchen equipment to

reduce energy consumption

•  Increasingly leverage scale through central procurement

and benchmark our businesses

FY 2026 priorities

•  Continue to build on the success of ‘My Account’

with more advanced loyalty schemes to further

incentivise repeat customer engagement and

strengthen brand loyalty

•  Identify further opportunities to realise commercial

benefits through supplier collaboration on packaging

•  Extend digital gamification across more brands,

enhancing customer interaction and engagement

•  Further enhancements to our ordering and booking

platforms, focusing on improving speed, reliability, and

the overall customer experience to meet the evolving

expectations of our digital audience

Sustainability

•  Enhancing the sustainability credentials of our buildings

is a key priority

•  During the year we have installed solar panels on 93 sites

producing on-site renewable electricity and have plans

to continue this programme into FY 2026

•  Removing gas as an energy source from our sites is a key

objective of our Net Zero roadmap. We now have 100

sites with all-electric kitchens and 24 sites where we

have fully removed gas in favour of renewable electricity

•  We have a team of sustainability ambassadors across the

business who have helped to drive behavioural change

resulting in reduced energy consumption; coupled with

investment in energy reducing technology we have

reduced consumption by 2% during the year

•  We divert 99% of our operational waste from landfill and

are focused on reducing overall volumes of waste whilst

increasing recycling rates

Sustainability

•  We communicate our sustainability ambitions on all

brand websites and have built our communication on

these topics through social media in appropriate brands

•  We have made good progress in reducing food waste,

down by 23% in FY 2025 from FY 2019 baseline,

facilitated through enhanced practices and partnerships

with FareShare and Too Good To Go to redistribute

unavoidable waste

•  Identifying opportunities to reduce water consumption

across the business

•  Continue our work with Stop The Traffik to drive best

practice in addressing Modern Day Slavery threats in

the supply chain

•  Expand our existing strong partnership with Social Bite,

providing employment to support people impacted

by homelessness

Sustainability

•  Around 14,500 people have completed our training

on sustainability designed to enhance understanding

of sustainability challenges

•  We have active and ongoing discussions with our

suppliers on innovative ways to reduce the

environmental impact of our supply chain

•  We are active members of the Zero Carbon Forum,

a cross-industry group which is focused on finding

solutions to help hospitality transition to a low

carbon economy

•  We have representation on the UK Hospitality

Sustainability committee and Hospitality Sector Council

Sustainability Group, making us part of the conversation

with Government for future legislative changes to

support enhanced sustainability in the sector

Links to Key Risks

1, 2, 3, 4, 5, 6, 7, 9

See pages 52 to 59

Links to Key Risks

1, 2, 3, 4, 5, 7, 8

See pages 52 to 59

Links to Key Risks

1, 2, 3, 4, 6, 7

See pages 52 to 59

Links to KPIs

2, 3, 4, 5

See pages 42 and 43

Links to KPIs

1, 2, 3, 4, 5

See pages 42 and 43

Links to KPIs

2, 3, 5

See pages 42 and 43

Mitchells & Butlers plc  Annual Report and Accounts 2025

41

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Key performance indicators

Measuring performance

We measure our performance against our strategy through

five key performance indicators.

1.

Staff turnover

2.

Guest review score

3.

Year-on-year same outlet

like-for-like sales

a

55%

58%

94%

81%

64%

2021 2022 2023 2024 2025

Definition

The number of leavers in our retail businesses,

expressed as a percentage of the average number

of retail employees. This like-for-like measure

excludes site management. The turnover

measurement gives an indication of the retention

of retail staff and can help to identify if there is an

arising retention issue in any area of the business

which could highlight an engagement issue. In

addition, as team members go through a thorough

induction and training process there is an element

of cost for each person who leaves the business.

Therefore, it is important for the Board to monitor

this measure.

FY 2025 performance

Retail staff turnover reduced by 9 ppts to a record

low of 55% due to the effective delivery of our

people promise, to meet the needs of our

employees, driving improved retention. Turnover

was reduced across all employee groups, with

particular progress in front and back of house

team members. During 2021, turnover was

suppressed by the impact of Covid-19 as there

were minimal leavers during closure periods.

Link to strategic priority: 2

See page 41

Definition

Our reported guest measure is an average

feedback score across the major third-party

feedback channels such as Google, Facebook,

TripAdvisor and other review sites. Improving this

score remains a key focus of the business as we

aim to create memorable moments for our guests.

FY 2025 performance

Our average feedback score across all major

feedback channels was 4.6 out of 5 for FY 2025,

and improvement on prior year of 0.1. We are

delighted with the continued progress made in

recent years on guest feedback, which reflects

the satisfaction of our guests. Progress has been

improved over the year, driven by a collection of

Ignite projects focusing on improving this metric

and our managers’ continued commitment to

delivering excellent guest experiences.

Definition

Sales in FY 2021 and 2022 were impacted by

Covid-19 related closures, therefore during these

years sales were compared to the sales in FY 2019,

being the last full year pre-Covid-19. Since

FY 2023 the measurement has reverted to using

the prior year as a comparative of all UK managed

sites that were trading in the two periods being

compared, expressed as a percentage. Like-for-

like sales is an important indicator of how the

business is performing in the context of its

previous performance, the long-term trend of

which can reflect improvements in guest appeal.

FY 2025 performance

Like-for-like sales increased by 4.3% in FY 2025

built on strong brand performances across the

portfolio. We remained ahead of the market in

totality and in each segment reported by the CGA

business tracker, supported by broadly flat

volumes across the period.

Staff turnover

55%

4.6

4.3

4.3

4.4

4.5

2021 2022 2023 2024 2025

Links to strategic priorities: 1, 2 & 3

See page 41

Guest review score

4.6

4.3%

-9.6%

1.1%

9.1%

5.3%

2021 2022 2023 2024 2025

Links to strategic priorities: 1, 2 & 3

See page 41

Year-on-year same outlet

like-for-like sales

a

4.3%

Annual Report and Accounts 2025  Mitchells & Butlers plc42

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

4.

Incremental return on

expansionary capital

a

5.

Adjusted operating profit

a

Definition

Expansionary capital includes investments made

in new sites and investment in existing assets that

materially changes the guest offer. Incremental

return is the growth in annual site EBITDA,

expressed as a percentage of expansionary capital.

Is it important for the Board to monitor return on

investment as it indicates the success of the capital

programme which underpins one of our three key

strategic pillars, to build a balanced business.

FY 2025 performance

The EBITDA return on all conversion and

acquisition capital invested over last 4 years was

17%. We remain confident in the quality of the

investment programme and committed to the

re-establishment of a seven-year investment

cycle. Our capital programme continues to be

a key focus of the business and one which we

believe will deliver significant future value.

Definition

Operating profit before separately disclosed

items as set out in the Group Income Statement.

Separately disclosed items are those which are

separately disclosed by virtue of their size or

incidence. Excluding these items provides both

management and investors with useful additional

information about the Group’s performance and

supports an effective comparison of the Group’s

trading performance from one period to the next.

The Board monitors adjusted operating profit

as one of the financial health indicators, as it

helps to reveal how efficiently the business is

being operated.

FY 2025 performance

Adjusted operating profit

a

, of £330m was £18m

higher than the prior period. Strong sales

performance and enhanced operating efficiency

during the year resulted in profit growth as well

as strengthened operating margin to 12.2%

(FY 2024 12.0%).

a.  The Directors use a number of alternative

performance measures (APMs) that are considered

critical to aid the understanding of the Group’s

performance. Key measures are explained on pages

189 to 191 of this report.

b.  52-week basis

Links to strategic priorities: 1

See page 41

Links to strategic priorities: 1, 2 & 3

See page 41

£330m

£29m

£240m

£221m

b

£312m

2021 2022 2023 2024 2025

Adjusted

operating profit

a

£330m 4.6 out of 5

Average guest review score

17%

Incremental return on expansionary capital

Incremental return on

expansionary capital

a

17%

17%

-0.8%

18%

19% 19%

2021 2022 2023 2024 2025

Mitchells & Butlers plc  Annual Report and Accounts 2025

43

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Our sustainability targets

We have been working on enhancing the

sustainability of our operations since 2019 and

are pleased with the progress we have made.

We believe that embedding sustainability skills

into our existing teams is essential in order to

generate the changes needed to reduce the

environmental impact of the business. During

the year we have continued to build knowledge

and skills across the organisation enabling

sustainability considerations in each business

decision, and team members across the business

receive communication on key initiatives to drive

engagement and enhance understanding of our

objectives. The Sustainability Steering

Committee oversees the development and

progress of the Company strategy, supported

by working groups aligned to the three pillars of

the strategy. Our established Board-level

Responsibility Committee provides oversight and

governance to the management working group.

The Board provides challenge and insight on our

progress in an ever-changing macro environment

and is regularly updated on progress.

Our strategy has been developed to align with

the issues addressed by the UN Sustainable

Development Goals and Paris Climate

Agreement. We have committed to reducing the

negative impact of our business model on the

environment in light of these objectives and look

for opportunities to enhance our positive impact

on society. Our Net Zero ambition has been

developed to align with the Science Based

Targets initiative (SBTi) methodology to keep

global warming well below 2°C, and our roadmap

was validated by the SBTi in January 2024. We are

working on recalculating our 2019 baseline and

reduction pathway to align with the Forest, Land

and Agriculture (FLAG) guidance and latest

guidance in the Greenhouse Gas protocol.

We plan to submit our FLAG targets for SBTi

approval in early 2026.

Our strategy was informed through a stakeholder

materiality assessment, and we regularly review

our objectives, targets and timeframes in the

context of evolving external factors. We have

identified the UN Sustainable Development Goals

which we believe we can have the greatest impact

on and have aligned these to our strategic pillars

as shown below. For each of the pillars we have

defined our objective, key actions and targets.

Collaboration across our industry and value chain

is essential in order to facilitate progress; we are

members of industry groups such as the UK

Hospitality Sustainability Committee, representing

hospitality in the development of environmental

policy and Zero Carbon Forum, to share best

practice with the intention of moving the industry

forward as a whole.

We are committed to reducing the environmental impact of our business

operations and are pleased with our sustained progress against our key targets.

Sustainability strategic pillars

1. Respect for the planet 2. Pride in our offers 3. Care for communities

Objective

We are committed to reducing our emissions,

tackling waste and protecting biodiversity

Objective

We strive to deliver responsibly-sourced products

and menu options for everyone

Objective

People are central to our business, we are focused on

supporting our teams and the communities we serve

Key actions

•  We have made progress against our Net Zero

roadmap, which was built in collaboration with

third-party experts, providing a detailed plan

for decarbonisation

•  We received validation for our Net Zero

roadmap from Science Based Targets initiative

•  We are a founding and active member of the

Zero Carbon Forum, bringing the industry

together to reduce emissions across the sector

through shared learning and insights

•  We continue to purchase 100% renewable

electricity and continue our solar panel roll

out, with 244 sites now completed, allowing us

to generate on-site renewable energy

•  We have successfully removed gas as an

energy source for cooking, heating and hot

water in 24 sites, providing essential learning

for the future scaling of this initiative

•  We have successfully converted 100 kitchens

from gas to electricity

•  We have increased the proportion of

operational waste diverted from landfill to 99%

(FY 2024 98%) and our recycling rate to 60%

(FY 2024 59%) with the latter end of the year

achieving 62%, through team engagement

and working with suppliers on more

sustainable packaging

Key actions

•  We work with suppliers across all categories to

understand and improve the environmental

credentials of the products we buy

•  We conduct annual supplier surveys to gain

better understanding of their sustainability

targets and progress to date

•  We collect product-specific emission data to

inform decision-making

•  We have enhanced our animal welfare

requirements from suppliers

•  We engage with suppliers on sustainability

through our procurement managers and at our

annual supplier conferences

•  We have maintained our focus on enhancing

the nutritional balance and information

available on menus

•  We source all direct palm oil purchases from

Rainforest Alliance Approved sources

Key actions

•  We have developed a partnership with Social

Bite, a charity tackling homelessness

•  We have expanded our employment

programme with Social Bite, supporting 36

vulnerable people back into employment

•  We have employed two dedicated support

workers who are assisting people to re-enter

the workforce

•  We raised £1.2m on behalf of Social Bite

during FY 2025, through fundraising activity,

unlocking an additional donation of £0.5m

from Mitchells & Butlers plc resulting in a total

of £1.7m donated to Social Bite.

•  We have an enhanced employee wellbeing

strategy and improved resources and tools

available to employees

•  We maintain oversight of our Modern Day

Slavery policy with risk assessment completed,

in partnership with Stop the Traffik

UN Sustainable Goal alignment

UN Sustainable Goal alignment UN Sustainable Goal alignment

Annual Report and Accounts 2025  Mitchells & Butlers plc44

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

Our targets

1. Net Zero greenhouse gas

emissions by 2040

2. Zero operational waste

to landfill

3. Food waste

Target

Achieve Net Zero greenhouse gas emissions by

2040 (absolute reduction of emissions, including

Scope 1, 2 & 3) from our FY 2019 baseline. We

align our definition of Net Zero to the Science Based

Targets initiative corporate standard. Our Net Zero

target includes our Scope 1, 2 & 3 emissions, using

an operational control approach. We have set a

near-term target (validated by SBTi) to reduce our

absolute Scope 1 & 2 GHG emissions by 70% by

2030, compared to a 2019 base year (aligned to well

below 2°C) and a target to reduce our absolute

Scope 3 emissions by 28% over the same timeframe.

We also set a long-term target (validated by SBTi) to

reduce absolute GHG emissions from Scopes 1, 2 &

3 90% by 2040 from a 2019 base year to be Net Zero

by 2040. Aligned to the SBTi criteria we will offset

our residual 10% emissions using carbon removal

offsets at our Net Zero date. We are working on

recalculating our 2019 baseline and reduction

pathway to align with the Forest, Land and

Agriculture (FLAG) guidance and latest guidance in

the Greenhouse Gas protocol. We plan to submit

our FLAG targets for SBTi approval in early 2026.

Target

Zero operational waste to landfill by 2030.

Target

Reduce food waste by 50% by 2030 from our

FY 2019 baseline.

Performance

Our Scope 1, 2 & 3 greenhouse gas emissions

decreased by 16% against our FY 2019 baseline

in FY 2025, driven by reduced energy consumption,

reduced reliance on gas and a reduction in the

emissions associated to the products we buy.

Total Scope 1 & 2 emissions reduced from the

baseline by 22% (FY 2024 18%) driven by energy

consumption reduction initiatives, and the

removal of gas from the estate. We made good

progress in reducing gas usage with 100 electrified

kitchens now in place, and 24 sites where gas has

been fully removed and replaced by air source

heat pumps. We also continued our solar panel

roll out with 244 sites with panels installed, and

plans to install panels at 100 sites in FY 2026.

Our Scope 3 emissions, including all other indirect

emissions that occur in our value chain, reduced by

15% versus our 2019 baseline driven by reductions

in emissions associated with the products we buy

and our supply chain logistics. Scope 3 emissions

represent 92% of our baseline footprint and therefore

are an important focus of our transition plan. Food

emissions are the largest individual contributor to our

footprint and we have made good progress over the

year, by continuing to engage with our suppliers

on reduction opportunities and by enhancing the

quality of data we hold on product level impact. We

will continue to progress our work with suppliers

with the aim of reducing our food emissions,

which is a key focus for achieving Net Zero.

Performance

During the year we have diverted 99% of

operational waste from landfill, putting us on track

to deliver our target of zero operational waste to

landfill by 2030. In partnership with our waste

management providers, we have run a bin

optimisation programme, ensuring that all of our

sites have appropriate recycling and general

waste bins in the most accessible areas of the

business, to encourage improved segregation of

waste. To facilitate the introduction of Simpler

Recycling legislation in England, which came into

effect in March 2025, we delivered nearly 10,000

additional recycling bins across the estate.

Supported by our sustainability ambassadors and

communication to encourage behaviour change

we have improved our recycling rate to 60% with

rates increasing in the latter part of FY 2025 to

c. 62%, encouraging momentum which we will

carry into FY 2026.

We have targeted a recycling rate of 80% by 2030

and are working across a number of fronts to

achieve an improvement in the proportion of

waste we recycle. We are working with suppliers

to reduce the volume of packaging entering our

sites, and to ensure that as much packaging as

possible can be recycled, as well as engaging

teams in the positive environmental impact of

increased recycling rates. We will continue to

engage our teams on our environmental

ambitions through a network of Sustainability

Ambassadors and training.

Performance

This year we have achieved a 23% reduction in

food waste against our FY 2019 baseline. Food

waste reduction has been achieved through

strengthened operational procedures which

reduce the level of waste generated during the

food prep process, including enhanced ordering

accuracy, as well as reduced menu complexity.

The introduction of auto-ordering helped to

improve the forecasting of dish mix and therefore

reduced waste through spoilage. In addition, we

have continued our roll out of Too Good To Go

which is now across seven brands, saving on

average over 13,000 meals a week from wastage

and having saved over 2.65 million meals from

waste since the beginning of the partnership.

In the year we collected data to understand the

drivers of food waste including plate, preparation,

spoilage and buffet waste. Analysis of the data

has helped us to develop strategies to deliver

further food waste across these areas.

Unavoidable food waste from our pubs and

restaurants is sent to anaerobic digestion.

We remained focused on managing waste within

the supply chain, particularly around menu

changes and key dates, and made good progress

last year. Where possible we donate food which

would otherwise go to waste to FareShare who

redistribute the food to community groups who

need it. During the period we donated 18 tonnes

of food through FareShare, the equivalent of

c. 41,000 meals.

Zero

Target to achieve Net Zero

greenhouse gas emissions

by 2040

Zero

Target to achieve zero operational

waste to landfill

by 2030

50%

Target to reduce food waste by 50%

by 2030

Mitchells & Butlers plc  Annual Report and Accounts 2025

45

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Task Force on Climate-related

Financial Disclosures (‘TCFD’)

We are pleased to confirm that we have included

climate-related financial disclosures consistent

with the TCFD recommendations and

recommended disclosures, except for Scope 3

emissions, and in compliance with UKLR

6.6.6R(8). Our report addresses the four TCFD

pillars: Governance, Strategy, Risk Management

and Metrics and Targets. In preparing this

information, all of the guidance in Section C and E

of the TCFD Annex has been considered. Scope 3

emissions have not been disclosed for the current

period. Our intention is to disclose Scope 3

emissions on the conclusion of our rebasing for

Forest, Land and Agriculture targets as required

by Science Based Targets initiative, allowing us to

begin disclosure on a basis which we expect to

remain consistent in future years. We anticipate

our internal processes to be concluded in the first

half of 2026 with Science Based Targets initiative

approval to follow.

Governance

We, alongside our stakeholders, recognise that

the health of our planet is critical to the wellbeing

of society at large and that the food industry has

a significant part to play in addressing the current

climate emergency. We also recognise that the

food industry will feel the effects of continued

climate change ever more acutely which will result

in changes in consumer behaviour, advances in

innovation and the evolution of leisure offers to

adapt to changing needs.

The purpose of this statement

is to provide investors and

wider stakeholders with an

understanding of Mitchells

& Butlers plc’s governance

structure in relation to climate,

our exposure to climate-related

risks and opportunities, our

strategic response to managing

identified risks and opportunities

and the key metrics we use.

The Board of Mitchells & Butlers plc is committed

to delivering the purpose of the organisation: to

be the host of life’s memorable moments, and to

do so in a way which reduces the environmental

harm caused by operations. The Board considers

climate-related matters when reviewing and

guiding strategy, investment decisions and the

risk management policies. Our approach to

climate enables us to evolve our offers to meet

changing consumer expectations in order to

realise potential climate-related opportunities

whilst also monitoring and addressing the risks

posed by climate. We have developed a clear

governance framework to support our

assessment and response to climate-related

matters. This framework has helped us to

continue to make progress against our climate

goals and to address challenges faced by the

industry as a whole.

Strategy and risk management

In response to the TCFD requirements, we

performed a detailed review of the climate-related

risks and opportunities relevant to the business.

The resulting principal risks were added to the risk

register and are now assessed on a regular basis

as part of the Risk Committee’s review.

Identifying, assessing and managing

climate-related risks and opportunities

The following stages formed the process of

identifying and assessing climate-related risks

and opportunities:

•  Workshops were held with external third

parties who reviewed Mitchells & Butlers’

operations before generating a list of

climate-related risks and opportunities

relevant to the business. These were

considered alongside guidance from the

World Business Council for Sustainable

Development (“wbcsd”) Food, Agriculture

and Forest Products TCFD Preparer Forum

to formulate a list of all the climate-related

risks and opportunities which may impact

our organisation.

•  Workshops were held with representatives

from relevant functions across the organisation

to obtain a wide range of perspectives on the

identified climate-related risks and

opportunities. Using expert knowledge of the

business and its supply chain, experience from

past events and insight into guest behaviour,

each risk and opportunity was assessed and

opinions were gathered on future change and

perceived risk materiality. The output of the

workshops was a reduced list of risks and

opportunities which were considered to be

most material to the organisation based on this

qualitative assessment. This process helped to

reinforce our response to TCFD requirements.

•  Our established risk management framework

and heat mapping (see page 52) were then

used to establish which of those identified

risks were likely to be material to our business,

being those with a high likelihood and a high

impact. Two risks were identified to be material,

and therefore have now been included as

principal risks, with the results discussed and

approved by the Risk Committee. Our

sustainability strategy has been developed

to mitigate those risks where possible with

associated KPIs to track progress, as well as

risk indicator measures which identify if the

impact of an identified risk is increasing.

All potential climate-related risks and

opportunities are reassessed annually through

the Sustainability Steering Committee and Risk

Committee. Analysis and response to risks are

supported by TCFD guidance and evolving

corporate best practice. Additional risks are

added to the principal risk register if the criteria

to do so are met; no additional risks have been

added to the register in the financial year.

Through our membership and active involvement

in industry-led organisations, such as the UK

Hospitality Sustainability Committee and Zero

Carbon Forum, and through regular dialogue with

suppliers, we will continue to collaborate on our

responses to climate risks and to seek out

opportunities to progress against our goals.

We engage actively with our suppliers on

sustainability issues, including at our annual

supplier conference and annual supplier surveys,

and will be seeking to further progress alignment

of objectives which will help manage climate

risks through Scope 3 emissions measurement

and management.

Annual Report and Accounts 2025  Mitchells & Butlers plc46

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

Climate-related risks and opportunities

management and strategy

Our analysis of climate-related risks and

opportunities identified the risk of the introduction

of carbon taxes and the risk of increased severe

weather events as material and these risks have

been included within our principal risks (see page

52). Carbon tax is included within Risk 2–Cost of

goods, critical products and services; and severe

weather is included within Risk 3 –Supply chain.

These risks are consistent across all of our locations.

During the year we have conducted quantitative

analysis of identified risks. In the modelling of

climate-related risks we have considered three

warming scenarios, using the Representative

Concentration Pathways (RCP) 2.6, 4.5 and 8.5

developed by IPCC as a basis for our assumptions.

RCP capture forecasts how concentrations of

greenhouse gases in the atmosphere will likely

change as a result of human activity, and predict

the future impact on regional climates. RCPs are

widely recognised and represent respectively

1.6°C of warming, 2.4°C of warming and 4.3°C

of warming. Our analysis assesses the short-term

risks as being between 0-3 years, in line with how

we assess our principal risks and viability statement;

medium-term risks between 3-6 years; and

long-term risks between 6-20 years in line with our

longer-term contracts and climate commitments.

The results of the quantitative analysis will be

considered in our financial planning as we make

progress against our transition plan. Elements of

the sustainability strategy are already embedded

in financial planning, for example capital

investment in sustainable technology and

building development are considered at Group

level and built into the annual capital plan and

specific initiatives developed by brands to ensure

optimal alignment with guest needs are factored

into brand budgeting assumptions. The financial,

and environmental impact of all sustainability

initiatives are carefully tracked and reported to

the Sustainability Steering Committee which in

turn escalates any material impact to the Executive

Committee and Board.

Board oversight of climate-related

risks and opportunities

The Board is responsible for the long-term success

of Mitchells & Butlers plc and has an established

framework in place which enables effective

assessment and management of risks, including

climate-related risks and opportunities.

Responsibility for ESG matters is managed within

the framework by the Corporate Responsibility

Committee, a Board level committee, using insight

from the Group Risk Committee on the assessment

of climate-related risks, the Group Audit Committee

on the financial consideration of climate-related risks

and the Group Remuneration Committee on the

inclusion of climate-related metrics in remuneration.

The Corporate Responsibility Committee is chaired

by Bob Ivell and is led by Dave Coplin, Non-Executive

Director, who has been designated by the Board to

take a lead role in oversight and development of the

Company’s approach to climate-related issues.

Dave Coplin has, for the last 30 years, been providing

strategic advice and guidance on driving innovation

and transformation to organisations and

governments both here in the UK and around the

world giving him excellent experience in this role.

The Committee is made up of five Board members

with Phil Urban invited to attend regularly.

Board of

Directors

The Corporate Responsibility Committee meets

at least twice a year to review progress utilising

information provided by the Sustainability Steering

Committee. The Sustainability Steering Committee,

which is a management level committee, provides

regular update papers to the Corporate

Responsibility Committee, including performance

against stated targets including Net Zero by 2040,

waste management and food waste reduction, as

well as progress on key transition plan initiatives.

The Board is updated at least annually on performance

against targets and initiatives or investment, either

underway or future, which facilitate the attainment

of our goals. Ad hoc updates are provided where

approval is required, or a significant development

is reported. As such, climate-related risks and

opportunities form an important part of the context

from which the organisational strategy is considered

and developed, ensuring that the Group is positioned

to protect itself from financial and reputational risks

associated with climate.

This structure also enables the Company to benefit

from the commercial opportunities of accelerating

the sustainability programme in order to align brand

propositions with guests’ changing needs. When

considering any business planning activity, the Board

takes into consideration the broader context of its

trading environment, with details of the climate aspect

provided by the Corporate Responsibility Committee.

Corporate

Responsibility

Committee

The Sustainability Steering Committee is

a management level Committee which has

responsibility for the continuous monitoring

and evolution of the sustainability strategy.

The Committee oversees the three working groups

responsible for discrete areas of the sustainability

strategy: respect for the planet, pride in our offers

and care for communities.

The Sustainability Steering Committee meets with

the working group leads every eight weeks, and

receives supporting update papers in advance of

meetings. The meetings ensure that the Sustainability

Steering Committee maintains oversight over

sustainability activities which are in place across

various business functions, ensuring that our

approach is consistent and executed effectively.

These meetings also provide the foundation of the

update information provided to the Board-level

Corporate Responsibility Committee. The

Sustainability Steering Committee also meets on

a monthly basis with members of the Executive

Committee to inform management on progress of

key initiatives and to discuss any decisions required

by the Executive Committee.

Sustainability

Steering

Committee

Mitchells & Butlers plc  Annual Report and Accounts 2025

47

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Task Force on Climate-related Financial Disclosures continued

Transition risk

Risk

Introduction of carbon taxes and levies

Category

Operational costs

Description

This risk represents the impact on operating

costs of the business both directly through

taxation and indirectly through higher

input costs which would result from the

introduction of taxation and levies

attributed to greenhouse gas emissions.

Qualitative assessment has identified this

risk as both high in impact and likelihood

over the medium to long term especially

under RCP4.5 and RCP8.5 warming

scenarios. The introduction of a form of

carbon taxation is likely to be introduced as

pressure mounts for progress to be made

against the Government ambition to

achieve Net Zero by 2050.

Mitigating actions

We have developed a Net Zero strategy with a target

date of 2040 which has been validated by Science Based

Targets initiative (SBTi). We plan to resubmit for Forestry,

Land and Agriculture (FLAG) SBTi in 2026 and are

working on recalculating our 2019 baseline and

reduction pathway.

We have a number of initiatives underway designed to

reduce our emissions in line with our Net Zero roadmap.

In order to reduce Scope 1 & 2 emissions, we are investing

in solar panels, electric kitchens and fully electrifying

sites. Furthermore, we are investing in technology and

focusing on behavioural change that will reduce our

energy consumption.

The detailed plan for reduction will help to mitigate an

element of potential cost, and a target date ahead of

Government ambition will help to position the

organisation ahead of the market average.

In order to reduce Scope 3 emissions, we are working

closely with suppliers, particularly in high emission

categories, to support their pathway to carbon reduction

which will help to mitigate an element of this risk.

However, if input costs increased materially in response

to carbon taxes margins would be at risk.

We are a member of UK Hospitality Sustainability

Committee which enables us to have foresight over

potential policy changes impacting the organisation.

Quantitative analysis considerations

The approach to the quantitative assessment

performed took the Group’s forecast carbon

emissions, from our Net Zero plan submitted for

Science Based Targets initiative approval, and

applied the 2025 carbon price for use in civil

penalties in the UK of £41.84 per tonne of CO

2

over the short, medium and long term giving an

estimate of the potential financial impact of the

introduction of carbon taxes.

Under RCP2.6, a scenario under which warming

remains under 1.6°C, we have considered the

introduction of carbon taxes is unlikely as other

action has controlled temperature rise.

Under RCP4.5 we assume a high likelihood of

introduction of taxes in relation to Scope 1 & 2

emissions in the long term as warming poses a

greater risk and intervention is introduced to

attempt to limit warming.

Under RCP8.5, where warming is 4.3°C, the

impact would be considerable with increased

severe weather events and considerable impact

on human welfare. We have considered

intervention in both the medium and long term

likely, and due to the scale of impact have

assumed carbon tax of Scope 1, 2 & 3 emissions

in the long term.

Our sustainability strategy is designed to mitigate

the financial and reputational impact of climate-

related risks and to capture the benefit of aligning

our brand proposition to changing consumer

needs. In particular, we have a well-developed

transition plan to Net Zero, which has been

designed in collaboration with third-party experts

and was validated by Science Based Targets

initiative (SBTi). We are working on recalculating

our 2019 baseline and reduction pathway to align

with the Forest, Land and Agriculture (FLAG)

guidance and latest guidance in the Greenhouse

Gas protocol. We plan to submit our FLAG targets

for SBTi approval in early 2026. Our Net Zero

roadmap aligns with SBTi methodology to keep

global warming well below 2°C. This detailed

roadmap provides the benchmark against which

performance can be tracked to a low emission

economy, with our contribution clearly understood

as well as that of our suppliers, such that we can

influence others in our supply chain to reduce

their emissions.

Sustainability is a key priority for the Board

and management and remains so despite the

challenges currently faced by the industry as a

whole. Hence, we have included a Sustainability

target in our Long-Term Incentive Plan for the

Executive and Leadership team and intend to

include appropriate measures within incentives

plans through the organisation to outlet level.

The financial impact of identified climate-related

risks and opportunities bring to life the possible

consequences for the business and its supply

chain. The various warming scenarios were

developed using the Met Office predictions of

future weather events. We performed a qualitative

analysis of the possible (1) reduction in sales (2)

increase in supplier costs (3) increase in damage

to properties under the three warming scenarios.

We believe that we have a robust strategy in place

to help mitigate an element of the risks posed

particularly under RCP 2.6 where the impact is on

the organisation and supply chain is lower. Under

extreme warming scenarios, such as RCP 8.5 the

impact on the environment will be more severe

reducing our ability to mitigate and manage risks,

with food supply chain disruption being a

particular area of risk. We have a centralised

building management team who monitor the

physical risk to our estate and our sustainability

strategy is designed to address the transition risks

identified. We are conscious that collaboration,

particularly with the supply chain, will be vital in

order to tackle the future challenges ahead.

Identifying ways to develop commercially viable

solutions to approach the environmental impact

of the food supply chain, an area of greater risk,

is a significant challenge and one on which we are

working with industry bodies, supply chain

partners and other hospitality businesses. Under

a 4°C warming scenario whereby, according to

Met Office predications, adverse weather events

would be far more frequent, the impact of both

our physical and transition risks are higher. From a

physical risk perspective, due to sea levels rises in

this scenario, a small number of sites would enter

the flood risk register and we would expect

increased frequency of damage to properties

caused by storms and extreme weather. We

monitor the frequency of weather-related

damage to buildings centrally and would evolve

an enhanced strategy to mitigate the risk under

this scenario should this be the likely direction

of travel.

Below is a summary of the climate-related risks

included within our principal risk register, for

further details on our risk assessment framework

please see pages 52 to 59.

Risk level

Short-term Medium-term  Long-term

Annual Report and Accounts 2025  Mitchells & Butlers plc48

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

Physical risk

Risk

Increased severity of extreme

weather events

Category

Acute

Description

This acute physical risk represents the risk

to both revenue and the supply chain of

increased severe events. Revenue would

be impacted through the interruption to

trade caused by both extremely hot

weather and adverse weather such as rain

and snow, as well as possible site closure

resulting from flooding. In addition, the

availability of products in the supply chain,

in particular agricultural produce, could be

impacted by severe weather affecting

product availability and input prices.

The qualitative assessment of potential

revenue impact included a high-level

review of previous interruption to trade

resulting from extreme weather and

considered scientific forecasts as to the

likely increase in extreme weather events.

Procurement information relating to

previous disruption to supply chain due to

localised weather events and geopolitical

issues were reviewed and considered in

the context of increased severe weather

events. As a result of these assessments

the risk has been identified as both high

impact and high likelihood.

Mitigating actions

The weather has a high level of impact on trading levels

across the estate and therefore monitoring weather

forecasts in relation to expected trading levels is a normal

part of the financial planning of the business.

This monitoring activity will enable us to identify when

patterns of increased instances of extreme weather

events begin to develop at which point investment in

mitigating action, such as installation of air conditioning,

can be considered. In addition, our experience during

Covid has meant that we have developed strategies to

close sites at short notice, such that in the instance of

extreme weather significantly impacting trade we could

close sites in order to mitigate some of the financial losses

which we would be exposed to.

In relation to site closure due to damage to buildings,

such as during flooding, we have insurance in place to

recover the lost trade and required repairs and therefore

does not represent a significant risk in the short term;

however this might impact us in the medium and long

term under RCP4.5 and RCP8.5 if the business incurs

higher insurance premiums and is unable to insure some

buildings at high risk of flooding.

To manage the risk associated with our supply chain,

we monitor and communicate with our suppliers closely

giving us foresight over potential supply issues. We also

have sufficient breadth of products across our brands

that supply issues with one product could be mitigated

through switching to a substitute. We are also aware

of emerging agricultural techniques which are less

susceptible to weather conditions, such as vertical

farming and regenerative agriculture, as well as shifting

crops to more favourable conditions, and would consider

these alternatives if the supply chain was likely to

become severely impacted.

Quantitative analysis considerations

The quantitative assessment performed involved

a detailed analysis of extreme weather’s previous

impact on trade to determine the potential impact

on revenue. In order to quantify the future impact

of extreme weather, four weather-related data

points (maximum temperature, minimum

temperature, rainfall and wind speed) were taken

from the Met Office Climate Projections under

RCP2.6 and RCP8.5 warming scenarios. These

were used to determine the financial impact of

weather-related extreme events in the short,

medium and long term under the three warming

scenarios, that is above and beyond what the

Company has experienced in the last three

financial years.

To measure the potential impact on the supply

chain, we reviewed historical impacts of a variety

of weather events and gathered scientific

evidence showing up to 31% decrease in crop

profits under RCP8.5, half of which can be

avoided by reallocating crop lands, and no

material impact on livestock products. Hence,

we have assumed 5% increase in crop items cost

under RCP4.5 and 10% under RCP8.5 as we will

be able to implement strategic ingredient swaps

to dishes to adjust for certain product’s inflation,

both were considered in the long term only.

To measure the potential impact of increased

flood risk on the estate, we assumed that in the

short term the risk would be mitigated by insurance.

In the medium and long term our insurance

premiums would increase under RCP4.5 and

RCP8.5 due to an expected increase in flood

instances which was derived by the Met Office

Climate Projections. In the long-term scenario

under RCP8.5, due to significantly increased

flooding we have assumed that half of our

high-risk sites would be unlikely to be insured

resulting in exposure to financial risk.

Transition opportunity

Risk

Adjusting brand propositions to appeal

to changing consumer preference

Category

Revenue

Description

Changing consumer preferences towards

products seen as better for the environment,

for example dietary shifts towards low

carbon products, presents an opportunity

for the Group to position brands to appeal

in an evolving market. The breadth of

brands within the Group portfolio provides

the opportunity to test adapted brand

propositions in a low risk way and to

therefore be ahead of the market when

consumer preferences begin to change

in the mass market.

Mitigating actions

All of the initiatives under the sustainability strategy

help to strengthen the Group’s position in relation to

environmental matters. This allows our brands to

communicate with guests on environmental issues with

consistency across the portfolio and to build a reputation

for sustainable operations.

Our focus on achieving ambitious environmental targets

will position the Group well to benefit from changing

consumer habits. Our ability to trial proposition

adaptations in appropriate brands to gauge guest reaction

will ensure we are well prepared to make informed

decisions in the future as consumer preferences change.

In addition, our scale and commitment to our investment

programme will enable the Group to enhance the

sustainability credentials of its properties.

Quantitative analysis considerations

Consumer insight is continuously reviewed and

is used to inform brand evolution. In addition,

direct consumer feedback is used to highlight

changing guest preferences, and reactions to

brand changes designed to enhance

environmental credentials.

Alongside financial performance these metrics

will inform the future evolution of our brands.

Mitchells & Butlers plc  Annual Report and Accounts 2025

49

Governance Financial Statements Other Information

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAXvBG8DASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD3+s/U9C0fW/K/tbSrG/8AJz5f2u3SXZnGcbgcZwOnoK0KKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAMvTfDWg6NcNcaXomm2M7IUaS1tUiYrkHBKgHGQDj2FalFFABWfqeiafrHlfb7fzvKzs+dlxnGehHoK0KKmcIzXLJXRUJyg+aLszA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+isfqmH/AJF9yNvrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FU+LwfoMMgkjsMMOh85/wD4qtyin9VoL7C+5A8XiH/y8f3sKKKK3OcKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACisvw1qU2seFdH1S4VFnvLKG4kWMEKGdAxABJOMn1rUoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiisvUoNeluFbS9S022g2AMl1p7zsWyeQyzIAMY4x2PPPABqUVz/2Pxh/0HdD/APBNN/8AJVH2Pxh/0HdD/wDBNN/8lUAdBRXP/Y/GH/Qd0P8A8E03/wAlUfY/GH/Qd0P/AME03/yVQB0FFc/9j8Yf9B3Q/wDwTTf/ACVR9j8Yf9B3Q/8AwTTf/JVAHQUVz/2Pxh/0HdD/APBNN/8AJVH2Pxh/0HdD/wDBNN/8lUAdBRXP/Y/GH/Qd0P8A8E03/wAlUfY/GH/Qd0P/AME03/yVQB0FFc/9j8Yf9B3Q/wDwTTf/ACVR9j8Yf9B3Q/8AwTTf/JVAHQUVz/2Pxh/0HdD/APBNN/8AJVH2Pxh/0HdD/wDBNN/8lUAdBRXP/Y/GH/Qd0P8A8E03/wAlUfY/GH/Qd0P/AME03/yVQB0FFc/9j8Yf9B3Q/wDwTTf/ACVR9j8Yf9B3Q/8AwTTf/JVAHQUVz/2Pxh/0HdD/APBNN/8AJVH2Pxh/0HdD/wDBNN/8lUAdBRXP/Y/GH/Qd0P8A8E03/wAlUfY/GH/Qd0P/AME03/yVQB0FFc/9j8Yf9B3Q/wDwTTf/ACVR9j8Yf9B3Q/8AwTTf/JVAHQUVz/2Pxh/0HdD/APBNN/8AJVH2Pxh/0HdD/wDBNN/8lUAdBRXP/Y/GH/Qd0P8A8E03/wAlUfY/GH/Qd0P/AME03/yVQB0FFc/9j8Yf9B3Q/wDwTTf/ACVR9j8Yf9B3Q/8AwTTf/JVAHQUVz/2Pxh/0HdD/APBNN/8AJVH2Pxh/0HdD/wDBNN/8lUAdBRXP/Y/GH/Qd0P8A8E03/wAlUfY/GH/Qd0P/AME03/yVQB0FFc/9j8Yf9B3Q/wDwTTf/ACVR9j8Yf9B3Q/8AwTTf/JVAHQUVz/2Pxh/0HdD/APBNN/8AJVH2Pxh/0HdD/wDBNN/8lUAdBRXP/Y/GH/Qd0P8A8E03/wAlUfY/GH/Qd0P/AME03/yVQB0FFZ+mQ6xF5v8Aa19Y3WceX9ks3t9vXOd0r57dMYweueNCgAooooAKKKKACiiigAooooAKKKKAOf8AAn/JPPDX/YKtf/RS10Fc/wCBP+SeeGv+wVa/+ilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UtdBXP+BP+SeeGv8AsFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiuT8ZePtN8IRCKRWuNQkXdHbJxx0yx7Dg+p9qqMXJ2iTOcYLmk9DrKK+f5/jJ4nlnDxrZQoOkawkg/Uk5rs/B/xcttYuo7DWoUs7qVgsUsWfKcngA5yVP4ke4raWFqRV7HPDGUpy5bnptFFFc51BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilroK5/wJ/yTzw1/2CrX/wBFLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUVl65rkGh2izSoZHdtqRqcZ9/p/jWVofjKPVL1bOe28mWQnYytlT3wfQ1oqU3HmS0M3Vgpcrep1NFFFZmgUUUUAFFFFABVXUL+30yxku7p9sUY5xySewHvVquG+JMkgtdPjH+qZ3Zv8AeAGP5mufF1nQoyqLodODoKvXjTezKN18R71pj9ks4EiB483LMR+BGK6Dw54xg1qYWk8XkXZBKgHKvj09/avKqs6dJJFqdrJCMyLMhUepyMV83RzPERqJyd12Ppq+VYaVJqMbPue50UUV9YfIBRRRQAUUUUARzyrb28kznCRqWY+wGa+T9Z1W51zV7nUrty007ljz90dlHsBgfhX1hPClxbyQyDKSKVYexGK+TtX0q50TVrnTbxCk9u5VvcdiPYjBH1rvwNrvuebmN7R7FKiiivRPLPpb4ca3NrvguzuLp2kuYi0Mrt1YqeD7nGMn1zXWVyXw30SbQ/BdpBcoyXExaeRG6ruPA9jtxkeua62vDq253y7H0VG/s4829gooorM0CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOb8XaFPrFrBJaANPCT8hbG5T1xnjOQKwfDfhW/XVYLq9gMMML78MfmZh0wPrivQqK3jiJxhyIxlQjKfOwooorA2CiiigAooooAKzNe0aLXNMa1kbY4O6OTGdrf4dq06KmcIzi4yWjLhOVOSnF2aPH7nwhrltMY/sLyjOA8RDKff2/HFdH4W8F3Fvex3+qKqeUd0cGQSW7E444613tFebSymhTnz6ux6VXOK9Sm4aK/VBRRRXqHlBRRRQAUUUUAFch408Aaf4vjE5c22oxptjuFGQR2Vh3HJ9/5V19FVGbg7xJnCM1yyWh893Hwf8AFUM5jjjtJk7SJNgH8wD+ldn4P+EMGl3Md/rs0d3cRsGjt4s+UpHQsSAW+mAOO9eo0VvLFVJKxzQwdKMrhRRRXMdYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv+wVa/8Aopa6Cuf8Cf8AJPPDX/YKtf8A0UtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/wCSeeGv+wVa/wDopa6Cuf8AAn/JPPDX/YKtf/RS1vlgvU4oAWim71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6im71/vCjev94UAOopu9f7wo3r/AHhQA6ikDBuhzS0AFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilrbn/AIaxPAn/ACTzw1/2CrX/ANFLW3P/AA0AQ0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUATQfxVLUUH8VS0AFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilrbn/AIaxPAn/ACTzw1/2CrX/ANFLW3P/AA0AQ0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUATQfxVLUUH8VS0AFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilq5rGr2+leT9ohvpPM3bfsljNc4xjr5SNt698Z5x0NU/An/JPPDX/AGCrX/0UtdBQBy//AAlunf8APprn/givf/jVH/CW6d/z6a5/4Ir3/wCNV1FFAHL/APCW6d/z6a5/4Ir3/wCNUf8ACW6d/wA+muf+CK9/+NV1FFAHL/8ACW6d/wA+muf+CK9/+NUf8Jbp3/Pprn/givf/AI1XUUUAcv8A8Jbp3/Pprn/givf/AI1R/wAJbp3/AD6a5/4Ir3/41XUUUAcv/wAJbp3/AD6a5/4Ir3/41R/wlunf8+muf+CK9/8AjVdRRQBy/wDwlunf8+muf+CK9/8AjVH/AAlunf8APprn/givf/jVdRRQBy//AAlunf8APprn/givf/jVH/CW6d/z6a5/4Ir3/wCNV1FFAHL/APCW6d/z6a5/4Ir3/wCNUf8ACW6d/wA+muf+CK9/+NV1FFAHL/8ACW6d/wA+muf+CK9/+NUf8Jbp3/Pprn/givf/AI1XUUUAcv8A8Jbp3/Pprn/givf/AI1R/wAJbp3/AD6a5/4Ir3/41XUUUAcv/wAJbp3/AD6a5/4Ir3/41R/wlunf8+muf+CK9/8AjVdRRQBy/wDwlunf8+muf+CK9/8AjVH/AAlunf8APprn/givf/jVdRRQBy//AAlunf8APprn/givf/jVH/CW6d/z6a5/4Ir3/wCNV1FFAHL/APCW6d/z6a5/4Ir3/wCNUf8ACW6d/wA+muf+CK9/+NV1FFAHL/8ACW6d/wA+muf+CK9/+NUf8Jbp3/Pprn/givf/AI1XUUUAcv8A8Jbp3/Pprn/givf/AI1R/wAJbp3/AD6a5/4Ir3/41XUUUAcv/wAJbp3/AD6a5/4Ir3/41R/wlunf8+muf+CK9/8AjVdRRQBy/wDwlunf8+muf+CK9/8AjVH/AAlunf8APprn/givf/jVdRRQBy//AAlunf8APprn/givf/jVH/CW6d/z6a5/4Ir3/wCNV1FFAHL/APCW6d/z6a5/4Ir3/wCNUf8ACW6d/wA+muf+CK9/+NV1FFAHL/8ACW6d/wA+muf+CK9/+NUf8Jbp3/Pprn/givf/AI1XUUUAcv8A8Jbp3/Pprn/givf/AI1R/wAJbp3/AD6a5/4Ir3/41XUUUAcv/wAJbp3/AD6a5/4Ir3/41R/wlunf8+muf+CK9/8AjVdRRQBy/wDwlunf8+muf+CK9/8AjVH/AAlunf8APprn/givf/jVdRRQBy//AAlunf8APprn/givf/jVH/CW6d/z6a5/4Ir3/wCNV1FFAHL/APCW6d/z6a5/4Ir3/wCNUf8ACW6d/wA+muf+CK9/+NV1FFAHL/8ACW6d/wA+muf+CK9/+NUf8Jbp3/Pprn/givf/AI1XUUUAcv8A8Jbp3/Pprn/givf/AI1R/wAJbp3/AD6a5/4Ir3/41XUUUAcv/wAJbp3/AD6a5/4Ir3/41R/wlunf8+muf+CK9/8AjVdRRQBy/wDwlunf8+muf+CK9/8AjVH/AAlunf8APprn/givf/jVdRRQBy//AAlunf8APprn/givf/jVH/CW6d/z6a5/4Ir3/wCNV1FFAHL/APCW6d/z6a5/4Ir3/wCNUf8ACW6d/wA+muf+CK9/+NV1FFAHL/8ACW6d/wA+muf+CK9/+NUf8Jbp3/Pprn/givf/AI1XUUUAcv8A8Jbp3/Pprn/givf/AI1R/wAJbp3/AD6a5/4Ir3/41XUUUAcv/wAJbp3/AD6a5/4Ir3/41R/wlunf8+muf+CK9/8AjVdRRQBy/wDwlunf8+muf+CK9/8AjVH/AAlunf8APprn/givf/jVdRRQBy//AAlunf8APprn/givf/jVH/CW6d/z6a5/4Ir3/wCNV1FFAHL/APCW6d/z6a5/4Ir3/wCNUf8ACW6d/wA+muf+CK9/+NV1FFAHL/8ACW6d/wA+muf+CK9/+NUf8Jbp3/Pprn/givf/AI1XUUUAcv8A8Jbp3/Pprn/givf/AI1R/wAJbp3/AD6a5/4Ir3/41XUUUAcv/wAJbp3/AD6a5/4Ir3/41R/wlunf8+muf+CK9/8AjVdRRQBy/wDwlunf8+muf+CK9/8AjVH/AAlunf8APprn/givf/jVdRRQBy//AAlunf8APprn/givf/jVH/CW6d/z6a5/4Ir3/wCNV1FFAHL/APCW6d/z6a5/4Ir3/wCNUf8ACW6d/wA+muf+CK9/+NV1FFAHL/8ACW6d/wA+muf+CK9/+NUf8Jbp3/Pprn/givf/AI1XUUUAcv8A8Jbp3/Pprn/givf/AI1R/wAJbp3/AD6a5/4Ir3/41XUUUAcv/wAJbp3/AD6a5/4Ir3/41R/wlunf8+muf+CK9/8AjVdRRQBy/wDwlunf8+muf+CK9/8AjVH/AAlunf8APprn/givf/jVdRRQBy//AAlunf8APprn/givf/jVH/CW6d/z6a5/4Ir3/wCNV1FFAHL/APCW6d/z6a5/4Ir3/wCNUf8ACW6d/wA+muf+CK9/+NV1FFAHL/8ACW6d/wA+muf+CK9/+NUf8Jbp3/Pprn/givf/AI1XUUUAcv8A8Jbp3/Pprn/givf/AI1R/wAJbp3/AD6a5/4Ir3/41XUUUAcv/wAJbp3/AD6a5/4Ir3/41R/wlunf8+muf+CK9/8AjVdRRQBy/wDwlunf8+muf+CK9/8AjVH/AAlunf8APprn/givf/jVdRRQBy//AAlunf8APprn/givf/jVH/CW6d/z6a5/4Ir3/wCNV1FFAHL/APCW6d/z6a5/4Ir3/wCNUf8ACW6d/wA+muf+CK9/+NV1FFAHL/8ACW6d/wA+muf+CK9/+NUf8Jbp3/Pprn/givf/AI1XUUUAcv8A8Jbp3/Pprn/givf/AI1R/wAJbp3/AD6a5/4Ir3/41XUUUAcv/wAJbp3/AD6a5/4Ir3/41R/wlunf8+muf+CK9/8AjVdRRQBy/wDwlunf8+muf+CK9/8AjVH/AAlunf8APprn/givf/jVdRRQBy//AAlunf8APprn/givf/jVH/CW6d/z6a5/4Ir3/wCNV1FFAHL/APCW6d/z6a5/4Ir3/wCNUf8ACW6d/wA+muf+CK9/+NV1FFAHL/8ACW6d/wA+muf+CK9/+NUf8Jbp3/Pprn/givf/AI1XUUUAcv8A8Jbp3/Pprn/givf/AI1R/wAJbp3/AD6a5/4Ir3/41XUUUAZej6vb6r532eG+j8vbu+12M1tnOenmou7p2zjjPUVqUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS1oanoWj635X9raVY3/k58v7XbpLszjONwOM4HT0FAGhRXP/8ACCeD/wDoVND/APBdD/8AE0f8IJ4P/wChU0P/AMF0P/xNAHQUVz//AAgng/8A6FTQ/wDwXQ//ABNH/CCeD/8AoVND/wDBdD/8TQB0FFc//wAIJ4P/AOhU0P8A8F0P/wATR/wgng//AKFTQ/8AwXQ//E0AdBRXP/8ACCeD/wDoVND/APBdD/8AE0f8IJ4P/wChU0P/AMF0P/xNAHQUVz//AAgng/8A6FTQ/wDwXQ//ABNH/CCeD/8AoVND/wDBdD/8TQB0FFc//wAIJ4P/AOhU0P8A8F0P/wATR/wgng//AKFTQ/8AwXQ//E0AdBRXP/8ACCeD/wDoVND/APBdD/8AE0f8IJ4P/wChU0P/AMF0P/xNAHQUVz//AAgng/8A6FTQ/wDwXQ//ABNH/CCeD/8AoVND/wDBdD/8TQB0FFc//wAIJ4P/AOhU0P8A8F0P/wATR/wgng//AKFTQ/8AwXQ//E0AdBRXP/8ACCeD/wDoVND/APBdD/8AE0f8IJ4P/wChU0P/AMF0P/xNAHQUVz//AAgng/8A6FTQ/wDwXQ//ABNH/CCeD/8AoVND/wDBdD/8TQB0FFc//wAIJ4P/AOhU0P8A8F0P/wATR/wgng//AKFTQ/8AwXQ//E0AdBRXP/8ACCeD/wDoVND/APBdD/8AE0f8IJ4P/wChU0P/AMF0P/xNAHQUVz//AAgng/8A6FTQ/wDwXQ//ABNH/CCeD/8AoVND/wDBdD/8TQB0FFc//wAIJ4P/AOhU0P8A8F0P/wATR/wgng//AKFTQ/8AwXQ//E0AdBRXP/8ACCeD/wDoVND/APBdD/8AE0f8IJ4P/wChU0P/AMF0P/xNAHQUVz//AAgng/8A6FTQ/wDwXQ//ABNH/CCeD/8AoVND/wDBdD/8TQB0FFc//wAIJ4P/AOhU0P8A8F0P/wATR/wgng//AKFTQ/8AwXQ//E0AdBRXP/8ACCeD/wDoVND/APBdD/8AE0f8IJ4P/wChU0P/AMF0P/xNAHQUVz//AAgng/8A6FTQ/wDwXQ//ABNH/CCeD/8AoVND/wDBdD/8TQB0FFc//wAIJ4P/AOhU0P8A8F0P/wATR/wgng//AKFTQ/8AwXQ//E0AdBRXP/8ACCeD/wDoVND/APBdD/8AE0f8IJ4P/wChU0P/AMF0P/xNAHQUVz//AAgng/8A6FTQ/wDwXQ//ABNH/CCeD/8AoVND/wDBdD/8TQB0FFc//wAIJ4P/AOhU0P8A8F0P/wATR/wgng//AKFTQ/8AwXQ//E0AdBRXP/8ACCeD/wDoVND/APBdD/8AE0f8IJ4P/wChU0P/AMF0P/xNAHQUVz//AAgng/8A6FTQ/wDwXQ//ABNH/CCeD/8AoVND/wDBdD/8TQB0FFc//wAIJ4P/AOhU0P8A8F0P/wATR/wgng//AKFTQ/8AwXQ//E0AdBRXP/8ACCeD/wDoVND/APBdD/8AE0f8IJ4P/wChU0P/AMF0P/xNAHQUVz//AAgng/8A6FTQ/wDwXQ//ABNH/CCeD/8AoVND/wDBdD/8TQB0FFc//wAIJ4P/AOhU0P8A8F0P/wATR/wgng//AKFTQ/8AwXQ//E0AdBRXP/8ACCeD/wDoVND/APBdD/8AE0f8IJ4P/wChU0P/AMF0P/xNAHQUVz//AAgng/8A6FTQ/wDwXQ//ABNH/CCeD/8AoVND/wDBdD/8TQB0FFc//wAIJ4P/AOhU0P8A8F0P/wATR/wgng//AKFTQ/8AwXQ//E0AdBRXP/8ACCeD/wDoVND/APBdD/8AE0f8IJ4P/wChU0P/AMF0P/xNAHQUVz//AAgng/8A6FTQ/wDwXQ//ABNH/CCeD/8AoVND/wDBdD/8TQB0FFc//wAIJ4P/AOhU0P8A8F0P/wATR/wgng//AKFTQ/8AwXQ//E0AdBRXP/8ACCeD/wDoVND/APBdD/8AE0f8IJ4P/wChU0P/AMF0P/xNAHQUVz//AAgng/8A6FTQ/wDwXQ//ABNQyeBvCIfjwroY/wC4fF/8TQB01Fct/wAIN4R/6FbRP/BfF/8AE0f8IN4R/wChW0T/AMF8X/xNK4HU0Vy3/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TRcDqaK5b/hBvCP/QraJ/4L4v8A4mj/AIQbwj/0K2if+C+L/wCJouB1NFct/wAIN4R/6FbRP/BfF/8AE0f8IN4R/wChW0T/AMF8X/xNFwOporlv+EG8I/8AQraJ/wCC+L/4mj/hBvCP/QraJ/4L4v8A4mi4HU0Vy3/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATRcDqaK5b/hBvCP8A0K2if+C+L/4mj/hBvCP/AEK2if8Agvi/+JouB1NFct/wg3hH/oVtE/8ABfF/8TR/wg3hH/oVtE/8F8X/AMTRcDqaK5b/AIQbwj/0K2if+C+L/wCJo/4Qbwj/ANCton/gvi/+JouB1NFct/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E0XA6miuW/4Qbwj/0K2if+C+L/AOJo/wCEG8I/9Cton/gvi/8AiaLgdTRXLf8ACDeEf+hW0T/wXxf/ABNH/CDeEf8AoVtE/wDBfF/8TRcDqaK5b/hBvCP/AEK2if8Agvi/+Jo/4Qbwj/0K2if+C+L/AOJouB1NFct/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE0XA6miuW/4Qbwj/ANCton/gvi/+Jo/4Qbwj/wBCton/AIL4v/iaLgdTRXLf8IN4R/6FbRP/AAXxf/E0f8IN4R/6FbRP/BfF/wDE0XA6miuW/wCEG8I/9Cton/gvi/8AiaP+EG8I/wDQraJ/4L4v/iaLgdTRXLf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNFwOporlv+EG8I/9Cton/gvi/wDiaP8AhBvCP/QraJ/4L4v/AImi4HU0Vy3/AAg3hH/oVtE/8F8X/wATR/wg3hH/AKFbRP8AwXxf/E0XA6miuW/4Qbwj/wBCton/AIL4v/iaP+EG8I/9Cton/gvi/wDiaLgdTRXLf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNFwOporlv+EG8I/wDQraJ/4L4v/iaP+EG8I/8AQraJ/wCC+L/4mi4HU0Vy3/CDeEf+hW0T/wAF8X/xNH/CDeEf+hW0T/wXxf8AxNFwOporlv8AhBvCP/QraJ/4L4v/AImj/hBvCP8A0K2if+C+L/4mi4HU0Vy3/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TRcDqaKy9G0PSNF87+ytKsbDzdvmfZbdIt+M4ztAzjJ/M1qUwCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/2CrX/wBFLXQVz/gT/knnhr/sFWv/AKKWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACoJfv8A4VPUEv3/AMKTAZRRRSGFFFFABRRRQAUjusaM7EBVGST2FLUN3brd2c1uxIWVChI7ZGKa31E/I5ZvHcIucLZSG3/vFwG/Lp+tdVbzx3VtFcRHMcihlPsa81bwxrC3PkfY2Yno4I24+teh6VZf2dpdvaZyY0+Y5z8x5P6k11YmFKKXIc1CdSTfOXKKKK5DqCiiigAooooAKKKKACiiigAooooAKKKKACqWqanDpNk1zOGIyFVV6sT2/wA+lXaxfE+ky6tpgS35mjfeqk4DdiKumouaUtiKjkotx3KOmeMob29S2ntjCZG2owfcMnoD0rqK850jwzqMuoxG4tnhhjkBdnOM4PQev1FejVtiY04yXIZYeU5R98KKKK5joCiiigAooooAKKKKACiiigAooooAKKKKACsPXfEkOjOsIhaadl3Bc4AHTk1uVxvizQLu6vft1pEZQyASKpywI7gfTHStqEYSnaexlWlOMLw3NnQvEMOtb0ETQzRgMyE5BHqD/nrWzXI+EtBu7G5kvbuMxEptRCeTnqSO3SuuorxhGbUNgouThee4UUUViahRRRQAUUUUASw/xVLUUP8AFUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/wCSeeGv+wVa/wDopa6Cuf8AAn/JPPDX/YKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUVT1KynvrdYrfU7vT3D7jLarEzEYPynzEcY5z0zwOetAFyiuf/wCEe1T/AKHPXP8AvzZf/I9H/CPap/0Oeuf9+bL/AOR6AOgorn/+Ee1T/oc9c/782X/yPR/wj2qf9Dnrn/fmy/8AkegDoKK5/wD4R7VP+hz1z/vzZf8AyPR/wj2qf9Dnrn/fmy/+R6AOgorn/wDhHtU/6HPXP+/Nl/8AI9H/AAj2qf8AQ565/wB+bL/5HoA6Ciuf/wCEe1T/AKHPXP8AvzZf/I9H/CPap/0Oeuf9+bL/AOR6AOgorn/+Ee1T/oc9c/782X/yPR/wj2qf9Dnrn/fmy/8AkegDoKK5/wD4R7VP+hz1z/vzZf8AyPR/wj2qf9Dnrn/fmy/+R6AOgorn/wDhHtU/6HPXP+/Nl/8AI9H/AAj2qf8AQ565/wB+bL/5HoA6CoJfv/hWN/wj2qf9Dnrn/fmy/wDkeoZPD2ph/wDkcdcP/bGy/wDkekwNyisD/hH9T/6HHW/+/Nl/8j0f8I/qf/Q463/35sv/AJHpDN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDpIf4qlrL0bT7mw877TrF9qO/bt+1JCvl4z08qNOue+egxjnOpVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVBL9/8ACp6gl+/+FJgMooopDCiiigAooooAKKKgvY5ZbC4jgbbM0bBD6HHFNasTKLeJNIW58g3se7+8Mlf++ulagIZQykEEZBHevHGR1coysHBwVI5zXqmhxTwaJZx3B/erGMgjBA7D8BgfhXViMPGkk0znoV5VG00aFFFFch0hRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUc88VtC008ixxr1ZjgCpK5zxpDPLoqtFkpHIGkA9MHn6Zq6cVOaiyKknGLaNGy17TNQm8m3ulaTsrAqW+metaVeT6PDPPrFqtvkSCVW3AZ2gHk/SvWK1xFGNKSSZnQquom2gooornNwooooAKKKKACiiigAooooAKKKKACiiigCOeeO2t5J5m2xxqWZvQCvNdT8aaneTt9lkNrB0VVA3H3J9fpXa+K45JPDF6IvvBQx+gYE/oDXk1eFm+JqwkqcHZWufQZNhaVSEqk1d3sdPpXjXUbS4UXrm6tzgMGADKPUHv+P6V6RFKk8KSxsGjdQysOhB6GvEK9f8OpInh6wWQ/N5Kn8O36Yp5RialRypzd0ic5wtKmo1IKzehp0UUV7h4IUUUUAFFFFAEsP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilroK5/wJ/yTzw1/2CrX/wBFLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRVPUpNSit1bS7S0uZ9+GS6uWgULg8hljck5xxjueeOQC5RXP/bPGH/QC0P8A8HM3/wAi0fbPGH/QC0P/AMHM3/yLQB0FFc/9s8Yf9ALQ/wDwczf/ACLR9s8Yf9ALQ/8Awczf/ItAHQUVz/2zxh/0AtD/APBzN/8AItH2zxh/0AtD/wDBzN/8i0AdBRXP/bPGH/QC0P8A8HM3/wAi0fbPGH/QC0P/AMHM3/yLQB0FFc/9s8Yf9ALQ/wDwczf/ACLR9s8Yf9ALQ/8Awczf/ItAHQUVz/2zxh/0AtD/APBzN/8AItH2zxh/0AtD/wDBzN/8i0AdBRXP/bPGH/QC0P8A8HM3/wAi0fbPGH/QC0P/AMHM3/yLQB0FFc/9s8Yf9ALQ/wDwczf/ACLR9s8Yf9ALQ/8Awczf/ItAHQVBL9/8KxvtnjD/AKAWh/8Ag5m/+Rahku/F2/nQ9D/8HEv/AMi0mBuUVgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUhm/RWB9r8Xf9APRP/BxL/wDI1H2vxd/0A9E/8HEv/wAjUAb9FYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1AG/RWB9r8Xf9APRP/BxL/wDI1H2vxd/0A9E/8HEv/wAjUAbZghMwmMUZlAwH2jcB9akrA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkamBv0Vgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1IDforA+1+Lv+gHon/g4l/+RqPtfi7/AKAeif8Ag4l/+RqAN+isD7X4u/6Aeif+DiX/AORqPtfi7/oB6J/4OJf/AJGoA36KwPtfi7/oB6J/4OJf/kaj7X4u/wCgHon/AIOJf/kagDforA+1+Lv+gHon/g4l/wDkaj7X4u/6Aeif+DiX/wCRqAN+isD7X4u/6Aeif+DiX/5Go+1+Lv8AoB6J/wCDiX/5GoA36KwPtfi7/oB6J/4OJf8A5Go+1+Lv+gHon/g4l/8AkagDforA+1+Lv+gHon/g4l/+RqPtfi7/AKAeif8Ag4l/+RqANuKCGEsYokj3HLbFAyfU1JWB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNTA36KwPtfi7/oB6J/4OJf8A5Go+1+Lv+gHon/g4l/8AkakBv0Vgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1AG/RWB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNQBv0Vgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1AG/RWB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNQBv0Vgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1AG/RWB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNQBvMAylWAIIwQe9cPqfgFnnaTTbiNY2OfKmz8v0IzW19r8Xf8AQD0T/wAHEv8A8jVWvNd8Qaege9sPDdsp6GbXZEH621YV8LTxCUZq50YfF1MM3Km7FHSfAXlTrNqU6SKpyIos4J9ye3tiu26VzFprfiG/QvZ6f4cuUHVodckcfpbVY+1+Lv8AoB6J/wCDiX/5Gp0MLTw65YKwq+KqYl81R3N+isD7X4u/6Aeif+DiX/5Go+1+Lv8AoB6J/wCDiX/5GrYwN+isD7X4u/6Aeif+DiX/AORqPtfi7/oB6J/4OJf/AJGoA36KwPtfi7/oB6J/4OJf/kaj7X4u/wCgHon/AIOJf/kagDpIf4qlrL0abV5fO/tWxsbXG3y/st48+7rnO6JMdvXOT0xzqVSEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUEv3/wqeoJfv/hSYDKKKKQwooooAKKKKACiioL6aS3sLiaJN8kcbMq+pAppXdhN21JsjOMjPpS14+11cNcfaGnlM3XzC53fnXqOi3E11otpNOCJWjGc9W7Z/Hr+NdFfDukk73MKNdVG1Yv0UUVzHQFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFc/r3iu10WT7OsZuLrAJjDYCj3P9K6CvFtQmkn1G5llBEjysWB6g56V5uZYueHguTdnqZXg4Ymo/abI6+2+ITecBdWA8snkxvyB9D1/Su0tLuC+tY7m2kEkUgyrCvE67/4ezSNZ3sJz5aOrKfcg5/kK48ux9WpV9lUd7nbmeXUadH2tJWsdnRRRXvHzwUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBwvxG8cP4YtIrPT2Q6ncDcCwz5SdN2PUngZ44PpXg93d3F9dSXN3PJPPIcvJI2ST9a6b4lTSTeP9T8zPyFEUE9FCLj/AB/GuTr2sNSjCCa3Z4OKqynUaeyLFjfXWm3kd3ZXEkFxGcrJG2CP/re1e+fDzxqfFWnSQXhjXU7b/WBRgSJ2cD9D7+mQK+e67P4VzyQ/ECxSM4WZJUk912M381FLFUozpt9UPCVZQqJLZn0LRRRXjHuhRRRQAUUUUASw/wAVS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUVT1LU4NKt1nuI7t0Z9gFraS3DZwTysasQOOuMdPUUAXKK5//hMtL/59dc/8EV7/APGaP+Ey0v8A59dc/wDBFe//ABmgDoKK5/8A4TLS/wDn11z/AMEV7/8AGaP+Ey0v/n11z/wRXv8A8ZoA6Ciuf/4TLS/+fXXP/BFe/wDxmj/hMtL/AOfXXP8AwRXv/wAZoA6Ciuf/AOEy0v8A59dc/wDBFe//ABmj/hMtL/59dc/8EV7/APGaAOgorn/+Ey0v/n11z/wRXv8A8Zo/4TLS/wDn11z/AMEV7/8AGaAOgorn/wDhMtL/AOfXXP8AwRXv/wAZo/4TLS/+fXXP/BFe/wDxmgDoKK5//hMtL/59dc/8EV7/APGaP+Ey0v8A59dc/wDBFe//ABmgDoKK5/8A4TLS/wDn11z/AMEV7/8AGaP+Ey0v/n11z/wRXv8A8ZoA6CoJfv8A4Vjf8Jlpf/Prrn/givf/AIzUUni/TWbItNc/8EV7/wDGqGBt0Vhf8Jdp3/Pprn/givf/AI1R/wAJdp3/AD6a5/4Ir3/41UjN2isL/hLtO/59Nc/8EV7/APGqP+Eu07/n01z/AMEV7/8AGqAN2isL/hLtO/59Nc/8EV7/APGqP+Eu07/n01z/AMEV7/8AGqAN2isL/hLtO/59Nc/8EV7/APGqP+Eu07/n01z/AMEV7/8AGqAFbwlpDXPneQwHeMOQpP8AP9cVtIixoqIoVVGAAOAKxP8AhLtO/wCfTXP/AARXv/xqj/hLtO/59Nc/8EV7/wDGquU5S+J3JjCMdkbtFYX/AAl2nf8APprn/givf/jVH/CXad/z6a5/4Ir3/wCNVBRu0Vhf8Jdp3/Pprn/givf/AI1R/wAJdp3/AD6a5/4Ir3/41QBu0Vhf8Jdp3/Pprn/givf/AI1R/wAJdp3/AD6a5/4Ir3/41QBu0Vhf8Jdp3/Pprn/givf/AI1R/wAJdp3/AD6a5/4Ir3/41QBu0Vhf8Jdp3/Pprn/givf/AI1R/wAJdp3/AD6a5/4Ir3/41QBu0Vhf8Jdp3/Pprn/givf/AI1R/wAJdp3/AD6a5/4Ir3/41QBu0Vhf8Jdp3/Pprn/givf/AI1R/wAJdp3/AD6a5/4Ir3/41QBu1wHifwldG9kvtOi82OU7niX7ysepA7j/ABrov+Eu07/n01z/AMEV7/8AGqP+Eu07/n01z/wRXv8A8arnxOFhiIcszpwuKnhp88Dz228PavdTCNLCdSTgtIhRR9Sa9L0DR00TTFt9waVjvlcdC3t7VW/4S7Tv+fTXP/BFe/8Axqj/AIS7Tv8An01z/wAEV7/8arDCZdTw0uZas3xmZVMTHkasjdorC/4S7Tv+fTXP/BFe/wDxqj/hLtO/59Nc/wDBFe//ABqu8883aKwv+Eu07/n01z/wRXv/AMao/wCEu07/AJ9Nc/8ABFe//GqAN2isL/hLtO/59Nc/8EV7/wDGqP8AhLtO/wCfTXP/AARXv/xqgDdorC/4S7Tv+fTXP/BFe/8Axqj/AIS7Tv8An01z/wAEV7/8aoA3aKwv+Eu07/n01z/wRXv/AMao/wCEu07/AJ9Nc/8ABFe//GqAN2isL/hLtO/59Nc/8EV7/wDGqP8AhLtO/wCfTXP/AARXv/xqgDdorC/4S7Tv+fTXP/BFe/8Axqj/AIS7Tv8An01z/wAEV7/8aoA84+L3heWO9XxFbIWhlCx3QA+4wGFY+xGB9QPWvK6+mX8V6XIjI9jrbIwwytoN6QR6H9zXB6r4R8G6hcvPb23iWxLnJjg0S8KZ9gYTj6A4r0MPi1GPLPoeZicE5S54dTyKvXfhB4WljaTxFdIVVlMVqpHUH7z/AKYH4+1P0jwr4N0y5S4ntPEl86HIS40O88vP+6IRn8ciu6XxZpqqFWz1wADAA0K94/8AIVGIxalHlgPDYNwlzz6G9RWF/wAJdp3/AD6a5/4Ir3/41R/wl2nf8+muf+CK9/8AjVeeekbtFYX/AAl2nf8APprn/givf/jVH/CXad/z6a5/4Ir3/wCNUAbtFYX/AAl2nf8APprn/givf/jVH/CXad/z6a5/4Ir3/wCNUAdFD/FUtZej6vbar532eG+j8vbu+12M9tnOenmou7p2zjjPUVqVSEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilrbm/hrE8Cf8AJPPDX/YKtf8A0Utbc/8ADQBFk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAC5PrRk+tJRQAuT60ZPrSUUALk+tGT60lFAE0P8VS1FB/FUtABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilrbn/hrE8Cf8k88Nf9gq1/8ARS1tz/w0AQ0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUATQfxVLUUH8VS0AFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWtuf+GsTwJ/yTzw1/2CrX/wBFLW3P/DQBDRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBNB/FUtRQfxVLQAUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv+wVa/8Aopa25/4axPAn/JPPDX/YKtf/AEUtbc/8NAENFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAE0H8VS1FB/FUtABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilq9q1tq9x5P9lX9ja7d3mfarN593TGNsqY7+ucjpjmj4E/5J54a/7BVr/wCilroKAOb/ALN8Xf8AQd0T/wAE0v8A8lUf2b4u/wCg7on/AIJpf/kqukooA5v+zfF3/Qd0T/wTS/8AyVR/Zvi7/oO6J/4Jpf8A5KrpKKAOb/s3xd/0HdE/8E0v/wAlUf2b4u/6Duif+CaX/wCSq6SigDm/7N8Xf9B3RP8AwTS//JVH9m+Lv+g7on/gml/+Sq6SigDm/wCzfF3/AEHdE/8ABNL/APJVH9m+Lv8AoO6J/wCCaX/5KrpKKAOb/s3xd/0HdE/8E0v/AMlUf2b4u/6Duif+CaX/AOSq6SigDm/7N8Xf9B3RP/BNL/8AJVH9m+Lv+g7on/gml/8AkqukooA5v+zfF3/Qd0T/AME0v/yVR/Zvi7/oO6J/4Jpf/kqukooA5v8As3xd/wBB3RP/AATS/wDyVR/Zvi7/AKDuif8Agml/+Sq6SigDm/7N8Xf9B3RP/BNL/wDJVH9m+Lv+g7on/gml/wDkqukooA5v+zfF3/Qd0T/wTS//ACVR/Zvi7/oO6J/4Jpf/AJKrpKKAOb/s3xd/0HdE/wDBNL/8lUf2b4u/6Duif+CaX/5KrpKKAOb/ALN8Xf8AQd0T/wAE0v8A8lUf2b4u/wCg7on/AIJpf/kqukooA5v+zfF3/Qd0T/wTS/8AyVR/Zvi7/oO6J/4Jpf8A5KrpKKAOb/s3xd/0HdE/8E0v/wAlUf2b4u/6Duif+CaX/wCSq6SigDm/7N8Xf9B3RP8AwTS//JVH9m+Lv+g7on/gml/+Sq6SigDm/wCzfF3/AEHdE/8ABNL/APJVH9m+Lv8AoO6J/wCCaX/5KrpKKAOb/s3xd/0HdE/8E0v/AMlUf2b4u/6Duif+CaX/AOSq6SigDm/7N8Xf9B3RP/BNL/8AJVH9m+Lv+g7on/gml/8AkqukooA5v+zfF3/Qd0T/AME0v/yVR/Zvi7/oO6J/4Jpf/kqukooA5v8As3xd/wBB3RP/AATS/wDyVR/Zvi7/AKDuif8Agml/+Sq6SigDm/7N8Xf9B3RP/BNL/wDJVH9m+Lv+g7on/gml/wDkqukooA5v+zfF3/Qd0T/wTS//ACVR/Zvi7/oO6J/4Jpf/AJKrpKKAOb/s3xd/0HdE/wDBNL/8lUf2b4u/6Duif+CaX/5KrpKKAOb/ALN8Xf8AQd0T/wAE0v8A8lUf2b4u/wCg7on/AIJpf/kqukooA5v+zfF3/Qd0T/wTS/8AyVR/Zvi7/oO6J/4Jpf8A5KrpKKAOb/s3xd/0HdE/8E0v/wAlUf2b4u/6Duif+CaX/wCSq6SigDm/7N8Xf9B3RP8AwTS//JVH9m+Lv+g7on/gml/+Sq6SigDm/wCzfF3/AEHdE/8ABNL/APJVH9m+Lv8AoO6J/wCCaX/5KrpKKAOb/s3xd/0HdE/8E0v/AMlUf2b4u/6Duif+CaX/AOSq6SigDm/7N8Xf9B3RP/BNL/8AJVH9m+Lv+g7on/gml/8AkqukooA5v+zfF3/Qd0T/AME0v/yVR/Zvi7/oO6J/4Jpf/kqukooA5v8As3xd/wBB3RP/AATS/wDyVR/Zvi7/AKDuif8Agml/+Sq6SigDm/7N8Xf9B3RP/BNL/wDJVH9m+Lv+g7on/gml/wDkqukooA5v+zfF3/Qd0T/wTS//ACVR/Zvi7/oO6J/4Jpf/AJKrpKKAOb/s3xd/0HdE/wDBNL/8lUf2b4u/6Duif+CaX/5KrpKKAOb/ALN8Xf8AQd0T/wAE0v8A8lUf2b4u/wCg7on/AIJpf/kqukooA5v+zfF3/Qd0T/wTS/8AyVR/Zvi7/oO6J/4Jpf8A5KrpKKAOb/s3xd/0HdE/8E0v/wAlUf2b4u/6Duif+CaX/wCSq6SigDm/7N8Xf9B3RP8AwTS//JVH9m+Lv+g7on/gml/+Sq6SigDm/wCzfF3/AEHdE/8ABNL/APJVH9m+Lv8AoO6J/wCCaX/5KrpKKAOb/s3xd/0HdE/8E0v/AMlUf2b4u/6Duif+CaX/AOSq6SigDm/7N8Xf9B3RP/BNL/8AJVH9m+Lv+g7on/gml/8AkqukooA5v+zfF3/Qd0T/AME0v/yVR/Zvi7/oO6J/4Jpf/kqukooA5v8As3xd/wBB3RP/AATS/wDyVR/Zvi7/AKDuif8Agml/+Sq6SigDm/7N8Xf9B3RP/BNL/wDJVH9m+Lv+g7on/gml/wDkqukooA5v+zfF3/Qd0T/wTS//ACVR/Zvi7/oO6J/4Jpf/AJKrpKKAOb/s3xd/0HdE/wDBNL/8lUf2b4u/6Duif+CaX/5KrpKKAOb/ALN8Xf8AQd0T/wAE0v8A8lUf2b4u/wCg7on/AIJpf/kqukooA5v+zfF3/Qd0T/wTS/8AyVR/Zvi7/oO6J/4Jpf8A5KrpKKAOb/s3xd/0HdE/8E0v/wAlUf2b4u/6Duif+CaX/wCSq6SigDm/7N8Xf9B3RP8AwTS//JVH9m+Lv+g7on/gml/+Sq6SigDm/wCzfF3/AEHdE/8ABNL/APJVH9m+Lv8AoO6J/wCCaX/5KrpKKAOb/s3xd/0HdE/8E0v/AMlUf2b4u/6Duif+CaX/AOSq6SigDm/7N8Xf9B3RP/BNL/8AJVH9m+Lv+g7on/gml/8AkqukooA5v+zfF3/Qd0T/AME0v/yVR/Zvi7/oO6J/4Jpf/kqukooA5v8As3xd/wBB3RP/AATS/wDyVR/Zvi7/AKDuif8Agml/+Sq6SigDm/7N8Xf9B3RP/BNL/wDJVH9m+Lv+g7on/gml/wDkqukooA5v+zfF3/Qd0T/wTS//ACVR/Zvi7/oO6J/4Jpf/AJKrpKKAOb/s3xd/0HdE/wDBNL/8lUf2b4u/6Duif+CaX/5KrpKKAOb/ALN8Xf8AQd0T/wAE0v8A8lUf2b4u/wCg7on/AIJpf/kqukooA5v+zfF3/Qd0T/wTS/8AyVR/Zvi7/oO6J/4Jpf8A5KrpKKAOb/s3xd/0HdE/8E0v/wAlUf2b4u/6Duif+CaX/wCSq6SigDm/7N8Xf9B3RP8AwTS//JVH9m+Lv+g7on/gml/+Sq6SigDN0m21e387+1b+xut23y/stm8G3rnO6V89vTGD1zxpUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa0NT1G6sPK+zaNfalvzu+yPAvl4xjPmyJ1z2z0OccZz/AAJ/yTzw1/2CrX/0UtdBQBz/APwkOqf9CZrn/f6y/wDkij/hIdU/6EzXP+/1l/8AJFdBRQBz/wDwkOqf9CZrn/f6y/8Akij/AISHVP8AoTNc/wC/1l/8kV0FFAHP/wDCQ6p/0Jmuf9/rL/5Io/4SHVP+hM1z/v8AWX/yRXQUUAc//wAJDqn/AEJmuf8Af6y/+SKP+Eh1T/oTNc/7/WX/AMkV0FFAHP8A/CQ6p/0Jmuf9/rL/AOSKP+Eh1T/oTNc/7/WX/wAkV0FFAHP/APCQ6p/0Jmuf9/rL/wCSKP8AhIdU/wChM1z/AL/WX/yRXQUUAc//AMJDqn/Qma5/3+sv/kij/hIdU/6EzXP+/wBZf/JFdBRQBz//AAkOqf8AQma5/wB/rL/5Io/4SHVP+hM1z/v9Zf8AyRXQUUAc/wD8JDqn/Qma5/3+sv8A5Io/4SHVP+hM1z/v9Zf/ACRXQUUAc/8A8JDqn/Qma5/3+sv/AJIo/wCEh1T/AKEzXP8Av9Zf/JFdBRQBz/8AwkOqf9CZrn/f6y/+SKP+Eh1T/oTNc/7/AFl/8kV0FFAHP/8ACQ6p/wBCZrn/AH+sv/kij/hIdU/6EzXP+/1l/wDJFdBRQBz/APwkOqf9CZrn/f6y/wDkij/hIdU/6EzXP+/1l/8AJFdBRQBz/wDwkOqf9CZrn/f6y/8Akij/AISHVP8AoTNc/wC/1l/8kV0FFAHP/wDCQ6p/0Jmuf9/rL/5Io/4SHVP+hM1z/v8AWX/yRXQUUAc//wAJDqn/AEJmuf8Af6y/+SKP+Eh1T/oTNc/7/WX/AMkV0FFAHP8A/CQ6p/0Jmuf9/rL/AOSKP+Eh1T/oTNc/7/WX/wAkV0FFAHP/APCQ6p/0Jmuf9/rL/wCSKP8AhIdU/wChM1z/AL/WX/yRXQUUAc//AMJDqn/Qma5/3+sv/kij/hIdU/6EzXP+/wBZf/JFdBRQBz//AAkOqf8AQma5/wB/rL/5Io/4SHVP+hM1z/v9Zf8AyRXQUUAc/wD8JDqn/Qma5/3+sv8A5Io/4SHVP+hM1z/v9Zf/ACRXQUUAc/8A8JDqn/Qma5/3+sv/AJIo/wCEh1T/AKEzXP8Av9Zf/JFdBRQBz/8AwkOqf9CZrn/f6y/+SKP+Eh1T/oTNc/7/AFl/8kV0FFAHP/8ACQ6p/wBCZrn/AH+sv/kij/hIdU/6EzXP+/1l/wDJFdBRQBz/APwkOqf9CZrn/f6y/wDkij/hIdU/6EzXP+/1l/8AJFdBRQBz/wDwkOqf9CZrn/f6y/8Akij/AISHVP8AoTNc/wC/1l/8kV0FFAHP/wDCQ6p/0Jmuf9/rL/5Io/4SHVP+hM1z/v8AWX/yRXQUUAc//wAJDqn/AEJmuf8Af6y/+SKP+Eh1T/oTNc/7/WX/AMkV0FFAHP8A/CQ6p/0Jmuf9/rL/AOSKP+Eh1T/oTNc/7/WX/wAkV0FFAHP/APCQ6p/0Jmuf9/rL/wCSKP8AhIdU/wChM1z/AL/WX/yRXQUUAc//AMJDqn/Qma5/3+sv/kij/hIdU/6EzXP+/wBZf/JFdBRQBz//AAkOqf8AQma5/wB/rL/5Io/4SHVP+hM1z/v9Zf8AyRXQUUAc/wD8JDqn/Qma5/3+sv8A5Io/4SHVP+hM1z/v9Zf/ACRXQUUAc/8A8JDqn/Qma5/3+sv/AJIo/wCEh1T/AKEzXP8Av9Zf/JFdBRQBz/8AwkOqf9CZrn/f6y/+SKP+Eh1T/oTNc/7/AFl/8kV0FFAHP/8ACQ6p/wBCZrn/AH+sv/kij/hIdU/6EzXP+/1l/wDJFdBRQBz/APwkOqf9CZrn/f6y/wDkij/hIdU/6EzXP+/1l/8AJFdBRQBz/wDwkOqf9CZrn/f6y/8AkimnxJqSnB8G65/3+sv/AJIroqgl+/8AhQBif8JNqP8A0J2uf9/bL/5Io/4SbUf+hO1z/v7Zf/JFbFFK4zH/AOEm1H/oTtc/7+2X/wAkUf8ACTaj/wBCdrn/AH9sv/kitiii4GP/AMJNqP8A0J2uf9/bL/5Io/4SbUf+hO1z/v7Zf/JFbFFFwMf/AISbUf8AoTtc/wC/tl/8kUf8JNqP/Qna5/39sv8A5IrYoouBj/8ACTaj/wBCdrn/AH9sv/kij/hJtR/6E7XP+/tl/wDJFbFFFwMf/hJtR/6E7XP+/tl/8kUf8JNqP/Qna5/39sv/AJIrYoouBj/8JNqP/Qna5/39sv8A5Io/4SbUf+hO1z/v7Zf/ACRWxRRcDH/4SbUf+hO1z/v7Zf8AyRR/wk2o/wDQna5/39sv/kitiii4GP8A8JNqP/Qna5/39sv/AJIo/wCEm1H/AKE7XP8Av7Zf/JFbFFFwMf8A4SbUf+hO1z/v7Zf/ACRR/wAJNqP/AEJ2uf8Af2y/+SK2KKLgY/8Awk2o/wDQna5/39sv/kij/hJtR/6E7XP+/tl/8kVsUUXAx/8AhJtR/wChO1z/AL+2X/yRR/wk2o/9Cdrn/f2y/wDkitiii4GP/wAJNqP/AEJ2uf8Af2y/+SKP+Em1H/oTtc/7+2X/AMkVsUUXAx/+Em1H/oTtc/7+2X/yRR/wk2o/9Cdrn/f2y/8Akitiii4GP/wk2o/9Cdrn/f2y/wDkij/hJtR/6E7XP+/tl/8AJFbFFFwMf/hJtR/6E7XP+/tl/wDJFH/CTaj/ANCdrn/f2y/+SK2KKLgY/wDwk2o/9Cdrn/f2y/8Akij/AISbUf8AoTtc/wC/tl/8kVsUUXAx/wDhJtR/6E7XP+/tl/8AJFH/AAk2o/8AQna5/wB/bL/5IrYoouBj/wDCTaj/ANCdrn/f2y/+SKP+Em1H/oTtc/7+2X/yRWxRRcDH/wCEm1H/AKE7XP8Av7Zf/JFH/CTaj/0J2uf9/bL/AOSK2KKLgY//AAk2o/8AQna5/wB/bL/5Io/4SbUf+hO1z/v7Zf8AyRWxRRcDH/4SbUf+hO1z/v7Zf/JFH/CTaj/0J2uf9/bL/wCSK2KKLgY//CTaj/0J2uf9/bL/AOSKP+Em1H/oTtc/7+2X/wAkVsUUXAx/+Em1H/oTtc/7+2X/AMkUf8JNqP8A0J2uf9/bL/5IrYoouBj/APCTaj/0J2uf9/bL/wCSKP8AhJtR/wChO1z/AL+2X/yRWxRRcDH/AOEm1H/oTtc/7+2X/wAkUf8ACTaj/wBCdrn/AH9sv/kitiii4EGlanc6j5v2jRr7TvLxt+1vA3mZz08qR+mO+OoxnnGjUUP8VS0xBRRRQAUUUUAFFFFABRRRQAUUUUAc/wCBP+SeeGv+wVa/+ilroK5/wJ/yTzw1/wBgq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUEv3/wAKnqCX7/4UmAyiiikMKKKKACiiigAqC8uPsllPcbS3lRs+B3wM1PSMoZSrAEEYIPemt9RM8sbX9Va6+0G+mDjoAcL/AN89P0r0fSLxtQ0m2unBDunzcY5HBP0yKw38DWLXO9bmZYe8fBP4N6fhXTQwx28EcMS7Y41CqPQCurEVKU0lBHNQp1It87H0UUVyHUFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYXirU59M0tWtiUllcIHAztHU/jW7VTUdOg1Sza2uAdhOQVOCp9RV03FTTlsRUTcWo7nn+j6/qFvqUO+5mmikkAkR23ZBOOM9/pXpdc5pvg+0sLxbl55JmjbdGCAAPTPqa6OtsTOE5JwMsPCcYvnCiiiuY6AooooAKKKKACiiigAooooAKKKKACiiigArifF+tXkN/9htppIY1QFyvBYn39Mf1rtqx9a8PW2slZHd4p0Xarrzx6Ed62oShGd57GVaMpQtExvB+s3d1dSWVzK8yiPejNyVwecnr3rsaydG0C20VXMTvJLIAGdv6DsK1qK8oym3DYKMZRhaW4UUUViahRRRQAUUUUASw/wAVS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVT1LVtN0a3W41TULSxgZ9iyXUyxKWwTgFiBnAJx7GrlFAHP8A/Cd+D/8Aoa9D/wDBjD/8VR/wnfg//oa9D/8ABjD/APFV0FFAHP8A/Cd+D/8Aoa9D/wDBjD/8VR/wnfg//oa9D/8ABjD/APFV0FFAHP8A/Cd+D/8Aoa9D/wDBjD/8VR/wnfg//oa9D/8ABjD/APFV0FFAHP8A/Cd+D/8Aoa9D/wDBjD/8VR/wnfg//oa9D/8ABjD/APFV0FFAHP8A/Cd+D/8Aoa9D/wDBjD/8VR/wnfg//oa9D/8ABjD/APFV0FFAHP8A/Cd+D/8Aoa9D/wDBjD/8VR/wnfg//oa9D/8ABjD/APFV0FFAHP8A/Cd+D/8Aoa9D/wDBjD/8VR/wnfg//oa9D/8ABjD/APFV0FFAHP8A/Cd+D/8Aoa9D/wDBjD/8VR/wnfg//oa9D/8ABjD/APFV0FFAHP8A/Cd+D/8Aoa9D/wDBjD/8VUMnjnwiX48VaGf+4hF/8VXTVBL9/wDCkwOd/wCE58I/9DTon/gwi/8AiqP+E58I/wDQ06J/4MIv/iq36KQzA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iq36KAMD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKrfooAwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qt+gnAyelAGB/wAJz4R/6GnRP/BhF/8AFUf8Jz4R/wChp0T/AMGEX/xVXT4g0gS+WdStt3/XQY/PpWijrIiujBlYZDA5BFTGpCXwu5cqc4/ErGD/AMJz4R/6GnRP/BhF/wDFUf8ACc+Ef+hp0T/wYRf/ABVb9FUQYH/Cc+Ef+hp0T/wYRf8AxVH/AAnPhH/oadE/8GEX/wAVW/RQBgf8Jz4R/wChp0T/AMGEX/xVH/Cc+Ef+hp0T/wAGEX/xVb9FAGB/wnPhH/oadE/8GEX/AMVR/wAJz4R/6GnRP/BhF/8AFVv0UAYH/Cc+Ef8AoadE/wDBhF/8VR/wnPhH/oadE/8ABhF/8VW/RQBgf8Jz4R/6GnRP/BhF/wDFUf8ACc+Ef+hp0T/wYRf/ABVb9FAGB/wnPhH/AKGnRP8AwYRf/FUf8Jz4R/6GnRP/AAYRf/FVv0UAYH/Cc+Ef+hp0T/wYRf8AxVH/AAnPhH/oadE/8GEX/wAVW/UU9xBaxGW4mjijHVpGCj8zQ2krsEm3ZGL/AMJz4R/6GnRP/BhF/wDFUf8ACc+Ef+hp0T/wYRf/ABVaFvrel3Uoigv4HkJwF3jJPt61fqYzjJXi7lShKDtJWMD/AITnwj/0NOif+DCL/wCKo/4Tnwj/ANDTon/gwi/+KrfoqiTA/wCE58I/9DTon/gwi/8AiqP+E58I/wDQ06J/4MIv/iq36KAMD/hOfCP/AENOif8Agwi/+Ko/4Tnwj/0NOif+DCL/AOKrfooAwP8AhOfCP/Q06J/4MIv/AIqj/hOfCP8A0NOif+DCL/4qt+igDA/4Tnwj/wBDTon/AIMIv/iqP+E58I/9DTon/gwi/wDiq36KAMD/AITnwj/0NOif+DCL/wCKo/4Tnwj/ANDTon/gwi/+KrfooAwP+E58I/8AQ06J/wCDCL/4qj/hOfCP/Q06J/4MIv8A4qt+igDA/wCE58I/9DTon/gwi/8AiqP+E58I/wDQ06J/4MIv/iq36q3ep2NhgXd3DCSMhXcAkew60pSUVeTsOMZSdoq5lf8ACc+Ef+hp0T/wYRf/ABVH/Cc+Ef8AoadE/wDBhF/8VWtaajZX4P2S6imwMkI4JH1HarNEZKSuncJRcXaSsYH/AAnPhH/oadE/8GEX/wAVR/wnPhH/AKGnRP8AwYRf/FVv0UxGB/wnPhH/AKGnRP8AwYRf/FUf8Jz4R/6GnRP/AAYRf/FVv0UAYH/Cc+Ef+hp0T/wYRf8AxVH/AAnPhH/oadE/8GEX/wAVW/RQBV0bXNI1rzv7K1Wxv/K2+Z9luEl2ZzjO0nGcH8jWpUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFQS/f8AwqeoJfv/AIUmAyiiikMKKKKACiiigArhPHmrTLPHpkTFI9gklKn72cgA+3Gfx9q7uuA8fabKt5FqKLmFkEbkdmGcZ+o/lXn5o5rDPk+foejlSg8Uuf5epxldb4G1aaHUhpruWgmBKKT9xgCePrzXJV1HgfTZbjWBelSILYH5j0LEEAfrmvnsA5rEQ5O/4dT6TMFB4afP2/Hp+J6VRRRX2J8UFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeSeI9Xm1XVpmZz5EbFIkB4ABxn6mvW68f13TJNK1aeB02oWLREdChPGP5V42cufso22vr+h7eSKHtZX3tp+pm16d4M1aXUtLeK4ffNbMFLE5LKehP5EfhXmNek+BtMlstLluZl2tdMCoPXaOh/U1wZQ5/WLR2tr/XqejnKh9WvLe+n9eh1NFFFfUHyYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBR1i//szSLm8ABaNPlB6FjwP1Irx+e4lup3mnkaSVzlmY5Jr17XLBtT0W6tExvdcpn+8DkfqK8fdHikaORSrqcMrDBBr57OnPnivs2/E+kyNQ5JP7V/wJLW6nsrlLi3kMcqHII/z0r2LTbwahpttdgAebGGIBzg9x+deNQwyXEyQwoXkchVUdSa9j0qzOn6Va2hILRRhWI6E9/wBaeSufNJfZ/UnPVDlg/tfoXKKKK+gPnQooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiqepaZBqtusFxJdoivvBtbuW3bOCOWjZSRz0zjp6CgC5RXP/APCG6X/z9a5/4Pb3/wCPUf8ACG6X/wA/Wuf+D29/+PUAdBRXP/8ACG6X/wA/Wuf+D29/+PUf8Ibpf/P1rn/g9vf/AI9QB0FFc/8A8Ibpf/P1rn/g9vf/AI9R/wAIbpf/AD9a5/4Pb3/49QB0FFc//wAIbpf/AD9a5/4Pb3/49R/whul/8/Wuf+D29/8Aj1AHQUVz/wDwhul/8/Wuf+D29/8Aj1H/AAhul/8AP1rn/g9vf/j1AHQUVz//AAhul/8AP1rn/g9vf/j1H/CG6X/z9a5/4Pb3/wCPUAdBRXP/APCG6X/z9a5/4Pb3/wCPUf8ACG6X/wA/Wuf+D29/+PUAdBRXP/8ACG6X/wA/Wuf+D29/+PUf8Ibpf/P1rn/g9vf/AI9QB0FQS/f/AArG/wCEN0v/AJ+tc/8AB7e//Hqhk8HaYH/4+tc/8Ht7/wDHaTA3KKwP+EP0z/n61v8A8Hl7/wDHaP8AhD9M/wCfrW//AAeXv/x2kM36KwP+EP0z/n61v/weXv8A8do/4Q/TP+frW/8AweXv/wAdoA36KwP+EP0z/n61v/weXv8A8do/4Q/TP+frW/8AweXv/wAdoA36bJGksbRyIrowwysMgj3rC/4Q/TP+frW//B5e/wDx2j/hD9M/5+tb/wDB5e//AB2gCQ+EdDaXzDYjPXAkYD8s1rwQRW0KwwRrHGowqqMAVif8Ifpn/P1rf/g8vf8A47R/wh+mf8/Wt/8Ag8vf/jtZwo04O8IpeiNJ1qlRWnJv1Zv0Vgf8Ifpn/P1rf/g8vf8A47R/wh+mf8/Wt/8Ag8vf/jtaGZv0Vgf8Ifpn/P1rf/g8vf8A47R/wh+mf8/Wt/8Ag8vf/jtAG/RWB/wh+mf8/Wt/+Dy9/wDjtH/CH6Z/z9a3/wCDy9/+O0Ab9FYH/CH6Z/z9a3/4PL3/AOO0f8Ifpn/P1rf/AIPL3/47QBv0Vgf8Ifpn/P1rf/g8vf8A47R/wh+mf8/Wt/8Ag8vf/jtAG/RWB/wh+mf8/Wt/+Dy9/wDjtH/CH6Z/z9a3/wCDy9/+O0Ab9FYH/CH6Z/z9a3/4PL3/AOO0f8Ifpn/P1rf/AIPL3/47QBv1WvbC01GHybuBJkzkBh0Pse1ZP/CH6Z/z9a3/AODy9/8AjtH/AAh+mf8AP1rf/g8vf/jtKUVJWew4ycXdOzJ7bwtotpMs0Viu9TkF2ZgPwJxWxWB/wh+mf8/Wt/8Ag8vf/jtH/CH6Z/z9a3/4PL3/AOO1MKcKatBJehVSrOo7zbfqb9FYH/CH6Z/z9a3/AODy9/8AjtH/AAh+mf8AP1rf/g8vf/jtWQb9FYH/AAh+mf8AP1rf/g8vf/jtH/CH6Z/z9a3/AODy9/8AjtAG/RWB/wAIfpn/AD9a3/4PL3/47R/wh+mf8/Wt/wDg8vf/AI7QBv0Vgf8ACH6Z/wA/Wt/+Dy9/+O0f8Ifpn/P1rf8A4PL3/wCO0Ab9FYH/AAh+mf8AP1rf/g8vf/jtH/CH6Z/z9a3/AODy9/8AjtAG/RWB/wAIfpn/AD9a3/4PL3/47R/wh+mf8/Wt/wDg8vf/AI7QBv0Vgf8ACH6Z/wA/Wt/+Dy9/+O0f8Ifpn/P1rf8A4PL3/wCO0Ab9Z2oaFpmpuJLu0R5Om8Eq35jrVH/hD9M/5+tb/wDB5e//AB2j/hD9M/5+tb/8Hl7/APHamcIzVpK6KhOUHzQdn5Ghp+iadpZLWdqkbkYL5LN+Z5q/WB/wh+mf8/Wt/wDg8vf/AI7R/wAIfpn/AD9a3/4PL3/47RCEYK0VZBOcpvmk7s36KwP+EP0z/n61v/weXv8A8do/4Q/TP+frW/8AweXv/wAdqiTforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDpIf4qlrL0bR7bSfO+zS3z+bt3far6a5xjPTzXbb17YzxnoK1KpCCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/2CrX/wBFLXQVz/gT/knnhr/sFWv/AKKWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACoJfv8A4VPUEv3/AMKTAZRRRSGFFFFABRRRQAVy/i7xHLpKR2lmQLqVdxcjOxenHuT/ACrqK838ewSJrkcxDGOSEbSRxkE5H8j+NcGZVZ0sO5Q3PQyylCriFGexgHVNQMvmm+uTJ/e81s/nmu38H+JZr+Q6ffPvmC5ikI5YDqD7+/1rz2ug8GQSTeJbd0B2xKzuR2G0j+ZFeBga9WNeKT3ep9Fj8PSlh5NpaK6PUqKKK+uPjQooooAKKKKACiiigAooooAKKKKACiiigArzvxR4qupb6WysZmhgibazocM7Drz2H0r0SvFtRt5LXUrmCXdvSRgS3U89fx615Gb1qlOnFQdr7ns5NRp1KsnNXa2JbfWdStZRJDfTq2cnMhIJ9weD+Nem+HdaGt6YJ2ULMh2SqOmfUexrySvQPh7byJZXlw2RHI6qoPQ7Qcn9f0rgymvU9vyXumehm9Cl7D2lrNHZUUUV9MfLBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAEF5dR2NnNdTZ8uJSxx1NeV6n4k1LU52driSKI8LFE5VQPf1+pr0TxRbyXPhu9jiyX2BsDuFIJ/QV5JXgZxWqRlGmnZWPosloU5QlUau729Da0rxPqOmXCsbiSeHgPFKxYEe2ehr1O3uI7q2iuIjmOVA6nHYjNeJV7DoMEltoNlFKGDrEMhuozzj8M1WT1qknKEndInO6FOKjUirNmjRRRXunz4UUUUAFFFFAEsP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilroK5/wJ/yTzw1/2CrX/wBFLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRVPUo9Slt1XS7u0tp9+We6tmnUrg8BVkQg5xznseOeAC5RXP/Y/GH/Qd0P8A8E03/wAlUfY/GH/Qd0P/AME03/yVQB0FFc/9j8Yf9B3Q/wDwTTf/ACVR9j8Yf9B3Q/8AwTTf/JVAHQUVz/2Pxh/0HdD/APBNN/8AJVH2Pxh/0HdD/wDBNN/8lUAdBRXP/Y/GH/Qd0P8A8E03/wAlUfY/GH/Qd0P/AME03/yVQB0FFc/9j8Yf9B3Q/wDwTTf/ACVR9j8Yf9B3Q/8AwTTf/JVAHQUVz/2Pxh/0HdD/APBNN/8AJVH2Pxh/0HdD/wDBNN/8lUAdBRXP/Y/GH/Qd0P8A8E03/wAlUfY/GH/Qd0P/AME03/yVQB0FFc/9j8Yf9B3Q/wDwTTf/ACVR9j8Yf9B3Q/8AwTTf/JVAHQVBL9/8KxvsfjD/AKDuh/8Agmm/+Sqa2n+LmOTruh/+CaX/AOSqANiisX+zvF3/AEHdE/8ABNL/APJVH9neLv8AoO6J/wCCaX/5KpWGbVFYv9neLv8AoO6J/wCCaX/5Ko/s7xd/0HdE/wDBNL/8lUWA2qKxf7O8Xf8AQd0T/wAE0v8A8lUf2d4u/wCg7on/AIJpf/kqiwG1VPU9LtdWtDb3ablzlWBwVPqDVH+zvF3/AEHdE/8ABNL/APJVH9neLv8AoO6J/wCCaX/5KqZQUlyyV0OM3BqUXZowT8O1835dSIj9DDz/ADrp9I0W00W2MVspLNgySNyzn/Paq39neLv+g7on/gml/wDkqj+zvF3/AEHdE/8ABNL/APJVc9HBUKMuaEbM6a2Or1o8tSV0bVFYv9neLv8AoO6J/wCCaX/5Ko/s7xd/0HdE/wDBNL/8lV1WOU2qKxf7O8Xf9B3RP/BNL/8AJVH9neLv+g7on/gml/8AkqiwG1RWL/Z3i7/oO6J/4Jpf/kqj+zvF3/Qd0T/wTS//ACVRYDaorF/s7xd/0HdE/wDBNL/8lUf2d4u/6Duif+CaX/5KosBtUVi/2d4u/wCg7on/AIJpf/kqj+zvF3/Qd0T/AME0v/yVRYDaorF/s7xd/wBB3RP/AATS/wDyVR/Z3i7/AKDuif8Agml/+SqLAbVFYv8AZ3i7/oO6J/4Jpf8A5Ko/s7xd/wBB3RP/AATS/wDyVRYDarE1vwxZa0fNYtDcgY81BnI9CO9L/Z3i7/oO6J/4Jpf/AJKo/s7xd/0HdE/8E0v/AMlVnUpQqx5Zq6NKVadKXPB2ZiW3w9iSYNc37SRg/dSPaT+OTXYW1tDZ20dvbxiOKMYVR2rK/s7xd/0HdE/8E0v/AMlUf2d4u/6Duif+CaX/AOSqzoYSlQ/hxsaV8XWr29pK5tUVi/2d4u/6Duif+CaX/wCSqP7O8Xf9B3RP/BNL/wDJVdFjnNqisX+zvF3/AEHdE/8ABNL/APJVH9neLv8AoO6J/wCCaX/5KosBtUVi/wBneLv+g7on/gml/wDkqj+zvF3/AEHdE/8ABNL/APJVFgNqisX+zvF3/Qd0T/wTS/8AyVR/Z3i7/oO6J/4Jpf8A5KosBtUVi/2d4u/6Duif+CaX/wCSqP7O8Xf9B3RP/BNL/wDJVFgNqisX+zvF3/Qd0T/wTS//ACVR/Z3i7/oO6J/4Jpf/AJKosBtUVi/2d4u/6Duif+CaX/5Ko/s7xd/0HdE/8E0v/wAlUWA2q5PU/AlndztNaTm1LHJTZuXPsMjFaX9neLv+g7on/gml/wDkqj+zvF3/AEHdE/8ABNL/APJVY1sPTrLlqK5tQxNWhLmpuxQ0nwRZ2FwtxczG6dDlFK7VB9cZOa6msX+zvF3/AEHdE/8ABNL/APJVH9neLv8AoO6J/wCCaX/5Koo4enRjy01ZBWxFSvLmqO7NqisX+zvF3/Qd0T/wTS//ACVR/Z3i7/oO6J/4Jpf/AJKraxibVFYv9neLv+g7on/gml/+SqP7O8Xf9B3RP/BNL/8AJVFgNqisX+zvF3/Qd0T/AME0v/yVR/Z3i7/oO6J/4Jpf/kqiwG/D/FUtZuk22r2/nf2rf2N1u2+X9ls3g29c53Svnt6YweueNKmIKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtaGp67o+ieV/a2q2Nh52fL+13CRb8YzjcRnGR09RWf4E/5J54a/7BVr/wCilroKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKgl+/+FAGN/wAJ34P/AOhr0P8A8GMP/wAVR/wnfg//AKGvQ/8AwYw//FVrUUrgZP8Awnfg/wD6GvQ//BjD/wDFUf8ACd+D/wDoa9D/APBjD/8AFVrUUXAyf+E78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKrWoouBk/8J34P/6GvQ//AAYw/wDxVH/Cd+D/APoa9D/8GMP/AMVWtRRcDJ/4Tvwf/wBDXof/AIMYf/iqP+E78H/9DXof/gxh/wDiq1qKLgZP/Cd+D/8Aoa9D/wDBjD/8VR/wnfg//oa9D/8ABjD/APFVrUUXAyf+E78H/wDQ16H/AODGH/4qj/hO/B//AENeh/8Agxh/+KrWoouBk/8ACd+D/wDoa9D/APBjD/8AFUf8J34P/wChr0P/AMGMP/xVa1FFwMn/AITvwf8A9DXof/gxh/8AiqP+E78H/wDQ16H/AODGH/4qtaii4GT/AMJ34P8A+hr0P/wYw/8AxVH/AAnfg/8A6GvQ/wDwYw//ABVa1FFwMn/hO/B//Q16H/4MYf8A4qj/AITvwf8A9DXof/gxh/8Aiq1qKLgZP/Cd+D/+hr0P/wAGMP8A8VR/wnfg/wD6GvQ//BjD/wDFVrUUXAyf+E78H/8AQ16H/wCDGH/4qj/hO/B//Q16H/4MYf8A4qtaii4GT/wnfg//AKGvQ/8AwYw//FUf8J34P/6GvQ//AAYw/wDxVa1FFwMn/hO/B/8A0Neh/wDgxh/+Ko/4Tvwf/wBDXof/AIMYf/iq1qKLgZP/AAnfg/8A6GvQ/wDwYw//ABVH/Cd+D/8Aoa9D/wDBjD/8VWtRRcDJ/wCE78H/APQ16H/4MYf/AIqj/hO/B/8A0Neh/wDgxh/+KrWoouBk/wDCd+D/APoa9D/8GMP/AMVR/wAJ34P/AOhr0P8A8GMP/wAVWtRRcDJ/4Tvwf/0Neh/+DGH/AOKo/wCE78H/APQ16H/4MYf/AIqtaii4GT/wnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVa1FFwMn/hO/B//AENeh/8Agxh/+Ko/4Tvwf/0Neh/+DGH/AOKrWoouBk/8J34P/wChr0P/AMGMP/xVH/Cd+D/+hr0P/wAGMP8A8VWtRRcDJ/4Tvwf/ANDXof8A4MYf/iqP+E78H/8AQ16H/wCDGH/4qtaii4GT/wAJ34P/AOhr0P8A8GMP/wAVR/wnfg//AKGvQ/8AwYw//FVrUUXAyf8AhO/B/wD0Neh/+DGH/wCKo/4Tvwf/ANDXof8A4MYf/iq1qKLgZP8Awnfg/wD6GvQ//BjD/wDFUf8ACd+D/wDoa9D/APBjD/8AFVrUUXAh0zXdH1vzf7J1Wxv/ACceZ9kuEl2ZzjO0nGcHr6GtCoof4qlpgFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWugrn/An/ACTzw1/2CrX/ANFLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUEv3/wqeoJfv8A4UmAyiiikMKKKKACiiigApk0qQQyTSHCIpZj6Ac0+o7iBLm2lgkGUkUq30Ipq19RPyOIbx1d/aQy2kIg/uEncf8AgX/1q7Syuo76yhuovuSqGA9Pb8K4N/BWqC68tWhaI/8ALXdgfiOua7rT7NNP0+C0TkRrjOMZPc/ic11YhUUl7Pc5qDq3fOWaKKK5DqCiiigAooooAKKKKACiiigAooooAKKKKACs3W9WTRrD7QU8xywVEzjJ/wD1VpVleINIOsaf5KMqzI26Nm6e4PtV0+XnXNsRU5uV8u5g6V4znnv44LyGIRyuFDpkbM+uc5FdnXCaV4PvV1COW9EaQxOGIDbi+PTHb613dbYlU1JezM8O6nK+cKKKK5jcKKKKACiiigAooooAKKKKACiiigAooooAK5vxF4mfSZ1tbaJHmK7mZzwvtjua6SuV8TeGp9RuReWWwybMPGTgsR0IPTOOOfStqHJz+/sZVufk9zcs+HPEjaw8lvPEkc6LuBQ8MM88du1dDXM+GPDk2lSyXV2U81k2qinO0d8+/wBK6aivyc75Ngo8/J7+4UUUViahRRRQAUUUUASw/wAVS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUVT1LTINVt1guJLtEV94Nrdy27ZwRy0bKSOemcdPQUAXKK5//hDdL/5+tc/8Ht7/APHqP+EN0v8A5+tc/wDB7e//AB6gDoKK5/8A4Q3S/wDn61z/AMHt7/8AHqP+EN0v/n61z/we3v8A8eoA6Ciuf/4Q3S/+frXP/B7e/wDx6j/hDdL/AOfrXP8Awe3v/wAeoA6Ciuf/AOEN0v8A5+tc/wDB7e//AB6j/hDdL/5+tc/8Ht7/APHqAOgorn/+EN0v/n61z/we3v8A8eo/4Q3S/wDn61z/AMHt7/8AHqAOgorn/wDhDdL/AOfrXP8Awe3v/wAeo/4Q3S/+frXP/B7e/wDx6gDoKK5//hDdL/5+tc/8Ht7/APHqP+EN0v8A5+tc/wDB7e//AB6gDoKK5/8A4Q3S/wDn61z/AMHt7/8AHqP+EN0v/n61z/we3v8A8eoA6CoJfv8A4Vjf8Ibpf/P1rn/g9vf/AI9UMng7TA//AB9a5/4Pb3/47SYG5RWB/wAIfpn/AD9a3/4PL3/47R/wh+mf8/Wt/wDg8vf/AI7SGb9FYH/CH6Z/z9a3/wCDy9/+O0f8Ifpn/P1rf/g8vf8A47QBv0Vgf8Ifpn/P1rf/AIPL3/47R/wh+mf8/Wt/+Dy9/wDjtAG/RWB/wh+mf8/Wt/8Ag8vf/jtH/CH6Z/z9a3/4PL3/AOO0Ab9FYH/CH6Z/z9a3/wCDy9/+O0f8Ifpn/P1rf/g8vf8A47QBv0Vgf8Ifpn/P1rf/AIPL3/47R/wh+mf8/Wt/+Dy9/wDjtAG/RWB/wh+mf8/Wt/8Ag8vf/jtH/CH6Z/z9a3/4PL3/AOO0Ab9FYH/CH6Z/z9a3/wCDy9/+O0f8Ifpn/P1rf/g8vf8A47QBv0Vgf8Ifpn/P1rf/AIPL3/47R/wh+mf8/Wt/+Dy9/wDjtAG/RWB/wh+mf8/Wt/8Ag8vf/jtH/CH6Z/z9a3/4PL3/AOO0Ab9FYH/CH6Z/z9a3/wCDy9/+O0f8Ifpn/P1rf/g8vf8A47QBv0Vgf8Ifpn/P1rf/AIPL3/47R/wh+mf8/Wt/+Dy9/wDjtAG/RWB/wh+mf8/Wt/8Ag8vf/jtH/CH6Z/z9a3/4PL3/AOO0Ab9FYH/CH6Z/z9a3/wCDy9/+O0f8Ifpn/P1rf/g8vf8A47QBv0Vgf8Ifpn/P1rf/AIPL3/47R/wh+mf8/Wt/+Dy9/wDjtAG/RWB/wh+mf8/Wt/8Ag8vf/jtH/CH6Z/z9a3/4PL3/AOO0Ab9FYH/CH6Z/z9a3/wCDy9/+O0f8Ifpn/P1rf/g8vf8A47QBv0Vgf8Ifpn/P1rf/AIPL3/47R/wh+mf8/Wt/+Dy9/wDjtAG/RWB/wh+mf8/Wt/8Ag8vf/jtH/CH6Z/z9a3/4PL3/AOO0Ab9FYH/CH6Z/z9a3/wCDy9/+O0f8Ifpn/P1rf/g8vf8A47QBv0Vgf8Ifpn/P1rf/AIPL3/47R/wh+mf8/Wt/+Dy9/wDjtAG/RWB/wh+mf8/Wt/8Ag8vf/jtH/CH6Z/z9a3/4PL3/AOO0Ab9FYH/CH6Z/z9a3/wCDy9/+O0f8Ifpn/P1rf/g8vf8A47QBv0Vgf8Ifpn/P1rf/AIPL3/47R/wh+mf8/Wt/+Dy9/wDjtAG/RWB/wh+mf8/Wt/8Ag8vf/jtH/CH6Z/z9a3/4PL3/AOO0Ab9FYH/CH6Z/z9a3/wCDy9/+O0f8Ifpn/P1rf/g8vf8A47QB0kP8VS1l6No9tpPnfZpb5/N27vtV9Nc4xnp5rtt69sZ4z0FalUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilroK5/wJ/yTzw1/2CrX/wBFLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUEv3/AMKnqCX7/wCFJgMooopDCiiigAooooAKCQBknAoqC9ga5sbiBH2NJGyBvQkYprcTMVvGelLdCIGVk7yhPlH9f0rfjkSWNZI2DI4DKR3BryV9OvUuvszWkwn7JsOT7j2r07RrWSy0e1t5mJkRPmyc4J5x+HT8K6sRRp00nFnNQqzm2pIvUUUVyHUFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFV729t9PtWuLmTZEuATjPJ9hVisDxdYXF9pK/ZlZ2ikDmNRksMEdPUZ/nV04qU0nsRUk4xbQ/T/FWnajdC3TzYpGOEEi/e/LP61uV5boumXl3qsAjilURygvJtI2YOevY16lW2JpQpySiZ4epKcW5BRRRXMbhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWZquu2WjhRcMzSsMrGgySPX0FadcJ4z066/tEXqpJJA0YBYDIjx29h3/ABNbUIRnO0jKtOUIXidVpWtWesIxtmYOgG9HGCuf0/KtGuJ8FaddR3kt5JHJHD5e1dwxvyQePUcV21FeEYTcYhRnKcLyCiiisTUKKKKACiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf8AYKtf/RS10Fc/4E/5J54a/wCwVa/+ilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooqnqUepS26rpd3aW0+/LPdWzTqVweAqyIQc45z2PHPABcorn/sfjD/oO6H/AOCab/5Ko+x+MP8AoO6H/wCCab/5KoA6Ciuf+x+MP+g7of8A4Jpv/kqj7H4w/wCg7of/AIJpv/kqgDoKK5/7H4w/6Duh/wDgmm/+SqPsfjD/AKDuh/8Agmm/+SqAOgorn/sfjD/oO6H/AOCab/5Ko+x+MP8AoO6H/wCCab/5KoA6Ciuf+x+MP+g7of8A4Jpv/kqj7H4w/wCg7of/AIJpv/kqgDoKK5/7H4w/6Duh/wDgmm/+SqPsfjD/AKDuh/8Agmm/+SqAOgorn/sfjD/oO6H/AOCab/5Ko+x+MP8AoO6H/wCCab/5KoA6Ciuf+x+MP+g7of8A4Jpv/kqj7H4w/wCg7of/AIJpv/kqgDoKgl+/+FY32Pxh/wBB3Q//AATTf/JVQyWni7fzrmh/+CeX/wCSqTA3KKwPsni7/oOaJ/4J5f8A5Jo+yeLv+g5on/gnl/8AkmkM36KwPsni7/oOaJ/4J5f/AJJo+yeLv+g5on/gnl/+SaAN+isD7J4u/wCg5on/AIJ5f/kmj7J4u/6Dmif+CeX/AOSaAN+isD7J4u/6Dmif+CeX/wCSaPsni7/oOaJ/4J5f/kmgDforA+yeLv8AoOaJ/wCCeX/5Jo+yeLv+g5on/gnl/wDkmgDforA+yeLv+g5on/gnl/8Akmj7J4u/6Dmif+CeX/5JoA36KwPsni7/AKDmif8Agnl/+SaPsni7/oOaJ/4J5f8A5JoA36KwPsni7/oOaJ/4J5f/AJJo+yeLv+g5on/gnl/+SaAN+isD7J4u/wCg5on/AIJ5f/kml+yeLv8AoOaJ/wCCeX/5JoA3qKwPsni7/oOaJ/4J5f8A5Jo+yeLv+g5on/gnl/8AkmgDforA+yeLv+g5on/gnl/+SaPsni7/AKDmif8Agnl/+SaAN+isD7J4u/6Dmif+CeX/AOSaPsni7/oOaJ/4J5f/AJJoA36KwPsni7/oOaJ/4J5f/kmqWp32uaNCJdR8U+HbVWzt83SpQWx1wPtWT+FNJvRCbSV2dZRXntr4yku5vKi8beGw2cfvNHnjH5tcgV0YtfFpAI1zQyD0I0eX/wCSacoyjurCjOMvhdzforA+yeLv+g5on/gnl/8Akmj7J4u/6Dmif+CeX/5JqSjforA+yeLv+g5on/gnl/8Akmj7J4u/6Dmif+CeX/5JoA36KwPsni7/AKDmif8Agnl/+SaPsni7/oOaJ/4J5f8A5JoA36KwPsni7/oOaJ/4J5f/AJJo+yeLv+g5on/gnl/+SaAN+isD7J4u/wCg5on/AIJ5f/kmj7J4u/6Dmif+CeX/AOSaAN+isD7J4u/6Dmif+CeX/wCSaPsni7/oOaJ/4J5f/kmgDforA+yeLv8AoOaJ/wCCeX/5Jo+yeLv+g5on/gnl/wDkmgDforA+yeLv+g5on/gnl/8AkmsbVPEV9o0rRX/jHw3FKv3oxpMzuvGeVW5JFUouTsiZSUVdux3FFcTpevajrUvlaf4v8OTynpGNJlVz34U3IJrX+yeLv+g5on/gnl/+SaTi07MakpK6Zv0VgfZPF3/Qc0T/AME8v/yTR9k8Xf8AQc0T/wAE8v8A8k0hm/RWB9k8Xf8AQc0T/wAE8v8A8k0fZPF3/Qc0T/wTy/8AyTQBv0VgfZPF3/Qc0T/wTy//ACTR9k8Xf9BzRP8AwTy//JNAHSQ/xVLWXo0Orxed/at9Y3Wdvl/ZbN4NvXOd0r57emMHrnjUqkIKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKgl+/+FT1BL9/8KTAZRRRSGFFFFABRRRQAUUVBfNMthcNbDM4jYxj/AGscU0ruwm7A19aLci2a5hE56Rlxu/Kp68ZJJJJOSa9W0N530Oza4/1hiH4jsfrjFdNfD+ySdzno1/aNqxoUUUVynSFFFFABRRRQAUd6KO9ABRRRQAUUUUAFFFFAGB4w8SxeFvD8t8wDTsfLt4yPvSEHGfYYJP0r5x1LU73V717zULmS4uH6u57egHQD2HFepfG5pAmiICfKJmJHYn5MfzP615FXrYOmlT5urPFx1STqcnRBXovw08cXOmanBo2oXDSadORHFvOfIc9MH+6emOg68c586pQSrBlJBByCO1dNSmqkeVnLSqSpyUon1vRTYyxjUt97Az9adXgH0gUUUUAFFFFABRRRQAUUUUAFFFFABRRRQB5t8UfG0+ixx6PpcxivZl3zTL1jQ8AA9mPr1AHuDXiLMzuXdizMckk5JNdT8STIfiBqvmdQyAfTy1x+mK5Wvbw9NQpq3U8DFVJTqO/QdHI8MiyROySIQyspwQfUGvdfhj40l8QWkumajKZNQtl3rIRzLHnGT7gkA+uR714RXZfCxpV+INgIydrJKJMf3fLY8/iBSxNNTptvoPCVJQqpLqfQ1FFFeKe8FFFFABRRRQBLD/FUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUVT1K9nsbdZbfTLvUHL7TFatErAYPzHzHQY4x1zyOOtAFyiuf/AOEh1T/oTNc/7/WX/wAkUf8ACQ6p/wBCZrn/AH+sv/kigDoKK5//AISHVP8AoTNc/wC/1l/8kUf8JDqn/Qma5/3+sv8A5IoA6Ciuf/4SHVP+hM1z/v8AWX/yRR/wkOqf9CZrn/f6y/8AkigDoKK5/wD4SHVP+hM1z/v9Zf8AyRR/wkOqf9CZrn/f6y/+SKAOgorn/wDhIdU/6EzXP+/1l/8AJFH/AAkOqf8AQma5/wB/rL/5IoA6Ciuf/wCEh1T/AKEzXP8Av9Zf/JFH/CQ6p/0Jmuf9/rL/AOSKAOgorn/+Eh1T/oTNc/7/AFl/8kUf8JDqn/Qma5/3+sv/AJIoA6Ciuf8A+Eh1T/oTNc/7/WX/AMkUf8JDqn/Qma5/3+sv/kigDoKgl+/+FY3/AAkOqf8AQma5/wB/rL/5IqN9e1VmyPBuuf8Af6y/+SKGBtUVh/25q3/Qm63/AN/rL/5Io/tzVv8AoTdb/wC/1l/8kUhm5RWH/bmrf9Cbrf8A3+sv/kij+3NW/wChN1v/AL/WX/yRQBuUVh/25q3/AEJut/8Af6y/+SKP7c1b/oTdb/7/AFl/8kUAblFYf9uat/0Jut/9/rL/AOSKP7c1b/oTdb/7/WX/AMkUAXH0LS3uvtLWMJl/3eD9R0JrQAAGAMCsP+3NW/6E3W/+/wBZf/JFH9uat/0Jut/9/rL/AOSKbcnuJJLY3KKw/wC3NW/6E3W/+/1l/wDJFH9uat/0Jut/9/rL/wCSKQzcorD/ALc1b/oTdb/7/WX/AMkUf25q3/Qm63/3+sv/AJIoA3KKw/7c1b/oTdb/AO/1l/8AJFH9uat/0Jut/wDf6y/+SKANyjvWH/bmrf8AQm63/wB/rL/5Io/tzVv+hN1v/v8AWX/yRQBuUVh/25q3/Qm63/3+sv8A5Io/tzVv+hN1v/v9Zf8AyRQBuUVh/wBuat/0Jut/9/rL/wCSKP7c1b/oTdb/AO/1l/8AJFAG5RWH/bmrf9Cbrf8A3+sv/kij+3NW/wChN1v/AL/WX/yRQBV8deGB4p8OyW0fF3CfNtyTgFgPun2I4/I185XNtPZ3D29zDJDNGcPHIpVlPuDX0v8A25q3/Qm63/3+sv8A5IrG1uxi8RBTqfw/1iaRRhZRPZq4HpuFyDj26V14fE+yXLLY4sVhPavmi7M+fK7j4ceD59f1qK+uYnXTbVhIzkYErg8ID356+31Fdlb+CdJt5hIfh/r8uDkLJe2hX8hc8/jXXw6tqNvCkMPgnWI4kAVESWxCqB2AFxxWtXGJxtBGFHANS5qjN+isP+3NW/6E3W/+/wBZf/JFH9uat/0Jut/9/rL/AOSK889Q3KKw/wC3NW/6E3W/+/1l/wDJFH9uat/0Jut/9/rL/wCSKANyisP+3NW/6E3W/wDv9Zf/ACRR/bmrf9Cbrf8A3+sv/kigDcorD/tzVv8AoTdb/wC/1l/8kUf25q3/AEJut/8Af6y/+SKANyisP+3NW/6E3W/+/wBZf/JFH9uat/0Jut/9/rL/AOSKANyisP8AtzVv+hN1v/v9Zf8AyRR/bmrf9Cbrf/f6y/8AkigDcorD/tzVv+hN1v8A7/WX/wAkUf25q3/Qm63/AN/rL/5IoA4b4seDprsr4g0+F5ZFUJdRoMkqOj49uh9sehrxyvpz+3NW/wChN1v/AL/WX/yRXL6r4Y07V7lrmf4ea1HO5yzwXNnHuPqQLnGffFd1DF8keWaPOxGC55c8GeF17X8KPB8+lwy63qETxXM6eXBE4wVjyCWI9SQMew96t6R4csNFulurX4e601whysk1zZyFT6gG5wD74zXTf25q3/Qm63/3+sv/AJIpYjF88eWKHhsF7OXPN6m5RWH/AG5q3/Qm63/3+sv/AJIo/tzVv+hN1v8A7/WX/wAkVxHoG5RWH/bmrf8AQm63/wB/rL/5Io/tzVv+hN1v/v8AWX/yRQBuUVh/25q3/Qm63/3+sv8A5Io/tzVv+hN1v/v9Zf8AyRQB0MP8VS1maRfXd7532rRr7Tdm3b9qeBvMznOPKkfpjvjqMZ5xp0xBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilroK5/wJ/yTzw1/2CrX/wBFLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv+wVa/8Aopa6Cuf8Cf8AJPPDX/YKtf8A0UtaGp67o+ieV/a2q2Nh52fL+13CRb8YzjcRnGR09RQBoUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVz/wDwnfg//oa9D/8ABjD/APFUf8J34P8A+hr0P/wYw/8AxVAHQUVn6Zruj635v9k6rY3/AJOPM+yXCS7M5xnaTjOD19DWhQAUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP8Aknnhr/sFWv8A6KWugrn/AAJ/yTzw1/2CrX/0UtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFQS/f/Cp6gl+/+FJgMooopDCiiigAooooAKKKZNKkELzSHaiKWY+gHWgB9FcK3ju5+07ls4vI/uFjuP4//Wrs7K6jvrKG6i+5KoYDPT2/CtalGdNJyRnCrCbtEnooorI0CiiigAooooAKKKKACiiigAooooAKKKKACiis7W9WTR7D7QyeYxYIiZxk/wD6s1UYuTshSkoq7NGiuN0rxnNcX8cF5BEElcKHTI2Z6ZznP6V2VVUpSpu0iKdSM1eIUUUVmaBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRXOeIvEzaTMtrbxI8zJuLOeF9OO5q4QlN8sSZzUFeR0dFc/4d8SHWHkgniSOdF3AqeHHfjt2/OugonCUHyyCE1NXQUUUVBQUUUUAFFFFAEsP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/wCBP+SeeGv+wVa/+ilroK5/wJ/yTzw1/wBgq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUEv3/wAKnqCX7/4UmAyiiikMKKKKACiiigAqK4gS6tpbeUZSRSjfQ1LRTWgHnjeC9UF15SmFoz/y134A+o65rutOs00/T4LRORGuCfU9z+JzVmitatedRJSMqdGNN3QUUUViahRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWT4g0c6xp4hRlWZG3IzdPcGtaiqjJxfMiZRUlZnB6T4PvhqEct6sccMThiNwJfHPGO31rvKKKurVlVd5E06UaatEKKKKyNAooooAKKKKACiiigAooooAKKKKACiiigArlPE/hq41G6F7ZBDJsw8ZOCxHQjt0459K6uitKdSVOXNEicFNWZzHhjw7Ppcsl1d7PNZNqIpztHfPv06V09FFKpUdSXNIIQUFyoKKKKgsKKKKACiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAqnqWmQarbrBcSXaIr7wbW7lt2zgjlo2Ukc9M46egq5RQBz/8Awhul/wDP1rn/AIPb3/49R/whul/8/Wuf+D29/wDj1dBRQBz/APwhul/8/Wuf+D29/wDj1H/CG6X/AM/Wuf8Ag9vf/j1dBRQBz/8Awhul/wDP1rn/AIPb3/49R/whul/8/Wuf+D29/wDj1dBRQBz/APwhul/8/Wuf+D29/wDj1H/CG6X/AM/Wuf8Ag9vf/j1dBRQBz/8Awhul/wDP1rn/AIPb3/49R/whul/8/Wuf+D29/wDj1dBRQBz/APwhul/8/Wuf+D29/wDj1H/CG6X/AM/Wuf8Ag9vf/j1dBRQBz/8Awhul/wDP1rn/AIPb3/49R/whul/8/Wuf+D29/wDj1dBRQBz/APwhul/8/Wuf+D29/wDj1H/CG6X/AM/Wuf8Ag9vf/j1dBRQBz/8Awhul/wDP1rn/AIPb3/49UMng7TA//H1rn/g9vf8A47XTVBL9/wDCkwOd/wCEP0z/AJ+tb/8AB5e//HaP+EP0z/n61v8A8Hl7/wDHa36KQzA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2t+igDA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2t+igDA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2t+gnAyelAGB/wAIfpn/AD9a3/4PL3/47R/wh+mf8/Wt/wDg8vf/AI7SN4y0lbryt8rJ3lCfKP6/pW9HIksayRsGRwGUjuDVyhKPxKxMZxl8LML/AIQ/TP8An61v/wAHl7/8do/4Q/TP+frW/wDweXv/AMdrfoqCjA/4Q/TP+frW/wDweXv/AMdo/wCEP0z/AJ+tb/8AB5e//Ha36KAMD/hD9M/5+tb/APB5e/8Ax2j/AIQ/TP8An61v/wAHl7/8drfooAwP+EP0z/n61v8A8Hl7/wDHaP8AhD9M/wCfrW//AAeXv/x2t+igDA/4Q/TP+frW/wDweXv/AMdo/wCEP0z/AJ+tb/8AB5e//Ha36KAMD/hD9M/5+tb/APB5e/8Ax2j/AIQ/TP8An61v/wAHl7/8drfooAwP+EP0z/n61v8A8Hl7/wDHaP8AhD9M/wCfrW//AAeXv/x2t+igDA/4Q/TP+frW/wDweXv/AMdo/wCEP0z/AJ+tb/8AB5e//Ha36878UeKrqW9lsrGZoYIm2s6EhnYdeewz6VzYrFQw0OaZ1YTCTxM+SB0v/CH6Z/z9a3/4PL3/AOO0f8Ifpn/P1rf/AIPL3/47XndvrWp2swkivrgMDnBkJB+oPBr0zw7rQ1vTBOyhZkOyVR0z6j2NYYTMaeJlyWszfGZbUw0edu6K/wDwh+mf8/Wt/wDg8vf/AI7R/wAIfpn/AD9a3/4PL3/47W/RXoHnGB/wh+mf8/Wt/wDg8vf/AI7R/wAIfpn/AD9a3/4PL3/47W/RQBgf8Ifpn/P1rf8A4PL3/wCO0f8ACH6Z/wA/Wt/+Dy9/+O1v0UAYH/CH6Z/z9a3/AODy9/8AjtH/AAh+mf8AP1rf/g8vf/jtb9FAGB/wh+mf8/Wt/wDg8vf/AI7R/wAIfpn/AD9a3/4PL3/47W/RQBgf8Ifpn/P1rf8A4PL3/wCO0f8ACH6Z/wA/Wt/+Dy9/+O1v0UAYH/CH6Z/z9a3/AODy9/8AjtH/AAh+mf8AP1rf/g8vf/jtb9FAGB/wh+mf8/Wt/wDg8vf/AI7R/wAIfpn/AD9a3/4PL3/47WxeXUVjZzXUxIjiUs2OteV6n4l1PUp2drmSGI8LFE5VQPfHX6muLF46GGS5tW+h3YPAVMU3y6JdTvP+EP0z/n61v/weXv8A8do/4Q/TP+frW/8AweXv/wAdrhtK8UalptyrNcSTwZAeKViwI9s9DXqlvPHdW0VxEcxyoHU47EZFPCY2GJT5dGugsZgamFa5tU+pif8ACH6Z/wA/Wt/+Dy9/+O0f8Ifpn/P1rf8A4PL3/wCO1v0V2HEYH/CH6Z/z9a3/AODy9/8AjtH/AAh+mf8AP1rf/g8vf/jtb9FAGB/wh+mf8/Wt/wDg8vf/AI7R/wAIfpn/AD9a3/4PL3/47W/RQBV0bR7bSfO+zS3z+bt3far6a5xjPTzXbb17YzxnoK1Kih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf8AYKtf/RS10Fc/4E/5J54a/wCwVa/+ilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAqCX7/wCFT1BL9/8ACkwGUUUUhhRRRQAUUUUAFQXsD3NjcQRvseSNlVvQkVPRTTs7iavoeRPp94lz9ma1mE/aPYcn6eten6Nay2ej2tvMxMiIN2e3fH4dPwq9RXRWxDqpKxjSoKm27hRRRXMbhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXi2o28lrqVzBLu3pIwJbqeev49a9prD1zwvZ623mszQ3IGPNUZyPcd687MsJLEQXJuj08sxkMNUfPszymvQPh7byJZXlw2RHI6qoPQ7Qcn9f0qO2+HsazBrm/aSMHlEj2k/jk4rsba2hs7aO3t4xHFGMKo7Vx5dl9WlV9rUVrHbmeZUqtL2VJ3uS0UUV7p8+FFFFABRRRQAUUUUAFFFFABRRRQAUUUUAZHii3kufDd7HFkvsDYHcAgn9BXkle5VyWp+BLS7naaznNqW5MezcufbkYrx8zwNSvJVKerWlj2sqx9OhF06uietzzqvYNAgkttAsYpQQ4iBIbqM84/DNY+k+B7OxuFnupjdOpyqldqg+4yc11VPLMFUoNzqaN9BZrj6eIShT1S1uFFFFeueMFFFFABRRRQBLD/FUtRQ/wAVS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABVPUo9Slt1XS7u0tp9+We6tmnUrg8BVkQg5xznseOeLlFAHP/Y/GH/Qd0P8A8E03/wAlUfY/GH/Qd0P/AME03/yVXQUUAc/9j8Yf9B3Q/wDwTTf/ACVR9j8Yf9B3Q/8AwTTf/JVdBRQBz/2Pxh/0HdD/APBNN/8AJVH2Pxh/0HdD/wDBNN/8lV0FFAHP/Y/GH/Qd0P8A8E03/wAlUfY/GH/Qd0P/AME03/yVXQUUAc/9j8Yf9B3Q/wDwTTf/ACVR9j8Yf9B3Q/8AwTTf/JVdBRQBz/2Pxh/0HdD/APBNN/8AJVH2Pxh/0HdD/wDBNN/8lV0FFAHP/Y/GH/Qd0P8A8E03/wAlUfY/GH/Qd0P/AME03/yVXQUUAc/9j8Yf9B3Q/wDwTTf/ACVR9j8Yf9B3Q/8AwTTf/JVdBRQBz/2Pxh/0HdD/APBNN/8AJVQyWni7fzrmh/8Agnl/+Sq6aoJfv/hSYHO/ZPF3/Qc0T/wTy/8AyTR9k8Xf9BzRP/BPL/8AJNb9FIZgfZPF3/Qc0T/wTy//ACTR9k8Xf9BzRP8AwTy//JNb9FAGB9k8Xf8AQc0T/wAE8v8A8k0fZPF3/Qc0T/wTy/8AyTW/RQBgfZPF3/Qc0T/wTy//ACTR9k8Xf9BzRP8AwTy//JNb9FAGB9k8Xf8AQc0T/wAE8v8A8k0fZPF3/Qc0T/wTy/8AyTWw15arcC3a4iE56RlxuP4VPTs0K5gfZPF3/Qc0T/wTy/8AyTR9k8Xf9BzRP/BPL/8AJNb9FIZgfZPF3/Qc0T/wTy//ACTR9k8Xf9BzRP8AwTy//JNb9FAGB9k8Xf8AQc0T/wAE8v8A8k0fZPF3/Qc0T/wTy/8AyTW/RQBgfZPF3/Qc0T/wTy//ACTR9k8Xf9BzRP8AwTy//JNb9FAGB9k8Xf8AQc0T/wAE8v8A8k0fZPF3/Qc0T/wTy/8AyTW/RQBgfZPF3/Qc0T/wTy//ACTR9k8Xf9BzRP8AwTy//JNb9FAGB9k8Xf8AQc0T/wAE8v8A8k0fZPF3/Qc0T/wTy/8AyTW/RQBgfZPF3/Qc0T/wTy//ACTR9k8Xf9BzRP8AwTy//JNb9ct4i8YLpU7WdnGstyuN7P8AcT246msq1eFGPPUdkbUMPUrz5Kauy19k8Xf9BzRP/BPL/wDJNH2Txd/0HNE/8E8v/wAk1zFv4+1JJgZ4beWPPKqpU49jn/Gu703UbfVLGO7tmJR+x6qe4PvWWHxtHENqD1NsTga2GSdRaGX9k8Xf9BzRP/BPL/8AJNH2Txd/0HNE/wDBPL/8k1v0V1HGYH2Txd/0HNE/8E8v/wAk0fZPF3/Qc0T/AME8v/yTW/RQBgfZPF3/AEHNE/8ABPL/APJNH2Txd/0HNE/8E8v/AMk1v0UAYH2Txd/0HNE/8E8v/wAk0fZPF3/Qc0T/AME8v/yTW/RQBgfZPF3/AEHNE/8ABPL/APJNH2Txd/0HNE/8E8v/AMk1v0UAYH2Txd/0HNE/8E8v/wAk0fZPF3/Qc0T/AME8v/yTW/RQBgfZPF3/AEHNE/8ABPL/APJNH2Txd/0HNE/8E8v/AMk1v0UAYH2Txd/0HNE/8E8v/wAk1j6lr+oaPKYb/wAY+GoZV+9H/ZUrOPqouSRWd8UPG0+ixR6Ppcxivpl3zSr1ijPAAPZj69QB7g14gzM7l3YszHJJOSTXbQwntI80nZHBiMb7OXLFXZ9BaZrmpazJ5Wn+L/Dc8vaMaVKHP/ATc5rW+yeLv+g5on/gnl/+Sa+aI5HhkWSJ2SRCGVlOCD6g17r8MvGsviG0k03UZC+o2y7xIRzLHnGT7gkA+uR70V8I6a5ou6Hh8YqkuWSszovsni7/AKDmif8Agnl/+SaPsni7/oOaJ/4J5f8A5JrforiO4wPsni7/AKDmif8Agnl/+SaPsni7/oOaJ/4J5f8A5JrfooAwPsni7/oOaJ/4J5f/AJJo+yeLv+g5on/gnl/+Sa36KAKujQ6vF539q31jdZ2+X9ls3g29c53Svnt6YweueNSoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAqCX7/4VPUEv3/wpMBlFFFIYUUUUAFFFFABVe+aZLC4a3GZxGxjH+1jirFFNOzE9UeMkkkknJNeraG88miWb3P+tMYz7jsT74xSPoOlPdfaGsYTJ9OD7kdDWiAAMAYFdWIxCqpJI56FB0222FFFFch0hRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXil6ZGv7lphiUysX+uTmva64vxL4OlvLp77TdpkfmSEnbk+oPTn3rys1w1StTTgr26Hr5RiadGpJVHa/U4Gu++HjSfZb5SP3QdCp/2sHP8ASsG38Ga1PMEe2WFM8u7rgfkSa9D0fSodG09LSE7sfM7kYLt3NcOV4SrGt7SSaS7nfmuMoyoOnBpt9i/RRRX0Z8yFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAfOXxJaRviBqvmdQyAc9vLXH6Vylew/FnwfNdMviCwheR1UJdxouTtHR8ew4Ptj3rx6vcw81KmrHz+Jg4VXfqFdl8LXlX4g6eIydrLKJMD+Hy2PP4gVxte1/CjwfNpkMmuahE8VxOnlwROMFY8gliPUkDHsPeliZqNN36jwsHOqrdD02iiivEPfCiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKp6lez2Nustvpl3qDl9pitWiVgMH5j5joMcY655HHWrlFAHP8A/CQ6p/0Jmuf9/rL/AOSKP+Eh1T/oTNc/7/WX/wAkV0FFAHP/APCQ6p/0Jmuf9/rL/wCSKP8AhIdU/wChM1z/AL/WX/yRXQUUAc//AMJDqn/Qma5/3+sv/kij/hIdU/6EzXP+/wBZf/JFdBRQBz//AAkOqf8AQma5/wB/rL/5Io/4SHVP+hM1z/v9Zf8AyRXQUUAc/wD8JDqn/Qma5/3+sv8A5Io/4SHVP+hM1z/v9Zf/ACRXQUUAc/8A8JDqn/Qma5/3+sv/AJIo/wCEh1T/AKEzXP8Av9Zf/JFdBRQBz/8AwkOqf9CZrn/f6y/+SKP+Eh1T/oTNc/7/AFl/8kV0FFAHP/8ACQ6p/wBCZrn/AH+sv/kij/hIdU/6EzXP+/1l/wDJFdBRQBz/APwkOqf9CZrn/f6y/wDkio317VWbI8G65/3+sv8A5IrpKKAOZ/tzVv8AoTdb/wC/1l/8kUf25q3/AEJut/8Af6y/+SK6ailYDmf7c1b/AKE3W/8Av9Zf/JFH9uat/wBCbrf/AH+sv/kiumoosBzP9uat/wBCbrf/AH+sv/kij+3NW/6E3W/+/wBZf/JFdNRRYDmf7c1b/oTdb/7/AFl/8kUf25q3/Qm63/3+sv8A5IrpqKLAcz/bmrf9Cbrf/f6y/wDkij+3NW/6E3W/+/1l/wDJFdNRRYDmf7c1b/oTdb/7/WX/AMkUf25q3/Qm63/3+sv/AJIrpqKLAcz/AG5q3/Qm63/3+sv/AJIo/tzVv+hN1v8A7/WX/wAkV01FFgOZ/tzVv+hN1v8A7/WX/wAkUf25q3/Qm63/AN/rL/5IrpqKLAcz/bmrf9Cbrf8A3+sv/kij+3NW/wChN1v/AL/WX/yRXTUUWA5n+3NW/wChN1v/AL/WX/yRR/bmrf8AQm63/wB/rL/5IrpqKLAcz/bmrf8AQm63/wB/rL/5Io/tzVv+hN1v/v8AWX/yRXTUUWA5n+3NW/6E3W/+/wBZf/JFH9uat/0Jut/9/rL/AOSK6aiiwHM/25q3/Qm63/3+sv8A5Io/tzVv+hN1v/v9Zf8AyRXTUUWA5n+3NW/6E3W/+/1l/wDJFH9uat/0Jut/9/rL/wCSK6aiiwHM/wBuat/0Jut/9/rL/wCSKP7c1b/oTdb/AO/1l/8AJFdNRRYDmf7c1b/oTdb/AO/1l/8AJFH9uat/0Jut/wDf6y/+SK6aiiwHM/25q3/Qm63/AN/rL/5Io/tzVv8AoTdb/wC/1l/8kV01FFgOZ/tzVv8AoTdb/wC/1l/8kUf25q3/AEJut/8Af6y/+SK6aiiwHM/25q3/AEJut/8Af6y/+SKP7c1b/oTdb/7/AFl/8kV01FFgOZ/tzVv+hN1v/v8AWX/yRR/bmrf9Cbrf/f6y/wDkiumoosBzP9uat/0Jut/9/rL/AOSKP7c1b/oTdb/7/WX/AMkV01FFgOZ/tzVv+hN1v/v9Zf8AyRXK6r4V07V7h7ib4e63FO/LPb3NmmT64FxjPvivUKKqMpRd4uxMoRmrSVzzLSPDVhotylzbfD3WnuEOVknubNyp9QDc4B98V0/9uat/0Jut/wDf6y/+SK6aiiUnJ3k7hGEYK0VY5n+3NW/6E3W/+/1l/wDJFH9uat/0Jut/9/rL/wCSK6aipsUcz/bmrf8AQm63/wB/rL/5Io/tzVv+hN1v/v8AWX/yRXTUUWA5n+3NW/6E3W/+/wBZf/JFH9uat/0Jut/9/rL/AOSK6aiiwGZpF9d3vnfatGvtN2bdv2p4G8zOc48qR+mO+OoxnnGnRRTAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtaGp67o+ieV/a2q2Nh52fL+13CRb8YzjcRnGR09RWf4E/5J54a/7BVr/wCilroKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAOf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKroKKAM/TNd0fW/N/snVbG/8AJx5n2S4SXZnOM7ScZwevoa0KKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigD/2Q==)

Task Force on Climate-related Financial Disclosures continued

Summary of quantitative assessment

Potential financial impact on profit in the average

year (£m)

Risk level

Low  Medium  High

Introduction of carbon taxes and levies

Key Assumptions Time Horizon RCP2.6 RCP4.5 RCP8.5

•  We calculated the financial risk of carbon taxes and levies based

on our Scope 1, 2 & 3 emissions, as per our SBTi submission,

in the short, medium and long term.

•  We used the 2025 carbon price for use in civil penalties in the

UK – £41.84 per tonne of CO

2

e

<3 years

3–6 years

6–20 years

Increased severity of extreme

weather events

Key Assumptions Time Horizon RCP2.6 RCP4.5 RCP8.5

1. Sales risk

•  Maximum temperature, minimum temperature, rainfall and

wind speed were taken from the Met Office Climate Projections

under RCP2.6 and RCP8.5 warming scenarios.

•  The above weather events were quantified to determine the

financial impact of weather-related extreme events in the short,

medium and long term under the three warming scenarios,

above and beyond what we have experienced in the last three

financial years.

<3 years

3–6 years

6–20 years

2. Supplier costs risk

•  Assumed 5% increase in crop items cost under RCP4.5 and 10%

under RCP8.5, both were considered in the long term only.

•  Assumed no increase in livestock cost under RCP4.5 and RCP8.5.

<3 years

3–6 years

6–20 years

3. Flood risk

•  Assumed that our insurance premiums will increase in the

medium and long term under RCP4.5 and RCP8.5

•  Assumed that half of our high-risk sites are unlikely to be

insured in the long term under RCP8.5.

<3 years

3–6 years

6–20 years

Annual Report and Accounts 2025  Mitchells & Butlers plc50

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

Climate-related metrics & targets

The below metrics are used either to track the performance of strategies designed to mitigate the impact of the principal climate-related risks, or as an internal

measure of risk exposure. Emission reduction has been included in the long-term incentive scheme from FY 2024 with the SBTi verified Net Zero reduction

plan used as a basis to calculate targets. Performance against our stated sustainability KPIs is provided on pages 42 and 43. Current and historical greenhouse

gas emissions, Scope 1 and 2, are available within the Streamlined Energy and Carbon Reporting framework and progress against our Net Zero roadmap is

provided annually with details on the key initiatives within the sustainability section.

Metric category Metric Group targets Performance Link to identified

risks and

opportunities

Climate-related risk

Greenhouse gas

emissions Scope

1, 2 & 3

Unit of measure

tCO

2

e

Absolute Scope 1, 2 & 3

emissions calculated in

accordance with

Greenhouse Gas Protocol

guidance by an

independent third party

which is checked and

verified internally.

Yes – Group target set, Net Zero by 2040

using 2019 as our baseline year.

We align our definition of Net Zero to the

SBTi corporate standard. Our Net Zero

target includes our Scope 1, 2 & 3

emissions, using an operational control

approach. Our near and long-term targets

were verified by SBTi in January 2024. We

have set a near-term target to reduce our

absolute Scope 1 & 2 GHG emissions 70%

by 2030, compared to a 2019 base year

(aligned to well below 2°C), and a target

to reduce our absolute Scope 3 emissions

28% over the same timeframe. We have

also set a long-term target to reduce

absolute GHG emissions from Scopes 1, 2

& 3 90% by 2040 from a 2019 base year to

be Net Zero by 2040. Aligned to the SBTi

criteria we will offset our residual 10%

emissions using carbon removal offsets

at our Net Zero date.

We have reduced our total

footprint by 16% from our

2019 baseline year,

comprising a reduction in

Scope 1 & 2 emissions of

22% driven by energy

consumption reduction

and reduced reliance on

gas as an energy source,

and Scope 3 reduction of

15% reflecting progress

made in partnership with

our suppliers to reduce the

impact of our supply chain.

Risk 2 – “Cost of goods,

critical products and

ser vices.”

Climate-related risk

Waste management

Unit of measure

% of waste diverted

from landfill

Proportion of total waste

diverted from landfill, i.e.

recycled or incinerated.

Data is provided by a third

party and corroborated

with internal information.

Yes – Group target set – Zero operational

waste to landfill by 2030.

We underpin this target with an internal

metric on recycling, with an ambition to

achieve 80% of waste recycled by 2030.

99% of operational waste

is diverted from landfill.

We expect to achieve zero

operational waste to landfill

ahead of the 2030 target.

Risk 2 – “Cost of goods,

critical products and

ser vices.”

Climate-related risk

Food waste

Unit of measure

Volume of food waste

generated

Volume of food wasted.

Data is provided by third

parties and corroborated

with internal information.

Yes – Group target set – Halve food waste

by 2030 from 2019 baseline.

We have achieved 23%

reduction of food waste

from 2019 baseline.

Risk 2 – “Cost of goods,

critical products and

ser vices.”

Climate-related risk

Proportion of estate

exposed to flood risk

Unit of measure

% of estate

Proportion of sites within

the estate identified as

high or medium flood risk

due to proximity to rivers

and coasts.

No target set, used as an internal measure

of risk exposure.

Risk 3 – “Supply chain.”

Climate-related

opportunity

Transition to renewable

energy

Unit of measure

% and Megawatt Hour

(‘MWh’)

% and MWh of energy

consumption which is

purchased from renewable

sources. Data is provided

by third parties and

reviewed internally.

No target set, reported as an indicator

of progress.

100% of energy

purchased is REGO

backed. In addition, 244

sites have been fitted with

solar panels to date with

continued roll out planned

over the coming years.

Risk 2 – “Cost of goods,

critical products and

ser vices.”

Climate-related

opportunity

Workforce competence

Unit of measure

Number of employees

to complete training

Sustainability training

made available to all

employees.

Sustainability included as

part of the induction process.

Target 80% of General Managers to

complete training and 90% of inductions

to have included sustainability.

100% of General

Managers have completed

the Sustainability training

and we continue to release

training to specific areas,

for example water

consumption where 96%

of team members have

completed the training.

Risk 2 – “Cost of goods,

critical products and

ser vices.”

Mitchells & Butlers plc  Annual Report and Accounts 2025

51

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Risks and uncertainties

Keeping risk under control

This section highlights the principal risks and uncertainties

that affect the Group, together with the key mitigating

activities in place to manage those risks.

Overview

Risk management is critical to the proper

discharge of our corporate responsibilities and

to the delivery of shareholder value. Risk is at the

heart of everything we do as an organisation.

Therefore, the process for identifying and assessing

risks and opportunities for improvements is an

integral and inseparable part of the management

skills and processes which are at the core of

our business.

There is a formally established Risk Committee

in place which continues to meet on a quarterly

basis to review both the key risks and emerging

risks facing the business.

Key risks identified are reviewed and assessed

by the Risk Committee in terms of their likelihood

and impact and recorded on the Group’s ‘Key Risk

Heat Map’, in conjunction with associated agreed

risk mitigation plans. The processes that are used

to identify emerging risks and manage known

risks are described in the Internal Control and Risk

Management statement on pages 92 and 93.

Management support, involvement and

enforcement is fundamental to the success of our

risk management framework and members of the

Executive Committee take responsibility for the

management of the specific risks associated with

their function. Our Group risk register clearly

outlines the alignment of each key risk to an

Executive Committee member and identifies

an ‘action owner’, to ensure responsibilities are

formally aligned.

There is a robust and transparent process in place to

provide an appropriate level of direction and support

in the identification, assessment and management

of risks across all areas of the business which have

the potential to seriously damage our financial

position, our shareholder value, our responsibilities

to our staff and guests, our reputation and our

relationships with key stakeholders.

During FY 2025, we carried out an assessment of

the Group’s emerging and principal risks. As part

of this process we undertook a series of risk

workshops with senior management across the

business functions, to reassess and update the

Group’s principal risks, resulting in the identification,

assessment and management of risks across all

areas of the business. As part of the output of this

review, we have consolidated the previously

identified risks into the below principal risks.

Overall, there are no material changes to the risk

profile of the Group.

The principal risks are subject to review each

quarter by the Audit Committee, which is also

attended by the Board.

Key risk heat map

The key risk heat map below includes an

indication of the likelihood of a ‘risk event’

occurring in relation to each of the principal risks

and the expected magnitude of the impact of

each such event. The risk assessments in the

graph are after taking into account the mitigating

actions against each of the risks.

Overview of risk profile

Risk key

1

Sales

2

Cost of Goods, Critical Products

& Services

3

Supply Chain

4

IT Resilience & Cyber Security

5

Operating Safely & Legally

6

Property Asset Management

7

People

8

Capital Structure

9

Business Continuity Planning

Impact

Likelihood

Low Catastrophic

Rare Almost Certain

4

7

155

158

152

1

159

153

156

Our three lines of defence

First

•  Executive Committee

•  Leadership group/management

•  Internal controls and processes

•  Internal policies and procedures

•  Training

Second

•  Financial authority limits

•  Risk management processes

•  Audit Committee

•  Risk Committee

•  Health and Safety Team

•  Technology specialists

•  Legal support

Third

•  Group Assurance

•  Operational Practices Team

Please also refer to how we link the key risks to our

strategic priorities, on page 41.

Annual Report and Accounts 2025  Mitchells & Butlers plc52

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

Risk category and description High-level controls/mitigating activities Movement

1

Sales

This risk falls into the below main categories:

Sales: There is a risk that declining sales, concerns around

consumer confidence, increased personal debt levels,

squeezes on disposable income and rising inflation individually,

together or in combination, may adversely affect our market

share and profit, reducing headroom against securitisation tests.

Consumer and market insight: If the Group fails to manage

and develop its existing (and new) brands in line with consumer

needs and market trends due to failure to obtain or use

sufficient insight in a timely manner, this may lead to a decline

in revenues and profits.

Pricing and market changes: If price changes are not

intelligently applied due to a lack of appreciation of market

sensitivities and elasticities, this may result in decreased

revenue and profit.

Risk Stable

Overall, this risk remains stable.

•  Right operational and commercial team and structure in

place. Brand alignment ensures the right research is done

and is acted upon.

•  Daily, weekly and periodic sales reporting, monitoring and

scrutiny activity is in place.

•  Our Eat Drink Share panel provides robust, quick and

cost-effective research. This is our own panel of 27,000

of the Group’s guests, whom we can use for research

purposes for quick and cost-effective insights.

•  Primary research in partnership with brand and

category teams.

•  Working with suppliers to tap into their research.

•  Each brand has its own pricing strategy.

•  Price promotions are in line with the agreed strategy.

•  Sales training for management.

•  Consumer and insight-led innovation process and

development for new brands.

•  Reduce guest complaints by improving the local management

of social media responses (e.g. TripAdvisor responses).

•  Increased digital marketing activity including new

loyalty apps.

•  Increased activity from takeaway and delivery offerings.

•  Online guest satisfaction survey to collect guest feedback.

This feedback, together with the results of research studies,

is monitored and evaluated by a dedicated guest insight

team to ensure that the relevance to guests of the brands

is maintained.

•  Our priority is to continue to protect our team members and

guests, providing an eating-out experience which can be

enjoyed. We have very strong health and safety practices

already in place in our businesses, which we will enhance

and evolve to tackle the challenges we face. We will be

transparent with guests as to these measures such that they

can trust in us and will clearly communicate our expectations

of guests to comply with the measures put in place.

Risk Stable

Mitchells & Butlers plc  Annual Report and Accounts 2025

53

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Risks and uncertainties continued

Risk category and description High-level controls/mitigating activities Movement

2

Cost of goods, critical products

and services

Food: The cost of food for resale increases due to changes in

demand, food legislation, exchange rates and/or production

costs and uncertainty of supply, leading to decreased profits.

Drinks: The cost of drinks for resale increases due to changes

in demand, legislation, exchange rates and production costs,

leading to decreased profits.

Utility costs: Utility costs continue to remain stable, with only

a minimal fluctuation in costs.

Goods not for resale: Increases in the cost of goods not

for resale and utilities costs as a result of increases in global

demand and uncertainty of supply in producing nations can

have a significant impact on the cost base, consequently

impacting margins.

Business rates: The UK Government announced in the

Autumn Budget 2024 that it would make changes to business

rate charges for certain Retail, Hospitality and Leisure

businesses, and that subsequent to that would engage in

discussions for wider business rates reform. Changes to

business rates could lead to higher or lower profits.

Introduction of carbon taxes and levies: This risk

represents the impact on operating costs of the business both

directly through taxation and indirectly through higher input

costs which would result from the introduction of taxation and

levies attributed to greenhouse gas emissions. Qualitative

assessment has identified this risk as both high in impact and

likelihood over the short to medium term. Whilst the risk is

currently assessed as stable, the introduction of a form of

carbon taxation is likely to be introduced as pressure mounts

for progress to be made against the Government ambition to

achieve Net Zero by 2050.

Risk Increasing

The overall risk of cost increases continues to rise; however,

mitigation to inflation is sought where possible through a

change of supplier, products, specification, range and an

ongoing review and monitoring of energy cost management.

In order to reduce the overall impact of cost increases, the

Group leverages its scale to drive competitive cost advantage

and collaborates with suppliers to increase efficiencies in the

supply chain. The fragmented nature of the food supply

industry in the world commodity markets gives the Group the

opportunity to source products from a number of alternative

suppliers in order to drive down costs. Consideration has been

given to potential areas such as supply chain risk (e.g. customs

controls on imports), labour risk and economic disruption.

Key mitigating activities for food and drink are detailed below:

Food:

•  A food procurement strategy is in place.

•  Full reviews are carried out on key categories to ensure

optimum value is achieved in each category.

•  A full range review was completed in FY 2025 ensuring

the correct number of products and suppliers. This is

regularly reviewed.

•  Regular reporting of current and projected inflation.

•  Good relationships with key suppliers.

Drinks:

•  Each drinks category has a clearly defined strategic sourcing

plan to ensure the Group’s scale is leveraged, the supply

base is rationalised, and consumer needs are met.

•  Good relationships with key suppliers.

•  Supplier collaboration programmes are in place.

Business rates:

•  The Group retains the services of professional advisors

to ensure legislative changes are fully understood

and implemented.

Energy:

•  Installation of solar panels at sites to reduce reliance on

the grid.

•  The Group is a member of the UK Hospitality Sustainability

Committee which enables us to have foresight over

potential policy changes impacting the organisation.

•  The Group has developed a Net Zero strategy with a target

date of 2040. The strategy has been developed in partnership

with an independent third party. Please also refer to our

sustainability targets, outlined on pages 44 and 45.

•  We have a number of initiatives underway designed to

reduce our emissions in line with our Net Zero roadmap.

The detailed plan for reduction will help to mitigate an

element of potential cost, and a target date ahead of

Government ambition will help to position the organisation

ahead of the market average. Please also refer to our Task

Force on Climate-related Financial Disclosures, on pages

46 to 51.

Risk Increasing

Annual Report and Accounts 2025  Mitchells & Butlers plc54

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

Risk category and description High-level controls/mitigating activities Movement

3

Supply chain

Food supply chain: There is a risk of inadequate

arrangements and a limited number of food suppliers in place

to ensure the supply of business-critical food lines to Mitchells

& Butlers are maintained in the event of the failure of a key food

supplier. The cumulative impact of various macro-economic

factors including the war in Ukraine has put significant pressure

on availability.

Drinks & Food logistics: There is a risk that one of our key

logistics suppliers has a significant business interruption event

that leads to a reduction in service because a distribution centre

is not available or any event that could lead to interruption in

service from a single depot, which leads to business and

service interruption to our sites. However, overall service from

our key logistics suppliers remains good, with consistent and

reliable performance.

Food supply chain safety: Malicious or accidental

contamination in the supply chain could lead to food goods for

resale being unfit for human consumption or being dangerous

to consume. This could lead to restrictions in supply which in

turn cause an increase in cost of goods for resale and reduced

sales due to consumer fears and physical harm to guests and/

or employees.

Increased severity of extreme weather events: This acute

physical risk represents the risk to both revenue and the supply

chain of increased severe events. The availability of products in

the supply chain, in particular agricultural produce, could be

impacted by severe weather having an effect on product

availability and input prices. However, following a qualitative

assessment, which included a high-level review of previous

interruption to trade resulting from extreme weather (as well as

scientific forecasts as to the likely increase in extreme weather

events), the overall risk is assessed as stable.

Risk Stable

Given the many mitigating factors in place, the overall risks

facing the supply chain are regarded as stable.

•  Critical suppliers have business contingency plans in place

which are reviewed on annual basis.

•  Alternative supply options identified for top 100 products

and reviewed on annual basis.

•  Our key logistics providers have their own detailed disaster

recovery plans in place.

•  The Group has a Safety Assurance team and uses a number

of technical partners including food technologists, food

safety experts, microbiologists, allergy consultants, trading

standards specialists and nutritionists.

•  The Group uses a robust system of detailed product

specifications.

•  All food products are risk rated using standard industry

definitions and assessment of the way the products are

used in the Group’s kitchens. Suppliers are then risk rated

according to their products.

•  Each food supplier is audited at least once per year in

respect of safety and additionally in response to any serious

food safety complaint or incident.

•  A robust response has been taken to manage allergens

and the associated data within the menu cycle, coupled

with a continuous review in place to ensure the controls

remain appropriate.

•  To manage the risk associated with our supply chain, we

monitor and communicate with our suppliers closely giving

us foresight over potential supply issues. We also have

sufficient breadth of products and dishes across our brands

such that supply issues with one product could be mitigated

through switching to a substitute. Please also refer to our

Task Force on Climate-related Financial Disclosures, on

pages 46 to 51.

Risk Stable

Mitchells & Butlers plc  Annual Report and Accounts 2025

55

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Risks and uncertainties continued

Risk category and description High-level controls/mitigating activities Movement

4

IT resilience & cyber security

Given the increase in the level and frequency of global cyber

attacks, the likelihood of occurrence is therefore increasing,

although current IT controls and monitoring tools are robust.

These attacks are becoming more frequent and the techniques

employed by the cyber criminals are becoming ever more

sophisticated. However, the likelihood of any financial damage

to the business is unchanged over the year.

There is a risk that inadequate disaster recovery plans and

information security processes are in place to mitigate against

a system outage, or failure to ensure appropriate back-up

facilities (covering key business systems and the recovery

of critical data) and loss of sensitive data.

Risk of non-compliance with data protection laws is an

increasing risk for the business to ensure full compliance

remains up to date.

Risk Stable

Overall, the risk is stable due to the ongoing review and

improvement of cyber security controls. However, the

increased activity, information security and reliance on IT

systems continue to be a key focus to ensure critical IT systems

are kept secure and tested frequently and any vulnerabilities

identified are addressed efficiently.

•  A review of cyber security processes is performed on a

regular basis in order to highlight any gaps and address any

challenges. As a result, a number of further improvements

have been made (and continue to be made) to strengthen

overall security cyber controls.

•  In addition, controls include:

– The work carried out by the Group’s cross-functional

Information Security Steering Group.

– Group Assurance IT reviews.

– Implementation and revision of appropriate cyber

security governance policies and procedures.

– Ongoing security awareness initiatives continue to

be undertaken.

– A regular cycle of penetration testing.

– Increased focus on protecting the business against

potential cyber attacks has resulted in the

implementation of additional controls to mitigate against

such risks.

– The effective implementation of a business-wide data

protection compliance programme, including training

of all relevant employees and contractors.

– Systems, processes and controls have been reviewed and

updated to ensure compliance with data protection laws.

– Annual IT Security training is undertaken and reported.

Risk Stable

Annual Report and Accounts 2025  Mitchells & Butlers plc56

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

Risk category and description High-level controls/mitigating activities Movement

5

Operating safely & legally

A major health and safety failure could lead to illness, injury or

loss of life or significant damage to the Group’s or a brand’s

reputation. In addition, there is a risk that the business fails to

maintain satisfactory food hygiene safety standards due to

failures to comply with company policy due to lack of attention,

supervision or knowledge, leading to customer harm/fatality,

and/or prosecution, adverse publicity, brand damage, fines and

loss of revenue.

Risk Stable

Overall, the risk continues to be stable. In particular, allergen-

related incidents and near misses have stabilised.

•  The Group maintains a robust programme of health and

safety checks both within its restaurants, pubs and bars and

throughout the supply chain.

•  The dedicated Safety Assurance team uses a number

of technical partners including food technologists,

microbiologists and allergen specialists to ensure that

our food procedures are safe.

•  Regular independent audits of trading sites are performed

to ensure that procedures are followed and that appropriate

standards are maintained.

•  Food suppliers are required to meet the British Retail

Consortium Global Standard for Food Safety and are

subject to regular safety and quality audits.

•  Comprehensive health and safety training programmes

are in place.

•  Comprehensive Food Safety policy is in place backed by

assured advice from our Primary Authority.

•  Clear health and safety responsibilities are defined and

communicated across the business.

•  The Safety Assurance Team attend the Trade Association

(UKH Food Group) and liaise with the Food Standards

Agency to identify and influence future industry and

legislative issues.

Risk Stable

6

Property asset management

Given the size of the property portfolio, there is a risk that

insufficient or lack of maintenance spend could lead to:

•  a breach of a statutory obligation or injury or death to

customers/employees exposing Mitchells & Butlers to fines

and adverse publicity, or a breach of a securitisation covenant.

•  declining trading performance.

•  increased maintenance expenditure in the long run.

•  reduced value of assets.

•  breach of lease covenant to adequately maintain and repair.

Risk Stable

There are a number of well controlled mitigating activities that

are in place across the management of the Group’s property

estate. Therefore, the overall risk is assessed as stable.

•   A robust asset management system is in place to manage

all repairs and maintenance work.

•  Regular maintenance activity across all properties within

the Group, as required.

•  The production and agreement of the annual building

development plans.

•  Regular inspections of all of our premises to ensure all

are safe and fit for purpose.

•  Suitably qualified staff and qualified external suppliers

to deliver the Group’s requirements.

•  During the contractor management meetings, metrics

are used to assess suppliers including cost performance

and satisfaction.

•  Estate planning and acquisition team, repairs and maintenance

team and building development teams are in place with

professional and legal support from various long-term third

party suppliers.

•  In relation to site closure due to damage to buildings, such

as during flooding, we have insurance in place to recover

the lost trade and required repairs. Our experience during

closure has meant that we have developed strategies to

close sites at short notice, such that in the instance of

extreme weather significantly impacting trade we could

close sites in order to mitigate some of the financial losses

which we would be exposed to.

Risk Stable

Mitchells & Butlers plc  Annual Report and Accounts 2025

57

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Risks and uncertainties continued

Risk category and description High-level controls/mitigating activities Movement

7

People

Talent attraction and management and employee engagement:

The Group has a strong guest focus and so it is important that it

is able to attract, retain, develop and motivate the best people

with the right capabilities throughout the organisation. There is

a risk that, without the right people, our guest service levels

would be affected.

There is a risk that increased wage cost will adversely impact

upon overall profit delivery, these increased costs could arise

from further increases to the statutory minimums, application

of minimums to lower age groups i.e over 18’s and/or upward

pressure on pay rates in the market, particularly back of house

roles, as talent supply reduces. Wage pressure (over 25’s)

remains an issue, as competition for labour continues to

increase.

Risk Stable

We have strong internal talent pools for a number of operational

roles; however, it is sometimes difficult to recruit top Operations

Director talent externally due to the competitive marketplace.

The risk remains stable.

•  The Group makes significant investment in training to

ensure that its people have the right skills to perform their

jobs successfully.

•  An employee survey is conducted annually to establish

employee satisfaction and engagement, and this is

compared with other companies, as well as previous

surveys. Where appropriate, changes in working practices

are made in response to the findings of these surveys.

•  Remuneration packages are benchmarked to ensure that

they remain competitive, and a talent review process is used

to provide structured succession planning. Please also refer

to the Report on Directors’ remuneration, on pages 98 to 118.

•  The apprenticeship programme will also assist in mitigating

against the increasing risk in relation to non-UK workers.

Please also refer to the Chief Executive’s business review on

pages 26 to 28.

•  Talent development and potential calibrations are carried

out biannually to anticipate and address any risks/issues.

•  The ongoing review of the impact, post-implementation

of the National Living Wage and the increase to National

Insurance, will continue to be monitored and reported to

the Executive Committee and where necessary the plc

Board/Remuneration Committee.

•  The Group continues to work with UK Hospitality and other

agencies to engage with the Government and the Low Pay

Commission on future pay policy and prospects.

•  We have successfully implemented a time and attendance

system to improve the management controls and reporting

of staff hours.

Risk Stable

8

Capital structure

Treasury management (cash and liquidity): There is risk of

the inability to raise sufficient funds from banks or the capital

markets, leading to lack of liquidity to support the business.

Any surplus funds are invested inappropriately due to a lack

of focus on credit risk issues or inexperienced dealing staff,

leading to poor returns or ultimately loss of funds invested.

Covenant compliance: There is risk that covenants are

breached due to insufficient cashflows or failure to take

required actions in respect of non-financial covenants which

leads to refinancing or loss of control of the organisation.

Trading/cost pressures could drive reduced headroom.

Risk Decreasing

As documented in the Going Concern note, the Directors

have assessed a base case forecast and a severe but plausible

downside scenario with headroom against all covenants and

sufficient liquidity. Therefore the overall risk is decreasing.

•  Strong relationships are maintained with banks and potential

providers of debt finance.

•  The Board Treasury Policy dictates that a minimum liquidity

level is maintained.

•  Investment of surplus funds is subject to approval under

approved limits within the Board Treasury Policy Statement.

•  Treasury employees are suitably qualified with sufficient

levels of experience.

•  The Group maintains sufficient headroom against

the covenants.

•  Each period, covenant owners are required to confirm

compliance with non-financial covenants. Findings are

reported to the Executive Committee.

•  The finance team conducts daily cash forecasting with

periodic reviews at the Treasury Committee (the role of

which includes ensuring that the Board Treasury Policy

is adhered to, monitoring its operation and agreeing

appropriate strategies for recommendation to the Board).

•  Each period the Treasury Committee meets and formally

considers compliance with financial covenants and limits

(both current and projected)

•  Compliance with all aspects of Board Treasury Policy.

•  Regular forecasting and testing of covenant compliance

is performed.

•  A detailed assessment of the mitigating risks is included

in the Viability statement on page 60.

Risk Decreasing

Annual Report and Accounts 2025  Mitchells & Butlers plc58

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

Risk category and description High-level controls/mitigating activities Movement

9

Business continuity planning

The Group relies on its food and drink supply chain and the key

IT systems underlying the business to serve its guests efficiently

and effectively. Supply chain interruption, IT system failure or

crises (such as terrorist activity or the threat of a further disease

pandemic) might restrict sales or reduce operational effectiveness.

Risk Stable

Overall, the risk is stable.

•  The Group has in place crisis and continuity plans that are

reviewed and refreshed regularly, that are designed to

determine the response to a range of potential crises, across

the business functions.

•  Crisis response teams and a separate IT crisis plan in place.

•  Detailed training and development of the security team

and Executive.

•  Key financial controls have been reviewed, assessed and

updated to ensure they continue to be operated in the event

of limited and/or no access to either the Retail Support

Centre or businesses.

•  New ways of working are in place for all Retail Support

Centre staff, to ensure when the office is temporarily closed

to employees, there is little or no impact to staff, given that

all staff have the appropriate resources available to them in

order to work remotely and in an efficient manner.

•  The business is geographically dispersed across a large

number of sites across the UK, covering a variety of brands

(with Wi-Fi) and could be utilised as an alternative base

for staff.

•  Contingency plans are in place to review and respond to

enforced Government actions and/or severe business

disruption or trading restrictions.

•  The Group, and in particular the Safety and Security Team,

is able to adapt quickly and respond to a change in operational

and functional processes, as a result of a pandemic and/or

business closures.

Risk Stable

Mitchells & Butlers plc  Annual Report and Accounts 2025

59

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Compliance statements

Corporate viability disclosure

In accordance with Provision 31 of the 2018 UK

Corporate Governance Code, the Directors have

undertaken an assessment, including sensitivity

analysis, of the prospects of the Group for a

period of three years to September 2028.

Assessment period

Three years continues to be adopted as an

appropriate period of assessment as it aligns with

the Group’s planning horizon in a fast moving

market subject to changing consumer tastes

against a backdrop of economic and political

uncertainties. This is supported by three year

forecasts as approved by the Board. Beyond this

period, performance will be impacted by domestic

and global political, macroeconomic and other

considerations which become increasingly

difficult to predict.

Assessment of prospects

The Group’s financial planning process comprises

a detailed forecast for the next financial year,

together with a projection for the following two

financial years. The Directors’ assessment of

longer-term prospects has been made taking

account of the current and expected future

financial position and the principal risks and

uncertainties, as detailed on pages 52 to 59 of

the Annual Report.

The Group’s financial strategy seeks to provide

a strong capital base and long-term direction

to protect the viability of the business model

given prevailing and evolving market and

economic conditions.

The main trading risks facing the business relate

to uncertainty surrounding the political and

economic environment on both a domestic and

global basis manifest as variability in consumer

demand, cost headwinds and potential supply

chain disruption. The Directors are also cognisant

of broader risks, notably the threat of disruption

either to the Group’s processes and systems, or

those of a key supplier or partner, potentially from

attack by a third-party agent. Longer term, further

risk is identified around evolving consumer

demands and tastes.

Key factors also considered in the assessment of

the Group’s prospects are a strong market position

built on a diverse range of brands and offers

trading from a well-positioned and largely freehold

estate, supported by capital investment focused

on development and premiumisation of offers,

an appropriate remodel cycle and maintenance

and protection of current infrastructure. These are

all anticipated to contribute to outperformance

against the wider market.

Assessment of viability

As set out in the note to the Accounts on Going

Concern, the principal funding arrangements of

the Group consist of just over £1bn of long-term

securitised debt which (unless or until refinanced)

amortises on a scheduled profile to 2036.

Securitisation covenants are tested quarterly,

both on an annual and a half year basis. In addition

the Group has an unsecured committed facility for

£150m, with financial covenants tested half yearly,

and which expires within the three year term of

this assessment, in July 2028. The unsecured

facility is currently undrawn.

Building on a very strong recovery in profits

in FY 2024 (marking a return to normalisation

following the pandemic and high levels of global

cost inflation) the Group has continued to grow

profits this year built on strong sales growth,

outperforming the sector. The principal short-term

risks now facing the business are now assessed to

be around continuing this sales outperformance,

against an uncertain consumer backdrop, whilst

mitigating further cost inflation, notably in wages

and food input costs. The Group has reviewed

a number of forecast scenarios and sensitivities

around these risks, including additional stress

testing that has been carried out on the Group’s

ability to continue in operation under unfavourable

operating conditions. In making this assessment

the Group has taken the view that there will be

no material further adverse impact of Covid-19

(or any other pandemic) or major system or supply

chain disruption. Through the assessment period,

the Group is forecasting sales growth consistent

with current levels and that overall cost inflation,

driven particularly by wages, will increase at

approximately 6% of the Group’s cost base for

FY 2026 before falling back towards a more

normalised 4% thereafter. Energy markets are

anticipated to remain stable.

The Group’s three year plan takes account of

these risks, in addition to the prevailing economic

outlook and capital allocation decisions, alongside

limited mitigating activity such as improved

operational efficiencies (notably stock and labour

management and energy saving initiatives) to

manage costs. In the base case scenario the

Group remains within solvency covenant limits

and has access to sufficient liquidity to meet its

outgoings. It is noted that there may be a

requirement to refinance the unsecured facilities

during the assessment period, in July 2028,

although it remains undrawn in the base case

scenario. It is noted that there are drawings

towards the end of the review period under the

downside scenario but still comfortably within

facility limits. It is considered that this can be

accommodated within the debt capacity of the

business given future anticipated profitability

and the strength of the creditor relationships

exhibited in previous refinancing exercises.

The resilience of this base case plan is then

assessed through the application of forecast

analysis, focused in particular on growth of

demand and levels of input cost inflation during

the current financial year as well as on a

longer-term basis. Sensitivities of the following

risks described in the Annual Report have also

been applied individually to the base plan:

•  Declining Sales Performance (Risk event 1):

2.5% lower sales growth rate on average

through FY 2026 to end of H1 FY 2027 and 1%

lower thereafter;

•  Cost of Goods Price Increases (Risk event 2):

3% increase in direct Cost of Goods (2% Drink

and 4% Food) in FY 2026, and 1% in FY 2027

and FY 2028;

•  Increased Wage Cost Inflation (Risk event 7):

1% from April FY 2026, and a further 1% in

each of FY 2027 and FY 2028;

•  Increased utilities cost (Risk event 2):

additional £10m in each of FY 2026 and

FY 2027 and £5m in FY 2028;

•  Increased business rates cost (Risk event 2):

additional £3m in FY 2026, £5m in each of

FY 2027 and FY 2028; and

•  A scenario combining all of the above sensitivities,

with some limited mitigating activities.

Liquidity and solvency based on financial covenants

(Risk event 8) on both secured debt and unsecured

facilities are assessed in all scenarios. In all scenarios,

notably the combined scenario, the Group continues

to remain profitable with sufficient liquidity and

no forecast covenant breaches.

Viability statement

The Directors have concluded, based upon the

extent of the financial planning assessment,

sensitivity analysis, potential mitigating actions

and current financial position that there is a

reasonable expectation that the Group will have

access to sufficient resources to continue in

operation and meet all its liabilities as they fall due

over the three year period to September 2028.

Non-financial and sustainability

information statement

The Group has complied with the requirements

of Section 414CB of the Companies Act 2006 by

including certain non-financial information within

the report. This can be found as follows:

•  Business model on pages 32 to 35.

•  Information regarding the following matters

can be found on the following pages:

– Environmental matters on pages 44 and 45;

– Employees on page 37;

– Social matters on pages 36 to 39;

– Respect for human rights on pages 76 and

91; and

– Anti-corruption and anti-bribery matters

on page 91.

Annual Report and Accounts 2025  Mitchells & Butlers plc60

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

Where principal risks have been identified in relation

to any of the matters listed above, these can be

found on pages 52 to 59 including a description of

the business relationships, products and services

which are likely to cause adverse impacts in those

areas of risk, and a description of how the

principal risks are managed.

•  All key performance indicators of the Group,

including those non-financial indicators, are

on pages 42 and 43.

•  The Financial review section on pages 62 to 64

includes, where appropriate, references to,

and additional explanations of, amounts

included in the accounts.

Section 172 Companies Act statement

The Directors have acted in a way that they

considered, in good faith, to be most likely to

promote the success of the Company for the

benefit of its members as a whole and in doing

so have given regard, amongst other matters,

to the following considerations in the decisions

taken during the financial period ended

27 September 2025:

•  the likely consequences of any decision in the

long term;

•  the interests of the Company’s employees;

•  the need to foster the Company’s business

relationships with suppliers, guests and

others;

•  the impact of the Company’s operations on

the community and environment;

•  the desirability for high standards of business

conduct; and

•  the need to act fairly as between members of

the Company.

The Board has a duty under Section 172

Companies Act 2006 to promote the success of

the Company and, in doing so, must take account

of the effect on other stakeholders of how it

manages the business of the Company, whether

these stakeholders are from within the Company,

in its Group or outside the Company and its

Group. Throughout the year the Board has kept

in mind these responsibilities as it has supervised

and monitored the business activities and prospects

of the Company and as it has considered, and,

where appropriate, made decisions relating to

strategic aspects of the Company’s affairs.

In addition, the 2018 UK Corporate Governance

Code specifically requires that the Board should

understand the views of the Company’s key

stakeholders (including employees, suppliers,

customers and others) and keep stakeholder

engagement mechanisms under review so they

remain effective. The 2018 Code also recommends

that there should be regular reporting as to how

the Board has complied with this engagement

approach in its decision-making processes and

how the interests of different shareholders have

been considered.

In carrying out these functions, the Board had

regard to those stakeholders which it had

identified as being of significant importance.

These are the Company’s shareholders, those

employees of the Mitchells & Butlers Group who

were likely to be affected by the activities of the

Company (including their job security and

entitlements in terms of pay, pensions and other

benefits), guests who purchase goods and services

provided by the Company, suppliers to the

Company, whether they are external to the Mitchells

& Butlers Group or within that Group, governmental

authorities such as HMRC and regulatory bodies,

the Trustees of the Group’s pension schemes,

providers of finance to the Group including its

banks and bondholders, real estate property

counterparties (whether as landlords or tenants) and

those specific entities or individuals who are likely to

be affected by the outcome of the relevant matter

falling for consideration on a case-by-case basis.

There is a robust and transparent process in place

to provide an appropriate level of direction and

support in the identification, assessment and

management of risks across all areas of the

business which have the potential to seriously

damage our financial position, our shareholder

value, our responsibilities to our staff and guests,

our reputation and our relationships with key

stakeholders. Established communication cascade

and mechanisms are in place for employees,

suppliers and guests: engagement with employees

is discussed on page 75 of the Directors’ report,

which sets out the various platforms for employee

communications, facilitated by Dave Coplin, a

Non-Executive Director who acts as the ‘employee

voice’; engagement with key, critical suppliers

is addressed on page 83 of the Corporate

Governance Statement which describes the

supplier tiering process; and engagement with

guests is discussed on page 110 of the Report on

Directors’ remuneration which describes the

mechanisms for providing guest feedback.

The Company’s culture is embodied in a set of

PRIDE values of Passion, Respect, Innovation,

Drive and Engagement which underpin its key

priorities of People, Practices, Profits and Guests.

The Board observes these PRIDE values in

discharging its everyday responsibilities in order

to ensure that decisions taken are in line with the

Company’s values and objectives. High standards

of business conduct are expected, in furtherance

of which the Board has implemented a Code of

Ethics, which is fully described on page 91 of the

Corporate Governance Statement, and a

declaration of compliance with the Modern

Slavery Act 2015 (including a Supplier Code of

Conduct) is dealt with on pages 76 and 77 of the

Directors’ report. Appropriate scrutiny of the

environmental impact of the Group’s activities

is included in the Sustainability section of the

Strategic Report on pages 44 and 45.

Not all of those stakeholders’ interests fall for

consideration in each set of circumstances which the

Board has to consider. However, as and when a

particular matter falls for review by the Board, it first

seeks to identify those stakeholders which are likely

to be impacted by the decision of the Board, and then

the Board discusses the respective interests of those

stakeholders as well as the consistency (or otherwise)

of the relevant proposal with the Board’s existing,

or any proposed change(s) to its, strategic plan.

Major matters considered by the Board during

the period included consideration of the UK

hospitality market as a whole; the macro-

economic environment; the UK labour market;

Executive Committee succession planning;

infrastructure transformations; unsecured debt

facility refinancing; and an ongoing review of

estate safety risks. In considering these matters,

the Board looked not only at the position and

prospects of the Company, but also took into

consideration the wider Mitchells & Butlers

Group as a whole.

Having identified the relevant stakeholders and their

interests in relation to specific matters or particular

circumstances, the Board then assessed the relevant

weighting of those interests in considering and

eventually reaching its conclusions, whilst being

mindful of the need to comply with the Group’s

obligations of its securitisation arrangements and

other financial arrangements.

In reaching its decisions, the Board was mindful of

the need to seek to preserve the integrity of the

Company’s business so as to allocate its resources

in such a way as to ensure creditors’ interests and

the interests of other stakeholders such as

employees and guests were not prejudiced.

Board papers set out the rationale for the

proposals and the relevant decisions were made

after discussion amongst the Board members

with appropriate legal, accounting, HR and

treasury input. The processes implemented by

the Board included regular meetings to consider

key developments as well as the provision of

training, if requested by a Director, in relation

to their responsibilities as directors of a limited

company, including the responsibilities under

Section 172 Companies Act 2006.

Specific consideration was given in the decision-

making processes implemented by the Board to

how the manner in which the Company operated,

and the specific proposals it was asked to consider,

aligned to its strategic goals as described on

pages 40 and 41 and its agreed purpose as

referred to on page 07.

The Board also confirmed that, in discharging its

responsibilities for management, supervision and

control of the Company’s business and its affairs,

it would seek to align to the Mitchells & Butlers

Group PRIDE Values of Passion, Respect, Innovation,

Drive and Engagement as set out on page 33 of

this Annual Report.

Throughout this Annual Report we provide

examples of how we take these considerations

into account. The Board values the importance of

effective stakeholder engagement and believes

that stakeholders’ views should be considered in

its decision-making. Details of how we engage

with various stakeholders can be found on pages

36 to 39.

Mitchells & Butlers plc  Annual Report and Accounts 2025

61

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

The Group Income Statement discloses adjusted profit and earnings per share information that excludes separately disclosed items, determined by virtue

of their size or nature, to allow a more effective comparison of the Group’s trading performance from one period to the next.

Statutory Adjusted

a

FY 2025

£m

FY 2024

£m

FY 2025

£m

FY 2024

£m

Revenue 2,711 2,610 2,711 2,610

Operating profit 322 300 330 312

Profit before tax 238 199 246 211

Earnings per share 29.7p 25.0p 30.9p 26.4p

Operating margin 11.9% 11.5% 12.2% 12.0%

At the end of the period, the total estate comprised 1,718 sites in the UK and Germany of which 1,631 are directly managed.

Revenue

Total revenue of £2,711m (FY 2024 £2,610m) reflects a strong period of trading driven by sustained like-for-like sales

a

growth.

Like-for-like sales

a

in the first half increased by 4.3%, comprising an increase in like-for-like food sales

a

of 3.8% and of like-for-like drink sales

a

of 4.3% driven by

strengthening spend per head. Over the second half like-for-like sales

a

grew by 4.2% and remained consistently ahead of the market

b

. Volumes of both food

and drink were broadly flat across the year. Other trading revenue lines (primarily from accommodation and machines) grew at a slightly greater rate than food

and drink in the year.

The current underlying rate of growth of like-for-like sales

a

, as measured over the first eight weeks of the new financial period, is 3.8%.

Like-for-like sales

a

:

Weeks 1–15

Q1

Weeks 16–28

Q2

Weeks 29–42

Q3

Weeks 43–52

Q4

Weeks 1–52

YTD

Food 4.0% 3.6% 4.9%  3.4% 4.0%

Drink 3.6% 5.1% 4.8%  2.3% 4.0%

Total 3.9% 4.7% 5.0%  3.2% 4.3%

Total sales grew by 3.9% against last financial year.

Financial review

Our financial and operating performance

“On a statutory basis, profit

before tax for the financial

year was £238m (FY 2024

£199m), on sales of £2,711m

(FY 2024 £2,610m).”

Tim Jones

Chief Financial Officer

Annual Report and Accounts 2025  Mitchells & Butlers plc62

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

Separately disclosed items

Separately disclosed items are identified due to

their nature or materiality to help the reader form

a view of overall and adjusted trading.

Revaluation and impairment assessment has

resulted in a £94m increase in the value of

property, plant and equipment (as set out in

Section 3 of the notes to the consolidated financial

statements). Within this a net £6m increase is

separately disclosed in the income statement

comprising an £11m increase arising from the

revaluation of freehold and long leasehold sites,

less a £5m impairment of short leasehold and

unlicensed properties. Further impairment of £9m

is separately disclosed relating to right-of-use

assets and goodwill.

Other separately disclosed items include a £3m

charge in relation to the amendment of past

service costs of defined benefit obligations,

an increase of £3m (on remeasurement) of the

contingent consideration relating to the acquisition

of Pesto and net profit arising on property

disposals of £1m. Refer to Section 2.2 of the notes

to the consolidated financial statements for

comparative information.

Interest

Net finance costs of £91m (FY 2024 £99m) for

the financial year were £8m lower than the same

period last year. The net pensions finance credit

of £7m reflects the recognition of the net surplus

funding position (FY 2024 charge of £2m).

Earnings per share

Basic earnings per share, after the separately

disclosed items described above, were 29.7p

(FY 2024 earnings 25.0p), with adjusted earnings

per share

a

of 30.9p (FY 2024 26.4p).

The basic weighted average number of shares in

the period was 595m and the total number of

shares issued at the balance sheet date was 599m.

Cash flow

FY 2025

£m

FY 2024

£m

EBITDA before movements in the valuation of the property portfolio 460 444

Non-cash share-based payment and pension costs and other 15 10

Utilisation of pension surplus for DC contributions 9 –

Operating cash flow before movements in working capital and additional pension contributions 484 454

Working capital movement (15) 15

Pension escrow return 12 35

Pension payments (1) (1)

Cash flow from operations   480 503

Capital expenditure (181) (154)

Acquisition of Pesto Restaurants Limited – (2)

Net finance lease principal payments (39) (40)

Interest on lease liabilities (14) (17)

Net interest paid (73) (82)

Tax (24) (18)

Purchase of own shares (5) (7)

Other 2 2

Net cash flow before bond amortisation  146 185

Mandatory bond amortisation (130) (123)

Net cash flow 16 62

EBITDA, before movements in the valuation of the property portfolio, increased largely as a result of the improved trading performance to £460m. Net cash

inflow for the period before bond amortisation of £146m (FY 2024 £185m) benefitted from a final pension escrow return of £12m in addition to £9m utilisation

of pension surplus towards ongoing DC contributions plus a further £3m utilisation against death in service benefits and AVCs in respect of prior year bonus

payments. Working capital flows reversed to an outflow of £15m, on timing differences, and capital expenditure increased to £181m with acceleration of the

investment programme based on strong returns.

After all outgoings, including mandatory bond amortisation of £130m (including the net impact of currency swaps), cash inflow was £16m (FY 2024 £62m).

Operating profit and margins

a

Adjusted operating profit

a

was £330m (FY 2024

£312m), an increase of 5.8% on a 52-week basis.

Adjusted operating margin of 12.2% was 0.2ppts

higher than last year with strong like-for-like sales

a

growth and operating efficiencies offsetting cost

headwinds. Statutory operating profit was £322m

(FY 2024 £300m) with a statutory operating profit

margin of 11.9% (FY 2024 11.5%).

The aggregate cost headwind for the financial

year of £100m represented c. 5% of our cost base

of c. £2.0 billion, driven primarily by labour costs

including increases to the statutory National

Living Wage and a second half increase in

employer national insurance contributions.

Looking forward to FY 2026, we anticipate an

increase in the level of cost inflation, to c. £130m,

representing slightly less than 6% of our cost base

before mitigation. The increase is driven by the

annualisation of labour cost increases, plus

further increases in statutory thresholds and high

increases in food costs, notably meat. This

includes our preliminary assessment of the impact

of the Chancellor’s recent Autumn Budget,

pending clarification of further detail.

Mitchells & Butlers plc  Annual Report and Accounts 2025

63

Governance Financial Statements Other Information

![](data:image/jpeg;base64,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)

Financial review continued

Capital expenditure

Capital expenditure of £181m (FY 2024 £154m, including £2m intangible assets) comprises £169m from the purchase of property, plant and equipment and

£12m in relation to the purchase of intangible assets.

FY 2025 FY 2024

£m Number £m Number

Maintenance and infrastructure  65 58

Remodels – refurbishment 91 193 69 170

Remodels – expansionary 2 6 2 8

Conversions 14 13 10 11

Acquisitions – freehold 5 2 12 4

Acquisitions – leasehold 4 2 3 2

Total return generating capital expenditure 116 216 96 195

Total capital expenditure 181 154

a.  The Directors use a number of alternative

performance measures (APMs) that are considered

critical to aid the understanding of the Group’s

performance. Key measures are explained on pages

189 to 191 of this report.

Maintenance and infrastructure spend included

investment of £10m towards our sustainability

ambitions, such as solar panels and remote

equipment control technology. Digital and

technology investment increased to £16m (FY 2024

£6m) due to upgrade and replacement of in-house

devices and network and hosting equipment.

During the period we have made good progress on

increasing the number of completed investment

projects, and we remain committed to resumption

of an average seven-year refurbishment cycle

across our estate, justified by the strong returns we

are generating in this area of c. 35% on remodels.

To that end, we expect capital expenditure to

increase further in FY 2026, to c. £210m, with

additional potential for new site acquisitions.

Pensions

In the prior period the Trustees of the Mitchells &

Butlers Executive Pension Plan (MABEPP)

completed a full scheme buy-out of the liabilities

of the plan. Subsequent to that, and in the current

period, the scheme has been wound up with all

escrow monies repaid and a surplus cash balance

of £3m transferring to the Mitchells & Butlers

Pension Plan (MABPP).

The Trustees of MABPP have resolved that any

surplus arising in that plan can be used to pay

for the employer contributions to the defined

contribution section of MABPP. During the

period, the MABPP surplus has funded the

settlement of £12m of the Company’s employer

contributions, AVC’s in respect of prior year

bonus payments and death in service benefits.

One further scheme remains. This is closed and

unfunded and has estimated liabilities of £22m,

before tax.

Net debt and facilities

Net debt

a

at the period end reduced to £1,277m,

comprised of £843m non-lease liabilities and

lease liabilities of £434m (FY 2024 £1,436m

comprised of £989m non-lease liabilities and

lease liabilities of £447m). This represents a

multiple of 2.7 times EBITDA over the last year

including lease liabilities (1.8 times excluding

these liabilities).

Further details of existing debt arrangements and

an analysis of net debt can be found in Section 4

of the notes to the consolidated financial

statements and at https://www.mbplc.com/

infocentre/debtinformation/.

Going Concern

After considering forecasts, sensitivities and

mitigating actions available to management and

having regard to risks and uncertainties, the

Directors have a reasonable expectation that the

Group has adequate resources to continue to

operate within its borrowing facilities and covenants

for a period of at least 12 months from the date of

signing the financial statements. Accordingly, the

financial statements have been prepared on

the going concern basis. Full details are included

in Section 1 of the notes to the consolidated

financial statements.

Approval of the Strategic Report

Our strategic report on pages 24 to 64 has been

reviewed and approved by the Board.

Tim Jones

Chief Financial Officer

27 November 2025

Annual Report and Accounts 2025  Mitchells & Butlers plc64

Introduction

Strategic Report

![](data:image/jpeg;base64,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)

Governance

Outlines how the Group monitors

its actions, policies, practices and

decisions as well as the effect of those

actions on its stakeholders.

In this section

66  Governance at a glance

68  Chair’s introduction to governance

70  Board of Directors

72  Directors’ report

80  Statement of Directors’ responsibilities in

respect of the Annual Report and Accounts

81  Corporate governance statement

94  Audit Committee report

98  Report on Directors’ remuneration

Mitchells & Butlers plc  Annual Report and Accounts 2025

65

Financial Statements Other InformationGovernance

![](data:image/jpeg;base64,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)

Governance at a glance

Highest ever retail engagement score

(beating FY 2024’s record high)

87.7

See page 99

Board and Committee meeting attendance

The Board holds regular scheduled meetings

during the year and on an ad-hoc basis as and

when required. During the year eight Board

meetings were held and the attendance is set out

below. Members of the executive team attended

Board meetings as and when appropriate.

Gender pay gap (for the Group)

5.4%

Mean

1.7%

Median

See page 114

The Board believes that good corporate governance is essential

to enable us to deliver our purpose for all our stakeholders.

It remains a top priority for the Board.

The Company is committed to the principles of the 2018 Corporate

Governance Code published by the Financial Reporting Council,

which sets out standards of good practice for listed companies.

Growth

•  Support and oversight of the growth of the

business via our Ignite programme, to drive

cost efficiencies and increase sales; and

•  Systematically enhance the amenity

of our estate through our established

capital programme.

See pages 40 and 41

Strategy

•  Deliver our strategic plan creating

long-term value.

See page 26

Sustainability

•  Continue to deliver emissions reduction

in line with our Net Zero roadmap;

•  Increase proportion of waste diverted

from landfill;

•  Decrease levels of food waste; and

•  Expand charitable partnerships.

See page 28

People

•  Embedding of the talent management

system which will further support

the development of our internal

talent pipeline;

•  Manage the impact of the introduction

of the Employment Rights Bill;

•  Implementation of a replacement HR

and Payroll system; and

•  Continued work on our DEI initiatives

including employee affinity groups on

ethnicity, neurodiversity and gender.

See page 28

Risk

•  Reduce the impact of key risks facing

the business.

See pages 52 to 59

Governance highlights Focus areas for FY 2026

Attendance levels at Board and Committee meetings

Directors who served during the year Board

Audit

Committee

Remuneration

Committee

Nomination

Committee

Bob Ivell 8 (8) n/a 4 (4) 1 (1)

Keith Browne 8 (8) n/a n/a n/a

Amanda Brown 8 (8) 4 (4) 4 (4) 1 (1)

Dave Coplin 8 (8) 4 (4) 4 (4) 1 (1)

Eddie Irwin 5 (8) n/a n/a 1 (1)

Tim Jones 8 (8) n/a n/a n/a

Josh Levy 8 (8) n/a 4 (4) n/a

Jane Moriarty 8 (8) 4 (4) 4 (4) 1 (1)

Phil Urban 8 (8) n/a n/a n/a

The numbers in brackets in the table above confirm how many meetings each Director was eligible to attend during

the year.

Annual Report and Accounts 2025  Mitchells & Butlers plc66

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Chair

Bob Ivell

The Chair is accountable to

shareholders for leading the

Board and ensuring the Board

receives timely, accurate

information to take good

decisions for the benefit of

all stakeholders.

Board and Committee structure

Senior

Independent

Director

Jane Moriarty

The Senior Independent Director

supports the Chair on all governance

issues and provides a communication

channel between the Chair and the

Non-Executive Directors.

Non-Executive

Directors

The Non-Executive Directors

support and constructively

challenge the executive team.

Audit

Committee

Chair – Jane Moriarty

See pages 94 to 97

Remuneration

Committee

Chair – Amanda Brown

See pages 98 to 118

Nomination

Committee

Chair – Bob Ivell

See page 89

Market Disclosure

Committee

Chair – Bob Ivell

See page 89

The Board

The Board has delegated the day-to-day running of the Group to the Chief

Executive Officer. The Executive Directors make and implement operational

decisions to run the Mitchells & Butlers business on a day-to-day basis. To support

the Chief Executive Officer in discharging his responsibilities, he is supported by

the Executive Committee.

The Executive Committee is responsible for ensuring that each of the Group’s

businesses and functions are managed effectively and that the key performance

indicators of the Group, as approved by the Board, are achieved. The Executive

Committee, chaired by the CEO, ensures the execution of the Company’s strategy

and the day-to-day management of the business. Certain other responsibilities

have been delegated to specialist committees and further details are given on

pages 89 and 90.

Board tenure for Chair and Non-Executive Directors

The UK Corporate Governance Code states that the Chair should not remain in post

beyond nine years from the date of their first appointment to the Board and that

circumstances which are likely to impair, or could appear to impair, a Non-Executive

Director’s independence include service on the Board for more than nine years from

the date of their first appointment. Of the Non-Executive Directors and Chair, two

Directors currently have less than nine years’ Board service.

Committees

Executive Directors

Phil Urban

(CEO)

Tim Jones

(CFO)

Mitchells & Butlers plc  Annual Report and Accounts 2025

67

Financial Statements Other Information

![](data:image/jpeg;base64,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)

As at 27 September 2025, the Company had more

than 50,000 employees and one of the key roles

for the Board is to provide leadership for them and

maintain the highest possible standards of

corporate governance.

A new Corporate Governance Code was

published in 2024, the main provisions of which

will apply to financial years beginning on or after

1 January 2025, except for Provision 29 (relating

to the monitoring of the Company’s risk

management and internal control framework),

which will apply to the Company’s financial year

ending September 2027. In the meantime the

Company is required to report under the 2018 UK

Corporate Governance Code (the ‘2018 Code’).

The 2018 Code places emphasis on relationships

between companies, shareholders and stakeholders.

It also promotes the importance of establishing a

corporate culture that is aligned with the Company’s

purpose and business strategy, promotes integrity

and values diversity and sets the expectations for

reporting the Board’s involvement in these areas.

Some of these aspects of the 2018 Code are

reflected in the Strategic Report on pages 24 to

64, which sets out the Group’s strategy, progress

and performance for the year. Meanwhile, the

Board-focused corporate governance aspects

of the 2018 Code are reflected in the Corporate

Governance Statement on pages 81 to 93,

which sets out the Company’s compliance against

published governance requirements where

there is a narrative explanation as to how the

Board has approached compliance with, or in a

few limited areas divergence from, the Code’s

best practice guidance.

Chair’s introduction

to governance

“Dear fellow shareholders,

I have pleasure in updating

you on our progress in

corporate governance over

the past year.”

Bob Ivell

Chair

Annual Report and Accounts 2025  Mitchells & Butlers plc68

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Climate change reporting requirements continue

to occupy the Board and details are included in

that section of the Strategic Report on pages 46

to 51. Phil Urban heads our climate change policy

initiatives, and while this area remains a

responsibility of the entire Board, the Corporate

Responsibility Committee manages and monitors

the detail of the Group’s approach to this

important topic. The Board oversight of

climate-related risks and opportunities is set out

on page 47 in our climate-related disclosures.

We were pleased to be able to report another

successful year where we outperformed the

market, delivering strong sales and operating

profit growth, despite the impact of the increase

in employers’ National Insurance.

Supporting this performance was the strength of

performance against key metrics with the lowest

team turnover the Company has ever seen and

the highest team engagement scores. So, we have

delivered another year of progress and we feel

we have maintained our momentum. We have

outperformed the market on sales growth for nine

straight years, and our metrics on people and

investment are the best ever. In Ignite, we have

a very special way of working that ensures we

never become complacent and that we seek out

constant improvement. Allied to this we have the

best brands in the industry, a fantastic portfolio of

largely freehold properties, and our balance sheet

is becoming stronger and stronger. Our focus

remains on delivering sales growth and efficiency

gains to deliver continued profit growth in the

year ahead.

Our broad range of Board talent covers a variety

of professional skills, and our diverse group of

Non-Executive Directors continue to bring much

experience and challenge to the Board.

My focus will continue to be on maintaining a

strong team, with a broad range of professional

backgrounds, experience from both within our

sector and in other industries and businesses and

communication skills to drive further improvements

where possible. From a governance standpoint,

the basic governance arrangements already in

place are unchanged since FY 2022, with the

exception of additional procedures and reporting

arrangements put in place in order to comply with

climate change and diversity reporting requirements.

Certain aspects of the 2018 Code could not be,

and were not, complied with in FY 2025. These

deviations from the 2018 Code are fully explained

on pages 85 and 86 in the Corporate Governance

Statement in line with the ‘Comply or Explain’

regime which forms an intrinsic part of that

2018 Code.

The 2018 Code states that there should be a

formal and rigorous annual evaluation of the

performance of the Board, its committees, the

chair and individual directors and that the chair

should consider having a regular externally

facilitated Board evaluation. In FTSE 350

companies this should happen at least every three

years and an externally facilitated review of the

Board’s effectiveness last took place in 2018.

Subsequently, the Board decided that the

interests of shareholders would be better served

by the Board focusing on the business and

consequently no external evaluation has taken

place since. The Board will review this approach

as and when it feels it necessary to do so in the

context of the circumstances in which the Group

is operating. Although there was no formal

evaluation carried out during the year, I remain

satisfied that the skills, contributions and

experience of the Board are appropriate for the

challenges faced by the Group during the year

and for the future. You can read the Board

biographies on pages 70 and 71.

All Listing Rule references in this Annual Report

derive from the UK Listing Rules which came into

effect on 29 July 2024. The remainder of this

Corporate Governance Statement contains the

narrative reporting required by the 2018 Code,

the UK Listing Rules and the Disclosure Guidance

and Transparency Rules. I hope that you find

this Corporate Governance Statement to be

informative and helpful in relation to this

important topic.

We are committed to maintaining an active

dialogue with all our shareholders, and we

continue to offer our institutional investors access

to key senior management and our Investor

Relations team. The Chair of each of our Audit

Committee and Remuneration Committee and

the Senior Independent Director are available for

dialogue with shareholders on any significant

matters in relation to their areas of responsibility

if this is needed and you can read their reports on

pages 94 and 98 respectively.

The Annual General Meeting will be held in

January 2026 and all shareholders are welcome to

attend. For those shareholders who cannot attend

but would like to hear the proceedings, we will

also supply a telephone listen-only facility. Full

details are set out in the separate Notice of AGM

published with this Annual Report.

I look forward to the year ahead, confident in the

knowledge that the Company is led by a highly

competent, professional and motivated team.

I also look forward to the support of you, our

shareholders, as our senior management team

continues to focus on driving future profit growth

and creating additional shareholder value.

Bob Ivell

Chair

Mitchells & Butlers plc

For the Company’s latest financial information

Go to www.mbplc.com/investors

Mitchells & Butlers plc  Annual Report and Accounts 2025

69

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Board of Directors

A strong leadership team

Phil joined Mitchells & Butlers in January 2015

as Chief Operating Officer and became Chief

Executive in September 2015. Phil was previously

Managing Director at Grosvenor Casinos, a

division of Rank Group and Chair of the National

Casino Forum. Prior to that, he was Managing

Director for Whitbread’s Pub Restaurant Division,

and for Scottish & Newcastle Retail’s Restaurants

and Accommodation Division. Phil has an MBA

and is a qualified management accountant (‘CIMA’).

Tim was appointed Chief Financial Officer in

October 2010. Prior to joining the Company,

he held the position of Group Finance Director

for Interserve plc, a support services group.

Previously, he was Director of Financial Operations

at Novar plc and held senior financial roles both

in the UK and overseas in the logistics company,

Exel plc. He was previously Non-Executive

Director and Chairman of the Audit and Risk

Committee of Poundland PLC. Tim obtained

an MA in Economics at Cambridge University.

Tim will retire from the Board of Directors and

the Company in the Summer of 2026 following

a full handover.

Appointed to the Board in May 2011, Bob has

over 50 years of extensive food and beverage

experience with a particular focus on food-led,

managed restaurants, pubs and hotels. He is

currently a board member of UK Hospitality and

was previously Senior Independent Director of

AGA Rangemaster Group plc and Britvic plc, and

a main board Director of S&N plc as Chair and

Managing Director of its Scottish & Newcastle

retail division. He has also been Chair of

Carpetright plc, Regent Inns, Park Resorts and

David Lloyd Leisure Limited, and was Managing

Director of Beefeater Restaurants, one of

Whitbread’s pub restaurant brands, and a

Director of The Restaurant Group. Bob is Chair

of the Nomination Committee, the Pensions

Committee, the Market Disclosure Committee

and the Corporate Responsibility Committee.

Key to Committee membership

A

Audit Committee

R

Remuneration Committee

N

Nomination Committee

M

Market Disclosure Committee

E

Executive Committee

C

Corporate Responsibility Committee

P

Pensions Committee

The Board brings together a

diverse range of professional

experience and industry

backgrounds.

Bob Ivell

Non-Executive Chair

R

N

M

C

P

Phil Urban

Chief Executive

M

E

P

Tim Jones

Chief Financial Officer

M

E

P

Annual Report and Accounts 2025  Mitchells & Butlers plc70

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Appointed as an independent Non-Executive

Director in February 2016, Dave is the Chief

Executive Officer and founder of The Envisioners

Limited. He was formerly the Chief Envisioning

Officer for Microsoft Limited, and is an

established thought leader on the role of

technology in our personal and professional lives.

For over 30 years he has worked across a range of

industries and customer marketplaces, providing

strategic advice and guidance around the role and

optimisation of technology in modern society,

both inside and outside of the world of work.

Dave is also a Non-Executive Director of both

Pensions UK and Vianet Group plc.

Appointed as a Non-Executive Director in

March 2012, Eddie is a nominated shareholder

representative of Elpida Group Limited which,

as part of the Odyzean Group, is a significant

shareholder in Mitchells & Butlers. Eddie is

Finance Director of Coolmore, a leading

thoroughbred bloodstock breeder with

operations in Ireland, the USA and Australia.

He graduated from University College Dublin

with a Bachelor of Commerce Degree and he is

a Fellow of both The Association of Chartered

Certified Accountants and The Chartered

Governance Institute.

Appointed as a Non-Executive Director in

September 2016, Keith is a nominated

shareholder representative of Elpida Group

Limited, which, as part of the Odyzean Group,

is a significant shareholder in Mitchells & Butlers.

Keith obtained a Bachelor of Commerce Degree

from University College Dublin, qualified as a

chartered accountant in 1994 and subsequently

gained an MBA from University College Dublin.

After joining KPMG Corporate Finance in 1996,

he became a partner in the firm in 2001 and Head

of Corporate Finance in 2009. He retired from the

partnership to operate as an Independent

Consultant in 2011.

Appointed as an independent Non-Executive

Director in February 2019, Jane is a Fellow of the

Institute of Chartered Accountants in Ireland, and

currently a Non-Executive Director of Babcock

International Group PLC, Tennants Consolidated

Limited and Nyrstar NV. Jane was previously a

senior advisory partner with KPMG LLP. Jane is

Chair of the Audit Committee.

Amanda joined the Board in July 2022 as an

independent Non-Executive Director. She is

Remuneration Chair of Entain plc and Manchester

Airport Group, and was formerly the Chief

Human Resources Officer of Hiscox Limited, and

was a Non-Executive Director and Chair of the

Remuneration Committee of Micro Focus

International PLC. She previously held senior

executive roles with Whitbread Group PLC,

PepsiCo, Inc and Mars, Inc. Amanda is Chair of

the Remuneration Committee.

Appointed as a Non-Executive Director in

November 2015, Josh is a nominated shareholder

representative of Piedmont Inc., which, as part of

the Odyzean Group, is a significant shareholder in

Mitchells & Butlers. Josh is Co-Chief Executive

Officer of Tavistock Group, and a member of the

Board of Directors and Executive Committee.

He also serves as Chief Executive Officer of

specialist asset-based lender Ultimate Finance

Group and is a Non-Executive Director of the

Australian Agricultural Company, Australia’s

largest integrated cattle and beef producer.

Eddie Irwin

Non-Executive Director

N

C

Josh Levy

Non-Executive Director

R

P

Jane Moriarty

Senior Independent Director

A

R

N

C

M

Keith Browne

Non-Executive Director

P

Amanda Brown

Non-Executive Director

A

R

N

C

Dave Coplin

Non-Executive Director

A

R

N

C

Mitchells & Butlers plc  Annual Report and Accounts 2025

71

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Directors’ report

The Board’s responsibilities in respect

of the Company include:

•  Determining the overall business and commercial strategy;

•  Identifying the Company’s long-term objectives;

•  Reviewing the annual operating budget and financial plans and

monitoring performance in relation to those plans;

•  Determining the basis of the allocation of capital; and

•  Considering all policy matters relating to the Company’s activities

including any major change of policy.

For FY 2025, the Board is reporting under the 2018 Code. Further

information is set out in the Strategic Report on pages 24 to 64 which

examines the ‘purpose’ aspect of the 2018 Code and in the Corporate

Governance Statement on pages 81 to 93, which describes the

Company’s approach and practices in relation to the 2018 Code.

For the Company’s latest financial information

Go to www.mbplc.com/investors

The Directors present their report on the affairs of the Group and the audited

financial statements for the 52 weeks ended 27 September 2025. The Business

review and Sustainability review of the Company and its subsidiaries are

given on pages 26 to 28 and pages 44 and 45 respectively which, together

with the Corporate Governance Statement and Audit Committee report, are

incorporated by reference into this report and, accordingly, should be read

as part of this report.

Details of the Group’s policy on addressing risks are given on pages 52 to 59,

92 and 93, and details about financial instruments are shown in note 4.3 to

the financial statements. These sections include information about trends

and factors likely to affect the future development and performance of the

Group’s businesses. The Company undertakes no obligation to update

forward-looking statements.

Key performance indicators for the Group’s businesses are set out on pages

42 and 43.

The Company’s Directors pay due regard to the need to foster the Company’s

business relationships with suppliers, guests and others. Details of the

Company’s engagement process with various stakeholders and different

tiers of suppliers, together with the effect of such consideration on the

principal decisions taken by the Company during the financial period, are set

out in the section discussing the Company’s business model on pages 32 to

35 and in the statement made in compliance with Section 172 of the

Companies Act 2006 set out on page 61.

This report has been prepared under current legislation and guidance in

force at the year end date. In addition, the material contained on pages 24

to 64 reflects the Directors’ understanding of the requirement to provide

a Strategic Report.

This report has been prepared for, and only for, the members of the

Company as a body, and no other persons. The Company, its Directors,

employees, agents or advisers do not accept or assume responsibility to any

other person to whom this document is shown or into whose hands it may

come or who becomes aware of it and any such responsibility or liability is

expressly disclaimed.

Areas of operation

During FY 2025, the Group had activities in, and operated through, pubs,

bars and restaurants in the United Kingdom and Germany. A summary of the

performance of the business is set out on page 99.

A full list of the Company’s subsidiaries and their respective country of

operation is given on page 181 of the Annual Report.

Share capital and voting rights

The Company’s issued ordinary share capital as at 27 September 2025

comprised a single class of ordinary shares of which 598,864,399 shares

were in issue and listed on the London Stock Exchange (28 September 2024

598,057,671 shares). The rights and obligations attaching to the ordinary shares

of the Company are contained within the Company’s Articles of Association.

Of the issued share capital, no shares were held in treasury and the Company’s

employee share trusts held 6,084,571 shares. Details of movements in the

issued share capital can be found in note 4.7 to the financial statements on

pa ge 17 7.

Each share carries the right to one vote at general meetings of the Company.

The notice of the Annual General Meeting specifies deadlines for exercising

voting rights in relation to the resolutions to be proposed at the Annual

General Meeting.

All issued shares are fully paid up and carry no additional obligations or

special rights. There are no restrictions on transfers of shares in the Company,

or on the exercise of voting rights attached to them, other than those which

may from time to time be applicable under existing laws and regulations and

under the Articles of Association. In addition, pursuant to the UK Listing

Rules of the Financial Conduct Authority, Directors and certain officers and

employees of the Group require the prior approval of the Company to deal

in the ordinary shares of the Company.

Participants in the Share Incentive Plan (‘SIP’) may complete a Form of

Instruction which is used by Equiniti Share Plan Trustees Limited, the SIP

Trustee, as the basis for voting on their behalf.

During the period, shares with a nominal value of £68,908 were allotted

under all-employee schemes as permitted under Section 549 of the

Companies Act 2006. No securities were issued in connection with a rights

issue during the period.

Annual Report and Accounts 2025  Mitchells & Butlers plc72

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

The Company is not aware of any agreements between shareholders that

restrict the transfer of shares or voting rights attached to the shares.

Interests of the Directors and their immediate families in the issued share

capital of the Company as at the year end are shown on page 116 in the

Report on Directors’ remuneration.

Dividends

No Final Dividend will be paid in respect of the financial period ended

27 September 2025 (FY 2024 nil). No Interim Dividend was paid during

the period (FY 2024 nil).

Interests in voting rights

As at 27 September 2025, the Company was aware of the significant

holdings of voting rights (3% or more) in its shares shown in Table 1 below.

Table 1: Interests in voting rights as at 27 September 2025

Shareholder  Ordinary shares

% of

share capital

a

Odyzean Limited

b

338,833,695 56.58% Indirect holding

Artemis Investment

Management LLP

36,408,331 6.08% Indirect holding

Lansdowne Partners

(UK) LLP

29,633,363 4.95% Indirect holding

Standard Life Aberdeen plc 29,260,403 4.89% Indirect holding

Standard Life Aberdeen plc

(rights to recall lent shares)

170,000 0.03% Indirect holding

a.  Based on the total voting rights figure as at 27 September 2025 of 598,864,399 shares.

b. As the parent company of each of Piedmont Inc., Elpida Group Limited and

Smoothfield Holding Ltd.

Percentages are rounded to two decimal places.

No changes took place between 28 September 2025 and 27 November 2025.

Directors

Details of the Board Directors as at 27 November 2025 and their biographies

are shown on pages 70 and 71. The Directors as at 27 September 2025 and

their interests in shares are shown on page 116.

In relation to the appointment and removal of Directors the Company is

governed by its Articles of Association and the Companies Act 2006 and

related legislation. The powers of the Company’s Directors are set out in the

Company’s Articles of Association.

In accordance with the Company’s Articles of Association (which are in line

with the best practice guidance of the 2018 Code) all the Directors will retire

at the Annual General Meeting and will offer themselves for re-election.

Major shareholder Board representation

and relationship agreement

The Company’s largest shareholder is Odyzean Limited (‘Odyzean’), which

holds approximately 56.58% of the Company’s issued share capital and was

formed in 2021 to consolidate the shareholdings of the Company’s then

three largest shareholders, Piedmont Inc. (‘Piedmont’), Elpida Group Limited

(‘Elpida’) and Smoothfield Holding Limited (‘Smoothfield’) (together with

Odyzean, the ‘Odyzean Group’) in connection with the Open Offer.

The Board is grateful for the significant financial commitment provided

by the Odyzean Group to the business, together with its 1,718 pubs and

restaurants, and over 50,000 UK and German employees. The Company

maintains excellent relations with the Odyzean Group, whose investment

objectives are fully aligned with those of the Group. The Odyzean Group

maintains a dialogue with the Board via their representatives on the Board

nominated by Piedmont and Elpida, all of whom are careful to ensure that

there is no conflict between their roles as representatives of the Company’s

shareholders and their duty to the Company.

The Odyzean Group has representatives on the Board, nominated by

Piedmont and Elpida respectively. Piedmont’s appointment rights are

formalised in the Deed of Appointment referred to in this report but there is

no equivalent agreement in place between the Company and Elpida. The

Elpida representatives were appointed with the approval of the Board in

March 2012 and September 2016. The Board has carefully considered

whether it would be appropriate to enter into a formal agreement with Elpida

that is similar to the existing agreement between the Company and Piedmont.

Having taken into account the Financial Reporting Council’s report of August

2014 ‘Towards Clear & Concise Reporting’ and the views expressed previously

by certain investor representative bodies, the Board considers that such an

agreement would be merely one of form rather than substance and not in the

interests of shareholders generally. As a result, the Board does not propose,

currently, that the Company should enter into such an agreement with

Elpida, and Elpida has not, to date, sought such an agreement.

Under a Deed of Appointment between Piedmont and the Company,

Piedmont has the right to appoint two shareholder Directors to the Board

whilst it owns 22% or more of the issued share capital of the Company, and

the right to appoint one shareholder Director to the Board whilst it owns

more than 16% of the Company but less than 22%. In the event that Piedmont

owns less than 16% of the Company any such shareholder Directors would

be required to resign immediately. This Deed of Appointment also entitles

Piedmont to appoint one Director to sit on the Nomination Committee and to

have a Director attend, and receive all the papers relating to, meetings of the

Remuneration Committee.

The Board confirms that the Company is able to carry on the business it carries

on as its main activity independently from Odyzean.

There is a requirement to disclose the parent and ultimate controlling party of

the Company where this is different. There is no parent or ultimate controlling

party as such of Mitchells & Butlers plc. However, as disclosed in the table of

‘Interests in voting rights’, and the section headed ‘Major shareholder Board

representation and relationship agreement’, both on this page, Odyzean, as

the indirect holder of the separate shareholdings of Piedmont, Elpida and

Smoothfield has disclosed its interest in 56.58% of the shares in the Company.

Odyzean, however, does not directly hold any shares in the Company on its

own behalf.

Mitchells & Butlers plc  Annual Report and Accounts 2025

73

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Directors’ report continued

Directors’ indemnity

As permitted by the Articles of Association, each of the Directors has the

benefit of an indemnity, which is a qualifying third-party indemnity as defined

by Section 234 of the Companies Act 2006. The indemnity was in force

throughout the tenure of each Director during the period, and is currently in

force. The Company also purchased and maintained throughout the period

Directors’ and Officers’ liability insurance in respect of itself and its Directors

and the directors of any subsidiary of the Company. No indemnity is provided

for the Company’s auditor.

Articles of Association

The Articles of Association may be amended by special resolution of the

shareholders of the Company.

Conflicts of interest

The Company’s Articles of Association permit the Board to consider and,

if it sees fit, authorise situations where a Director has an interest that conflicts,

or may possibly conflict, with the interests of the Company (‘Situational

Conflicts’). The Board has a formal system in place for Directors to declare

Situational Conflicts to be considered for authorisation by those Directors

who have no interest in the matter being considered. In deciding whether to

authorise a Situational Conflict, the non-conflicted Directors are required to

act in the way they consider would be most likely to promote the success of

the Company for the benefit of all shareholders, and they may impose limits

or conditions when giving authorisation, or subsequently, if they think this is

appropriate. The Board believes that the systems it has in place for reporting

and considering Situational Conflicts continue to operate effectively.

Related party transactions

Internal controls are in place to ensure that any related party transactions

involving Directors or their connected persons are carried out on an

arm’s-length basis and are properly recorded.

The related party transactions in FY 2025 to which the Group was party are

set out in note 5.2 to the financial statements.

Change of control provisions

There are no significant agreements which contain provisions entitling other

parties to such agreements to exercise termination or other rights in the

event of a change of control of the Company.

There are no provisions in the Directors’ or employees’ service agreements

providing for compensation for loss of office or employment occurring

because of a takeover.

The trustee of the Company’s SIP will invite participants on whose behalf it

holds shares to direct it how to vote in respect of those shares, and, if there is

an offer for the shares or other transaction which would lead to a change of

control of the Company, participants may direct it to accept the offer or agree

to the transaction. The trustee of the Mitchells & Butlers Employee Benefit

Trust may, having consulted with the Company, vote or abstain from voting

in respect of any shares it holds or accept or reject an offer relating to shares

in any way it sees fit, and it may take all or any of the following matters into

account: the long-term interests of beneficiaries; the non-financial interests

of beneficiaries; the interests of beneficiaries in their capacity as employees

or former employees; the interests of future beneficiaries; and considerations

of a local, moral, ethical, environmental or social nature.

The rules of certain of the Company’s share plans include provisions which

apply in the event of a takeover or reconstruction, as set out in Table 2 below.

Table 2: Provisions which apply in the event of a takeover

or reconstruction

Share plan Provision in the event of a takeover

2023 Short Term Deferred

Incentive Plan

Bonus shares may be released or

exchanged for shares in the new

controlling company

2013 Sharesave Plan and

2023 Sharesave Plan

Options may be exercised within six

months of a change of control

Share Incentive Plan Free shares may be released or

exchanged for shares in the new

controlling company

Restricted Share Plan Awards either vest having regard to

achievement of applicable underpin

conditions and, at the discretion of the

Board, time pro-rating or are exchanged

for an equivalent award in the new

controlling company

Performance Share Plan Awards either vest having regard to

achievement of applicable performance

conditions and, at the discretion of the

Board, time pro-rating or are exchanged

for an equivalent award in the new

controlling company

Shareholders approved the Company’s existing Directors’ remuneration policy

at the AGM in 2024 for a period of three years from the date of that meeting.

That vote, which is binding on the Company, remains in force until 2027, and

thus a new Directors’ remuneration policy will require approval at the 2027

AGM. Further details are set out in the Report on Directors’ remuneration.

The Company was authorised by shareholders at its AGM in 2025 to

purchase its own shares up to a maximum of 29,925,924 ordinary shares,

representing approximately 5% of its issued ordinary share capital. The

Company has not used this authority during FY 2025. The Company intends

to renew this authority at the 2026 AGM.

Additional disclosures

Other information that is relevant to the Directors’ report, and which is

incorporated by reference into this report, can be located as follows:

Page(s)

Future developments of the business 24 to 64

Research and development 32 to 35

Financial instruments and financial risk management 160 and 162

Greenhouse gas emissions 77 to 79

Corporate governance statement 81 to 93

Employee involvement 76

Employees with disabilities 75

Non-financial reporting 24 to 64

Stakeholder engagement 83

Section 172 statement  61

Annual Report and Accounts 2025  Mitchells & Butlers plc74

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Disclosures required pursuant to the UK Listing Rules can be found on the

following pages:

Page(s)

Information required by UK Listing Rule 6.6.1R

1. Long-term incentive schemes 98 to 118

2. Allotment of shares during the period 177

3. Significant contracts 73

4. Significant related party agreements 73

5. Relationship agreement  73

Information required by UK Listing Rule 6.6.6R

6. Directors’ interests 116

7. Significant shareholders (DTR 5) 73

8. Going concern statement 64

9. Shareholder buyback authorities 74

10. Statement of corporate governance 81 to 93

11. Details of Directors’ service contracts 116

12. Climate-related financial disclosures consistent

with TCFD 46 to 51

13. Board diversity 84

The Company has chosen, in accordance with section 414C(11) of the

Companies Act 2006, and as noted in this Directors’ report, to include certain

matters in its Strategic Report that would otherwise be required to be disclosed

in this Directors’ report. The Strategic Report can be found on pages 24 to 64

and includes an indication of future likely developments in the Company,

details of important events and the Company’s business model and strategy.

Employment policies

The Group employed an average of 50,559 people in FY 2025 (FY 2024

50,455). Through its diversity and equality policy, the Company seeks to

ensure that every employee, without exception, is treated equally and fairly

and that all employees are aware of their responsibilities. The Company takes

harassment of any type very seriously and has introduced training for all

employees that clearly outlines the Company’s expectations, and what

employees should do if they are subject to, or a witness of, harassment of any

type. This training also explains the importance of diversity and inclusion in

the workplace and supports our broader DEI agenda.

Employment of disabled persons

Our policies and procedures fully support our disabled colleagues. We take

active measures to do so via:

•  a robust reasonable adjustment policy;

•  disability-specific online resources (accessible via the Group’s online

recruitment system); and

•  processes to ensure colleagues are fully supported.

The Group is responsive to the needs of its employees. As such, should any

employee of the Group become disabled during their time with us, we will

actively retrain that employee and make reasonable adjustments to their

working environment where possible, in order to keep the employee with

the Group. It is the policy of the Group that the recruitment, training, career

development and promotion of disabled persons should, as far as possible,

be identical to that of other employees.

Employee engagement

Mitchells & Butlers engages with its employees on a regular basis and

in a number of ways to suit their different working patterns and this is

discussed further in the Report on Directors’ remuneration on page 98.

Engagement includes:

•  line manager briefings;

•  communications forums and roadshows held by functions or brands

across the Company;

•  a dedicated intranet for the Retail Support Team and Retail Management;

•  ‘Mable’, the Mitchells & Butlers online learning platform;

•  email news alerts;

•  focus groups;

•  weekly bulletins – specifically targeted at retail house managers and

mobile workers; and

•  employee social media groups.

Details of the financial and economic factors affecting the performance of

the Company are shared with all employees at the appropriate time using the

methods listed above. In line with the requirements of the 2018 Code, the

Board agreed that Dave Coplin will act as a link to the Board for employees in

order to strengthen the ‘employee voice’ at the Board. This involves attending

employee forums, focus groups and providing feedback on values and

behaviours, employee development and upskilling and ensuring that

feedback is listened to and acted upon where appropriate.

As part of this role, Dave Coplin uses the insight he has gained to provide the

Board with an employee perspective across a range of issues, which the Board

considers to be very valuable. Dave meets regularly with senior members of

the Human Resources team and is also supporting the business in how it may

utilise technology to better communicate with employees. In addition, as a

member of the Remuneration Committee his insight is also very helpful in the

context of Executive pay.

Updates on employee matters are normally presented to the Remuneration

Committee or Board at least twice a year and cover a wide range of issues.

Over the course of FY 2025 these updates have focused on employee

engagement and specifically detailed feedback from the two engagement

surveys held during the year, the forthcoming Employment Rights Bill and

its implications for the business, the introduction of a new employee

communications app and progress updates on the implementation of a new

HR and Payroll system, due in 2026.

The Remuneration Committee is also informed where significant changes

are proposed to employment conditions and policies elsewhere in the Group,

or if there are important employee-related projects underway. More detail

on how the Remuneration Committee takes into account wider workforce

polices and the views of employees in relation to Executive pay can be found

on page 108.

We provide opportunities for employees to give their feedback to the Company

in a number of ways, from team or shift meetings in pubs, bars and restaurants

and engagement surveys for all employees to the Mitchells & Butlers Business

Forum. Business Forum representatives collect questions from employees

across the Company and put them to members of the Executive Committee.

The questions and answers are communicated to employees.

Mitchells & Butlers plc  Annual Report and Accounts 2025

75

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Directors’ report continued

‘Hospitality With Heart’ – Our Employee Value Proposition

‘Hospitality With Heart’ is an evolution of the promise we make to our teams.

It enables us to clearly differentiate what it means to work with Mitchells & Butlers.

Pay is of course important to all in the current climate, but our research and

employee feedback show that people value much more than just pay.

What sets us apart is the way we combine rewarding careers with a culture

that truly cares for our people, guests, and communities.

Hospitality With Heart reflects what our employees told us they value most

about working with us – a place where they can thrive, belong, and be proud

of the difference they make every day.

The six core components of Hospitality With Heart:

•  A sense of pride, purpose & belonging: We foster a culture of inclusion,

respect, and allyship, so our teams take pride in creating memorable

moments for millions of guests and feel a true sense of belonging in our

local and national community.

•  Flexibility: We understand that life doesn’t stop when work begins.

Where possible, we offer flexible working arrangements so our people

can balance their commitments inside and outside of work.

•  Fair Reward: We believe hard work should be recognised. Alongside

competitive pay, we provide benefits and rewards that reflect the value

our people bring.

•  A Fun & Friendly environment: Hospitality is about people, and we

work hard to create an atmosphere where teams enjoy themselves, feel

supported, and can bring their personality to work every day.

•  A Safe & Secure environment: The wellbeing of our teams is essential.

We provide a safe, supportive workplace where people can feel

confident and secure every day.

•  Career progression: With structured training and opportunities to grow,

we help our people develop skills for today and careers for tomorrow.

Why this matters

Recent history has shown how important it is to lead with care, flexibility, and

understanding. Hospitality With Heart reflects what makes Mitchells & Butlers

special – the pride our people feel, the support we give each other, and the

memorable moments we create together. Hospitality With Heart is intended

to be more than a just a simple statement. It and its core components shape

the way we work together, look after one another, and ensure every guest

has a great experience. By living this every day, we make Mitchells & Butlers

a place where people want to join and want to stay.

Share ownership

Mitchells & Butlers is keen to encourage greater employee involvement in

the Group’s performance through share ownership. It operates two HMRC

approved all-employee plans, which are the Sharesave Plan (both the 2013

and 2023 versions) and the Share Incentive Plan (which includes Partnership

shares). Further details on the plans are set out in the Report on Directors’

remuneration on pages 98 to 118.

The Company also operates three other plans on a selective basis, which are

the Short Term Deferred Incentive Plan, the Restricted Share Plan and the

Performance Share Plan.

During the year, the Company has remained within its headroom limits for

the issue of new shares for share plans as set out in the rules of the above

plans. The Company uses an employee benefit trust to acquire shares in the

market when appropriate to satisfy share awards in order to manage headroom

under the plan rules. A total of 2,000,000 shares were purchased by the

employee benefit trust during FY 2025.

Responsible alcohol policy

Mitchells & Butlers operates the Challenge 21 policy in all our businesses

across England and Wales, a Challenge 25 policy in our Scottish businesses

and similar policies in Northern Ireland and Germany. The policy requires

that any guest attempting to buy alcohol who appears to be under the age

of 21 in England, Wales or Northern Ireland (or 25 in Scotland) must provide

an acceptable form of proof of age ID to confirm that they are over 18 before

they can be served. We employ similar policies across the various regions of

Germany in order to comply with local laws.

All of these policies form part of our regular training for our employees on

their responsibilities for serving alcohol.

Political donations

The Company made no political donations during the year and intends to

maintain its policy of not making such payments. It will, however, as a

precautionary measure to avoid inadvertent breach of the law, seek shareholder

authority at its 2026 AGM to make limited donations or incur limited political

expenditure, although it has no intention of using the authority.

Modern Slavery Act 2015

In accordance with the requirements of the Modern Slavery Act, a copy of

the Company’s Modern Slavery Act compliance statement, signed on behalf

of the Board by Phil Urban, can be accessed on the Company’s website,

www.mbplc.com

Annual Report and Accounts 2025  Mitchells & Butlers plc76

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

This statement covers the Company’s commitment to operating and

conducting its business in such a way that human rights are respected and

protected. Mitchells & Butlers will not permit or condone any form of slavery,

servitude, forced or compulsory labour or human trafficking. It clearly states

how the Company is committed to ensuring that there is no modern slavery

or human trafficking in its supply chains or in any part of its businesses and

this is reflected in the Mitchells & Butlers Modern Slavery & Human

Trafficking Policy and Supplier Code of Conduct. The statement also covers

due diligence processes for slavery and human trafficking, supply chain

accountability, Company accountability (including ethical and socially

responsible conduct in the workplace), training and information and

reviewing key performance indicators to measure how effective we have

been in ensuring that slavery and human trafficking is not taking place in any

part of our business and supply chain, in terms of record keeping and actions

taken to strengthen supply chain due diligence, auditing and verification.

Phil Urban has ultimate responsibility for employment-related issues and he

also oversees matters relating to human rights including the implementation

of the Modern Slavery Act throughout the Group.

Annual General Meeting

The notice convening the Annual General Meeting is contained in a circular

sent to shareholders with this report and includes full details of the

resolutions proposed.

Auditor

KPMG LLP has expressed its willingness to continue in office as auditor of the

Company and its reappointment will be put to shareholders at the AGM.

Funding and liquidity risk

In order to ensure that the Group’s long-term funding strategy is aligned with

its strategic objectives, the Treasury Committee regularly assesses the maturity

profile of the Group’s debt, alongside the prevailing financial projections and

three year plan. This enables it to ensure that funding levels are appropriate

to support the Group’s plans.

The current funding arrangements of the Group consist of the securitised

notes issued by Mitchells & Butlers Finance plc (and associated liquidity

facility) and £150m of unsecured committed bank facilities (reduced by

£50m during the year). Further information regarding these arrangements is

set out on page 64 and is also included in note 4.1 to the financial statements

on page 158. The terms of the securitisation and the bank facilities contain

a number of financial and operational covenants. Compliance with these

covenants is monitored by Group Treasury.

The Group prepares a rolling daily cash forecast covering a six-week period, a

four-weekly update on six-month forward-looking cash forecasts and an annual

cash forecast by period. These forecasts are reviewed and used to manage

the investment and borrowing requirements of the Group. A combination of

cash pooling and zero balancing agreements is in place to ensure the optimum

liquidity position is maintained. Committed facilities outside of the securitisation

are sized to ensure that the Group can meet its medium-term anticipated

cashflow requirements. Short-term cash management is optimised through

regular discussions considering projected cash inflows and outflows.

During FY 2022, the Group completed the necessary amendments to transition

its financing arrangements in advance of the discontinuation of LIBOR as a

floating reference rate, replacing LIBOR with a SONIA-based rate in respect

of sterling and a SOFR-based rate in respect of US dollars. The amendments

in respect of the securitised bonds were agreed by the Bondholders through

a formal consent solicitation process and bilateral agreements were reached

with securitised swap and liquidity facility providers (using amended

reference rates consistent with those agreed under the bonds). The

unsecured committed facility is also documented on a SONIA basis.

Going Concern

After considering forecasts, sensitivities and mitigating actions available

to management and having regard to risks and uncertainties, the Directors

have a reasonable expectation that the Group has adequate resources to

continue to operate within its borrowing facilities and covenants for a period

of at least 12 months from the date of signing the financial statements.

Accordingly, the financial statements have been prepared on the going

concern basis. Full details are included in Section 1 of the notes to the

consolidated financial statements.

Events after the balance sheet date

There are no post-balance sheet events to report.

Greenhouse gas (‘GHG’) emissions statement

The Group generates GHG emissions throughout its estate of bars and

restaurants for heating, cooling, ventilation, lighting, and catering including

the refrigeration and preparation of food and drink.

Location-based GHG emissions per £m turnover have decreased by 14% in

FY 2025 in comparison to FY 2024. Market-based GHG emissions per £m

turnover have decreased by 9% for the same period. This is due to the

following key factors:

1.   Realisation of the benefit from the efficiency measures that we have

rolled out as well as decreasing our fugitive (f-gas) emissions.

2.  An increase in revenue generated in FY 2025 compared to FY 2024.

3.   The published GHG Electricity conversion factor to convert kWh to

tCO

2

e saw a 15% reduction compared to the published factor for FY 2024.

We have also continued with our commitment to purchase a green,

REGO-backed supply of electricity from renewable sources in FY 2025.

Mitchells & Butlers plc  Annual Report and Accounts 2025

77

Financial Statements Other Information

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAXvBG8DASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD3+s/U9C0fW/K/tbSrG/8AJz5f2u3SXZnGcbgcZwOnoK0KKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAMvTfDWg6NcNcaXomm2M7IUaS1tUiYrkHBKgHGQDj2FalFFABWfqeg6Prflf2tpNjf+Tny/tVukuzOM43A4zgfkK0KKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAMvTfDWg6NcNcaXomm2M7IUaS1tUiYrkHBKgHGQDj2FalFFABWfqeiadrHlfb7fzvKzs+dlxnGehHoK0KKmcIzXLJXRUJyg+aLszA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+isfqmH/kX3I2+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKp8Xg/QYZBJHYYYdD5z/8AxVblFP6rQX2F9yB4vEP/AJeP72FFFFbnOFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRWX4a1KbWPCuj6pcKiz3llDcSLGCFDOgYgAknGT61qUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtbsjlcYoAfRUHmt7Uea3tSuBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6KZG5bOafTAKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/YKtf/AEUtbc38NYngT/knnhr/ALBVr/6KWrms65pGi+T/AGrqtjYebu8v7VcJFvxjONxGcZH5ihgWqKwP+E58I/8AQ06J/wCDCL/4qj/hOfCP/Q06J/4MIv8A4qpGb9FYH/Cc+Ef+hp0T/wAGEX/xVH/Cc+Ef+hp0T/wYRf8AxVAG/RWB/wAJz4R/6GnRP/BhF/8AFUf8Jz4R/wChp0T/AMGEX/xVAG/RWB/wnPhH/oadE/8ABhF/8VR/wnPhH/oadE/8GEX/AMVQBv0Vgf8ACc+Ef+hp0T/wYRf/ABVH/Cc+Ef8AoadE/wDBhF/8VQBv0Vgf8Jz4R/6GnRP/AAYRf/FUf8Jz4R/6GnRP/BhF/wDFUAb9FYH/AAnPhH/oadE/8GEX/wAVR/wnPhH/AKGnRP8AwYRf/FUAb9FYH/Cc+Ef+hp0T/wAGEX/xVH/Cc+Ef+hp0T/wYRf8AxVAG/RWB/wAJz4R/6GnRP/BhF/8AFUf8Jz4R/wChp0T/AMGEX/xVAG/RWB/wnPhH/oadE/8ABhF/8VR/wnPhH/oadE/8GEX/AMVQBv0Vgf8ACc+Ef+hp0T/wYRf/ABVH/Cc+Ef8AoadE/wDBhF/8VQBv0Vgf8Jz4R/6GnRP/AAYRf/FUf8Jz4R/6GnRP/BhF/wDFUAb9FYH/AAnPhH/oadE/8GEX/wAVR/wnPhH/AKGnRP8AwYRf/FUAb9FYH/Cc+Ef+hp0T/wAGEX/xVH/Cc+Ef+hp0T/wYRf8AxVAG/RWB/wAJz4R/6GnRP/BhF/8AFUf8Jz4R/wChp0T/AMGEX/xVAG/RWB/wnPhH/oadE/8ABhF/8VR/wnPhH/oadE/8GEX/AMVQBv0Vgf8ACc+Ef+hp0T/wYRf/ABVH/Cc+Ef8AoadE/wDBhF/8VQBv0Vgf8Jz4R/6GnRP/AAYRf/FUf8Jz4R/6GnRP/BhF/wDFUAb9FYH/AAnPhH/oadE/8GEX/wAVR/wnPhH/AKGnRP8AwYRf/FUAb9FYH/Cc+Ef+hp0T/wAGEX/xVH/Cc+Ef+hp0T/wYRf8AxVAG/RWB/wAJz4R/6GnRP/BhF/8AFUf8Jz4R/wChp0T/AMGEX/xVAG/RWB/wnPhH/oadE/8ABhF/8VR/wnPhH/oadE/8GEX/AMVQBv0Vgf8ACc+Ef+hp0T/wYRf/ABVH/Cc+Ef8AoadE/wDBhF/8VQBv0Vgf8Jz4R/6GnRP/AAYRf/FUf8Jz4R/6GnRP/BhF/wDFUAb9FYH/AAnPhH/oadE/8GEX/wAVR/wnPhH/AKGnRP8AwYRf/FUAb9FYH/Cc+Ef+hp0T/wAGEX/xVH/Cc+Ef+hp0T/wYRf8AxVAG/RWB/wAJz4R/6GnRP/BhF/8AFUf8Jz4R/wChp0T/AMGEX/xVAG/RWB/wnPhH/oadE/8ABhF/8VR/wnPhH/oadE/8GEX/AMVQBv0Vgf8ACc+Ef+hp0T/wYRf/ABVH/Cc+Ef8AoadE/wDBhF/8VQBv0Vgf8Jz4R/6GnRP/AAYRf/FUf8Jz4R/6GnRP/BhF/wDFUAb9FYH/AAnPhH/oadE/8GEX/wAVR/wnPhH/AKGnRP8AwYRf/FUAb9FYH/Cc+Ef+hp0T/wAGEX/xVH/Cc+Ef+hp0T/wYRf8AxVAG/RWB/wAJz4R/6GnRP/BhF/8AFUf8Jz4R/wChp0T/AMGEX/xVAG/RWB/wnPhH/oadE/8ABhF/8VR/wnPhH/oadE/8GEX/AMVQBv0Vgf8ACc+Ef+hp0T/wYRf/ABVH/Cc+Ef8AoadE/wDBhF/8VQBv0Vgf8Jz4R/6GnRP/AAYRf/FUf8Jz4R/6GnRP/BhF/wDFUAb9FYH/AAnPhH/oadE/8GEX/wAVR/wnPhH/AKGnRP8AwYRf/FUAb9FYH/Cc+Ef+hp0T/wAGEX/xVH/Cc+Ef+hp0T/wYRf8AxVAG/RWB/wAJz4R/6GnRP/BhF/8AFUf8Jz4R/wChp0T/AMGEX/xVAG/RWB/wnPhH/oadE/8ABhF/8VR/wnPhH/oadE/8GEX/AMVQBv0Vgf8ACc+Ef+hp0T/wYRf/ABVH/Cc+Ef8AoadE/wDBhF/8VQBv0Vgf8Jz4R/6GnRP/AAYRf/FUf8Jz4R/6GnRP/BhF/wDFUAb9FYH/AAnPhH/oadE/8GEX/wAVR/wnPhH/AKGnRP8AwYRf/FUAb9FYH/Cc+Ef+hp0T/wAGEX/xVH/Cc+Ef+hp0T/wYRf8AxVAG/RWB/wAJz4R/6GnRP/BhF/8AFUf8Jz4R/wChp0T/AMGEX/xVAG/RWB/wnPhH/oadE/8ABhF/8VR/wnPhH/oadE/8GEX/AMVQBv0Vgf8ACc+Ef+hp0T/wYRf/ABVH/Cc+Ef8AoadE/wDBhF/8VQBv0Vgf8Jz4R/6GnRP/AAYRf/FUf8Jz4R/6GnRP/BhF/wDFUAb9FYH/AAnPhH/oadE/8GEX/wAVR/wnPhH/AKGnRP8AwYRf/FUAb9FYH/Cc+Ef+hp0T/wAGEX/xVH/Cc+Ef+hp0T/wYRf8AxVAG/RWB/wAJz4R/6GnRP/BhF/8AFUf8Jz4R/wChp0T/AMGEX/xVAG/RWB/wnPhH/oadE/8ABhF/8VR/wnPhH/oadE/8GEX/AMVQBv0Vgf8ACc+Ef+hp0T/wYRf/ABVH/Cc+Ef8AoadE/wDBhF/8VQBv0Vgf8Jz4R/6GnRP/AAYRf/FUf8Jz4R/6GnRP/BhF/wDFUAb9FYH/AAnPhH/oadE/8GEX/wAVR/wnPhH/AKGnRP8AwYRf/FUAb9FYH/Cc+Ef+hp0T/wAGEX/xVH/Cc+Ef+hp0T/wYRf8AxVAG/RWB/wAJz4R/6GnRP/BhF/8AFUf8Jz4R/wChp0T/AMGEX/xVAG/RWB/wnPhH/oadE/8ABhF/8VR/wnPhH/oadE/8GEX/AMVQBv0Vgf8ACc+Ef+hp0T/wYRf/ABVH/Cc+Ef8AoadE/wDBhF/8VQBv0Vgf8Jz4R/6GnRP/AAYRf/FUf8Jz4R/6GnRP/BhF/wDFUAb9FYH/AAnPhH/oadE/8GEX/wAVR/wnPhH/AKGnRP8AwYRf/FUAb9FYH/Cc+Ef+hp0T/wAGEX/xVH/Cc+Ef+hp0T/wYRf8AxVAG/RWB/wAJz4R/6GnRP/BhF/8AFUf8Jz4R/wChp0T/AMGEX/xVAG/RWB/wnPhH/oadE/8ABhF/8VR/wnPhH/oadE/8GEX/AMVQB0kP8VS1l6Nrmka1539larY3/lbfM+y3CS7M5xnaTjOD+RrUqkIKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0Utbc38NYngT/AJJ54a/7BVr/AOilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/YKtf/AEUtbF1KsezcHOc/dQt/IVj+BP8Aknnhr/sFWv8A6KWtub+GhgVPtMf92X/v03+FH2mP+7L/AN+m/wAKmoqRkP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQA61lWTftDjGPvIV/mKsVFD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilrbm/hrE8Cf8k88Nf9gq1/8ARS1sXUqx7Nwc5z91C38hQwG0VD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VIyaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKALcP8VS1XtZVk37Q4xj7yFf5irFUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/wCSeeGv+wVa/wDopa25v4axPAn/ACTzw1/2CrX/ANFLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBLD/FUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv8AsFWv/opa2Lp2TZtid85+6Rx+ZFY/gT/knnhr/sFWv/opa25v4aGBU86T/n2l/Nf/AIqjzpP+faX81/8AiqmoqRkPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FAEPnSf8+0v5r/APFUedJ/z7S/mv8A8VU1FAEPnSf8+0v5r/8AFUedJ/z7S/mv/wAVU1FADrV2ffuidMY+8Rz+RNWKih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf8AYKtf/RS1tzfw1ieBP+SeeGv+wVa/+ilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLW3N/DWJ4E/5J54a/7BVr/wCilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0Utbc38NYngT/knnhr/sFWv/opa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/wAk88Nf9gq1/wDRS1tzfw1ieBP+SeeGv+wVa/8Aopa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLW3N/DWJ4E/5J54a/7BVr/6KWtub+GhgRUUUVIwooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0Utbc38NYngT/knnhr/sFWv/AKKWtub+GhgRUUUVIwooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf8AYKtf/RS1tzfw1ieBP+SeeGv+wVa/+ilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLW3N/DWJ4E/5J54a/7BVr/wCilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0Utbc38NYngT/knnhr/sFWv/opa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/wAk88Nf9gq1/wDRS1tzfw1ieBP+SeeGv+wVa/8Aopa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLW3N/DWJ4E/5J54a/7BVr/6KWtub+GhgRUUUVIwooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0Utbc38NYngT/knnhr/sFWv/AKKWtub+GhgRUUUVIwooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf8AYKtf/RS1tzfw1ieBP+SeeGv+wVa/+ilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLW3N/DWJ4E/5J54a/7BVr/wCilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0Utbc38NYngT/knnhr/sFWv/opa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/wAk88Nf9gq1/wDRS1tzfw1ieBP+SeeGv+wVa/8Aopa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLW3N/DWJ4E/5J54a/7BVr/6KWtub+GhgRUUUVIwooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0Utbc38NYngT/knnhr/sFWv/AKKWtub+GhgRUUUVIwooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf8AYKtf/RS1sXRkGzy0RuudzEf0NY/gT/knnhr/ALBVr/6KWtub+GhgVN1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaipGQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAOtTId/mIi9MbWJ/oKsVFD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP8Aknnhr/sFWv8A6KWtub+GsTwJ/wAk88Nf9gq1/wDRS1tzfw0MCKiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUASw/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWtub+GsTwJ/yTzw1/wBgq1/9FLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBLD/FUtRQ/wAVS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilrbm/hrE8Cf8AJPPDX/YKtf8A0Utbc38NDAioooqRhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAEsP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilrbm/hrE8Cf8k88Nf8AYKtf/RS1tzfw0MCKiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUASw/xVLUUP8AFUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/wCSeeGv+wVa/wDopa25v4axPAn/ACTzw1/2CrX/ANFLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBLD/FUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv8AsFWv/opa25v4axPAn/JPPDX/AGCrX/0Utbc38NDAioooqRhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAEsP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP8Aknnhr/sFWv8A6KWtub+GsTwJ/wAk88Nf9gq1/wDRS1tzfw0MCKiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUASw/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWti6ijl2eZGj4zjcoOKx/An/ACTzw1/2CrX/ANFLW3N/DQwKn2S2/wCfeL/vgUfZLb/n3i/74FTUVIyH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigB1rFHFv8uNEzjO1QM1YqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/2CrX/wBFLW3N/DWJ4E/5J54a/wCwVa/+ilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0Utbc38NYngT/AJJ54a/7BVr/AOilrYuhIdnlui9c7lJ/qKGA2iodtz/z1i/79H/4qjbc/wDPWL/v0f8A4qpGTUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUATUVDtuf+esX/AH6P/wAVRtuf+esX/fo//FUAW4f4qlqvaiQb/MdG6Y2qR/U1YqkIKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLW3N/DWJ4E/5J54a/7BVr/wCilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UtbF0jPs2yumM/dA5/MGsfwJ/yTzw1/2CrX/0Utbc38NDAqeTJ/z8y/kv/wATR5Mn/PzL+S//ABNTUVIyHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAdaoyb90rvnH3gOPyAqxUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/AIE/5J54a/7BVr/6KWtub+GsTwJ/yTzw1/2CrX/0UtbF0jPs2yumM/dA5/MGhgNoqHyZP+fmX8l/+Jo8mT/n5l/Jf/iakZNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBbh/iqWq9qjJv3Su+cfeA4/ICrFUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/wCBP+SeeGv+wVa/+ilrbm/hrE8Cf8k88Nf9gq1/9FLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBLD/ABVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWti6iWTZuLjGfuuV/kax/An/JPPDX/YKtf/RS1tzfw0MCp9mj/vS/9/W/xo+zR/3pf+/rf41NRUjIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAh+zR/3pf+/rf40fZo/wC9L/39b/GpqKAIfs0f96X/AL+t/jR9mj/vS/8Af1v8amooAh+zR/3pf+/rf40fZo/70v8A39b/ABqaigCH7NH/AHpf+/rf40fZo/70v/f1v8amooAdaxLHv2lznH3nLfzNWKih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0Utbc38NYngT/knnhr/sFWv/AKKWtub+GhgRUUUVIwooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf8AYKtf/RS1tzfw1ieBP+SeeGv+wVa/+ilrYujINnlojdc7mI/oaGA2iod1z/zyi/7+n/4mjdc/88ov+/p/+JqRk1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAE1FQ7rn/AJ5Rf9/T/wDE0brn/nlF/wB/T/8AE0ATUVDuuf8AnlF/39P/AMTRuuf+eUX/AH9P/wATQBNRUO65/wCeUX/f0/8AxNG65/55Rf8Af0//ABNAFuH+Kpar2pkO/wAxEXpjaxP9BViqQgooooAKKKKACiiigAooooAKKKKAOf8AAn/JPPDX/YKtf/RS1tzfw1ieBP8Aknnhr/sFWv8A6KWtub+GhgRUUUVIwooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS1tzfw1ieBP+SeeGv8AsFWv/opa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wACf8k88Nf9gq1/9FLW3N/DWJ4E/wCSeeGv+wVa/wDopa2LqKOXZ5kaPjONyg4oYDaKh+yW3/PvF/3wKPslt/z7xf8AfAqRk1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAE1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FAFuH+Kpar2sUcW/y40TOM7VAzViqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf8AYKtf/RS1tzfw1ieBP+SeeGv+wVa/+ilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLW3N/DWJ4E/5J54a/7BVr/wCilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UtXtWttXuPJ/sq/sbXbu8z7VZvPu6YxtlTHf1zkdMc0fAn/JPPDX/AGCrX/0UtdBQBzf9neLv+g7on/gml/8Akqj+zvF3/Qd0T/wTS/8AyVXSUUAc3/Z3i7/oO6J/4Jpf/kqj+zvF3/Qd0T/wTS//ACVXSUUAc3/Z3i7/AKDuif8Agml/+SqP7O8Xf9B3RP8AwTS//JVdJRQBzf8AZ3i7/oO6J/4Jpf8A5Ko/s7xd/wBB3RP/AATS/wDyVXSUUAc3/Z3i7/oO6J/4Jpf/AJKo/s7xd/0HdE/8E0v/AMlV0lFAHN/2d4u/6Duif+CaX/5Ko/s7xd/0HdE/8E0v/wAlV0lFAHN/2d4u/wCg7on/AIJpf/kqj+zvF3/Qd0T/AME0v/yVXSUUAc3/AGd4u/6Duif+CaX/AOSqP7O8Xf8AQd0T/wAE0v8A8lV0lFAHN/2d4u/6Duif+CaX/wCSqP7O8Xf9B3RP/BNL/wDJVdJRQBzf9neLv+g7on/gml/+SqP7O8Xf9B3RP/BNL/8AJVdJRQBzf9neLv8AoO6J/wCCaX/5Ko/s7xd/0HdE/wDBNL/8lV0lFAHN/wBneLv+g7on/gml/wDkqj+zvF3/AEHdE/8ABNL/APJVdJRQBzf9neLv+g7on/gml/8Akqj+zvF3/Qd0T/wTS/8AyVXSUUAc3/Z3i7/oO6J/4Jpf/kqj+zvF3/Qd0T/wTS//ACVXSUUAc3/Z3i7/AKDuif8Agml/+SqP7O8Xf9B3RP8AwTS//JVdJRQBzf8AZ3i7/oO6J/4Jpf8A5Ko/s7xd/wBB3RP/AATS/wDyVXSUUAc3/Z3i7/oO6J/4Jpf/AJKo/s7xd/0HdE/8E0v/AMlV0lFAHN/2d4u/6Duif+CaX/5Ko/s7xd/0HdE/8E0v/wAlV0lFAHN/2d4u/wCg7on/AIJpf/kqj+zvF3/Qd0T/AME0v/yVXSUUAc3/AGd4u/6Duif+CaX/AOSqP7O8Xf8AQd0T/wAE0v8A8lV0lFAHN/2d4u/6Duif+CaX/wCSqP7O8Xf9B3RP/BNL/wDJVdJRQBzf9neLv+g7on/gml/+SqP7O8Xf9B3RP/BNL/8AJVdJRQBzf9neLv8AoO6J/wCCaX/5Ko/s7xd/0HdE/wDBNL/8lV0lFAHN/wBneLv+g7on/gml/wDkqj+zvF3/AEHdE/8ABNL/APJVdJRQBzf9neLv+g7on/gml/8Akqj+zvF3/Qd0T/wTS/8AyVXSUUAc3/Z3i7/oO6J/4Jpf/kqj+zvF3/Qd0T/wTS//ACVXSUUAc3/Z3i7/AKDuif8Agml/+SqP7O8Xf9B3RP8AwTS//JVdJRQBzf8AZ3i7/oO6J/4Jpf8A5Ko/s7xd/wBB3RP/AATS/wDyVXSUUAc3/Z3i7/oO6J/4Jpf/AJKo/s7xd/0HdE/8E0v/AMlV0lFAHN/2d4u/6Duif+CaX/5Ko/s7xd/0HdE/8E0v/wAlV0lFAHN/2d4u/wCg7on/AIJpf/kqj+zvF3/Qd0T/AME0v/yVXSUUAc3/AGd4u/6Duif+CaX/AOSqP7O8Xf8AQd0T/wAE0v8A8lV0lFAHN/2d4u/6Duif+CaX/wCSqP7O8Xf9B3RP/BNL/wDJVdJRQBzf9neLv+g7on/gml/+SqP7O8Xf9B3RP/BNL/8AJVdJRQBzf9neLv8AoO6J/wCCaX/5Ko/s7xd/0HdE/wDBNL/8lV0lFAHN/wBneLv+g7on/gml/wDkqj+zvF3/AEHdE/8ABNL/APJVdJRQBzf9neLv+g7on/gml/8Akqj+zvF3/Qd0T/wTS/8AyVXSUUAc3/Z3i7/oO6J/4Jpf/kqj+zvF3/Qd0T/wTS//ACVXSUUAc3/Z3i7/AKDuif8Agml/+SqP7O8Xf9B3RP8AwTS//JVdJRQBzf8AZ3i7/oO6J/4Jpf8A5Ko/s7xd/wBB3RP/AATS/wDyVXSUUAc3/Z3i7/oO6J/4Jpf/AJKo/s7xd/0HdE/8E0v/AMlV0lFAHN/2d4u/6Duif+CaX/5Ko/s7xd/0HdE/8E0v/wAlV0lFAHN/2d4u/wCg7on/AIJpf/kqj+zvF3/Qd0T/AME0v/yVXSUUAc3/AGd4u/6Duif+CaX/AOSqP7O8Xf8AQd0T/wAE0v8A8lV0lFAHN/2d4u/6Duif+CaX/wCSqP7O8Xf9B3RP/BNL/wDJVdJRQBzf9neLv+g7on/gml/+SqP7O8Xf9B3RP/BNL/8AJVdJRQBzf9neLv8AoO6J/wCCaX/5Ko/s7xd/0HdE/wDBNL/8lV0lFAHN/wBneLv+g7on/gml/wDkqj+zvF3/AEHdE/8ABNL/APJVdJRQBzf9neLv+g7on/gml/8Akqj+zvF3/Qd0T/wTS/8AyVXSUUAc3/Z3i7/oO6J/4Jpf/kqj+zvF3/Qd0T/wTS//ACVXSUUAc3/Z3i7/AKDuif8Agml/+SqP7O8Xf9B3RP8AwTS//JVdJRQBzf8AZ3i7/oO6J/4Jpf8A5Ko/s7xd/wBB3RP/AATS/wDyVXSUUAc3/Z3i7/oO6J/4Jpf/AJKo/s7xd/0HdE/8E0v/AMlV0lFAHN/2d4u/6Duif+CaX/5Ko/s7xd/0HdE/8E0v/wAlV0lFAHN/2d4u/wCg7on/AIJpf/kqj+zvF3/Qd0T/AME0v/yVXSUUAc3/AGd4u/6Duif+CaX/AOSqP7O8Xf8AQd0T/wAE0v8A8lV0lFAHN/2d4u/6Duif+CaX/wCSqP7O8Xf9B3RP/BNL/wDJVdJRQBzf9neLv+g7on/gml/+SqP7O8Xf9B3RP/BNL/8AJVdJRQBzf9neLv8AoO6J/wCCaX/5Ko/s7xd/0HdE/wDBNL/8lV0lFAHN/wBneLv+g7on/gml/wDkqj+zvF3/AEHdE/8ABNL/APJVdJRQBzf9neLv+g7on/gml/8Akqj+zvF3/Qd0T/wTS/8AyVXSUUAc3/Z3i7/oO6J/4Jpf/kqj+zvF3/Qd0T/wTS//ACVXSUUAc3/Z3i7/AKDuif8Agml/+SqP7O8Xf9B3RP8AwTS//JVdJRQBzf8AZ3i7/oO6J/4Jpf8A5Ko/s7xd/wBB3RP/AATS/wDyVXSUUAZuk22r2/nf2rf2N1u2+X9ls3g29c53Svnt6YweueNKiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA//2Q==)

Directors’ report continued

Table 3: Mitchells & Butlers’ carbon reporting disclosure

Assessment parameters

Assessment year FY 2025

Consolidation approach Financial control

Boundary summary All bars and restaurants either owned or under operational control during FY 2025 were included.

Scope General classifications of greenhouse gas emissions scopes based on the GHG protocol and ISO14064-1:2006 within

the context of the Group’s operations are as follows:

Scope 1 – direct greenhouse gas emissions from sources that are owned or controlled by the Group, e.g., fuel combustion

of varying types, occurs during kitchen activity and to generate heating and domestic hot water most commonly through

natural grid supplied gas, but also some LPG (Liquefied Petroleum Gas) and oil. Real fires fuelled by logs or coal are also

used to supplement customer comfort and enhance ambience.

Scope 2 – GHG emissions from the generation of purchased electricity used during kitchen activity and for lighting,

heating, and cooling as well as from company electric vehicles.

Scope 3 – indirect emissions from activities up and down the Group’s value chain but occurring from sources not owned

or controlled by the Group.

This assessment focuses on Scope 1 & 2 emissions only (Scope 3 is optional under the current regulations).

Consistency with the

financial statements

Scope 1 & 2 emissions are reported for both FY 2025 and FY 2024 on a financial year basis.

Franchise sites are excluded as they are responsible for arranging and paying for their own energy.

Alex sites in Germany are included. Emissions are based on UK-average emissions per outlet multiplied by the number

of Alex sites. These sites make up the non-UK aspect of this report.

Exclusions Scope 1 – Wood, charcoal, and kerosene are excluded because each of these amounts to less than 1% of total emissions

which falls below the materiality threshold.

Emission factor data source All carbon emission factors used are sourced from the UK Government GHG conversion factors for company reporting 2025.

Assessment methodology Environmental Reporting Guidelines: including Streamlined Energy and Carbon Reporting Guidelines March 2019.

Materiality threshold All emission types estimated to contribute >1% of total emissions are included.

Estimation  Scope 1 & 2 – Electricity and gas consumption uses a pro-rata estimate for supplies that do not have complete data in

the reporting year.

Intensity threshold Emissions are stated in tonnes CO

2

e per £m revenue. This intensity ratio puts emissions into context given the scale of the

Group’s activities and enables comparison with prior year performance.

Target Emissions during FY 2024 are provided for comparative purposes. Note the figures for FY 2024 have been re-stated, as an

update was required for the calculation of Scope 1 emissions (which represents 1% of Scope 1 emissions, and is not material).

Energy efficiency action taken

During FY 2025 we continued our deployment of local renewable energy and low carbon technology sources including our solar panel roll out, with 244 sites

now completed, allowing us to generate on-site renewable energy. We have continued to expand the roll out of the Internet of Things (IoT) solution, with 870

sites complete, which involves installing remote sensors and controllers for lighting, catering, and heating/cooling systems. In addition, across the portfolio

we have successfully removed gas as an energy source for cooking, heating and hot water in 24 sites as well as converting 100 kitchens from gas to electricity.

In addition to the technological solutions adopted we have also continued to improve our staff awareness and engagement in energy use and carbon

emissions. We have a team of energy ambassadors who work across the business, who are trained to support General Managers to investigate and resolve

issues resulting in energy exceedances and to identify opportunities for optimising energy use and reducing consumption.

Commentary

Both location- and market-based reporting methodologies are used. Scope 2 location-based emissions use UK grid average emissions. It is worth noting that

the published UK grid average emission factor for Scope 2 electricity saw a 15% reduction compared to the published factor for FY 2024 which is having a

significant influence on the Scope 2 location-based emissions reduction. Scope 2 market-based emissions account for the electricity purchased within the UK

portfolio from REGO-backed sources which result in zero emissions.

For transparency we have reported two intensity ratios: a location-based ratio and a market-based ratio for both Scope 1 & 2 emissions.

Annual Report and Accounts 2025  Mitchells & Butlers plc78

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Global GHG emissions and energy use data for FY 2025

Current reporting period FY 2025 Comparison reporting period FY 2024

UK and

offshore

Global

(excluding UK

and offshore) Total

UK and

offshore

Global

(excluding UK

and offshore) Total

% Change

year-on-year

Scope 1 tCO

2

e

(location-based) 80,921 2,228 83,149 83,946 2,220 86,166 -4%

Scope 2 tCO

2

e

(location-based) 54,716 1,562 56,278 64,927 1,780 66,707 -16%

Total Scope 1 & 2 emissions tCO

2

e

(location-based) 135,637 3,790 139,427 148,873 4,000 152,873 -9%

Total Scope 1 & 2 emissions tCO

2

e

(market-based) 80,970 3,790 84,760 83,980 4,000 87,980 -4%

Energy Consumption used to calculate

the above emissions: kWh 706,610,850 19,884,920 726,495,770 716,909,464 19,454,275 736,363,739 -1%

Intensity Ratio: tCO

2

e/turnover (£m)

– (location-based)

a

– – 51 – – 59 -14%

Intensity Ratio: tCO

2

e/turnover (£m)

– (market-based)

a

– – 31 – – 34 -9%

a. Intensity ratios based on the turnover for FY 2024 of £2,610m and for FY 2025 of £2,711m.

Disclosure of information to auditor

Having made the requisite enquiries, so far as the Directors are aware, specifically those who are a Director at the date of approval of the Annual Report, there

is no relevant audit information (as defined by Section 418(3) of the Companies Act 2006) of which the Company’s auditor is unaware and each Director has

taken all steps that ought to have been taken to make themselves aware of any relevant audit information and to establish that the Company’s auditor is aware

of that information.

This report, which includes the Strategic Report, has been approved by the Board and is signed on its behalf.

Andrew Freeman

Group General Counsel and Company Secretary

27 November 2025

Mitchells & Butlers plc  Annual Report and Accounts 2025

79

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Statement of Directors’ responsibilities in respect of the

Annual Report and Accounts

The Directors are responsible for preparing

the Annual Report and Accounts and the Group

and parent Company financial statements in

accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and parent Company

financial statements for each financial period. Under that law they are

required to prepare the Group financial statements in accordance with

UK-adopted international accounting standards and applicable law and have

elected to prepare the parent Company financial statements in accordance

with UK accounting standards and applicable law, including FRS 101

Reduced Disclosure Framework.

Under company law the Directors must not approve the financial statements

unless they are satisfied that they give a true and fair view of the state of

affairs of the Group and parent Company and of the Group’s profit or loss for

that period. In preparing each of the Group and parent Company financial

statements, the Directors are required to:

•  select suitable accounting policies and then apply them consistently;

•  make judgements and estimates that are reasonable, relevant and reliable;

•  for the Group financial statements, state whether they have been

prepared in accordance with UK-adopted international accounting

standards;

•  for the parent Company financial statements, state whether applicable

UK accounting standards have been followed, subject to any material

departures disclosed and explained in the parent Company financial

statements;

•  assess the Group and parent Company’s ability to continue as a going

concern, disclosing, as applicable, matters related to going concern; and

•  use the going concern basis of accounting unless they either intend to

liquidate the Group or the parent Company or to cease operations, or have

no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that

are sufficient to show and explain the parent Company’s transactions and

disclose with reasonable accuracy at any time the financial position of the

parent Company and enable them to ensure that its financial statements

comply with the Companies Act 2006. They are responsible for such internal

control as they determine is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or

error, and have general responsibility for taking such steps as are reasonably

open to them to safeguard the assets of the Group and to prevent and detect

fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible

for preparing a Strategic Report, Directors’ report, Report on Directors’

remuneration and Corporate Governance Statement that comply with that

law and those regulations.

The Directors are responsible for the maintenance and integrity of the

corporate and financial information included on the Company’s website.

Legislation in the UK governing the preparation and dissemination of

financial statements may differ from legislation in other jurisdictions.

In accordance with Disclosure Guidance and Transparency Rule (‘DTR’)

4.1.16R, the financial statements will form part of the annual financial report

prepared under DTR 4.1.17R and 4.1.18R. The auditor’s report on these

financial statements provides no assurance over whether the annual financial

report has been prepared in accordance with those requirements.

Responsibility statement of the Directors in respect of the

annual financial report

We confirm that to the best of our knowledge:

•  the financial statements, prepared in accordance with the applicable set

of accounting standards, give a true and fair view of the assets, liabilities,

financial position and profit or loss of the Company and the undertakings

included in the consolidation taken as a whole; and

•  the Strategic Report includes a fair review of the development and

performance of the business and the position of the issuer and the

undertakings included in the consolidation taken as a whole, together

with a description of the principal risks and uncertainties that they face.

We consider the Annual Report and Accounts, taken as a whole, is fair,

balanced and understandable and provides the information necessary for

shareholders to assess the Group’s position and performance, business

model and strategy.

Tim Jones

Chief Financial Officer

27 November 2025

Annual Report and Accounts 2025  Mitchells & Butlers plc80

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAXvBG4DASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD2D/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36K5/qmH/kX3I6PrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/Jfeynp2l2ek27QWMPlRM5cruLc4AzyT6CrlFFbxioq0VZGMpSk+aTuwrHvfCXhvU7yS8v/D+lXV1JjfNPZRu7YGBliMngAfhWxRTJOf8A+EE8H/8AQqaH/wCC6H/4mj/hBPB//QqaH/4Lof8A4mugooA5/wD4QTwf/wBCpof/AILof/iaP+EE8H/9Cpof/guh/wDia6CigDn/APhBPB//AEKmh/8Aguh/+Jo/4QTwf/0Kmh/+C6H/AOJroKKAOf8A+EE8H/8AQqaH/wCC6H/4mj/hBPB//QqaH/4Lof8A4mugooA5/wD4QTwf/wBCpof/AILof/iaP+EE8H/9Cpof/guh/wDia6CigDn/APhBPB//AEKmh/8Aguh/+Jo/4QTwf/0Kmh/+C6H/AOJroKKAOf8A+EE8H/8AQqaH/wCC6H/4mj/hBPB//QqaH/4Lof8A4mugooA5/wD4QTwf/wBCpof/AILof/iaP+EE8H/9Cpof/guh/wDia6CigDn/APhBPB//AEKmh/8Aguh/+Jo/4QTwf/0Kmh/+C6H/AOJroKKAKem6TpujW7W+l6faWMDOXaO1hWJS2AMkKAM4AGfYVcoooAKw5/BfhW6uJbi48NaNNPK5eSSSwiZnYnJJJXJJPOa3KKAOf/4QTwf/ANCpof8A4Lof/iaP+EE8H/8AQqaH/wCC6H/4mugooA5//hBPB/8A0Kmh/wDguh/+Jo/4QTwf/wBCpof/AILof/ia6CigDn/+EE8H/wDQqaH/AOC6H/4mj/hBPB//AEKmh/8Aguh/+JroKKAOf/4QTwf/ANCpof8A4Lof/iaP+EE8H/8AQqaH/wCC6H/4mugooA5//hBPB/8A0Kmh/wDguh/+Jo/4QTwf/wBCpof/AILof/ia6CigDn/+EE8H/wDQqaH/AOC6H/4mj/hBPB//AEKmh/8Aguh/+JroKKAOf/4QTwf/ANCpof8A4Lof/iaP+EE8H/8AQqaH/wCC6H/4mugooA5//hBPB/8A0Kmh/wDguh/+Jo/4QTwf/wBCpof/AILof/ia6CigDn/+EE8H/wDQqaH/AOC6H/4mj/hBPB//AEKmh/8Aguh/+JroKKAKem6TpujW7W+l6faWMDOXaO1hWJS2AMkKAM4AGfYVcoooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKK4P4teNdS8CeFbXVNLhtZZ5b1LdluUZl2lHbICsDnKDv60Ad5RRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/wDsKx/+ipa9grx/9o7/AJJ5p/8A2FY//RUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/AO0d/wAk80//ALCsf/oqWvYK8f8A2jv+Seaf/wBhWP8A9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/ALR3/JPNP/7Csf8A6Klr2CvH/wBo7/knmn/9hWP/ANFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/wD7Csf/AKKlr2CvH/2jv+Seaf8A9hWP/wBFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/8A7Csf/oqWvYK8f/aO/wCSeaf/ANhWP/0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/wDtHf8AJPNP/wCwrH/6Klr2CvH/ANo7/knmn/8AYVj/APRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/wC0d/yTzT/+wrH/AOipa9grx/8AaO/5J5p//YVj/wDRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP8A+wrH/wCipa9grx/9o7/knmn/APYVj/8ARUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUV4J8XvEGtab43+z2GsahaQfZY28uC5eNcknnAOM0m7Ae90V8kHxf4oH/Myav/AOB0v/xVJ/wmHif/AKGTV/8AwOl/+Kqecdj64or5H/4TDxR/0Mer/wDgdL/8VU0Hi3xO7D/io9X/APA2X/4qmpXE9D6yor5ysfEXiB0Xdrmpsfe7kP8AWtA69rgX/kM6h/4FP/jWnKTzHvtFfNWo+J/EEZ+TXdTX6Xcg/rWPN4u8SgceIdWH/b7J/wDFVlKdi0rn1bRXyQ3jDxP/ANDHq/8A4HS//FU0eMPFB/5mTWP/AAOl/wDiqOcGj65or5H/AOEv8Uf9DHrH/gdL/wDFUf8ACYeJ+P8AipNY/wDA6X/4qjnCx9cUV8jHxh4n/wChk1j/AMDpf/iqhk8ZeKQOPEmsf+B0v/xVNSuI+v6K+Oj4z8Vf9DNrP/gfL/8AFVLB4y8Us/PibWce9/L/APFVS1Ic7H2BRXzDZ+KPETKu7XtUb63kh/rWqniTXtv/ACGtS/8AAp/8avkEqiZ9E0V8033ijxAkR267qan2u5B/Wsg+LvEvGPEOrf8AgbJ/8VUPRmi1R9W0V8sr4s8SY/5GDVT/ANvsn+NSDxX4ix/yH9V/8DJP8aAPqKivlebxb4kA48QaqP8At9k/xqr/AMJd4m5/4qLV/wDwNk/+KqHOw0rn1lRXycni/wASn/mYtX/8DZP/AIqlPi7xMP8AmYtX/wDA2T/4qnzA0fWFFfJh8X+Jg3/Ix6v/AOBsn/xVIPGHibOP+Ej1f/wOk/8AiqadxH1pRXygvi7xMT/yMOrH/t9k/wDiqnHizxJtH/FQat7/AOmyf40xXPqiivloeK/Ef/Qwar/4GSf40DxX4jz/AMjBq2B/0+Sf/FU7C5j6lor5otvFevSJhta1MuBkf6bJz+tadr4k1wj5tZ1A/W6c/wBa5K2KVPdHXTw7n1PoSivEoNf1cqM6pen63D/41eTW9UK/8hK8/wC/7f41xPN4L7LN1l8v5j1+ivI/7b1P/oI3f/f9v8aQ63qf/QSu/wDv+3+NT/bMP5WP+zpfzHrtFePNrmqA/wDISvP+/wC3+NRNruq/9BO9/wC/7f40f2xD+Vh/Z0v5j2aivFG17Vu2q3v/AIEP/jUZ1/WMf8hW+/8AAh/8apZvB/ZYv7Pl/Me30V4b/wAJBrGP+Qtff+BD/wCNVp/EWtL01i//AAuX/wAatZpB/ZYngJLqe90V80X3inX0J267qY+l3J/jXOXXjPxOs2F8R6uB7X0n/wAVXZSxCqbI5qtF092fXVFfJEfjLxOQM+I9X/8AA6T/AOKq3F4t8StjPiHVv/A2T/4qugxPqyivlg+K/EmP+Rh1X/wNk/xqo/i7xOG/5GLV/wDwNk/+KqXKw7H1lRXyLJ4y8UDOPEmr9f8An+l/+KqM+M/FP/Qyax/4HS//ABVHMI+vqK+QP+E08Uj/AJmXWP8AwOl/+KpjeNvFA6eJdY/8Dpf/AIqncVz7Cor4+Xxr4pLAf8JLrB/7fpf/AIqtWz8XeJWUbvEOrHPreyH/ANmppXE5WPqyivmmHxR4gYDOu6n+N3J/jUr+Jtf28a5qX/gXJ/jVcoKVz6Ror5YvvFniRD8viDVR9LyQf1rHm8Z+KFJx4l1gf9v0v/xVRco+v6K+ND458VZ/5GbWf/A+X/4qj/hOfFX/AEM2s/8AgfL/APFUXFc+y6K+NR458Vf9DNrP/gfL/wDFVYt/GvilmGfEusHn/n+l/wDiqE7hc+wqK+Wrbxb4jYDPiDVD9byT/GtGPxP4gIydd1L/AMC5P8avlJ5z6Uor5om8UeIVTjXdTBz2u5P8aw7rxh4mWRgPEWrgD0vZP/iql6FJ3PrOivjiXxt4qGceJtZH/b/L/wDFVB/wnPiz/oZ9a/8AA+X/AOKoWoXPs6ivjD/hOfFn/Qz61/4Hy/8AxVSxeN/FZPPifWf/AAPl/wDiqdhcyPsqivk2z8YeJnUbvEWrH63sn/xVakXivxEVGde1Qn/r7k/xp8oudH09RXzLJ4p8Q7eNe1P/AMC5P8aybzxf4mVvl8RasPpeyD/2ak1Yalc+sKK+PZPGnioHjxLrH/gdL/8AFVCPGvivJ/4qbWf/AAPl/wDiqRR9kUV8cDxr4q/6GbWf/A+X/wCKqaPxp4p7+JdY/wDA6X/4qgnmPsGivlO08XeJWXnxDqx573kn+NaKeKfEJHOvan/4Fyf41XKT7RH03RXzLJ4p8QheNe1P/wAC5P8AGsq88XeJVYbfEWrD6Xsn+NJqxSlc+r6K+R/+Ew8Uf9DJq/8A4HS//FUDxh4o/wChk1f/AMDpP/iqjmKPriivkn/hMPE//Qx6v/4Gyf8AxVMbxj4oz/yMesf+B0v/AMVRzDsfXNFfJKeMPE5/5mPV/wDwNk/+Kqwni7xMf+Zi1b/wNk/xo5gPq6ivlhPFniTHPiDVf/AyT/GnnxX4k/6GDVf/AAMk/wAadxH1JRXyu/izxL28Qat/4GSf41G3i3xMB/yMOrf+Bsn+NLmA+rKK+TW8X+J/+hi1f/wNk/xqJvGXicf8zHq//gbJ/wDFUucdj63or5Dbxl4pz/yMmsf+B0v/AMVUZ8Z+Kf8AoZdY/wDA6X/4qjnCx9gUV8gDxn4p4/4qXWP/AAOl/wDiqkHjLxSf+Zk1f/wOk/8AiqfMOx9d0V8jjxj4o/6GPV//AANk/wDiqQ+MfFGf+Rk1f/wOk/8AiqXOKx9c0V8iHxj4px/yMmsf+B0v/wAVUZ8Z+Kf+hl1j/wADpf8A4qnzBY+v6K+RLfxf4pd8HxJrB/7fpf8A4quk03xL4jfG/XtUb/eu5D/WpdRIuFNyPpeivCrfXdcI51e/P1uH/wAa0Itb1jvql4frM3+NS6y7Gqw0n1PZaK8kXWtVx/yErv8A7+t/jTxreqf9BG6/7+ml7ddg+rPuesUV5G+u6qD/AMhG6/7+moW8QasP+Yldf9/j/jR7ddhfV33PYqK8YbxDq+P+Qnd/9/m/xqF/EWsdtUvB/wBtm/xp+2XYXsH3PbaK8Em8Sa2Omr3w+lw3+NZ8vijXgONa1Af9vL/40e2XYXsX3Pouivmw+K/EH/Qc1H/wKf8AxpP+Eq8Qf9BzUv8AwKf/ABo9suwvZM+lKK+aj4r8QY/5Dmpf+BT/AONM/wCEr8Qn/mO6l/4FP/jR7Vdg9kz6Yor5p/4SrxDj/kO6l/4FP/jUbeLPEP8A0HdT/wDAt/8AGj2y7B7Jn01RXzD/AMJZ4i/6D2p/+Bcn+NB8W+Iv+g9qf/gXJ/jT9quwey8z6eor5dbxd4jH/Mf1P/wLk/xqM+L/ABJ/0H9U/wDAyT/Gj2qF7M+pqK+Wh4u8Sf8AQf1T/wADJP8AGj/hLvEn/Qf1T/wMk/xp+0QezPqWvH/2jv8Aknmn/wDYVj/9FS11Hwp1C81LwcZ767nupvtTr5k0hdsALxk1y/7R3/JPNP8A+wrH/wCipatO6uQ1ZnsFFFFMQUUUUAFFFFABRRRQAUUUUAFfOfxrIHj/AJ/59I/5tX0ZXzb8b2x8Qf8Atzi/m1TLYDgNymkyM1AHo3+9RYLk+farlmuWH1rMWTnrWrpvzsPrVRWopPQ67T4v3a1oOnyciorFP3a5x0FXJU+Q1uZJnK6tw1Yc3atvWfvisKZgD1rlnudMdis9MzzTZHAPWovM96EJlgtyKTdxUAk560eZ707CJi2Rion4OO1NL571Gz+9UkSwPpU9uuXAFV881fsFzIDWkdzGR0unwHy1z6Vr+QRHxVaxXCL06VqAfJ+FaMmJzupDEfNYpPIrf1dQIyawO4rCW50x2LC9BUyjiolqQdMU+givP0qqfrVm4quQT0rJ7msVoEY5pW5pI+nNOPFCYmRmmjl6c3NJEFaXDHAPA9jVogmTgfzqwOAM/nUABVipHIqdCcYHX0NaIkcDTurFfWpbYBpBugZgc8irVvYPOSY7eZQDz1Of0ockkNQbegy0UCRAWYnPIArXgUZ+VuO3HWiLSJw25lKkDjehJPHY1PHZsg6P8vqK8nFNS2PVoRaWpdgYqOTxWhG/yis5UYAdBnrmraIxjXOQa8ScGd6ZaD0heq/mnBzwRTNxPU1lyMq5OXpjv39RUeeDzTXyVFPlC4jtTC3yD60jnIB7Hioi52gGtIoTHZ4NVLhsVPu4qpOcitYoiRhag3LVy14/74/Wul1A9a5i6GZvxr2sIeXiizCc4rRgGRWfboQozWnAvy16N9DjSJGHFUpOHNXnGBVGX7xrKRZRnYAmq3mc96muOCarVcVoYy3FZ81Gz4pzdKiY4q7CJI5Pmrb08/LnmsGIZaug08fIKuKJkbtsPlqxIpMZplsnyCp5F+TpQwRz+oVgXXWuj1Fck4GK527HWsHuaPYzGJ3H60LmnOpLUAYqkjMUZq5bffAqrjvVyzX94KtITZ0NmpwOe1asY+Ss20XpWvEvy1ZKK84+Sufu+ZGro7hcJXO3Y/eNWc2axMeYcmqpXmrk45NVuKIiYzFTQLzTAM1NCMNirINm0HAxWvCMYrMswMDiteFcqKolbiyD5Kxb0fNW5KPlrEv1+as5GsTIl+9UP8VTzdarjr1qCx9SxctUWaki5amS0bdl9ytRBwKy7H7ta0fIFa9DLqJJ9w1j3v3xWzL901jXgy4rOZpBFXFOAoUY61IAMVkajcVGy81PjkVGw5qRhGvNWYxzUSDvViMc1SETKKkI5HFIgqQiqEV3HNQspNWXFQuKGgRWYYzVdhxVlxyahfgYqCys3UimmpGFMYUgEA6U9etN7VIlAD1oIAPSlXk0pHNAETDnNRFcGp3FRGgRbsUBc5rrNNjAxXMafjfzXWabjArOodlDY3rZBgcVoRJ7VTtugrShXmsWdSHhMCmNwKshKhlXFTsOxSlbFVJJMCprg4BrNnlwKZMkSPNz1qIy5HWqck59aiM5x1qjBk078Gs+ZutTSTbqpSydapEsjL80buKiJ5o3dqCSRmpu7FRFuaXdTES7u1Rs2aYWppahAKWxSFqiZhTdw9aokexyaZnmjPvTc0ASA0E8U1TzSk0CPf8A4N/8iMf+vuT+S1gftHf8k80//sKx/wDoqWt/4N/8iMf+vuT+S1gftHf8k80//sKx/wDoqWuiOyMJbnsFFFFUIKKKKACiiigAooooAKKKKACvmj45tj4iY/6c4v5tX0vXzR8dIy3xD3Dp9ji/m1AM8z30nmZ70NE3pTPKYZ60WRDuSB/etzSGGRzzmsDY3TFbGlNscAjBqopEy2PRLE5iT6Vcnb93j2rKsJf3SZParlxLlODVsmJzWst+8rAnPNbeqHdJWHcDmuWW50rYoTGqpbB61NMSM1TY1aWhD3Jd3vS78DrVfNJmqSC5Z8wEUmcmoA2PfNSLjrTJZMOK1NO6rmsgGtOxYh1qkZyO3suVX6VpZwv4Vk2THy1PfFaLv8nWrZMTG1c/IfWsInmtrVWJWsX+KuaXxHTHYmXpUo6VEvTjmplViMBSTjPSq6CK8mBkn8qrtIT1Y/0q3JazO+AF9eWFSWeli8kMazlmz/yyjLgD68CsZM2imZ8RJ6Fs+5qztjEQaeTr90D7x/8ArVtxaBZWsrC4vo1OPuuwBP8AwEc1ZSw0uKNmW7uWYfeEKrkj6dfzxUuSK5Gcu0bAjDoFPICjJpYlSViDOgPT5o+fwxmunjSzEfmQmYA958uD/wB8dK07a0i25L2e/bu5h28fQ/MaftEg9k2c7ZaX5iAy/vI+vCbdv4n/AArWbT9Ks4/MmjaSYr8qq2PxJJ6e9btrpKkLJ51upYHaEgIJz7H+v502bSxFMSYhOeodkBAI7HB9/T8aj2lzVUrFazBUCeKJYIsDbtQEsfqef0q1te6bMLyMwyVVMgN7Enmnrcwoy+WzPKoxjaQqntgYq9YaddmXM5BTJOWG0/kPb+VZSfU3hHoitp67vLMtvJG0g9S34HOMVeaCMfvCuzbw3y9gcH61qW1jHGRud2bq2SSCfpVv7PGUYBF564GM1hKzN1BmAdNVyAgBQ4II4xUZtXjgOBwuc47c10X2fCgKOFAwM02ZAcnaBkYIxWLpplq5ys0O/wCbaASN3HSqboQqlRnP866p7WLYMnDDBx6+1ZsloGJCp8inAI64rN0i9TFxnB2nkdameMqOTg55q8bJVjdNzD5AoPvTZbUsAAQdwA/HBFZSpFIzmQ+S4PUGq0i4wex5rWELEmMr2Izj/Peqc8CYA3fdqFATZRPSqc5rRZGAO1c1nXAwDkjJ9etXGJDZz9+DuJ61z82EuNx656V014qZI3kYGRgcGueuYH37lIcZ7da9bCnnYkmiYHBNaERGBisyHoAeD6VowdK7zjRM/v8AhVCXqavOeKoTHax9KyZZnziqpqe4bGapGQ5rWOxhJ6jmPoahY0pk5qPJ3VYrli35fFdPpkRZF4rm7FN0uPeu30qHEK96pESZqW1udlSzxYjOau26DaOKW4QeWamRUTjtRGGxXPXXU10urpiXk9RXNXQwTWPU1exmt1pKVuvFJ05rUxuKpzV+yH70VnrxWppy5kH1poDpbOPIFbEUfye1UbOPGBWzFH8gqmxIzLtPkrmrvlzXXX0fy1yV5xI1ZTZtExrg8mqpqe5PzVWzzVRJe4o61ZgGTVXp3q5ZjLYqzNm/ZR/IMc1rwRcVU0+L92MitqKIYp3J6lOZPkrBvx81dRcx4WuZ1FfnrORrExZl5NVsc1bmGDVU9TUopi4NTQ1GBUsIqiXsbdiPlFakY4xWdZLmMVqxJwK06GfUZIPlrHvB+8Fbky/LWLeLmQfSsqjNoFdRnrTgKRRingVkaDcGo26mp8VCwwaQx8dWYxzVeOrUY4qkSywg44qQj2pEXAp2PWrJIX5NQyDip2HJqF+lDBMrOKrvVl6rOKhlogI5phqQ0w9aQxAKkWmCnr0pMCQClpF604DrQBG4qMj0qV6iNMC3ZN8xrrNMkHFcbbtteum0qUHFZzR0UZWOytTkCtS3GTWLaPwK2LVvmrI7Ey8RgVXmGVNW8ZXNVpe4pSRSZj3gwDWFcvgmugvVyDXOXnDGpLaujPll5NRCSmTsQTUKvk1aOecS0ZOKgkanZyKay5FMyaICaM0EEGkpkATScGikNBIjHFMZiaUmo2bFUguNZuTTCxz1oY000CH5zS0wU9VpgPFHanbcik2mpEfQHwb/AORGP/X3J/JawP2jv+Seaf8A9hWP/wBFS1v/AAb48DH/AK+5P5LWB+0d/wAk80//ALCsf/oqWumOyMZbnsFFFFUSFFFFABRRRQAUUUUAFFFFABXzx8aIfM8eZ/6dI/5tX0PXz98Ysf8ACdf9usf82qJuyKgrs80Nsc9OKYbb2q+MHvR1PSsedmvs0Z32arVnDtkBqbbn0p8Y2mrVQTpI6C2kwigHtViSb5SM1kwz8DPapJLjjrV+1M/ZFS/OWFZM8eW9q05HDscnioXQMaxc9TVQ0MOW3NVmtjnpXQGIZqNrcHtVKqS6bOeNu3YGkEBHbNbxtgelRm29qtVEQ4GKYiO3NAjIHQ1sG2z2pn2f2qlNEuBmKvNaFp8rCl8jHarFvF8w4rSLRnKLOksmIRee1aBcbeayrdsAVaMvy1bZnFMqaoRs4zWSis74Ck/hWnfNvg3gj5Tzx0rLLkkD3rCT1OmOxpQ2kYw1xOI19mBP5da0YX0lFEOy8uz2RW2r+WKx4Ig6mR38uIEAt1J9gO5qwJ2nQxW6iKAcnnk+7Hufapeo0zRl8qNFMtvbWyA58pP3khHpzkLVNtfupneO3hSGHoqoPmPuWOfyFQJDbbx5wuJj/CkTYJB79Diujs9CeS0MuoLHplmyjMTtm5nH55A9jWMrLc2jd7GLDePFMGe5lL45jUbyx9NvX8W/KrcM8t3KrCKJT0UuuHAHog7/AIVsw2mlQ2zJbWbpCDn5yDu+q9vx/StXRrO6v32WyGC0AAZk/dr9BtALfnWfMuxoosybLT7qRUVBeOz8FkACp7kHoa6Sw0L7PFukLO3UtL978+o/Cuot4oLKFY4lGQMFjVG4cySbfMbj+ENjNZSmdEKZnSQQqHEaIzNwcx5zUEdjJLGEbdEnHAOCP8itpLdQM8nPIyaSQ7OchfUms3JnRGkRQ2UMOSkCB2HLBQM1Y2Ko5bFMjkZ+AuB2z396eITktt3OegzxUN3NuWxIAODmnAlvQCnRwNtDOuW9M8CpOBwx5pCIvk64b6E1E6q2Pm4qyQewqIqO9MOUrsFXaTg4NVJUyxwMA+lXpEVlO2qcoI6UhpFJoAB82cZ+ppvkYYN83HepmbPfBHXFR7889/rUlIYknl5EoyCc59KclnFdRZjlCsT3bH0qOZw4O7jFUPNZHZ4zlQegNK6IlTvsXJNLdckoXK9+1VLiwkf70Ix0rTsL+baAHDIw53dq11jtbuIusQJxxk96tQT1RhJuO55dq2gzxZmhiDjBHAOV/LrXD30E0E4cpIpH3m/xr3W8tmQkbB9McVh6lpUGoIRcRkOPuvtwQfY961pVfZvUwqUvaLQ8uhbzo8qoLD7yH+Ieo96tIFwGUnB7H+Gr2peHzazEtH5frImdvtx71VjGGOfmDKecdDXpRqKSujglCUXZjXPFUZSc8mr0nAOKoTc5qWPoZdyfvVRar1yBzVJutbx2OeRGOvNL3pSOKFU5qiLmjpiAyV3elIPISuH0ziSu60riFRQiJG/br8g4pblR5RpYPuikujiNh3pMuJx+tD94v0rmLoZY4rpdYO6QA1zlz1NYrc2exlsOabUrDk1Ga1MRFGa2tMTMiisYetbulffQ00wZ19mgGOK1kX5RWbaEACtSM/KKGJIoX6/JXG3v+sb612l8eD9K429++31rJo2iYVyPmNVDxV64HzZqsVzWkSGRDpWjYKC2aoYx2rQ0/wC9VEM7CxQbFrZhUYFZFifkWtqL7ooYkiO6QeWTXJ6mMSnmuuuSPLNcjqhzLn1qJM1gYk/U1V4zVqfqaq9zREbHDpViAdKrrVu1GWxTRLN+wjJQVsJHgDiqunRfugcVspFx0q7kdTOnTisK8XEoFdTcRfIeK5rUFxOOKyqGsCnTgOaSlrE1QE81A/Jqc1A3DUxksfarUQqslW4hxVIhlqIU9unvSRcCnEVoiGQOKhfpU71C/ShjRWcVWfrVl+TVeU881my0V2HNRkVKaY1IY3FPUU0808UmA8U8Ui9KXFICNqYRUpqJqoQJ1rX0yba4FZC9Kv2Z+dcUmVF2Z3dhNlBW3bSfMOa5XT3wo5retZPmrGSsd8Hc6JJP3dVpWyajST5aGOaTdzSKKl2Mqa5q+HzGuluuhrnb7qahm0UYNx1NVl+9Vu4XJNVlXmmiZRJk5qQLRGuasonHSmYSiU5Y8cgVAVrUeLKmqbxkU7mUolUjFRseasOvFVpKdyLEbNioXanMc1DzmqRLHZzSgGkUYqUCgkFHtUqr3pFFShaBgo6il28H1p6jnNPx/kUgse7fB4Y8EH/r7k/ktc9+0d/yTzT/APsKx/8AoqWuj+EX/IlH/r6k/ktc5+0d/wAk80//ALCsf/oqWumPwowl8TPYKKKKokKKKKACiiigAooooAKKKKACvnT41TbPH23/AKdI/wCbV9F180fHNiPiJj/pzi/m1TJXViouzOIFzxnIp63XPWsnzDmgTHPNZOmaqZsi54pwufSsZZySRzUqSknFTyD5zZW6xTxOWWs6IEkVcVMDNDgwU0SB89acGx9Kgbg1G0pX6Vm4stMubhml4xWd9qxS/aj/AHqFFjui9gUFRVMXWOpp/wBp96dmLQsbfamlQe1Ri5GKXzgaabFZBsHehRtNNMgppkANXGRLimaUUvHWnNOMdazPtG3vSG4LfStecy5EmW57gbgozt/iHrVQjEu0EZzxz1FJu7qjH3PSrtvM8UTERqZBwgVecfWobdyrEltZ3N5KqRRt5a8ZIwAO5rZFtptnEP7Suy67vlgtxkk+5PFY8l67RAtI6fw8kkVZs9Ourh/M8h5DwVEYORnpjtSkxJam0mvR6db+bY2C2Yc4VtwaVx3JcjgewxWRbyarql0xR5SC2cK2Nx7ZbOTVh9FllnLalcwWwLbUt925wOgAAya9A0LQ7a2iRljZcKNpYDIHoKxk0jeN3oZui+E/OxNdncsZyVLHZn/a7sfbpXdWsCJEtvCu1B0AHSoI+VSGNQQOgHatJ2+yQY/jPXnmsmzeMSlfyGEeWgCsOCetVQuxQzEsW7dzTwmSzOCSex70xnKDPUnjjsKybOyEbDPOwSuOAOT2FRh1cb8EDPBIqQ4YbSQM+lLHGOwJx3zWbubpCwRgjcGJDdjVtPl4OfwphYoBgY/pTlDE5LcU0SyYPn2puxc54Joxjnk073p2ERkMeAcVG6kcfnU3qaYefxp2GVnGF4bHvUDj5eTuPqatOnBqq4wKTRRny5ywAINQEH8quykgk7SQaqSd8VDQEUuw4D/pVGaFVcsny5/KrrAkAHrVSZTnPUDrUDIo5GRvlx15rVtb7aw243D1rCJIkPYnpkU+KR43BJxmmpWJlFM7QNFfRKJFTf3IBqhdae8ZYRurqO1UrO9aLDCQg1uLIt7b55LAc4/nW2k0ckouDOZurZbuMxzrkcjB/hPr7fhXH6hpD2/neUCVJ+b3x/L+tei3FsM7gxLdnHr6Gsq8ttq+eincB+8T+8KzhUlSlYJQVRHl7/KMVSl64rqNf0xIm+1WwJRvvL6e9czKrYPHQV6cJqaujzakHB2ZlXH8VUypzV246H1qrj2rqjsckxu3I6UBfan0tUZluw4krtdMkHlrXE2hw1dZpz4jWgTOqgfCim3T/IfWoIX4FFy/7s/SpZrE5rVDmWuduhya6DUj+8rn7rqeKyW5b2M88mmEVIQcnmkIrS5FhiitjTGwy1kqK0rE4YYoTE1odnZycCtVJAFFc/ZydK143+TrTYRG3z/KfpXI3fLN9a6a7fK9a5u76tUPc1SMW4+9VfFWZ+tVyatEMZjJ9auWfDiquPwqzbcMKq4mjrrGT5BWzFJgCuasZMBc1tQyEjrQySzdP8lcrqXMproZ3yp5rnr7mQms5msTFn6mq2OatzDk1WI5NERMBxV6yGXqkBxV6y4eqRMtjs9OUCFfpWsnSsnTW/cp9K1ozkVT2M0NuB8hrlNVH+kj6V1VwfkNctqhzcD6VlM2gUKUUmOaXuazNRDULfeqcgmoW+9SGSx81biHFVYu1W4utWiGW0GBTj0pI+lOIrVGbIXFQSVYcVBJnHFJlIqv3qtJzVph1qtJ1qGWiAiozzxUhphHNSMSnrTaevSkBIKWkWlNIBhqM96kNR1QAtX7MfMKpIKvWgwRSBbnR2TYA5rctJMnrXPWrYArZtHrKZ3UjdifgVNnNU4W+UVYDcVmdCRDcnKmufvuSa3rg5WsG970jeCMWbOTUSrk1JMfmpqdaByRPEtW414FQxrVuNadzCSDZkHiqkqYzxWkE4qCaP2oTMZIyJU9qpyqM1qzR9aoTJjt0qjFoznyKhPXNWpVwarkfN7VRmxVqUVEOKlXkUCJVGamQVElTrQNDhS4opDSYz3j4RHPgo/9fUn8lrnP2jv+Seaf/wBhWP8A9FS10fwh/wCRJP8A19SfyWuc/aO/5J5p/wD2FY//AEVLXVD4Uc0t2ewUUUVRIUUUUAFFFFABRRRQAUUUUAFfMnx3/wCSi/8AbnF/Nq+m6+ZPjv8A8lF/7cov5tTQmeZZ5ozQRzSEUWC4oLVctF3OKqhTxzWlp8f7xaaiJyNS3t844rQW2GBxT7aEYHy1e2ALRKIos565j2uazZ2wSM1rX3+uNYtyRnOa5up0J6FV35PNN80joahYjJwajLc1ry6GbkW/OPHNL57dc1T3mnZOKlxK5i4Jz61IJzjr+tUQcd6cGp8gucuifPenCQsetUg3erdsu5wKPZicy0ilvT8asx2csrEJGWOM9MY/OpYIASATtBwCR2rZKGaMJG2yEcAAY/M96bhYIzuyjFYw2qZmuGkf/nnbDJ/Fug/WtC1R9iRWmlwrKxzvucu2Dx0Jx+lU5jZ28ir5bXEncbto/Or0F1ebVMK+RGM4SMHA9yc8msJM3jqbqaTf4DtdW1hCijLYGcHvhQAOfc1oWtlpsMRea4mvmC5yuMtn/P0rDtVuLyQRAyXNzu3FQ2UQep7E+3QV2en2UEcP7tzLL0eTPyr6qtYyZrFE2nRKh81LSGEDgLtDOPYnpn2rUkVgQmcu33sdvanLGttCpI2lRgL6Va022z+8kByeRms2aJWLFpCLWLc+A3Ue9VribaWdjknoPWp76cKpCsS4HHtWTJIFyWO5u3fFRKXQ66UOo17lvMWMsSx+/joKeWHU4/Kq2TjcwAdjk/4U88lRWVzosTxx5+dgD+FTKfQfhUaZJ28gHpirCRhep/Okhi7cjmn8Dik9s/jQ3HWrRLH7dw64pdoA60mcgHFOGKpCG7fSmt1p546daYTlaYytIcE1A+Cvb8qsOOKrOrdDwKlllKUjJXHHtUDBWADZHvVp1IyOOenvTREMDI5qAZUaMjj9aruOSMitGRQeMYqiw2u3Wk0BRnjXGGG4H0qjIrR5KnOOxNac+cevPaqkieZkYwD3rNgJbzucfLzjgVo2F4LaYSg/KThgf4azY4CGBD89MetX/IZAcqNxHPvQqnKyZQUtDopZEkj81MYPUg1SkUFyuMEf54rP0yU2s5tncgEZUt0rVZVcAHGR0IrSfvrmRzJckrM5rVraSPfLbopcD5lK5yO/51wGpWQR/NT/AFb5IB6qe6n6V6pMjRsVfGOx9q5TXLFYZmkdC0MmS2OxH+I/Wnh6vK7MjEUlJXPOZoAc1XNufStueIZwMFP4TjrUHkjtXrRqHkSp6mSYSOKaYWHUVrmDnpTWt89qpTI9mUbeMhq6SxJEa1mRQYata2GFFWpkumblu3yjmnXDfIarQttFOmfKdaTkXGJh35y9YFz1NdBeDL1jXEOSahPUtoyzkGipzb0nke1U2iLEI61oWf3hVTycGrtrHhqIg0b9o2APpWtC3yc1jWw24rUib5atsSQ27Py1z90fvVuXJytYd0OtZt6lmNcH5qrn1qzODuqAjirTIaG9TVm3HIquDzVq36iqA27T7orXhPy1kWo+UVqxCmTYkk5WsW8GW6VsScLWPdffqGXEypQMnioCtW5F5NQMvbNNEshxVi2yGzUe2pYOGqhM6rTZD5YBNbUcg21zdixCjmtaOQ460EJFm4lGw1zV826fPtWzO529axLo5mz7VlM2gQUo6UmKUDFZmghqE/eqY8CoT96kMnj61bjHeqcfWrsXSrRDLcY4xTiMUkYwM0rYrVEET1BJU7jnrUEg5oYIrP1NVpBVpxxVWSoZZAfpTGqQ0w1LKQ2pFplOWpYEoFFKKT1qRjDTDTzTCKokcg6Cr1twfpVJOlWoSRjmmNG1bMMVr2bc1hWzYHNa9m/IrKaOyizehbjrVkNVCB+KshulZM7YoJm+Wsa85BNa0p+Wsi771JtEw7j79EXWif7+feiHqaByRei6VeiXOOKpwCtKFRgUjCSJVTio5YxiraJxSSR8ZqkZMxpY/aqU0IPOK2JU61Tlj4PFMyaMK4hwelUWXmt2eHPas14eelXcyaKgWpEGR0pxQ+lPRcUyLCopA6VKvFNApc0hj801myabuphakB798IDnwSf+vuT+S1zv7R3/ACTzT/8AsKx/+ipa6D4Oc+B2/wCvuT+S1z/7R3/JPNP/AOwrH/6Klrrh8KOafxM9goooqiQooooAKKKKACiiigAooooAK+ZfjsP+Li/9ucX82r6ar5l+O3/JRv8Atyi/m1NEy2PNMU0U/vTQKpiQ8VpafkSAVnjmtKwH74elC3FI6q05QVZk4Wqto3ygVZkOVqpbCjuYF9/rGNYlxgsT61tXud7c1i3HWuTqdK2MuTOT9aZUjj5zSAV0LYzYirT8Uqj1px9qRI3rSgZPSkp6daEJgBzWnYJulWs8DJrS0/iVapbkSN+KEY6VeIGwAgnjGBVaE9KnbLDaDjNOaCBCskwlYWsDOVHLIc4/wrStbK+vZV3RgkAEbyML7nP/ANeo7Kzkv5gplKxJ78sc8c9hXo+kaSkcCuIgARld3864KjszvprQr2Ogwx20aSArCACw6eYfU+x9K2IY0QK+AkKDCgDAFPcbmVWOFHX0pkrCXb/Cg6CudvU3Q3c97cBjnylPTHWtvd5Fs3Tgck/yqhaRkc7cA9Pao9SuuTEvahuyNaUeaVitczFyW3YOOp61XG4g84bGB7VGBI0zHIC44BpVAUseScYrnud6VhmHLhew7Zq0h+Vioz6Go41xudv0qeMFsnGEFKxVyaM7cEkZNS8tUaOGH3Q3oasICV9BTSIY5FAUAmnYB544pFXHOc07p2q0gEx3FKoIHNBO3GKcOeKaQiNupwaYSAADUpIAxiomC9SadguRPgdahf8AMVP8rZPUVGw4yKVikynIoxk9qi+8NwP1qxICVPy/hUW0bMYpWGROOQarSxgkmr3lgDNVpOGb0pNBczpUyD29KqsWQj5RgcNV64AUdOP1qjJIv8Q+mRWUkNMW2yHwoAUnByK2IwkLW6O4ZJAQrYOc+lY8eAo2vsJNWmuFgt/3ql4xwSq5x6fSuaotSkTatZL5e6HIZDuFWrOYXlnHKOG28/UdayJL8MJIJmIZSCG6YHbmqUF69tdb1xhuo3d61w87e6zCvC6ujp5gskZVlBPYY5rGnhjdWgm+6wIJPIrZglW6gDDOT6iqV8pBwRVzjZ3RlGV0eZahZyW97Na7QVDfl71Q2YJAPSu516xFzYNMke6SMZGF5IrhhNFl33KqgHO7t7fWu6jV54nDWp8jFC8Um3npUAuiwznj6U8Tjy91b6mFkSqAGq5EwC4rN85TViMlhxVJktI1o5aWSXctUV3AcE01pW6GhsaSC4O41RlQE1aZs1C3WkmNoreVmmeT14q3TcVVybFXyR0xViFACOKdinKdtNMTjcvRcYq6hwOtZkcmKsrJ8uabkLlJpz8tZVwmcmrsj5XiqslTcfKZU0QPNVmirTdQT0qMxCtEyeUz1hGOlTwxYYVZEYxT0THTimpicS7brhRWjGeKoQngVaVxir5ibE0v3eKybn71aDyDFUZ/maocirGdIvzVAwq6681EyCqTJaKnapYFOcU/YM9KkRcGqUiLGpZ8AVpoeKzIDhRVxXzTuJIkmztNZNz/AKzmtGVxjrWbP9/r2rGbNYqxFmnA00UorMsRvSoT96pzUJGWoAmjHNXIutVI+oq3F1q4ksup92g0icLTjWiIZE3XpUEh61O2ahcfShgiq54qu/TmrDiq0lSWiE1G3WpGFMpWHcbjmngU3vTgKhjJFBpaB0o7VIyJqaTTz1pp6VQh6VZj6VVXtVpOlMC7A1alo/zCsaE1pWzciokjpoM6GB8gVcU9KzLU5FX1PSsWehFj5DxWVd9603ORWbd9TWbN4mHcfeog6mluOppsBw2KOg2akA4BrThAI6Vn2/StOFeBQYSLca8Usi/LT4hUjLxTRkzLlSqkkec1qSR9aqyR0zNoyZo89qoyQ8k4rbkj5qrJDjtVIhoxHiwcYpmMdq0pohVVkxTM7EHQVGxxUrjioH4piEJOKQ1GWOaM+9AH0F8G/wDkRj/19yfyWsD9o7/knmn/APYVj/8ARUtb3wa/5EU/9fcn8lrB/aO/5J5p/wD2FY//AEVLXVD4Ucs/iZ7BRRRVEhRRRQAUUUUAFFFFABRRRQAV8yfHb/ko3/blF/Nq+m6+Y/jucfEb/tyi/m1NCZ5sOmKWmA0E8UyUS5FX7Bv3grL3Vo2HMgpx3FLY6u0YADNW3Py1n2Z4HNX2+5VT2JgYl2Muax5xljWzd/fNY9x941ydTrexmSL8xqOpn5JqHPOK6OhkPFLTQQD1pCetIQdaenSmL71IpGKZDJF61paeP3grNWtPT/viqiiWdBCeKv2lrJeXKwxAM7DgZ6D1qhbgNjk5J6YrtNOiSCFLO2x5r485z157ewqK1TkRpRhzM2NE0iz09U3fvJepA+7n39a6iPM3Lggdu34VnabagIqgYQdccZrWOI0woxngD0rzXJvVnoKKRSuCXO1BwKiWP5wpOf61Kck8DA6Z9TUkUPOGHTr/AIVNiizEw2A98cCsKeQvNK2f4sD39a3XBSNjzkiudl+aTngbjioqPY6sOt2SDG4gnjpT4hmQYxgVFtAAxyevJ6VPEAEJPBboKyR1CEjzQOw61OXwhUfd9O9VkUk5xwDzUitlgRzjvQFiwvCjOB3qxE2FHGRiqqjacMc55FWEUn5h9OapCZY6AYHWpFjIX5iMnpzUaqScFs/SpVVSemcVaRDbGMoKjJ574pM4PoOmTUhyBjGBUGVD4P60WBMc+CCAwqGTbgDcOak+8x+UYpjqijoMinYBkSgcDpUcmN20ipVbByx4FNnKl85GfajoO5VcZ4xxUQU57CpGZeSetQ7+CQOBSKuPfcF4waqOwXJI71M06qDgGq7SKykHqfWpAqzyBlBwOtZ7nD98HvVqYqiYPNUJ5CAPT0qGhobJnPyHpzTGupIz8yc/o1JvUDIbOeo9KZ521SWRXUcEHnNYziUmV55gYElXDHlSp5+WqyTqylB8wHQn9KY048uSNGxHklc8lT7+1VInzIwXgg5pRj1JlqjrdC1QpIIpGBXuCOhroL2386BZUILdcj9a4Czk2uG5yG4IrttIuTPbmNhuU8Z9Mf1rdq6scr0ZlucSNhea4DxNp6WN6HSDdHJzwTgMe2O9elXkYEzLja2c5FYGtWjT2jLvH90nBGfSopT5Jiqw5onmsnmzFnZkQLwAp4+mKrmbDYz0p9+ZknaAtIXXttwf/r1UwyNhwd38q9mKTR5M3ZmhbsXIrYgjO0Vmacm5gAK6SCDnkVfIZc4xIvlHFV7mLg8Vux2/y1WvLbCE+1Q0aKRzbMRVaSfB61PcDDGsu4c81MUU2WRc5PWn/aB61l78d6cJPer5CeY1BcClWXJ4zWYJDmr9qpkb2o5A5i9Fk1Z2nbxSwQcdKuCA7elJxGpGeWxnNQscjNWbiLaDxVCSQgdaixVwYjNMJqB5fm600THPerSJ5ixmnKar+dSrJk9RRYLl1JcDFSiboM8VWiUkc1YWP5elMNBzS9iaryPz1p0oxVdmyKkaBnpm7NNY+ppNwFVcTQpNOVqjzmgHFNMVi/BJx1q0swrLjJ7VYG4U+YmxbeUetVJG3NTHkIpgfPNRJlIkpc00HilqR2Bqi/iqQ9Kjz81AFiPqKtRkA9apocVYjIzVxJZfQ/KKeTVdGGKfuHrWiIYrHmoH5qUnvUTntTY0V3qtJVl6qyVBRCaYetPNMNJjEHBqRajp61DGSYo7UvUUh4pDI2FMNPYU3tTEPWrCHiqy1MpzTAtQnmtO2HIrKgYbsVs2fJFTPY3o7mvbdBV5elVLYcCrijisGelAG6Vn3YrRI4rPuulZs3iYVzwxpkB+an3feoYD8+DQUzbtucVqwise0OSK2YKEYyL8QxUpX5aZFzU+OKZiyq6cVWkjyKvstQSJ7U0Q0Zrx8mq8kdaUiD0qtIntTuQ0ZM8eKpunB6Vryx1RljABppkNGY681WlXBq7IOTVaQc00S0UnHNNqaReTxUJGKok+hPgz/wAiKf8Ar7k/ktYP7R3/ACTzT/8AsKx/+ipa3fgx/wAiIf8Ar7k/ktYX7R3/ACTzT/8AsKx/+ipa6YfCjln8TPYKKKKokKKKKACiiigAooooAKKKKACvmL47/wDJSP8Atyi/m1fTtfMPx5P/ABcc/wDXlF/NqaBnmlKaaGxSk02TYO9aWnj5xWaDzxWlp/Mgpx3JkjprPtV9s7fwqhZnJFXnPyH6Vc9giY9yPnase4+8a17o/MTWNOfmNca3OnoZ0h5PNQknPAzT5j8x9Ki3VuZNCn1o60maUdqlsB6+9SqKYBmpUFUmSx4HStGwGJM1RXsK0LIfNitIszkb1tJsdXC5xzXe+GbMsi3EqAvKTtOB07t/SvP4EY9FzjuRXqfhwk2SyPtOFCoF4CiuXGO0Tpwi946aEBEUdz0UelFwxchV/SqsEhYmQnJxgVODk4PXqa4UdrBEG/pyO9WQAqElQBTVXDbQMnr9Kft3/N2/nVpCTKtwwSDLfMzdB6VgZy5XOfetu9JMLnj/AOtXOsdoynJzXPV3O7D7FpQQVOM5PzfSp3lycKcrnAxVdCS0a9CBmpCq8EEhvQfWszoHKdhCAfWp487goGBnkjvUCpjcR2qRCwDc8jjPpTC5Zh+U5z+dW48YJzVOJQvGc/WrKOBwB+NaRIZN3BHepV647CoRMM+9SLJ8ueKtWIdyZSDjI9qilQYZh2pPtKEnGc9gBTGlLgjaap2JV7jEOxhkdeaRwGY0xmYOGC4AqFpZNxITH9anYuxMFxkVBJ/rCQuRTWuJVz8mCaq/aX80A5pXQ0mWZc7MgYqsJCme4NSSy4HQ56GoCwC4xwTQxoS4fBHy7V9qqs4LE4z6VNNLuG3HSoEZSevPpUFWK0qh1JK9OMYqpJBu5A6DFa0pCnOAc9qoM3zHJABNFgMS6gkRSFwx68HBFZzSyxD52PP8JrduEUuSD71QnZUJ3AZ25HGRmoaEc/LcFZTLHxkY4p1u4k5H3h1/xqG9TFwzJgBudo6D3plmy7mBPGOCKfLoRfU1omZWBU7Riux8PyhSCSoYjkAfrj0rjrU5dWUFx/Sun0hyJFI4IOA3Qj60kZzRv6nbK2JFGGPQZ4zWQ8fmrtZeV6Ait9/31uyHarAbkJHQjqKy7iISEyKpDjqoPT3rKorO446qx514i01I53kN0ltnnZg/N78f41xcsIDM6SGVQeWxj9K9f1nT4r20IaFZT1AIx+Vebalp09rM8sKnyxwVP8I98V6GErJrlZ52Lo2fMhukkeYtdhbBWxnrXHab804CD6gdBXV2jdOfrXpLY8xqzNlEULVHUCNjADtVpH+TrVK/b5G+lRI2icndfease45JrauOSayJ155qYblS2KYFLSkc0u2tTIWP7wroNLiDnpWDEvzj611WipyaBs1oLUelXhaLjpU1vGDirmzC0mKJzWoQKkTHHaucnUYNddq4/cvXJzjrWTWpsnoZsn3qTHvUkq81ERzWiiZthg1Ytk3kcd6gXJOK0LCLLj61ViXI0YLXp8tXVtRt6Vat7ckA1dWDjpUNApHP3NsBniseZSshGK668gwvSuZvExM1Q0apmbIajDVJKDk1GF5qlETYoJqSMFjUdWbZeRT5QctCzFFkDirAhNWIoOhAqyIOOlDRKkZMkNVtpzitqaDA6VmyJhyKyaNERgcUooxS4pFCEVHxn3qU1COWoAkXNSxnrUaipUFVEllhTUmeKiUGpMVqmQOB5qN/anUxjxRcEQydKrSVYc1XkqSiI0w4zT6YetJlCd6evIplPTioYyQdKD0oAyDQenFSBE9MNPamHrVCFWpV4Gc1F0qRelCAnhPzit6w5IrAhH7wV0FhwRUz2N6G5uW4wBVsYqpB0FWh2rBnpQB6oXWMVfaqF30NZs3iYN6eDVOJvnq1eHrWejYenYtnQWbdK27dsiues36Vu2rZAoMZGvDVkDiqsB6VcXpTMWRstRstWCKYy0yCo6e1V3jq86ioWSmKxmyR+1UZ4uvFbMiZ7VSmj60ENGBOmD0qnIuD0rZuIuelZ00fPFNEtGcyg9RULRjtV1o+tRlMVRDR7x8GhjwKR/09yfyWsD9o7/knmn/9hWP/ANFS10PweGPBBH/T3J/Ja579o7/knmn/APYVj/8ARUtdUPhRxz+JnsFFFFUSFFFFABRRRQAUUUUAFFFFABXy/wDHs/8AFx/+3KL+bV9QV8vfHv8A5KT/ANuUX82oA8yB6UpcelRg+1Gc8UBYeG5rV08/NWMp5rX045NVDcmWx1FoeBV9z8hHtWbZnpWg5+Q1cyYGPddTWNcH5jWzdcsax7kAk1ydTp6GQ/3jmmAc1K4BY4puK3M7hinAGmjinA5NSK5Ipx6VMp+lQCnA800Qy0OlaFiM1nIeladgpd9qgbj0ycVcSGbMLyFFiDnbnpnFdx4Zu2kfyIlyijGSc1wkOQQp+U9Dur0XwpaLbWzSNIuWI4C4xWOJtynRhr82h1sQ2qqHjHXNTIN7lByOpqLaWYBemPxrQgiEUfH61wJHaxwQINv8R64p8uFi2qMHOBTUXcxxnLdSfSlnYBCR0AwKsSMy7dQCMfnXPyBNzNkqQScVszsWzWQ6gF2K846HvWFRXZ20XZBHlrkAkrhcEjvUyMd5JPIqqsvzswU8EcVYi2vz3FZ2Om5ZEo2NtByTzmhSACTg8dPWo0XMY3VMhHQAClYRPCH25x+FTomOSevaoo3PepUO4YPBzVoCZYlK7gTnPWnpEpyWJI+tNVwMrnNPjO7jjFaJEseiqMYXj1qKXg7cYHtUo+UYJ4pkoVYy2aqxIw8Db+hquv8ArMn1pBIGcEk0yR1GSDj1qWyrWJp1VgSMZqgHX7WiNj7wqQTb0JJAx71SLg6lCB/eGaTZUUacr7ZCNuMk4qrKSXwRxVm5cCYsMHPrUO7eAePzoAgeJG6jGOKqNblZAU71qSgE/KPrVeTYq9eaBopvZSsvEgI9CKyL22c/IGOc9QOlbjzbMAms2acGU4IKkVDGYk6XEJA4kGO1ZV1OwDAxkMOpPatq4lBbAIA9c9KzZJTMGBUHjmkZtnPXEisxKNkYqBGIkUqMA1evLQId2NmejDoaz0649DzVEGtpztuU78Hd09a6yzcvtePhsYYerVw9tKyzAr3NdVplwSQDwfWpkhM7MSPJZRzoSHUYIPXPpVZ5Qh3rznkD09RS2rgWUgJ5xknuv+cVCFLuUGAzDKE9DWU0TEma3WaPeo3Hutcxrfh8ST+dHuEgHy8AlvVTmujgLR/Mc47gdqmmRZE3cP3qYNxd0OSUtGeRCPN89vDbi32HLxAksPck44rTg/d8ZB565rr9a0OG+h81IkMw/j6H9Otcc0RtpTFOqxspxndx+Ar2MNWU4+Z5GIoODua0cmV4PFVbx8o3PalR0wBGTt7bupqC6PymtpGUUYU/f1rKmHXNatx3NZlwcZpQHNFTbml20DnvTsVqQkLEP3grqtGGMnPauWj4YV0mkvgGkhSR1lueKvfwVm2zgqOavbztxmhiiZGrf6l65ScYFdPqzZiYVzU4qOpr0M2YGogM1YlHJ9KjC+lbJGLBUrU01PnX61nqOa09PHzqfemSdRbfdAq8o4qhb8Y5q8rcVDQ1uVL1QVxXJ3YzO2a6y8Py1yl0P3zH3qDVIzJU5NRFTVl161EVq0iWyHac1dtQdwqvtq1b/fWqSJbN+2QMoBq4IuKp2p6VdDHFJoEV7hQFrDn/ANc1bVycA5NYkvMhrnmbR2GYFGKBSjrUFjSOKiA5qZhnNQjqaAJVqZFqJBwKsxgGrRLJUXigipFXigrVokiNRvUrDmoXpgiFzUDmpmqB+tSURk8YphpxFMPWkxhUi9TUYqVPWpYx45pMcUtIelSBE1MbipD1phpgOUZqYDjFRIOasgcU0IWBfmzW9Yg8VlWse7H1rctEwQKiZ1UFqakOcCrQ4qCEcVYHWsGd8RH6VnXZ+U1fc8VmXjYBqDoiYd4etZqn97V67fOazC2JKpFSNyzYZretX4FczYuDXQWrdKRjI3rdjWhGay7Zq0ozwKZiyUimkU+g0EMiK1Cy1axTGUYpgUpE9qqSx9a0nWqzpk0xGPPF14rOmi5reljyDxVGaEHtRcTRiPD14qBoiO1a7xD0qu0WT0p3J5T2X4RjHgoj/p6k/ktc3+0d/wAk80//ALCsf/oqWup+Fa7PB5H/AE8v/Ja5b9o7/knmn/8AYVj/APRUtdkPhR59T42ewUUUVRAUUUUAFFFFABRRRQAUUUUAFfL3x7BPxJ/7cov5tX1DXzF8eELfEfP/AE5RfzamhM8r5oxVjy8Uwx4oY0yIDkVracPmBzWZtORxWrp4xVQ3Jk9DorQ4Aq/J9z8Ko2gxg1cfOw1VTYUNzKuT1rIuj1rVueprIuuprlW5u3oZjnDmmk8UPyxpO1bGQoFOxTVGeRThSAeKevQ1FzUgNUhMmU4IrTsmrJDVo2Z569aqO5DOo0x7qeVYrd1UgZaRsfIPXJ6fhXofh4bwsa42QjGD3Pr7mvN7FTwsLAu3XjP6GvV/DVtFHbAR5KIAGc9S3UmubEs6cMjooY8kEDFWwm4Begxzioo/lIAXnuPSrQXaMt39O9ciOoQLtjz0J/lVK6b5No7mrTybjg545qnPgsOOcU2NLUouPlzjrms6QEIx3LySMYrUZTtA9s1mXEZ2MGxjoB9aymjqpMznfZN5gO3sRjr71YiKiQEZ5xVeQ/MoGewzUkXGcH0Az1rI6E9C4rEsw4xUsabufeoI14bnpVsH0OABkmgaJOF56gUnmOz/ACqfr2qWC38xfnyqnoueTVhlVFCrx6iqSC5B5Uxw3C/jTkikBOxl/Cno3UHvUPnGKQ8cdveqSBMtZbZtfIYegpJSzIQqHHqaJblnhXbjJ647VNHKoTaQKuxJlyI6nkgL3prxBwMuTnmrV2FxjFV3ICKD021LRd7kbW8RGA2TVIwxwzCQ7jtIyc1bjZQ5GeDVXUnH2dwpwQKTRSfQ1JraKfDru2nnOaiWwQNwXxmptLk8/TIDuHKDipM+WfmOOaohO2hE1uqEjc341SmhjLbSzeuQasz3W07aoPPtVm98CpsUiG4hhDcs3sc9ay5be1kDHDDb/tHmpLy7JjZQRn6VliaQsFA5b+L0pcopMjmsbeVWAZ1PYA8VXS1mjc42uFGPetFLd2UsAD74qzHAyIrkAk9xRYmxzGoIrqqYKlRzkd6wmjMd269SQSPQ130lrBcBkuIi2Rjnj8RXIajai1uPkbcqNgN7elTewmigm5ZP1roNNnLEeqevcGsCQkNwODzmtnTvn2SEYJGGH9abWhkzs7SYeUAWJycYHYYqKK4LDaRjYdvHYVBYuzR4UjhDkn6Go/MaGdxw3Iz75rNrQSN9CkhWRGJ45A6H3+tPUsAWwMZznHSs6CcxMpBzkdf6VoL+82sCR9O+azSHcSQhQQSDG3X0rndSgtZpTb3MCCQrujkHynj36V0hCeU4wMk5yeBWFq7xonlyMArErG4P+etbUG4zMqy5onO3FlLZMMksjD5Wx/OqNwcxmrTboFMG04Xseo+ntVO4wVOG5969VvQ8y2pjznANZVweTWrcqcH5hWRcHBPNOApEAx6076VGOlOBxVskmQ4YfWt3TH2g1z6HLCtmwbsTxQtQZ1lrICBV7zPl61i2shH0rQDkrTZEdylqTgqawZSK2L9srWLMcGs1ua9CpIATUYApzn5uMU0cntXRHYxY9cev6Vo2JwwrPU4GKvWh+YUyTpLaT5eavq4xWPA/SryycVDKQy8cY69q5u45dvrW5eNwawZidx+tZ9TRFVxTMZqRuQaZWsUZyYwipoB84+tR1PCPmqiDXtmwtXQ3FUYOBVoH5ahlIhuGzmsiX/WGtS4PBrLk5c1zzN4jRS4o4oqChrcCof4jipm5FQgc0ATp0qeM81AnSp4+tUhMtL0pSetIo4pSK0IImqB6mNRP0NAIgaoHqc9DUL0iiI4x1qM1Iw4ph44pMoQVKnSowakUc1DAdSmgdKDSAibrSYpW6000wJFHNWVFV1HzVbhXLCmgL9pGMA4xWzbLg1n2qcVp24wazmdlFGhH92paiTpT81izuihkhwKx71+DWpO21TWDfS9ag6Ioybt855rOL/PjNWbl8k1nlv3oq4oJG1ZOOK6GzbpXM2R6V0NmelDRg2dDbNWlEaybU1qRHikZMtA0pNMHQUuaCB3UU00ZozQBGwzULrVhqiYZoQinKlVZY60XXNQSR0AZTxc1C0OO1abRc1G0Q9KAseo/DNdvhMj/AKeH/kK5H9o7/knmn/8AYVj/APRUtdn8Ol2+GCP+nh/5CuM/aO/5J5p//YVj/wDRUtd1P4UebV+NnsFFFFWZhRRRQAUUUUAFFFFABRRRQAV81/HGMN8RMn/nzi/m1fSlfN/xuH/FwM/9OcX82poUtjzIxL/k0x4VIqwRTTgU2QigR82K0rAfNVGUfNn1q7Y8U47jlsdFa/dFXJDlOvaqNofkFXHYlDTnsENzKuD1PasW7NbNyetYl0a5o7m72M1j8xoByaa2Mn605a6DIcOBxTgaTg0CpAeKdTc4paYMkRQ3/LRVbsG6Gtmys5ZADEvI6/OCB+Oaw1OCDjoe/Stezaa5kVFJYn7qgDA/wppkHXaNp0kkxgW4hSVly3zbsDueK9h0a0W2sIl4CquEXHX3PvXnfhvS0sdqSY86bAxjLMOpJ9B7d+c16RZS8AZJ525+lcVafMztpQ5UacaKGMh6YzUcsxI3E4HalQ5jJYnHpULkscdx09qxubJEisck9eOKhzukZj/d4qT5ghI7UxEYlJD/ABITRuBVOS2D2rMv1y20c4OcfTrW0YjvPHU5rMul5JH3iQBUyWhtTepl+UMEDp1FNKhJB9RVkoxPI6AH2NQuuXHOTkEe2OtZM60TqACcn3q1bxhxuPQdBVRWCsTjgnnPpVkSqoG08n0pFIuiQ9QenAqVSrDr83cVQNzFArtI/IHQVBDfGRi0Y2juzd6tEs1WhBGe/wBarTqrDkniq63uZMHAPpSG6VXO4qyDseuatWJUrDjwh5+lPiuHUAN9aqyX0MJKt3Ax+NOWVWBegtNSLc84MTEZ6deKpiXfASRyOM1FcThU+tRxS/utpHBOaGNWSIRd7Z/LY/SnyMroc85HIrKuZXGpQxkDYXxxW5Im0kHhV6VHQpuxZ0HBsvK3FRGSAanuVRBuMrMevXFZekTBZbqMHgNnOabdXCqSWfmqWwmtSWWdCflHJ/GqE0hWPlutOyjsu1+T+tU7qVBvDEEL7/pTE5Iq3DglQzbQerU4CPO1cnHc96iumhklWEMxfbuYjog9c06CW0iiSeSN9p+4C2S3/wASPrzRYylUSNKAoIFkYoqOMDe2Mn2ps7+QVdQVHvzj8qgjnS7lLPJDtXgIMMFHpT/3tq7JDLFIh4Kr1B9gaViPaMde3dy4AYRvERkHHX8etcjqYZZw6rmKU4K9cHrXUvKgGxni8xWzhyFB9sZ649KwNa8tYEZQpLN+8744Hf04qJIpTMCdFC46ccZrQ0iTerI2c45GaoXKkODz90GrWlNiQY685pdBM6W0kZMRrgucJ+dXJNlwSwbHyjJ9wKz0fZIGB68Z9KliIVmO7Abr14qHsSXYg8ZG/le5rWtZAYyhGP7pHNZsbkgAH5u/vWjbOgXDKFYHt0IqUgJGkBhZzhmXhgvG4f41yvinZ9ij27wu7jvXUTIIZWVckOMn0NYOqqJLOTcu9V5ZGGePWtKbtNMiavFo5eK53MpcGTHHzelNvo1VQyZ8txlTTTEYpWGfl6j6UMWkgkiPTBZf94V6b20PNW+ph3PQ1j3B+ate4B2nPWse46mqiTIhBoyccU3vS5qyUSK3IrYsWrGT7wrXsSAopxFJnQWrcCtAN8lZls3ArQU5WiTCKKV4crWLcGte76Gseesr6lvYpOeaap5pZPvUzkVvFmTJQxz1q7aOdw5rOB5zVu1bpVJiN+B29auJJkVmQNir6PgVLY0hl0/y1jSNljWrcn1rIl6ms+pdiAnrim9aUkGmE1qtjKSFByfpVmE8iqlWIjyKdyTVhPFWgcjFUoCQKtA8YqZFRIpjwazn++a0Jzz+FZ78sa55nREaRSiiipGMccGoe9TP92ogfmFICZe1Tx9BUCDIqwlWhMsr0pzdKag4FOIqyGQkE1E46ipiKhfvmhjIG4yKgc81O3eoXqblERxioz1qQ0zFIYgqVelRjrT16VLHYkHSkbpSjpQelICE0hpzUnU0CHp2rQtVJ5qilaFsOlUhx3Na3HAq9AeapQ9Pwq1EwzWUjuoo0EbinlqgVgacSMGsZM7oor3khCmudvZc5rZv5MLjNc1eScn0qFqbpGfcSnccGqYYmQZqSdhzVZWPmitUiZbG7ZnJFdHZnpXOWIzg10lmOBSZzM3LWtSLrWZaitOHipIZYB4ozSdqKZIuaM02jOKBDqbRRQA0rUTL1qemNQBXKVGU5q0RTStAHo/gEbfDZH/Tdv5CuI/aO/5J5p//AGFY/wD0VLXdeBRjw8f+uzfyFcL+0d/yTzT/APsKx/8AoqWu6n8KPMq/Gz2CiiirMwooooAKKKKACiiigAooooAK+b/jdn/hYP8A25xfzavpCvm343nHxDxn/lzi/m1NClsecMcDNRF6eWxnk1C5NMkimYlxnirlieay2kLSZLcA8VpWB5z/ADqo7jlsdHac4q5JgRmqVocqKuPkKeaUxQMm46HnisW5HWtq5PBrFuO9c63N+hm9zSig9aXHFdBlYd2opOaX61LAAcU8GmA8076UwuSxKHbBcKfcE5rqdDW3W6ysgURKXd9h6jHTP4Y965RSAemW7elb2nMWt0tw2d7ZbA7Dtx2yaTQLuel2FykNvDdqSsk0RcbjkgDAH8+B3rstLkOyFWPzBdxz7/8A6q8wtb6WVJlZRjAVc8bQCAMenAHNdnpWqKbmIZ+Uwrz364PH1/GuSpFo7KcrnbCUGIDPXvVGSYlmGW54JxxSxy/ulBPfg/qapSmSQKFP3m5H+fYVzs2ijTjfem0fxNsHrWnFDwAPuoNo+tUbGDyoMucsXZl4+6DWrCdqkdBVomb7FSSH5icdqybmLJx6nNdG6jtxkVj3kXzMRngc/lRJaFU3qYUoAJAPSqqLsk571bnX5j7fnUOFVVZuoOK53udy2Gbh3GM549BRJKI4WcHLHoMdKjm+UvsPB5PrVOWeWbcoYEAHP9KaQm7EF5csRHBHu3O2c9/fNWf7QFrHFAkZbB+Z9u7PrWLc3M0ORtAjA+UqQST75rm77WFtcPcTyeaG+WGL77e3oKpK5MpNndNqMMiuYxKWXBLIo4/E96yL3xA6rsW6jXn/AJZ43D6k/wBK5O7fxNrpRwBbWoXAUcAf4mm2/ga+vfnaaV17vk4P4Voo92RqdGmvxsqtNKGKn+Lj+VacOuKiboW38888Ee1cDd+Drq1BMNzJleOWxWLJNq+lScysQDjkZp8iezDmtueuvqUcwVi454256VpxTosKYXNeQWniC53q0oHH8QFd/o+oNd2aMzhFI4J5JqGrGylctTOJtXtVU4y+fpit6eZgCrjp0PrWfZWkTXS3CAyED7zdquyu2VBGR61NtC002YkN4YdXKqpxKv6ik1G4525/KoNQzFeLIQBhu9Qatd20drv81hKRkAHj9aEtAk7MlGqiBMsBuXpg9K5/Uddja6Z2LMAflVe/vXPX2qyNKQD83qelY15dSMwGSZD6VrGJhKZt3/iCRi6wt5SNjeS3LAdB7Cs0axhhukBUexNZSwBjuc4Hq1Wo202LHmHc3p0xWlkjBvua1trsYcH7UUHcYIFbcOvSzIVhugFwPuNg1zHnaQ+MxnA78CoGjtQC9q7o+flGaTSGn2OqbUZASDG3mZz5h61IbqaS2/fMobb8uDz1z0z/AErEt9QkECRznB7SdV/HuKtHylYTy3PmEdEU5J9gB0+tZSRpHUtpKXQcn6/41PYbku+QcA8nt7VVtXjdgZkZR6Dk/jU+ALkhCcEZHuKx6mjWh0qDcc9j0qSJirlT/wDqqC1dZLfkjI75qbyiQGGT9DUsg07c71w3SrsJP3zkxn5eP4T2/wAPwrNtmPr8wHeraORnA6j8CakRbcloGTfgjjctZV82YsPyy/8Ajw9quxybSW6cfMM8VnasQbZ2HKHuP88VUVeSJlojmJgyTMoJwnyrz27VXlkYfMGwRU8x3SFxnBGOeuaqTnINen0PNe5l3J4/Dise4PzGta5rInPzGriRIr0o60mKUDirJHxmtayrJTqK1bOqQmbtscc+vFXl+7WfbdBV9T8lKQRKd4eDWROcZrWu6yLjrWPUtlFzlqTrSScPUeT61smYsf0NWrZuRVLJqxbHmqA3IGq/G2RWXbE5HNaUZ+WkykMn7/SsmU8mtSY1kzHk5rO+poV2PNJmmOaYHrWOxlJEueasQnpVPdjpVmFuRVIho1YTVrtVKE1aU8VMiokcxzVJuWNXJupqk2c1zT3N0J0paSnYqRkbfMKiGM1K/So160DJV61YjqBBzViPrVolllKcRxTUFOIqyCJqhbvU7VA4xQxort0qB6nfrULioKIj0plPPAxTOM0DAVIp4qNRinrz2qWMkBGOetB6UgoPSpEMY009RTj0pMcimBIo+ar1ucYqkv3qtxHaRTQ7mrE/AqzC/JrPSTHWrMEnzVMkdlKRpK+BTjJxVUydKaZDg1zyR6FNlfUZOtc7ctkmtq+YlawbnPaoR0J6GfKeaijGZhU0intzU1lbF5OlarYib0NbT044rpbNOlZdhbYxxXQW0OAOKls5mX7ZcVoxDpVWBMVdjWkZseelNNPIphFAhKTNKRSUwDNANJRQAtFFFACYoxS0UCPR/A//ACL5/wCuzfyFcH+0d/yTzT/+wrH/AOipa7zwR/yL5/67N/IVwf7R3/JPNP8A+wrH/wCipa7qfwI8yr8bPYKKKKszCiiigAooooAKKKKACiiigAr5m+Oj7fiL0z/ocX82r6Zr5j+O/wDyUb/tyi/m1NClsebmUVBJKzZBOKDzUbc0xJDB96tax6j0rJGdwrWsKqO4pI6G04FXJD8pPtVO16Crcn3KKmwQMq56E1jXJrYuTisa5OQa5Y7m/QzgcsRUgqPuacDXQZNj6SjNFAISnCm96eBQJgDggn863NOuIokj2xNu7neR/KsOtKyqkJvQ6+01VTayIIBHIxxuQZP61vaRd74jExCtG5KuDk7Gz1/Hn8a5CzZVByWwRjC8frWjBdzplY2xGByOgI68/wCNZVIXRrTnZnqVpeJLCNrFgo49TxjNaEOGVXHRBk1wOi6mJppQjFscqNuNo44HrzXbWs5GxfUZ5GPrXny0djvjqjfikIKrjKnAq7E3z47dayY5MTIMgYFaEUg4PrxTQmi2z5Gazbpgu4Huf6VZ3E9+PSs64dXmznjBpNlQWpmzqC5z261WMY3Ebc7s1ZuGCvz36+9VmaUsSi7s8AA4rB7nZHYhfTGmGUc4x0rJu7dYGAmzsPcda1iL+IllCuD/AAhsVQuIb+4kDNHbxgDq8nH8qaBo5/xBcQWdtuVtznhV6k1jaXpSRKdX1FG8xsnJHCDtXRtpiXGoLJPGpERziJsgn1PYV0aaXa3VttOcjgEHHH+FaIl6HBXXjC0tl8uOBpX6t8pAb+tc9f8AxJ1SSPZbKsKoeAqV6zJ4csZhtuIYz23gc4rn7vwPpBjkCwsxJ55xz2rWLS3M5xcl7rPIm8T6xeynNy553HHStG31O4m2Le7WRuScV2Mng/SrKUt9jYZHKs+asWuiaZxGlmAoHG4ZxROpF6IKVKS+JmdDoEN/pyy2aCQY+YpXSaNpD22nQwzRt6jA5NWdJ0z+zLhTalR64OAc+vrXSzoPKEi87TwMdKzbNGrFXT4jH+4mEkQJ4yuDWg+mq44kzz/EKbPmWNXyCcdPSrVurPGFTBwO5pDi2czrGnMEZnCnHTmvOPEN0VcRlvlHTmvW9WtZpImy6pxzgdq8l8VactrcB0lMhYHOe1CtcuWxxj3UkshCLznirVvY3Fx8tvbyXE7dQoyBRZWRndYEOHlYKCOvNe1aPosHh3SY7eNY0fYPMkPLM1bOaMUlc8zsfAur3cLNNZOrHpuIFJJ8MtTPMs1vDxkDk16urSTMFl3LjkZbGPwzTf7Ptw3mIHHUnJyM1PtWthSpKW55a3gaCyKuWkuhgZyMAetNk0GKxH2loXaEc8jp+Jr0a/nFrHuZ4UA6Zb+lcpqN3LqHMcbTr/yyjVCBnoCx/pUynJlRpxjsjCsNMOo3bW8bpChXc5dcgHt+NXbzw3e6eD5UkMgXvtINb2l6Jqum2ok+zoJW++BKOfwqxLfSw28u+1kVjzgpuA/KocilA4yOO9DfPCh91araSqzockFeDxS3t3KXMrx4GfvqOlAkNxhsZfqCOM1FxtaG1pz/ALnPcHDe9aAI35B59KzLSPFmAozuByc9T2q9C7RjDDOeMGk0Zl2MlGzV4EEdcH2FUUKkAqcEjpT0uCkhByMjrUCLLSKcAzR/McBd2M/TIrA1GdlYorrnH3M56VY1OS35jJZdx4Kj7p9a5u5nE7rIM+YvBLdWPrXXQpX1OavU5dCYSeaA2Mccjtmq9x901YVtw3nGT1qCb7prqkcidzIuckE1j3Aya2bnoayJxhquBnMrbcGnAUveitCExy9a07TpWYvWtO1poTZtWx4Aq+D8tZ9sc4q9k4pSKRVujWRcd81qXR4NZNyfesVuW9ijIfmplLIfmpua2Rk9wzU9ueRVUnmrNuxz2qkBsWx5rRiPy1l23atGM8UpDiJOeKypz1zWnOeKyp+9ZdS+hTdqZQ54pm6tFsZseDj61ZhPIqoDyKswn5qpMRqwHIq6nQGqNv0q4pOKJDiRS9TVU9atSdarMPmrmmbxEHHUUUUVIMY/Sol61K/Sol60rjJ0ODVhO1V061ZjGcVpElllKD2oHQUGrIImBqFu9TuKgYcGkxkD8moX6GpjUL9c9qk0REajqQio6BCjrT1pi1IpqWMdSE0HkUdqQDD1oPUUd6B96mIlTrVhTioUFSDimgZZWT1q1C/IIrN3kVctmyRTktDWlLU0xllzQFJp8HK1MI+OBXNNHpUpGbcw7lNYdzCQSK6uSHK9KzJ7Xcx4rM6lLQ50W5Y1r2FmAc4qdLHBHFalna4PSnczkye1tgMcVsQQ8VHbwYHStGKLpSMpMdGmMVZVcUiR+1SgYoIY00xhUhppFIRHSEU8ikpgR4oxTyKbigAooooAKKSlpgej+CP+RfP/AF2b+Qrg/wBo7/knmn/9hWP/ANFS13ngj/kXz/12b+Qrg/2jv+Seaf8A9hWP/wBFS13U/gR5dX42ewUUUVZmFFFFABRRRQAUUUUAFFFFABXzJ8dx/wAXG/7cov5tX03XzL8dhn4i/wDbnF/NqaEzy45qNuualaoyMimwQxT84rVsOBWUo+atewHAqo7hI3rX7oq1IflqtajgVak+7+FKb0FAybkjBrHuTgGti4PXisa4Gc1zR3N+hmk4NOBFNKnPSnAc84roMh1Lmk7UgNIB3+c04U3tS84qiRw61pWRrNHWtKy6inHcmSNu3PSrchLJgZx6CqlvwBVlj8pqZlRLui3N3bXSqrKqE4IkOBjvXosV7C0K5cZxyV56+leRCZo5ww+91yea17PVrp1ZXfZhd6ggdM85/CuGpBt3R20qiirM9bju/OtvNj+Z4wAQDzitW2uA44Oc815tpGrPBNBOXP2ZlwcepPf0wa7e0m+QSqdwyQc1lsdCXMtDbjlBTceOKyL12UoR0U/dqxbXCltpIwwIxnuelR3MIlQoSCrevapY46PUpXhb5SPu4qmsjDJVxg+varswZYNsuODj71ZTx7x97C/3u9ZSOqGqJonuLkttYLGDgv1yfarSWEPHmM8x/wBs8flVVbhIQsaqeOijtV2CRyck/hUrzNeQkZAB5SRjnqAvAFU2j8mUxtuUfwso4FXJbuOFcs2c+nrUTTXcykqiwoRgMwySKtaCcWMZ7pRlHjkTpnHP6VWYkkySW7ZPVlxn+dVZbW7tnaSGeVl6lSOM1QuV12ZQqtbopOc4OcVfNoT7MtzOjHEdiznPLO2aqytI3GxYySc7Rjb+NCaReTnF3qEwUDlIVAz+NXLPQbdJRlS/fMnP50rXCyRUtLi5ZgEyVJwO/SuhjR2tVJyXPb0qW2sIoRtjRFwewq1HCBKwZhkVXKTJ3M8EBlP51o25AiJJwKqTRr554weppYJijbcZB6ZoKjEmvIxLHgjjH515d44sPLkDoDtIIr1G5Y8kcHFcP4pgMlvLkF88g+lS9y3HQ878OQmXWrbbhWRwwJHXFerfazOvmFlUtkKApZuvt0ryjTJzY6vG+MAEj869L02+hmiwo6jGTTZiokskiRSMDK6seQRGEXj/AHqpT6gRDIxvJgmcfu1Dbq2YLKKeRmZAy5qQ6TE2SV2joNvGKRpY4kx2E9yJLma6vp2xstl6e2cCut0jTbl3S6vreO1jj/1dupzj3b39q0Lazggj/dKFYdyP69abLO+worHA55ouaKKK2oTuiEoBjPQVzc+plI5ACCc9PT6iti5lcA55PXFctq6ljuUbWz1A6f40WuKWiK13fyTYHAxwvoKrp8zZKKrcA4PFRKVeMj+JT8w9P/rVOEXYCOppctjFu5tWWwqRuyOhGaa9wHv9qthlHNU4bo2tq5AyW+Xr0q1awqZBKo3AjqaTehPKW55lt7beWBOO9ZJ1fzmV+UZlABVv51B4huThEVspn52zzn/CuZe6JZ1XBBHB9K6aFBTjdnDXr8jsjavNRku7lgwztyQDx+VRwybx8351mRSuWRmO4oMAn0rQhxuODx1Fd8YKKsjgdRyd2aEf3MVHOcKakj+7UU/INYyNo7GVc9KyZ+WrYuU4rLmT5qumjKoysFzS7fepNnFLsrWxkmRquT1rStlwBVJF5rStx0ppBc07btV4HC4qnAOmKtVnI0iU7onaaybita46Vl3A5rNast7GbJ1phNSyj5qiPvWyRkMLVPbH5qgIqe2HNNAzYtu3NaMf3azrXn8K0o/u4pMaGT9KyrjHIrUn+7WXcc1n1NDOk60wdakcdaYOKtGbFHWrMHBFVu9WIeoqkSatv9aurwKpQVcHSkykRSZqsepq0/eq2Mk1zyNo7CDApc8Uc+lBGKkGRvwKjXrUj1GvUUrDJkq1EKrJVqIVaJZYUYFBoXpQRWhBGxHSoH5zip269KgbqaGUiB++agap35qFqlloib3/AEpn4VIw4qM1LGIOO9PHNMHvUgqQHYooxig9KQiM9aB1pT1pO4qgZNH1HNTE+1QJyanJ4polkRODVyzb58GqTdas2nMgrSWw6e50NquQKupHntVOzyMVrxJkCuOR6VMhMOR0qI2YPatRYs0/yayOhSMpbJc9KsQ2u09KviEelSrDigTYyGLjpV2OLpSRpVlFAoM2xFTFKRTsYprUwGEUwinmm0gGdaCKdSGmIYRSYp55pMUDG4oxTsUmKBDcUYp1IRQB6L4I/wCRfP8A12b+Qrg/2jv+Seaf/wBhWP8A9FS13vgjjQD/ANdm/kK4L9o7/knmn/8AYVj/APRUtd9P4EeXW+NnsFFFFWZhRRRQAUUUUAFFFFABRRRQAV84/G2383x+Tj/lzi/m1fR1eB/F+MN43z/06x/zNROXKrlwjzOx5I1kajax9q3zAvNNNuPSs/amnsjnxY4b7taVna4A4q6LdamhiCninGqJ0iS3jwo9qllU7TUifKopGIOacqglSMiZM54qjJa7sk1vNECKiNqCKx9pZmvszm/sHXimfYDnpXUGzXikNmoP/wBaq9sJ0TlvsR6YNMNkR0BrqjZj/IphsR60/bC9icx9jPvQbZgOldIbJRTGshVKtcl0jnxbkYFaNrCQRVv7GKsRQhcGtI1UQ6TJIFK4qww4NCLgUMcCm5pkqBQk4Y84pI5HVy24gqM5qR42Y5C7hnBFXbPTBcQlzKYycEB1x/M1ldF2LFi8pMMmN3XIxkDHSvUtAkkuNORZD+9GQc+tcjbeH7qJIQkreQybsqo4Pp710enwyWbKV4yQefWuSo77Hdh9HZllnmjnIz0PAfoPx9PatKS+RWVJjsbseoP+FSxQpeKS2MkdDWbqEDKoh+VhjqRyMVHQ6Wk2Ub++iNwVJ4LYwM5/Edqijclcnsc4rLlgmadJVbc/cdOKuxFmB7cCs5O5pFWLcEgjG/u54PtTpJ3BKplnbooNRZCle5xhRV63t44iXPzSEdfT6UJGyloRwW5jPnSsXlP5LV6OdsY2gj/a4qIDdnNOiiG/qTjtTSKTVtSVFJycqCem0USxA7RjDeoFXYYgNoxgdqdNDtyx7elXymbepmrEVkJxw3TFWokAODnNQvgMSSfWpo1ZmVscURBokPfGBjvToijSkvw3Y1I8OFOTwecVWKFDtBz7+lU3YhRuRuAZyc4H86YpAkAz34qR0I/+vTVA64GaW5oW7mAPbLIPTFctrcYFq67cZ4rr1YPp5Un5l5rmdaJMLA9qJqxMW9meP39qyynHDZroPDdyZIxbk/MD1qhqwzcSY7Gjw64h1RN3Rs5zSYtmeo6XA3kj5juPXmr7A5Ix7GszT7hVG5jgegPWtM3KMnHB9KEx63IJDjJ5HtWdcyHBAFW5pAw64INU5V3tktSNUjMuZCVLAEYOc1z+oyE7h29K2rt9oKhsg1zV9L85Hp3ppET2KSI3niReOfz9jV7YuHUH7q5qvCpKEZ4PU1Z2kDdk8qf5UMwGBFZGDDPTrW3ZxhLMFD1+X6Vibm8xFUDpk1t2A32BJyvJ6VhUeho1ocnq1zlxvjU/MySDuMVhSLk5XAX2rU1h2e8lA4JbcCKzAhYYOB1wQOlevQ0gjwcRrJj4CelacGcD6VnQRtn1x3rTt0x+Fbt6HOlqaEX3aZKMg1LEPkpsq8GueR1R2M2deKznUBua1Z1OKzpY2L1tTMKpBs9qTZU4jNL5RzyK2sYtlcLg1ethziq5T5quW6EHNIEaMA4FWsd6rw5wKtEfLWUzeCKNxWVcda1rgcVlXA5NZxWpTM+TqahIzVh1NNCHOK3sY31INp9Knth81ATJxVu3hAIyTmjlBstW49q0oqqwRAetW0XApNFxIpuVrLm71qz8Csucdax6l9DPkFRipmFRkelaIgQVah61XA9qswjFUhM0oKuDpVOCreeM0mOIx+hqt0Y1O/IqD+KuaW5sgNH4UvU0EUiiJwcVGvWpH4FMXrSCxOgqxFVdM81Zi6Zq0QyyOOKGpBRnrVkEbdKhbrUzHg+9QN70FIgbvUL9ancVA9Sy0RmmGnt0plIY3PJqReaYBzTxUMBx6Unaig00Aw5oHWlPWk/iFMTJk61N1qGPrU1VETIn4NWLQ5kFVpBUtqcOKuWwofEdPZdq3Ldciufsn6Vv2jdK45bnpQZfjjqby6SLBFWMVmzVMhEftT1TnpUm2lApDBUqXGKaKcTQSIaYTSk0wmgBCaSg0UABpKKWgBMUEU7FGKAGYoxzTsUYoAbik20/FGKBHoPgsY0E/wDXZv5CuB/aO/5J5p//AGFY/wD0VLXf+DP+QEf+uzf0rgP2jv8Aknmn/wDYVj/9FS16FP4EeXW+NnsFFFFWZhRRRQAUUUUAFFFFABRRRQAV4H8X3C+N8Z/5dY/5mvfK+c/jXNs8fbc4/wBEj/m1Z1VeJpTdpHJeYvrQJAe9ZH2nPcU37Se7Vz8pvzmv5i+opwlAxgisb7VnvTluTmjkYc6NpbgdM0vmZOay45ie4qwknHJpOLBSLyvzT1PcmqBlwOtMa6K96jlZakau9aXcuaxhfH1pwvSO4pcjHzo18rTTiswXpzjNOF6fWnyMOZGgQOmKiI5NVftvvTTeZ70lFickTkdqBgVUa6HrTRc1pG5DaNASYFRSyZqr5xbpSbySPetE2Q7CsSW4JJ7gVYQpJKPPkdUOMeXgtgelVwVRvmZuD/DV62ubKSYGdCMYyAPvfh60ydz0Dw1qPk2iRI5kjPKo7AbfYd+ldHLItxDuMZjYkEDHSvOl1/T9LGIIHM7fdUvwPrXTaHqM19EktwSoONvzcc+lc04u5005LY6eydsMG4Paobp2kU+ZhTng/jSRl4XYN0/h+lLcszQnavLE8ntis2dcNdTEYtzkBXU44HBFEfDZ9qU4zu5JYYo7qoHHPNZs6LEwG+RCo6c1fBAXP8VULY7ZevAFWVYGTIqkJMnVuPep4pCq4wPxqsBhsipC3y+9M1Wxft7oDrj8BT3uEcEbsZrJEm1OBUbXBTmq5hOFzUVFZweMZxg96tEpEm4n5e1YBv8AZhs/N61nalry2qElgcDhc9KdxKJ002owx5ZiVA7mo47z7Qu9UJXscVyGgxS63efbbli0CNiOPPBru40QLtIAA4wKBNdiqJlfIp6Y7YIpJbZVbcopYxhRzQNF+3QNE4xzjiud1mPcrY6AEV09oP3b89q5zVVP7zr7VUtkTH4meXanBiV3PBzisSScwykL98dDXVa1BhWY+vFcfIpN67Hv09qSJnudjoHiISlLe4B3Z4rrRLlsgkD3Nef3GkSWMEV1FLl9obGK0dK1adoVlkbeq/eHcUOIRlbc7J5QU4x0qtLKFAz+NVI7xJ0Vwcg9DmmSSsVIHP1qDe9yjqBPmhlPy9a5+8fMhx+Fbd22UbI5xx7ViOgZ9xPPTmqiRNktojG3bPr1qfb5ofB3ADtTgRDaZIOM+lPjyVyCCpHYUMwMdrl4dSAHQY/lXSC7H9kyPGFDdTmudkty2oyexH8quNIYYvKI+8ucGpdPmsaVHaFzHukDy5CZI7moRb5HIx7VcbBf7uKAAPeuyMrKx4so3dyGK3AOauxRY7VGgAqwpAHWq5xKmWFUYpsiDBpVcGkZxjGazcjVRKssXGaqtACc1fdh0qLArWMzGcLlQQCneSKs7R2prD6Vr7Qy5EVDAN2cVYhjAo4qVCMij2g/ZliNQAOKlIOKiVwBSmQ9BUSkXGJBMveqEseT04rQkYHNVn/ClF6hKJnvDz0pvkeoq6QCaTArZSM+UqLDirEEVS7fapI8CnzC5SaJanxlfxqNHAFP35HFKUhpEE4yDWdKoINaUpFUpBkGsr6l20M9o+elRmPmrpFNKVSZNip5eKsRLg0pXkU9Rg5xVKRLRaiFWAeMc1WjOKm3cZpSkNIGqDHNPLZBqMHJrBmqHUho6cUUDI3HFMXrT3PFMHJzSAsJViOqsdWozVohlgUHvQvSg81ZLImqBu9WGqCTrihjRC/SoG61O/TFQN1qS0RvUZJqVqizSGAp45pg609RzUMB1IaXvQaAI+9AyDmjvS98UxEsfWpugqFOtT9qpCZXk7063OHFDrwcUQj5xWnQmOjN+yfkV0Fo/SubsctgV0VqhAFcc9z0Kb0Nu3bpVsVn2/FXlbIrM2RJSimijNIofmmlqaTTSaB2HE0maaTTc0BYdmgGm04UAApwpKcKQgxS4oxS0xCYoxS0tAhuKMU6mk0AegeDf+QGf+urf0rz/wDaO/5J5p//AGFY/wD0VLXf+DedCP8A12b+lcB+0d/yTzT/APsKx/8AoqWvQp/Ajy6vxs9goooqzMKKKKACiiigAooooAKKKKACvmj46Pt+In/bnF/Nq+l6+Yfj0xHxG/7cov5tSauNOx52Zcimmaqxc4pjOe1TylcxZ82rMTZrMViWANaNtzimog5GjCuSKuLGcc1FbL0q7gbelTOIRZUkG3NZ80hBPNX7g8Gsm4brWSWpo3oRic56077Qc1RL4Jo809q05TPmL/2liaPtJ9aohz60b8U+VMrmL32k5p32k1QV6duxRyIjnZdE5Ip6SE4qgDmrsABUU1BC5mXIian2kc9x0psKe1WwnFEooakVT16VIkkcafdJfOQG+6P8aCvXFRc7gVz9BUIot6fbG7vQ8r/KPnbPU49K2re/e4v0t4gQFBZEX+Irk8fhWbZukMMpJUSSr5at2GTz9MVFbM0WqIyt5flN94NUyVyoux6np1zK6RQzygEpgg9QRXSLGptiWxjb3rzXRNQtLrUUkkLRXCMC46gkjHHtXb3V35UDxkk4HOD0HrXLJW3PTwvvIzeAxxk4Jx9KQHjjtVezn86OUg5KuVzn8asqGCncPrWDOpqwRkgkgcYFTp69BUSLxx3p4Py47YqkSiyj/Lkc1G8pXknAziog7KFUVDNJuOPxqjSL0J2m2nqPaqU9ztBYnj2NV57gKAMVi3t+FDEk8Hn3oSKH6prq26EnI9OetZGlWl54mvypcxwpgsTVQaXeaveMcFSIy6oePlHpXpPh/RItMsgkaEzclmJ6cd61ijGVTsWdGs4tKj8lB8vUH1reikRl5PNZklu5QvuznGAD0qsl+sFz9nlYLJ2z/EPUUpBCSasbjy4UnrUSDGPQ9KqmfKg+hq1C4YgtUGqsjRgykJA7isLU2Dbj3HpWxNPGtuFDc4rCvJVAPNW9jOO9zjtbgZoiemc9a4w2xNyAxAHBNd1rErGEjj61y7WZkkMrERx9S7cYFJCnuX767WS3RQTtRPmJ9qw9PuWt8DYWDcsD6U+5vYptkUO4wKeSern/AAqGCMySlT3AxVpkNnRwMfMU2inaVDFT0q0lysoxnB7ineFCkOoJDKhYOwH0B60/ULN4L6d1j8qFCy7VHJKnn9OaGkJVLOxTnXeCQaqRwqDlgCAc4q1Ip2gjIB6VAN2cDHNSi5O5Deyq6+UoAOAefzqxp/7yPJ7cZFU523Xj4OeABn6VqafEFRieAFzgetKRmhsenRvIZmkK7jyAKtXPh+zvlVrWZoZgMfOcqf8ACoxIcEe5/nU0cpGMHFcbnO+jHL3lZnJ3dvNZXLwXCMrr3PQj1FQeYBXfLcJKNs8aSr/tjNQz+HNH1D5wrQOf+eZ4/Kt44lL4kcsqD6HD+cM09bjtW3d+BLxAWsrlJgATtc4Nc9dadf6e+26tpEx3xkfnXTCpCezMZRlHdF1ZeKQy1TRztHvSs+OpqnEnmLDS/lTPOAPWqjSmq0kxB+9VxiS5GoLgGk84E8Vk/aTjrSi496uzM+ZGoZaUS46VmfaT608Tk96LMfMjUWepPOBrNSU1OHzUyQ00WGkqFmHOaZuPrTGk45pxQpSH5pwGRVfzOacJa1UWZ8xPz2zThwM1AJSOOxo83AxmnysLlkPinCT5aqiTNO8w461DGiRpM1A7800tUbOKlFC5yaQnFRNKQetJ5uapEskzmgHB61EZKN4NLULosiQipA+RVVDmpQcihjRIW5oU81FzmnioZZJ1NITSA0E0gGseopq9ac1NU0CJlOKsIeaqjrU8Z5q0Qy4pyKCajBpc1aJBjUL+9SscCoWOTQwRC9QseamfnNQvUmiI26VH16CpGOMCoz8vSkxiCpBUa1IOlQwFoPSig0IBh6ijvQeopM9famBKnWpd1QKe9PLU0SKzCkjPz8VGWqS2G+YADNU2LqdNpUJIUkV0kMQAFZGmR7UFbKNxXHKV2d8Ni1GADVhDxVRGqdWpGqZY3UZqLNLmgtD91NJpM0maRSFzRmmnrRmgBc04Gm0o4oESCnCminCkJjqWkpaZIUhOKC1Rs1ADi1RlsUxnqJpPemhHpXgo50En/ps38hXBftHf8k80/wD7Csf/AKKlruvAh3eHif8Apu38hXC/tHf8k80//sKx/wDoqWu+n8KPMq/Gz2CiiirMwooooAKKKKACiiigAooooAK+X/j1/wAlI/7cov5tX1BXy/8AHr/ko/8A25RfzamhM8wIz3pnXpUlMbrTsNMRPv1qWnasxBlq1bMUWEzZthxVpxxVe2HFWnxtNRMcDOuOhNZFz3rXuOhFY113rKJs9jOzzTsmmY+ane1bWMRSTS96SlxRYbFHWlXmkAp4HOaZA5OvNaNsBgCqCgE1pWw4HQU0K5pQLgVYbgGoYRzUrEYwDuPtzUz2HHcrNjdzkD2pS6qMRqRn+I9ak+zTyD5IJW9NqE0v9n3rHizuD/2zP+FYI1I0kZkZNxx5ZHIqI5GMdquR6dqAf5bG4ORjHlN/hXTeG/h1qutTpLdRm1tMjcZfvMPYU3YaTKXhvwxqviJ0ksISpVfLMz/KvXg578H9K9c/4Qq8aygjub9PNVAsjovUgda6SwsYdNsYbW1jEcUShQorTRhKmD1rJ2kdEJSp6pnnepaDDo9nCLZDt34Zz1YnuazNuAA54PU16Jq9h9rsJoMZbGUJ9RXnrjGT29K5pxszuo1OaOoseP59qbg5P1oReAOfzoPyg1BsRFio59apyPjcc1bkCkZzn1FZV2SuSOCKpMpFG9u9vGevpWHBK95qcYCM0SOOPWp9RaWYsqD5iMZ9K67w94ejsoopJ1JkkhViPrWkURUqWN3TdItRcW7hGHk7sF+uxu351ti3SGCTOFLHJ465/wD1VFZhRFA+04YY68jjvVlQJdm/tkgnrWhwuTbK21FijRV++xOMe/WodU0aC8tzHKgJOfm6EenNXH2RkvjIAz645pruzPjIO/G0DtSK5n0OKmttS0a5Aidrq0258tuXWr1jq8N5CHgk/A9R9a1L9VikNxI2+NQBtB5J/wA5rnNR0vN1HPpmLdmYlx2I9CKlxR0QqM1pLwhcE9O+aoT36eWzZBOO9c7qOpXNhdGG6hdT2ZTlW9xVSTWI+B5crkjO0LilY1VRF66mWYl5DtiXkk965u/kfUXKCQi3Q5SMcfiaLy4mvp1QkpCBkKOn41Zs7TdkEEqF+YAUGcpNmctuEgyTnn1rVsrYtKoIG4fdpUsjJMscaAL/ABe1aiRpbOxH3ioCnHQnvSuRcmsId96CxChHBY+ldRqKR3NzA7cxygHnvkEk/l/nvXMW7G3HnHLvL2B5A6fzqe71B5JT5By4PlNk/dXbggfX1ppkS1dzOttklzcWfzcZZM/U8VVlUw3Bixz9elRahdG0123x83yHlT1B6fyq1MouJBKM/McjPUUmzeOsTLfLaiwwTlRjFdBbosdru9sGsRI86tJ1wuAOa3po2Fkqr95sn9KUtgKEc29c56mp1+tY1rKUPlt1UkH8DWvA25a5rE3Jw2KtQy7QMVUAqaPpScbibNaC4xzVovHMm18MD2PIrJjp439s1k4BzEN74X067YvEDBIepTp+Vc9e+Er6AFoSk6D0OGrqvmxy361IqyAZIOPetqdSpHrcylCDPNLrTryDJktZlA77Kx5c7iMc+lfRnhvRIdQtWuLtC4JwoJOKl1nwBomqQMkljGrHo6Daw/GvSpTla8kcVSMb2iz5qNB4r0jVvg9qtu7vpt1DcxclVkJR/p6Vw+paHqmkOV1Cxmt8HG5l+U/j0roUos55RkjPBNTx88VCgyR7+1XIUzVEJk0anirKpTYU6VbCcVlI2iVWU1A9XZFwKpyGnBEzZEDRk5poPNOxk11KJzuQ9c9zS4zSAVNGoJxmnyDUxqLTwD6VMsYp/l56VjOJrF3KbqaruMCtFox6VWkQYORWSjqW2ZrtzQGqaRBnpTDHWnKRzajQeetOBOabtwelSoMkU7CciWNTiplWlijqwsVRJFRZX20DirDJioSOaxZsg57UhzR9aCKQCHpTByacelIoweaAHipUOTUXepUFWiWTg07NRgmnZqyR2eDUbU8YIqJjQwsRuagbjNTPULGoLRG3SmE57U81GSKQwWpAaYvTpTx1qQFpG46UvekahAM70g65oxzSjimAuaGOKUDNMk4poljGfFX9JiLy5xWckbSyACuq0ayIAJoqO0R01dm7ZrtjFXkNV0UItSq3euI7EWVNTKaqq1Sqao1RZBzTs9qhDU4GgtEmaM03NGaCkOzSimZozSKRJS1Hvo30CJgakBqvvFOEgpCZNmkLVAZKY0tMkmZ/eoXk96ieYVXknAqkhMmeWq7ze9VpLgA1Vku6tRM3I9i+Hjb/AAyT/wBPD/yFcX+0d/yTzT/+wrH/AOipa634YyeZ4TZv+nl/5CuS/aO/5J5p/wD2FY//AEVLXZD4UedUd5M9goooqiAooooAKKKKACiiigAooooAK+YPjzj/AIWP/wBuUX82r6fr5h+PP/JSP+3KL+bU47ilseYd6Y3XrTyMDFMIGaslMI/vDk1rWY4zmsuMDNa1p90cCkNmzbD5asP92oLc8Cp5Pu1lMqJm3Hese6PJrXuOQayLkcGsos2exm/xGnDrTQOeKlC/5NbXMQwPelHPp+Naml+HNY1pwunadcXAP8SoQo/E8frXpWhfBC5lVJdbv1hXgmG35b6FjxSc1HcpRlLY8jGPp9as21jdXbbba1nnJ6COMt/KvpXSfhp4W0pV2aXHO4/juP3h/XgV1MFlb2yBILeKJR0CIAP0rN110NFQfU+bdL+GHizUdrDTfs6N/FcOFx+HWu10z4KXeFN9q0cfqsMe4/mTXsoXFPGO9R7aT2KVGPU4XT/hToFqB5wmuiOvmPgfkK6a18O6RZgCCwt0xxkIM1r0wj0qHKT3ZahFbIiTT7bGFjVfoKRrDB4CkfSrCMQcVYXmiyYXaM77EvYAVKlrjv0q2VFAFLlHzkRUKMU6Himy1LGvyj3qkiWx0i7lzXnGq2hs9QnhIyNxKkeh5FelAZGK5XxXY5WO8TgqdjVFWN1c0w87Sscki7TtPUd6bMmTwcipSMMvPtikkHIPbrWB6ESm6gdeKp3kBcZ7dKvyjew281WkXcpzyAORQWjGsNKNzq3l5wOOTXdlT5jSbQFUHaAMkk//AKq5+0i8udXRM5PVeo+tar3BmiZmJV0HTOAfcHFaR2OavrIt/amiskdxt4y3+P6VAmtWzvHtuFBHLAnORXLa1rc8elz26o5kT5sxKTvHPtwK8c1LV728nLSSuvoqkjArSMXIycUo3Z9Jzarbw8yyrHDxhmOB+JqD+2LNrlITcp5gJePDD5/yrwPTNZ8u0W2miklYNhW344Neur4TC2cckbZYKCpU9iO31qKl4lJJK7Lt9qlrIrxiQOw5JzgKeuPerD3KXULvDGCAVw3UcgZ/lVQ+C7b7AuAwfHJzzmnaV4Q8m2Ym4nJY8AOQMVl7TujTmjylXULKK+WeKVG2FAAwGTnqSP0rk7vSZ7SVPLXeq5KO3Gfr6V1WreHruIxCKZzuPlgE8AZqvL4Vnt7f55nYkcnNDq3BNI5ZooUkaTem49i33atW8qsjoGYKPvSBeD9Kim0TZfBFXO4dO31qW8W20u3uJ7phGgB2Jnlj6AU1Jy2BsZPrcdpGghtXmjJCjPGT6n1rmLjxjcrfsPLVvmJYbsYPbH0pmteJrdtPih05HSUcvI4GR7CuTj3SynPJJ5NdNOlpdnNKo+ZJHott4jN3FHcFDHs4Ck9Ktaff+ZeYK7oid7EHuT1NcnFH5Fgo5yatWUgjBiDsA+BzwSSeahxXQ3aNm8umutQeUxbVDna395e1blkw8mIjoRXNRMcsrZHzHFdHpoDW7bjyF/Ks2bR2KttGZNRdugLcfnXUwRLJdmE8/uHP6Vz+lYe53EZBY/zrd0mcSahqEoO5YIWXI+nNRJ6BLY4/yXGoXBA43Z/OtO1JHFQeXi5mb1IqxAPmzWJmXFFTKM1Gv3eOtWY1+TmqsJsVSRU8au4piJk1oQR4ApqFzNyFht1UAkc+pp8afaLqKAAku2OKWRtoxnitnwlZfaL9rllysfT61tCKvZGUpWVzsbO2S0tUiQYAHSpWAPXmlJyBSHpXacl7kLRA9qrXFjDOhSWNXQ9VYZFXqawqWrjTscBq/wAMdA1KRpEtzaSn+K3+Ufl0rkL74T6jaZaxvI7hR0WQbG/PpXtJSmGMelTeS2KSiz53u9D1LSm/02yliUfxkZX8xVfjHHT2r6JkgV1KsgKnqCMiuW1fwJpWpMZEiNtKf4ouAfqKXtH1K9muh4xKeMelUJW5rutW+Hms2gZrXZeJ22fK+PoetcPf21xZzGK6t5YJP7sikVrTkrmNSLSKwPzVKpOeRUBPP9aVXPrXbF6HI0WgRU0ZHHHNVFb1qeFuTVMSL0YBqcLz7VWjzVpfu1hM2hsRSCqMvetCXAFZ03eoW5bKz9aYRTz1pjVp0MxhFSRjmo+/NSRdaSEy/D0qz2qvCKs9qmSNIkTVAfvVZccVXPWuaW5uhp60UpGaCOKQEbdaAc0P0FCikMeOalQCowOalQYq0QyTFLjilApD1qiRD0qNulSHvUbdKCkRN061C3WpXxULdaRQxhwKZint1JqPNADgecVJ2zUa1JipYAeKa1PNNNIBhpAOaDyaAKYEg5prDNPT0q7a2TSsCRxTTsK19BNNsyzBj612FlAI06dqqWFiEUHbWuqbVrnqzudFOFkMI4pFJFSkZpmMVijQkU1OnNVlPrViI1aNIk2KM4ppYAVGZKZoT76N9VxJxR5lAFgv703fjvVcyU0yUrFIs76N9VfNpDN70hlzzPejzBVPzRTTN70WEy40tQvNVZpveoHuOOtUkQyzJPgdaqS3HvVeW5GOtUJ7r3rRRM5SsWJbn1NUZrvk1TnuuOtUJLknvW8YHLOqfRHwjfzPBbN/09yfyWub/aO/5J5p/wD2FY//AEVLW58Fm3eBGP8A0+SfyWsP9o7/AJJ5p/8A2FY//RUtbWsczd2ewUUUUCCiiigAooooAKKKKACiiigAr5g+PX/JSP8Atyi/m1fT9fL3x7OPiTj/AKcov5tTQM8yJzSEcUmT/jSE1VxJD4/vYrWtBwKyIvvVsWfQUAzYh4A9alkb5eaigOFq7Y6de6xdraWEDTTN6dAPUnsKiY4mNcEBc5A+tS6d4R17xCf+Jbpssqf89G+RPzOBXtfhj4Y2Gm7bjVFW8vOuDzGh9AO/1rvY4ERQqqFUdABgVyudtjpULnhWj/Aq8lw+s6lFCp58u2Uuf++jgV6Fonwt8M6NtZLAXUo5D3PzH8un6V3QTAp6r7UnOT6jUIx6FSO2WFAkaKiDoqgAD8KlC1aCZ60MFVcnip5SuYrbcU4KaJnVVznj1pIJA3Q5BpJa2HfQXac9KNuamIppqrE3IyCKYTzVjtUMi+lA7iAHqKnRhUMZxUwQMM00SySkNIpI4NOIzVCIZKnj+6Khf3qdPu0ITHgYFc/4olaHRbiReSFLAHvit9jhDXNeMF3aDdKO8ZH6UpvQql8RxlvNFfW0N0nCyLkc8j1FPdfujqOhrkvD2rG11y40ib5Y5W3Q56Bu4/H+ea63eA+Mnn19a5WrHoxZXEbKxIpuwqMnnNWXBVuOhpiHlhwTnikaEC25W5VmON2QQOgxjBql5dy4YqzRuAd21iwcHjkVr4IZHxkxvuIzjI9qZdIwjjmijB+Yqw4Gc/16GrRE0Zlvp98JoZrmRpIC+wxknlSeeO1YHi/4eJLBJc6bwcllQ9PpXoUSh7JVbJOM5+lLp9/Akxtrgbo3+7nsa0i7C5bo8N8J6ZA2pmG8GHjOCjDvXqs9zqVvovl6cYJHhTEaTE5cDsMd/rWXrmnXGj6ncTWUeYLsbJVKjEgByPxHWrVtPNbLH524Iygo/qD0+hrSVmOMV8Ml6DYPinYCPydSsbi2mUAMVUOpOO3euz0LW9M1bS4Li0uI2DryhYBlPoR2NcRe6VaXodpoo2dupI5/OuJ1zwzKlyZrEAL3VTgisnTTLnhov4dD2nVr60sxDLcTxxJ5oG5jgZzWTqviHSVVg2pWg29cTKf5GvA54bn7s3mnDY+cnAqv5YDdMUvYq2rMlh2nqehap43tIr9jYW/2oqu1ZCSqk/Tqa4rUrqa8uJLq6fdLIdx54H09KiiiJYBBkk4UAZJ+nvWnc+G72K1kkuonjlC7xEeCB7+9WkoaGjioo5ibdKcj6VZ0+1LSDPWtaHw1ezaebuNVC9kP3jTrC0dZEBGDnBFaOeljGNH3udl5kItQhqGBvJmJAywHGavzoUBA7VSiXfNwOnXmsbmkkXbfI29fXJ610ds/kac0ntiueiUpKc7s9hW3d5js7eI/eY7j9BWbGti7YMLe0ebaP3aNIf51Y8LoyaHfyN95ouT6kmqF0wi8Pz4PMxWMfiea2NJQx+GbonjcUT685/pWUhTMeNCZ5T2JqVBtY05Rgsfc01UbcSehqUiGWoQWbArQVMADHT0qtYQlmLe1ascR3dKtIykxsFuSMkVdI2JT412ryKrzSjua02Mm7kMrFm2r1Neh+H7I2OlRqww7/M1ch4d0ttQ1BZHGI4zk+5r0PoAoHAroox6sxqy6BQRTgtGK2MRmKQinYNIRQA3bmk2Zp/NGKhouJEUqJo/arJHFNZalo0TKTxe1Z2o6TZajCYry1inQjBEi5rYdetVjyahotO6PJvEHwoDu0+hzJHnrbzE7fwPb8a8/1XQdU0GUJqNo8QJ4kHzIfow4r6VdMjiqN5aRXMDxTxrJG4wysMg1pHETjvqZSoRntofNQcEVZgIyK7bxX8OWtt97oqlohy9rnkD/AGT/AErhIcq21gVZeCGGMGu6nVjUWhyVKcoOzNOMjt1q2pqjCcd6tqeBUTY4ISUjacVny96tzNgcVQlmAzkVCepbRCe9Rsaa8wJNML56Vq3oZWHk1LDyarhsnFWIsBqSA0IelWscVVh6datDOKmRcSN+hquasP0qDvXNLc3QhpOtOxSHikFiN+lIKV+lIv1pDJVqZahXipkq0QyXsKQilFFUSMNRPUp6ZqNutBSIGGajYc1K+TUDDmgoY3b0FMIp7U2pY7Cr1qQZqMVJUsBTyaaaWmnNIQ3vTkUsdqinRwtJxg1rWGmkkEg0OSRSi2Jp+ms5yRXR2unhADgVLZ2qxryKu7gBgVzym2dEYKIJEEFDMKTd71FI/aoKY4uKaXzUJfmmlqdibkwfB5qZJgKz2kx3pPOxVIuDNJ5hiozKPWs83PFJ9ozV2NOYvmYY60nm1Q873pDN70WHcvmbFMMwqgZveo2m607Bc0DcD1pDcCswz4HWmG496OUOc0zcCmG5FZZuR61E9yPWmoiczTe5HrVaS7A4zWbJdYqpLddea0jAxnVNCW8GDzWfNd54zVGS4yetV3k962jBI5J1GyxJPk1A0lRF8mm5NaGR9J/BA58AMf8Ap8k/ktY/7R3/ACTzT/8AsKx/+ipa1vgd/wAk+P8A1+y/yWsn9o7/AJJ5p/8A2FY//RUtIR7BRRRQAUUUUAFFFFABRRRQAUUUUAFfLnx8OPiT/wBuUX82r6jr5a+P3/JSv+3KL+bU0NHmG40mT60mOOtGM0BYli+9W1aH5RWNCMMM16H4F8D3/imQTDEGnxuBJO3f1CjucU721ZLTexqeC/Blz4nk81pDBYRth5MfMx9F/wAa900rRLDRrRbext44lAwSo+ZvcnuaNN0u10jT4rGxj8qCJcAD+fuc1djkwQj8HsfWuSpPmOmEOUcV+XFOVOKk20o4qLF3GBcU8YFNd1Uev0qMzHjA/OmLcsHAHWq7/MwJ/AUqEsCSSTTWPz0xWFlQSRsCO1Zdm7Cd0z0rXx8tYikpq5Xs4P51Mty47GuXYL1qLzWLYzSu3GKZGPmqhErSMF7Uxp+Oac/Sq8gwOlAEsbq3Tr6VaRuKzYyd1WlZh0oQWLlFQCVvSned7UE2HOoODUyjioPNU+tTowxTQmLJ9zofwrE8QQ/aNNmjx1U96sa3dy28KeUdpPcVhQX89xPHbzylo5DsPAyM1E3rYumraniHim2a2125MUmHikyrL6iuy0HVk1TTI7jpIPlkTP3WHWs3xlZY12+wM4lYfqa5bTNSbQ9RVzuNtKcPj9DWVro7E7O56twycenFNjVQ2OhqLT51njyhB7qc1LICjbiMDHWszdCyjDRIOWY/lSXMbGORTjHmAj0JFW44GeNZiASMY+lRzqZH28hVkyoPfr/hVIN2S2z4hCk4YDmqV1bH7y8e9WyAuBzx1zT+CB3FVcpaFBwlxbeXMxc4xgmsuayubW2OyMXFqxyV/iU+3pWzNbLuLDGQc0iyGMOMDHXjgiqUilsZmlx2188iSM0eOBEx+b6+9JJol690628YliQg78gfhW+un6bqUBF67xv94FV5qKLRfsav5F9InOfmbIxVEczT0f3mDf8AhSXWlmiaBIWkbczZwF9OawoPhMwvgl5qcS2+CWMQJb2HP86664+0QSjy9QOWPPOc1nXaalJMzPO0ka+mBScmWlUl1HWOh+HPCt/DNAplmQECSZtxUnuAOBWZrEsd/fvc7/kPABHWpJo5pAQx5x361mG3mGS+CPWo82VGlGLu9SC5kZZRHCBg8VCdNErbwAr46dcmtG0gXcd8bFgQBj0p0oELMMbSD3GabZM3dnM3kTRblPGODWZbASMc9jnI710dzavqFyIo+GztPHrV+TwNfWyAxyRSrjd12n8u9Bk9zEj/AHoUqArE9NvWrkzs1+qNkiJFGPwq7Hos0EURkTBLkZHP51FHBu1O5fI2lyv4Dj+lQyg1c/u9PtQeSTIwP5D+tdIsbQ+GoVxgSTFs/Qf/AF65dSNT1xmjGY4/kB9hx/jXWaoRBpNhFnGdxA/EVlIzkzHSIu23tmpGiOQi8YqSI7VzkdOKlQAuCSOfehIzbL9lb+XCD61oQpznFU0kZUCheKvW8qEDcpB9q0SMGySUbYz2qtbWU1/drDEm49TjsPetax09tVlKRPtUH5mI6V2Om6Za6ZDsiUbj1c9TW0Kbk9TKU+VEelaammWSxAfMeWPvV7HNI8qg8k00MTzjFdKVtDBtsk6CimZpm4tyOlAiXFJj3pgJpSaAHd6XANMDU4MMUmMUqKjYU9mAFMDA+59PSpZSuQSZAqoxGeKtTuAvNZiS77jA6etRY0TLYXIxTZYsKeO1WI0JYelLdYWFj7UOOgJ6mJIm4nFebeNPBz3E8mqacv74D99CP48fxD3r0+3iMoZh0rPuU2XZ4471mnKm+aJo0prlkeCQ8ZGCGB6GraGvRPFPgkah/p+nBI7g8uvRX9/Y159LBLaztDPG0cicMprrVVT9TllScGV5zwazJiea0pu9Zs5Gaa3JZTb71KOlIeTS+laIzFHWrUPWqq9atQ1SJNCDpVn6VWh6CrPapkXEjc8VDU0lRCuV7nQhDSHpS0h6UARvSKKV6FpASpjNTR1CnWp4+tWiGSd6D0pe9IatCYxhxULetTkVA+aQ0RGoX61Mx4qFs5pFDGphpzU3NJjFXipBUan2qaOJn+6CakBDwelWbWza4bocVcs9JlkYMw4rpbHS/LHIArKVS2xrGnfczrHSQAMituGyWMDgZFXFjSNeAM1G8lYOTZuopDGAAxUeaGkGaiLj1osJkhPHWoXPvTGkA71E0o9apIm5IeKYWAqFph61CZxmqsImdqgZvyqOSbiq7zYHWrSFckeT3qPziD1qBphUJmA5rRRDnL/n0Ges03AFMa5HrVco+c0GuKia4OOtZz3I9aYboc01AHURfa5461C1z71nPc55BqFp896tUzN1TSe696ja6J71mtMSaYZDiq5CHVZcluc96rtKTULMTSZNWlYycrji5NNzxTSaM0yRcmkzSE57Ugp2A+lfgYc/D0/9fsv8lrK/aO/5J5p//YVj/wDRUtavwL/5J63/AF+y/wAlrK/aO/5J5p//AGFY/wD0VLUMR7BRRRQAUUUUAFFFFABRRRQAUUUUAFfLfx9B/wCFlf8AblF/Nq+pK+Xvj2M/Ej/tyi/m1NDR5Zj0pwWlAxSgZ607DN3wj4bufE+v2+nW6kKx3TSY4jQck19VaTpdpo2nW9hZRrHbwKFVfX6+/euR+FvhKLw54YiupEH2++QSyEjkKeVX8ua7roK5q07uyN6Ubakw6Ux03CnryKG4rOxY63m3gow+ZePrUwyfaqJYw3AcdD1q+jB1DDvTRLViIrgYqJhVl1yKhYUMaYkRpGPzULxSMfmpATjlKxJB/wATZD6A1tKfkrHcf6cW9KJbjiXDzUijFRJyamFMQHmonHBqao2HWgZXQYeraDiqwHzVaj6UAKRSYzQzYpqtmlYQ4ZXpU8bVGBT1GDTE9SprCB7Pp0rmTEQQycEc/jXY3Mfm27L1rmSjKxDDmpkuoRZzPjTRnkkGqxoWt7oAyED/AFb9MH2OPzzXl+pWeG5H3WBBr6FswWt3hliDxSLyjDhlrznxp4RbT1e8tMvZOePWMnsfb0NS49Ub06l/dZzHhbWmg1U2MzDBUGPPBx3H4da71jk4HbqD3rxXUzJaXtrexfLIjfhn0r1vRr8anpNperhTJGCee+OR/Ookup1QfQ25i3kqiIoYkDBFNlCxMYowzM2OhzgDH5VFFGzShnJ9cZ6/WrKxLHIHlwsrcBV9PWkGiIJIyC2F+XvzTOUwA2eOanjjIiyMEv6nvTJElTqnHTA71NzUhdsAtznoagk7n8/epnB3EYHAFQypk8EA+9MaYLJuKHcu0dqZNdMoOX+XsDVd43Uk85VeQB0HrVRxJJE0hICqOp7+lNXNE0LLOhO4gMR3zmo5rxtwYHAHp3prxGOIs3IIJxjk+gFZzpI4JPCg4Ix3qrBcvPc+YpLZz3NUpXDL8oHzdfXFSRQS+YMsFEibifRalTTZEjWR5gY2IwUO0jpyfwOaLEuZWlZYVXaBhhk/Lnae1VGJ++iBjkM3PGB7Vo3OmyRl/Mk3FsIuOC3Xnj35/Gs8w7oQCV5wNyj8zSZle5Y8PwibUhtUeWHLZ9fTBrt2jYxOPKJdgRuHB69KwvD9rDbQCdztUjAOM5rWiaSeTcz7sOB32/j6DHemiZMGijNqwjU+SRh1OTg4GOTXnuot/ZlhcOrFuSELDBYn/wCvXoGoh4DJNu+WNQXAA6c8j15ri9K04+LPG0GnnJtoG8+Y9dwzkD3pcvM7GSnypyNHwT4T1G7sFuFhIDDJkcYHv9as+LYjb6ha2DMCYYcn6k17FsS3tfLjRVVRwFGAK8V8TStd+JruQjhWEY/AUVKajsYU6jmzKHyqBWlpsW+TcckL61R2/NjrW/YwCK2Hq1QkXJlmNMsBWjZ2b3MyxID16+lV4I84NdV4cjUBjgZz1raEbsxk7I2dPso7G3EUYx3J7k1YdsDg0pO0VG/Cj1NdRzPUYi7mz6VMeDSIu1felJpARyNngd6VRgCmqMkmn0AFBpaQ0AJyacKQdaU9MUmNEcrhFLHt0pIMlS56mq11JuljiHUnFXVG1MCpRTKGocj5eCByPUVVs48tyKnvZCt1Eeq5wfoakii8t8A8Y4NA9kWolqC/P7rb61bjxiqt0m6ZQemKGtBJ6la0Ty4yD3qtcWu6VnrSCY7UjIDUtXLTszJ8vC7D0rlfE3hRNStnkgGLtBmNj3/2TXX3kkUPBJLnoqKWP5CqweWdfltmxjOZGC/p1rKzuWpXVjwK9hlt5pIJkaOVDhlI5FZM/XmvSfH1gsl206xbLlEG/a2VdffjIIrzeYjr+FdNOamc9SHKUz14pR1ofk0A4FbowsOHUVai61UB5FWoTzVxJNGLpxVnnFVoegxVnrUTNIkbd6hqVhUQrme5utgxSGnU09KQET0KaJODSrSDoSoKnjqFetWIhWiIY/FIadSN61SEMPSoXqZuFxVdzQxoY3SoW61Ix4qI1DNBj9qZ1p5BPAq5Z6e8zDK8VLdkCVyK0tHnIwDj6V0un6TwuV/SrmmaWEjBwR9a2URYlwAK551LnRCmluRW9qkQGVqZnC8DpUbyVWll561na5pexM83vVd5feoWkzUTSirUSGyVpfeojLx1qu82B1qu02e9WokORYeb3qF56rPIPWoGnA69KtQJ5i00/XmoWuPcVUkuB0GKrPPzVqBLkXHuCeCahefA61TeY4yDUDS5wc1agQ5Ftps96heb3qq0vPWozJWiiQ5Fkz1G0xz1quWNJnNVyhcleXNRGQmm5pM1VibiljSZozSE0xXFz9KSjpQfagBM0ZpKO1ABnNJRnHFJSAUmkzQelNpgfS/wK/5J4f8Ar9l/ktZf7R3/ACTzT/8AsKx/+ipa1PgV/wAk8P8A1+y/yWsv9o7/AJJ5p/8A2FY//RUtSxHsFFFFIAooooAKKKKACiiigAooooAK+YfjyufiNn/pyi/m1fT1fM3x2H/FxM/9OcX82oGjyvb7Guq8AeFJPFfiWG2MZNlCRJcv2C+n1PT865soxIAGSeAB1JPavpv4ceFF8LeFoYpUxfXWJrk9wxHC/QDj65pTnyxuaRjzOx16IFQIowqgKo9hQ33fpTwKTGSRXJY36jom3DFSEZFVrc4kZKtU0DIZkLJxRZz4+Q1KapzKY5Awo2FualROuDT4nDxhh3FDDIqiCEioj1qbrUJHzUrFonT7prLkX98WrUX/AFZrPlHz0MIksQ4qTvUafdp4OaYD6aRTqSkBHt5qQHApKQmgBHPNLEM1G3JqaLihCZOowKB1pR0FGKAJOq1jXlv5c+7Gc/lW0OlQ3cPmwEDrin0JKUUwVEYEE+lRSiK6WS3nRZI5RtZCMgiqYd4nKg89/rVa7vBamOeQhY94UnsMnipvYqx5H8QvCFxoiyyJGZLDzN0Mo7f7Le/8/wA6j+H2tqLZ9Mlba8ZLKfVSc/zP8q9yurK11fT5rO6RZredCHU9we+a+f20N/CHjy4spAxt0bETOOXibofr2PuDUzjZHTQqX0Z6nC7cMMtt5THr61bALSKB5gATLOTz9KwdOu3j/cFlyBwfWtwPHMFjkYjBBfJx0rJG0tBCAWIGDsUhc9M9ajcuWAZjkEjBPT6VYwGTanGcnJqqwwc9hk5PXHr+tJo0g7iKmcKMZAOfWonhI5AOT0PWrdugYFs8gZB9aQTAYO08LzzQimUmgG1Qo2mQYJJ9KSW3j8tYyq4DYIA/HJq/IY/lQRBWUg+opVnD4I6Z4OPvVaFqZM1p5igqrFiNgbsB3xUEum5ygJ+QZwABzW7M3AJXkZP41nyS/OH6f3v6UFRuUorcK0TnzA2CucjgH/Cq8pc24ijbJUsEyMhj2PtU8tyBg9ATg8dKo3lyuVEDARqTkqenSgOW5WjuJzIJpSJX3cbeMN16+tMgjWS6Adl2jBIxggfhT1eGRpDnZuffuI6H6060CudwZZJDhM7h8mfXila4mrG4sa4KxnO3lR04Pv6+1SRSfv2khXEitngcOPce1QIGhH2godz4jwD3x0q3cT21jE08siKipudmPB6ZppGE5WVjK8U6nb2djdSbtkrKoVM+h9PzrT+EFjFB4cvtenUBruZyp9I16f1rio/DGufEXV5rqBvs2lMwH2iTkEDsg/i9+1entFbaJo1t4d04sYbdQru3Unr+eea1Xuq7OWo0/dRs6dqVxqUVy8kQSJQSr56fX+deT3jG4vJpj1kkLfrXfajqcemeGGs4Xzc3JYcdVUgZJ/Dj/wDVXB4yayqO9kOirJsjtoDLPjbXQxx4woHAFUdPhwDJ68VrQrzSiNsmRAo4B6V0PhzLlyPuiueOcYHUniux0Oz+y6coYfOxya2prUxqOyNE8n6UzG58+lOY7QaAMKPetzEWo3POKeTgVGvLZoAcowtFKaSkAtNPWnU09aAHLTSwAJPQUvaqmpTeRZse9TJ6FR3KdtL9q1bKnKxAk/Wtg8DFZGgwAWr3BHzSt19hWpIcA0lsU9zMujuuAfSrNqdwIbt0qswLyH61cgTC+lCBllPlFMdQ77j0FSL0qvPKVYRoMyHoB296ZHUR3RCAT16etQTFiSMlR6dz/hT1i8uTcWLOerf4Ulyvy7hSsWiC2iTyZUVQp3bgfX61CgEUbBhjb1qzbDAJrA8WaiLDTnKn95ICo9aiTsrlRV3Y4HxBdG916QJ8yL8vH0xXnupW7Wl3LCwOVbj6dq7a3yZDIep5NYPjCEfabe4xy6FW+oP/ANescNP95bua4iHuX7HLHqaTikc/NSE9K9Ox51x6datwDJNUxVuE1SJNKHpVgcCq0JJGasdqiZpEY3eogMVKxwKi/P8AGuZ7m8RDSHGKdSEZpDIXpUokoUYpITJk7VZjqslTKcVoiGTZpCaTOKYTVIBGOagc1Ix9KhY0MERsajIycCnMau6damaUsQcVD0Vy4q7sS6fpjzMpZa6qy01Ilywos4FhUcdqsvJXLNuR1RSSLG4IuBULzCq7ze9VpJvepUQciw8oz1qvJKM9ageb3qrJOK0USGyy86+tV5J1x1/Wqr3AqvJPxWiiQ5FiScY61XaYk+1VXm5qCSfNaKBDkWXnA781XkuPUiqrS5PWoWfJ65rRQIciw02e9QtL71CWzTCRVqJDZI0pqMuaTmk5qrCuLk0mTSUmc0ALRSUhNMBTSZozSUAKTgdKSikzQAZJozzSE4OTSUCFoNNNGaAFpD1pKDQAtJRRQB9L/Ar/AJJ4f+v2X+S1l/tHf8k80/8A7Csf/oqWtT4Ff8k8b/r9l/ktZf7R3/JPNP8A+wrH/wCipalgewUUUUgCiiigAooooAKKKKACiiigAr5p+Og/4uF/25xfzavpavmv44Kz/EZVRSzNaRBVAySctwKTLhuZHwt8MtrvilLiaMGysMTSZHDN/Cv58/hX0cvNcp8PfDX/AAjPhaG3lTbdznzrkHqGI4H4DArrRXPUldnRBW1HClbjBpBxT+1SMrS/upUl7ZAP41a+lRNGskbRv0biiBy0YVhiReGH9foaA3Ju1QzJvU1LmlxkUCILGXkxtV496yHJguA3bNaqOJEDL0NUhSRGww2KjI+appBUZGaAQ7pFVKQc1dfiPFVXXIpAhqnipFqNRipFpjJO1NNLTTSATNIaM0hOaAG9TU6cVGoqQUxEyningVEpqZaNxDhSP0p1RSttQmjoJbmHeJict/C3NYniMhNAmVusjqo+uf8A61b/APrrX3Rs/hWF4lUPYRRD7xnU1Eti472NrSLV/wCy4mL5bHGO2Bj+lcV8V7WJLbSrgopn8xkDj+5gEg/oa9GsU8myhX1QZ+vWuO+Kll53hVLkKf8ARrhXYjsrZU/qVqpr3Aoy/eI84s9R8sokz4Cj5HJ6exrrbTUUuYHYMgkH3sHOfevN2kV4gF5P86s6dqc1lJ8jZI7MeCPT0rnR6Uo3PVLe5WKMOfulVye4z0p7hZHjO5sNt6jtXO22qx3dgqo0ayvjzQ5GV9Pr65rTs7x2Z0fBTP7s+3t/nvVXuYK8WWiQspO7YByAvSpJnhiRSqk71wfp61EQrou4hnZ9qgdRQSkiCIhhJDgrk/eHr70krGymmMnuV5ZSSDkjNQi5Ma7iA/zHrSO5W4ChAjEHhhjPY/yqGRxucTq0eD6cfSmappobJckvkEnAO0dgKhMgcMzEDYC34VDM224l+zDLbf4gcdenpjpUUwCtOmPmAUMCcZBPNFinJIS5kZhGAMgn5Qe/FUJIllJBBBH61Yure5W5Z5AQjMECgcEY7fU0y5Vm1OKGKFmIBI2jnnJH14osHMmiOaOPzkgCFdwBAPXOOp9sir+npFZXzxJgBVyG25w3TAzx1NVZYrpL1VCsZEyRlcc/3cfT+dXpHVJ1mk+RYcktnGX7An1zmqRhORoSTLb2Ut1cHpJIyADovf8AUCkHhK88UIt1q8jado7Yfyh/rZgOgx/COvvWj4b0jz1i1bVMPDtAtLZhnzMf8tG9s8imeK9caa8j0+KfdM/3lU/cX1NVolc4pycnZGhLr9vBbJp2iwiG1iXy1YL0A9Kp+atrB5suWdux6k/571VtYobW0aaZxFDGuXdui+9VkuDqCi5+YRtkxq3Ze359aiUm9WJRKV9K80xZ+S35D0A9qgWPIqeVd0pFTQw85PSs0jV7E0CBUVaux8jFV415qyvAqzNgHzOgHZhXoqfcX6CvOMYcH0Neh28oezik/vIK3pmNQU8tj0p54FNQYFObpWpiRyHkClAwKYBufNSGgY00UUUAHakPWlpO9AhyjJFYXiGVm8uFTyTmt4cKa5/b9u14DrGhyxHoP/r1nLXQ1gbNpCLezhixjaoz9e9Ok5XFSMT370gXuaZNysItpzT0qVhULE7vl/OkMc0mDtXBf36CiNMIeSWP3iepqJPvEd6nHSmmFhrDmoJ+Vqdqgf1pAiIMIoyTxgV5f4o1E6jqDlT+7jJVfc9zXXeKNYW0tWt4XHnuMY9B6158VLoc9e9c1eX2UdNGP2mRwcDd60zxlo0sPhiC8cYPmBgvopra8P6O+qXqKUzbRnMrY7eldB48shdeGLqML0TgfSlRg174VJX90+fG5NJxjg05gxz8pqWG2aRuQa9NySVzzuVsijDE4FaNvayOeBWjY6WGxhfxrdt9M2DJXk1zVMXGGhpGg3uY1vYuVGc/jVv7E2OK3orMAdKkNqtc0sbc3jRSOZayY8YpF09vQ/hXTfZlzR9nQCsXim9i1BI5o6eQOc1GbD3rpGhU55qLyE9B+NL6wx8pzcllgdDUYtWGMCuleKPnOBUDRR+oqliBOBhGFx/DTgjDqDW15cIHUVG4gUfeFbRxBHsmY5yDSFhn3rQkWE8g1WMceeoraNZMl02VWOBUTNVl4lx8uKhMGeK050TyNDIYzNIFA4zXUabbLDHzjtWRZQrFgk1rrdRouN1ZTlfQ1grGi0oUdaiefAqibxT/ABConu17MtQoluRYln7Zqs8/FVpLlT0aqslz7itFAhyLbzjueKrSTiqslxjvVV5wT1rVQIcyy8/vUDXGe2KrNNzwaiZya0UTNyJnl4PNRNITzTCSaaatIi44knimUcUHpQAd6aetLnmgnmmITNJnnNFGaQDaKUmm0wFpOaO1J3oAOlJn06d6Wk49KBhSGg0nSgAo7Ug4oB9aBAaSiigApDR7ig0AGaM0lGaBn0x8Cf8Aknjf9fsv8lrM/aO/5J5p/wD2FY//AEVLWn8Cf+Sdn/r9l/ktZn7R3/JPNP8A+wrH/wCipahiPYKKKKACiiigAooooAKKKKACiiigAryTXNAGs/HBLmZN1vYWMUzZGQXywUfnz+Fet1h3drFFqk9wFHmzBdzeyjgfnn86ibsi6avIQetPFNFOAzXMdI4U6m0ZpgO75qORWDCaP76jkeo9KeDTk60xbCKd6hh07U4dKjKmGQ4/1bfoaf0oQitdpuTPen6dNuQxnqOlPkUMpqhC5gvFHQHjmjZj3RsEZqMDJxUnpTcfNmmQmJL6VA4+Wp35NRMvymgpMripFNNFOFAx2aaTS54phpAHajFAopgPXinCmA04UASLU69KhQVOOFoJYZqvdNtgY+1WKo374gb6UnsC3KunpvSYe1YOtxv59uSPl3rXRaQMmX6AVV1K1V87x0YEfnRa6HezNdRst0U9QorK8W2ovvB+qw7cs1q5X6gZH6itiUYFQzp59lPDwd8bLg+4xVyWhnB2lc+XImcxhl6nmpA685Izj86ZGrwzNA52MrFce44xTj2LYz0yDXKz2Imrpl1mVIS5jmXiOTP6GuoivWUhJiIZmHysfutjvXnnmhJMqSSD265rt/D7x6/Zy2963+kKMqwHI96TG0mbK380bYlDNGOd2enuKtR3KtcxtbyK/GDtbkLXK6n9o0FgkspmjwMFOpH496zo9XtVmFxE7xFGyvyZOaEyfZdUemoontk3urPGcFuuR6f41QZFLyJLIREACQx6E46fjXIReO4IMx5kfccsVjABNWD460oRv5kUuduQNv3j27+9WZcskaN28qzI6D+8pDDg88j+VTRoEDTGNAuAMZzu4zg/SsmPxvo1xHLNLHKrqoIQjJJ44FV18Xae8buyMHzkAdTgcZ7UF6vobuk27XUKtcS/IfnclsHrjB7/AJVauLCP7YLpmIZu3Tgdhjrk/wA65ZfGVogKrbvuAwrkduOfrxms288ZX08bBcxynALr0Iz09vT8c00JqV9Dr576w0i3NxcyQxMHx8zbmcgEjp61k6Tdp4w8UW9ij406L97cHpuHTaPr6159dXU074bcxkfO0dSf557V638M/DP9l6dLqNx/r7j93j0xyacUZ1fdi2dpql0llBLKmAiJtjA4CqBxivPdBR9R1i5vZCWLHaCe1dF40uTHZJCpwZSc/QVS0JI9I0CXUJRt4LDP6UnuYRVomT431FpHh0S2bliPMI9+35fzrooIFhtVQDhEAH4VxWkxvqWvrdz5cly/PoK7+NcwnPpUvYrYxlTMh+tWVGBio9u2Q/Wp40JNSkDHoMCpVXJ5pQnFSRoWdUXlicDFaJGbJLe0lvJ1iiG5j19AK7WCD7Pbx24OdigE0WVpFZ26KiBTgZNTDlia6IxsYSlcUDFMc4FSdqhPzPj0qiRUGFFO70h44ooADSUvakoAKUDJpKeo5oCxHcv5UDt0wCaydBiyJ7hurNtH9at6zL5dk/q3FTafb/Z7KKPHO3LfU1H2i+hYxuNOPSlxio5WxgDqaZO5E53ttB47n+lNk4xinqoNMl60ikMjGWJqamRjAp9IY1qzNXv47C0klc/dHFacjBFJPYV594imuda1cWFoNypjdjoPr7VE20tCoRuzm5bifU9TDYLPI+1QP0FWTp9z5rQLCzOGK4AzzXWaXodtpTJIf3s4x+8Pb6e1TEeTrciZOJsSp/WslSe7NfbLZFrw9ph0zSlifaZWJZ8dvQfgMU3X4BNpVymOqGtaEfu6ralHuspQf7preStCyMIu8rnzU0KCRl44Y/zod0hHTn2ovX8vUbhP7srD9aptKXfntXEpS6s3aRu6dqKxgbq1G1tMcVySSBBTxPz1rCcHJ3LVkdQNc96Ua2M/e/WuW833pDL71HsR3R1Ta4vrTDrPPBrl/O96UTe9UqVhaHSjVVbkv+tK2qrt61zHnc8E08S56mrjSuLQ3X1EseDULXjHgGsjzecVMjcitVSQnIv+dI38VMZJW/iNNRwBTjMa0VNkOYmyYd+KYVlz0zTjOcGka4IHQVqqZLmRkP6UBn9KDcHPSmGbitFTJ5yZZWHU4p/n46mqRl4ppl+tWqZDkXWuSelRPK5/ix+NVGk7A1Gz/wCc1agTzFl3Ofv1C0pz1qFnzzmmkk1ajYm5I0h9ajL5pvNLVWE2JRnmlppoELnNJmkFFMBKKWkNABSGkpTzQAlJS9KaSPWgANNp3ammgAzSZoNNzQMUmkzRmk60CF/GkNJRQAuaSjNJmgBaSgnFITQAtIaO1A5oGFFIAcYo5oA+mfgTz8Oz/wBfsv8AJazP2jv+Seaf/wBhWP8A9FS1p/Aj/knZ/wCv2X+S1mftHf8AJPNP/wCwrH/6KlqWI9gooopAFFFFABRRRQAUUUUAFFFFABWXf/8AHz+ArUrNvv8Aj4/AVnV+E0pfEVRThxSUtYHQLS0lLQAZpwOKZSZpiauTsokQg8gioUYgmNvvL39RT0bkA0TIWGQfmXkGmStAPSs2/UoQ47c1oqQygiq93GHibNJ7DW5btpBLAre1TYrK0WYvAYz1U4P4VrHgVS2JasyNhzTGHFO7mkbpSGiqRzSg0rDFIKRQppppxphNMAozSZooAeOakWo1qVBQImQU+mp0p1AgPSs3UmxER9K0WOBWRqbfKB71LGkTaL92U+4/rT71NwJ9x/Om6L/qJD/tf0qe8wInI7DmqWxMtS1NjBAqFOv0qU8qDTIxyavczsfOnjbSH0fxRfI8eLeaVpI39AxzWEsikCOVQD2YnqK+gfG/huPW9MdlQGRFP1I/xB5/OvnyW2ktbiSCYHch2sGH61zzVmepRqc0Rwt1BJVivpzgCui8Gsy60AzCPdGRuY8Gse1wFVCNvHB7GrmnSyWWsQPHGWO4A7jxWLZ1qN0d9c2Vncb1lQTBhhn25CD0HvXluuQG1upYbZWFuHID4yPpnoTXqV7A1ygF5KTF/wA84+h+pPaqh08alH5UsQW1GQqhcgD1H60X1F0PHpGK8456ADtUQViTknPX2rrdd8LS6bIZYUaSAn5T1I+tc5JBsJ46/wB2tFK4nAZGpXBPHb61bR0Iw4Cj1zxUO1iowenrQu7HJx7dqbYWsWWkQLwR+dVZXJXjr69qcqnkEAD26VY0rTm1XVFs1xtHzSFR91f/AK9NClLTU1vCej+dK9/OuUQ4jyOrdz+FeyeG3D+HIgpGUmkVvqcGuTSCK2gWNV2xooUD0rp/CcEy2t+xidYXKFGYYBIzn9D+lOO5w1ndGH4oV9S8QW2nxZJ2gMR/CCck/lVDxXfrKYtKtiPKhx5hHQt6Vu3JFtHqWoKQJZmYI3faOK4rYWbLElickmoYRXU1vDduFeSXHCrtFdXCQVxWRokGywQ/3yWzWrH8uOaZMmVrq1IfevQ06HK9RWvDZXFwuVibb6kYp/8AY1wW+6AP96mosnmRlDmug0PSW3C6nGFH3ARVzS9FjtiJpSHk7egrY6VtGHVmMp9ENc4Bx+ApFGBSNyad2rQyGMcCmoO5pGO5sCn9BQMaetLTT1pwpAFJS0UxAOtPApqjmnnpSGjK1Mefd21v2Z8n6CtVRgVQhj8zWJJDyI4wo+prRpIcn0Gsdoyagfk1Ixyc+lRHlqLjSHDgVGwyak7UKuTSHsNVeKU8CnHiszU777PGFjBaZjtRR1JoYtyjruoyKi2lovmXMpwoHb3NQ6Xpo0uzKswe4c7pJMck+lXrGwFlGzu2+5kOZX/oPanTYFJLqO/QoSsQajvY/wB9p9yByrlG+hFSSjk1Ps82wdepXDD6g5oauBowD5ai1Ef6NL/umrNuP3Waqau2yzlb0U0T2CG58v6u+NXvOePOb+dUVbNW9YONSus8Eysf1qnGDsJrktobPclLHFN3HrTSaTNKw7j/ADKb5npTT0puKaSFcl8z3pQ9RgU8AYqlG4uYeHp3mGmAU7BrdQRLkSKxJHSrMZ4GKgjT1qyOFxVcpm5Eu73ppc+tR5wetMY+9WokORIXppkqIn3phNaKArkhkpPM4qLdg0hNWoiuSF6Qt71Hmkp2C48tTC1BOf8A69NxTsK4vY0A0maKLALRTfxoBoAU0gpe9JkUABpKXikzSADSZxR1ooASjNISaTrQAppOfQUdOtJn0oADnPWmmlzTTTYAfrTTS02kAZozQTim5oAUmg/WmmjPagYvPTNBPpTc80A4oAdmkNJRmgYvaj6GkozQSLSZozSUAfTfwI/5J23/AF+y/wAlrM/aO/5J5p//AGFY/wD0VLWl8B/+Sdn/AK/Zf5LWb+0d/wAk80//ALCsf/oqWpYHsFFFFIAooooAKKKKACiiigAooooAKzrzBuMZ7CtGqF4AZ/fFZ1fhNKXxFXFJT8MOvNHBrBG9xtLQRRTAQ0wnFPpjUACtzVkHctUicVNDJnjNMmSAfu5Mfwt09jSyDKkU6VA6mmIxdMH73RqAMzTX8nVpoezgOP61vt90Vzd2fs2q21wOBu2n6V0TH5R9KI7BPe43vSHpSA0p6UySFxTKkYUwCkWIajJqRqiPWgYtKKQUvegB4qZKhWp46BEwGBS96KSgQ2Q8VjaicgfWtWU1kXxzUspGho422Of7zGp5l3o6dytR6YAunRfQn9aJnIPHWqJZYhO6FP8AdoT7zCkt/wDVAULxKfeqIZKy5HNeJ/E7w3/Zuox6jAMQSna+Ox7V7dxxWP4n0SPXtEubJwNzodjHs3Y1M43RrRnySR86wqGXa2GT+76fSp1jMUyNFKCAeFc9Kg8qaxuntpkKyRsUYEcgjt/OtCBlkdM7TkgEkVwS0Z7dOzR6HawtcWcTyHKlASuMCpWzHiGNVCnqTxUsK7baJVPG0HHahUCybnIPb61Rl1BbaPZ5bpv3DByMjFclr3gtblnnsV2sf+WWeK7VXGwDngflQjhlKkHg9ziqEm0eJXOmXNrI0csLhl4I21QkBjGNhB9K91m8tz91SR1YgVkX2iWl/G6yxKi9SQBk0+Yvmv0PEZppX+XlcHt6V7X4I+HU9noFvcysIrm7USy7x8yg/dX8v1qt4Q+HEbeJRqF1h7G2O9UIzvf+EH2HWvYRzXTTimrs8/FVrPliYNl4S0+3lWSUNcODx5nQfhVvxBcCy0aUoFBI2RgccnitXgDOeK4zxBqK6jqkNtEQ1vbne57E/wD1qqVoxOON5S1OY1q58uBbRSDhQrevqTXPqu5yB15rRviZbuaU4w7k0ul2omvYwRwp3H8K5kdmyOnsLKR1htoV+fAFdbZ6Tb2ka7o1klxy55ql4cjBe4fAyAFBrbc10RitzknJ30GnoBxj26U3AozSrzWhBLEMCpDSIOKU0xDO9DHApajc84FAhEGTmlNKOBTWNAxO9Opgp3ekAuKBS0oFAIcBxQ5wuaWo5mCpSY1uMsxzM+OWfH5CpmOeKgssizB7sSf1qU0dAtqNamU5jQBmgoAKdwKXGBUcjhBkkAY70mIr3l0ltEzseg6VRsbRmkN7cj9+w+Rf7i/4mpI4ft10LiTmJD+7X+8fX8O1XHIoH0IZTiqUxyasysPWqb8mkBCwzVyzAwVPQ8GoNlXLWPpxQBaiXZCBWN4mn8nSLhgf4SBW23XiuM8b3YSyEQPLtioqu0WXTV2eEeKYfK1l9o4kVXrNHypiui8YwZks7gDqCh/pXNMelc0XeKNZq0mJ3paaCaXNUSxc0YoA9aeKtRJbACnY46UcCnVtGJDYg4qRRzTcU9TitkiGyeMDFP3YFRqeKRmquUzbFL0xjSFh60wk1aQhSwpOpptANUgA0E0maDxTADjHSjPFITmkP1oEFBNJmigA70ppueaU0AFHeiikAmcUZo70UDDPvSZpaTvQAUnNB+tGaLAIabTjTTSAQ0ZpCaShABIpKKM0MAz2ptBpM0AITxSZoNNJoAUmkJpM+9JmgBc0uabRSGO70U3NGfemA6iko60BYWikPSgGgD6b+A//ACTtv+v2X+S1m/tHf8k80/8A7Csf/oqWtL4Df8k6b/r9l/ktZv7R3/JPNP8A+wrH/wCipaliPYKKKKQBRRRQAUUUUAFFFFABRRRQAVRu/wDX/hV6qF3/AK/8KzqbF09yGl4PvSUtYm40gjpzRwfr6U6ggHrzQAzFMYVIQR700nPSgLlaRTUauVIqxK21SR1qgJdxw3WgaNaMhlBqGT92wcfQ1DBLtbaTwelWpAGTmqItYydZi3W+4fwnIrZjbfbRv/eQGs25Hm2siHqvH+FXLNt2m2zesSn9KVtRvYlFPPSo81J2pkkbUzFPam4pFjGqOpWqOgBKWkooGPWrMdVR1q1HQJk1JS9qYxwKBIglPBrIuzxWnMflNZN2eBUstG3ZcafB7oDTJeWqZF2W0af3VAqF+TVEIsw/cFNc7ZAfenQ/cFMmoYiQyEuQB0qUMsi471VDEIHAyCMU0S7ZYwOrNj8KL2YWujxf4naSdN8U/bAP3N8u9fZxgMP5H8TXIwuTtYDIHYHpXuPxI0VdW8J3ThczWn+kR8c8Dkfl/KvAUU5+RTx91lrnqxsz1MLUvD0PUtC1JbzTIgXxIo2kL14rVE65ClSGI9e1eY6Fq8mn3f71XEbna23uK9CgAnUSK3B5AasDq5epdWRiNhwcHjmpN20DHHFQIkcYweOeuKBIRnaTx7daCWh42gsx545x1p1ram/uliT5QeoPO0dzVF7jEyxx5d3IARRya7nRNM+w2mZRumk5c/yFbUoczOfEVVSj5l61gSCCOGJcKgwuev1/rUs00VvGZJWCxj1qK6u4rKLfKeT0UdWNczd3cl5MXfgZ+VQeldbmlseVGDm7sdq2sSXSsiExwjt3P1rnrh44LVlibLydcelXboZU5rLlUZzgVzybbOqEUkZkq8gYrX0aEqry45+6KzmGZfxrtPDWmb0SWRf3afN/vH0pxV2KcrI3NHtTa6em8YdzuYf59qsOanY9T+FVnPNdC00OTcavWp0FQJ1q0gpoGPHSkNL2pDTEITjNRDls05zzSIMCgQdqaaVjTaQxRTqQUtADgM04Ui04UikHaqd62IH+lWyeKzr45MUY6vIBSY0Xol2Qoo6BQKQ06m96YkJjNSKKQClJwKAY12Cgkms8q17Lgn9wv3v9r2qaTdcvsU4Qfeb+lS4VECqMKOMUhoaxCrgcD2qCRqdI+aru1IZG5yajxzmpCKTFMAVc1fhXAFV4kzVvhY/ekIhupAkbMTgA15T4n1D7bqhAOUQ4Fdv4o1VbOxeFW/euuFH415fcNmQk9Sc1zV5acp00I63MzxLD5uhF8cxOrZ9ulcMa9HnjNzptzBwd8ZxXnJrKltYqqtbjcU4CjBpwreKMGAFOopRW8UQ2L1NOHFNFPFapENhjilHWijvWiRDY7NIWpDSdBVpEgT7Un40vamnimAtGcUlJQIOKQ0E5pKQCGjNBNJTAU0dqTNBoAKWkpaTAKXFJRQAvFJS0HigBCRTetKeaSgApMUUlK4BnNIeaXHNNNAxDTaU0nagBKSjNJmgBDSGgmkJ4oAQ0hNFNJoGB+gpM/SkJzSZoAdnikzTQaKQDs0ZpM85opjH54pAabQKAHk8UU2jOBQB9PfAb/knTf9fsv8lrO/aO/wCSeaf/ANhWP/0VLWh8BOfhyf8Ar+l/ktZ/7R3/ACTzT/8AsKx/+ipalknsFFFFIAooooAKKKKACiiigAooooAKz7z/AF/4CtCs69/4+PwFZ1NjSn8RGDS0zNLmsDew6ijNFMTDimMuafSGgRA2RnI4qhPDtbcvfrWm1V5E9KB2KUbHG08g/pV6CU/6tjz2NUnTB4ojm+YI/B7GmhNFib5Z9vZxj8e1TWB/4l0IH8IK/kapXjsY938SEGrdiR9mYDpvOPx5/rTW5L2J88ipc8VCOtS9qYkNPIpKdSVJoMaou9StUVACmm0ppMUDHL1qzFVZetWYqBMm6VHIeKearytzQBXmPyGs2Qb54k9WFaEv3D9KqWq79ThHYc1PUpbG5JwMCqp+9U8xqt1eqIRci+5TJuVNPjHyUkg4/CmwG23KFT2NQfZmivfMzmMdPapLc4cj8atsoZadkyXoQuFljZXUMrDaynuD2r5p8Q6TJoHiC+04EiOKQiPnqh5U/livpQfKxFeXfGHRw0NhrEScqxt5jjqDyuf1H41nUjdXOjCT5Z27nmFu2QPMY9eo616RobrLpcZMrO6jYxzyD2/SvMMkEYGPWu18FzDz54GwVIDDPTNcc0eytYnW7JeDvbaOitzmoJ45ZW8tpSxPUg4Wp5ZCcqpGD0JPFW9H05dTvRFtZY15f0xUxV3ZETlyrmZp+FNHURm6eEAA4jJ/i9TXQ3+ow2ERXIaXHCj+tU76/FrB9ntQFVBtBFc7lnbc5JJ61235Vyo8mV6knORNNcS3czSSsS3rTSMCnKuBSMaQehVuB8prLmrTuXATrWVJlm68UmUnoNtLY3FxHGo+aRsV6fawrbWyQoMKork/DFkGuvOZeIxx9a7EcCtqcbK5zVZXdhrniqzn5qsSHiqbnL4q2QiWIZNW1FQRLVgcU0JgaYxwKVjUbGgQh5p3akApGoGNJ5opKUc0hjhR3pKB1oESrTqavSlpDGscDFZ7fvNTgH9wF/6VclbANU7Mb724k/ugKKTKRoHrQBmgCndBmqFcOlQSkudgOB3NSO3GB1qInAx+dJgkAwi4A4qJ396Vm461XY0h3Gu9R9TSnk0oFACEU9VzTgtTRp3NAXHRKAMmquo30dnbvNIwAXp71LdXCwRFiQABXDXklzrl/wCUhIiB5PZR/jUyehUY9TC1jUJL+9eZ+h6ewrEnP7zHrW/4ktIrHUVgiGFWNPx9TXPTnLVxzvc64PQntsA+1ed38P2fULiLGAspA+ma72J8EVyviaLy9ZZwOJEDH69P6Uqa96wqu1zG9KUCilAzXbFHK2FLijFOxW0YmbY3rTxRjAoxWqRDYtGaKSqJCg80hpO9AhaSigUXASg9KD0pKAEoyKXFIQaAG0lOpKYmFJS0GgYmaXNJ2paAAUtJS0ALRSZpaAE7U3qaeRzmm/hSAaaSndaQigBuaQ0uKQ0WGMNBoNJ2pAIaZnmnmmHrQA00meKcaYTQAZppoJppoAXNNxS0maBidKOlFNoGOpaToMUUgFzxRnmkJ4pARTAfRTc9aKAPqD4Cf8k5P/X9L/Jaz/2jv+Seaf8A9hWP/wBFS1f+AfPw4b/r+l/ktUP2jv8Aknmn/wDYVj/9FS1DJPYKKKKACiiigAooooAKKKKACiiigArMvj/pP/ARWnWXf/8AH1/wEVFTY0p/ERClpgNPFYG4tLmm5o70gH5pCaTNITxQAjGoiaGao91MBroG+tVJoyQR37Grmaay7qA3KyMZYSH++vDD+VW9NINrx7fyqhKfs8glwdo4b6VZ0t/lmjz91ziqTuyJKyLw+9U1RKPmqWmJCUdqQnApoOaRVxGqLvUzdKh70hi0YpelBNACDg1Zh6VWHJq1EMCgB7dM1TkOWqzI2FqoTzmgBkvKGotKTdes/wDdSpX+6adpK4SZyOrYFK2odC1MeTVdOXqaY9ahh++afUC/H92mSdKfH92mP0psRCvEmavJylUD96r0RygpomRHInXFYvinSRrnhjUNPA+eSImL2ccr+orfYZFQEYNDVwi7NM+Vo8qpwAJVPzBucV1HhBy125OMleGAxxmqfjnTP7G8YanbRphHl86P/dfn+eak8KXka6g8ZwnyHJA54rjlE9yErxujuowLkeUFLMWAwOpOa7O0gXSNP+zqQZn+aVvf0rG8O2q83jBSsR+UgdWxWpKxYkk5Pr61dKFlc48VVcnyIpXjknB6k5qFF9afN80xz2qGSZU71RgloSO4UdarSzcdagkn3d6jyWOKLgNdi556U+3tXnnWNELM3QVasdPuLyTbDGTjq3YV1mn6ZFp0RI+aZur/ANBVxi2ZynYdptmLK2WIAbhyxHrV7pTIxgU81vsc711IpTxVSP5pSaszdDVaD/WEVL3KRdjHFS0yMcU5jTJYxjTMZpTyaXGKYWCmMeaeaiY80BYTvThwKaKcOlIBc0DrSUq0ATL0pCcUDpTJGwtIZXlfmm6Yv7hpP77k/hUMzEhsct0A+taMEQhhSMfwjFJblPYeowM0McClJwKhZqZKEJ796iY0pOaY1BRGxqFjzUj0wDNACKvNSBeaVVqVVoARVokkWNeTTydorLv5mdvLTqe9IEZuoyS383kxnCdzU9pbR2yBI1wO/vTo4BGuPzqZOtCQN6WOG8acaz9Yl/rXJyHmut8bD/icR+8C/wA2rkJSBk1xz+JnXT+BCK+Gx+tYXif5p7Z/VCv5H/69bCDzJUjBwWbGaq+L9Oeyht9xD4bII9xVQj7yFJ3Vjk8Uo4paK7VE5GwXml6UDijqcVqkZtiilzSetJmrRLFNApDQKYAaBQaO1IQEd6SjrRTACaSnYFNNIBPxpDn1pelIaYDaO9BODSjrQA3HvS0UGgYYopaD0oEJRS0dqQCUtIKWmMU02lJopCEzTTSmkoGNNNNPNMNADaQmlpD1pCGGmmnGmmmMbmmnrT6Y3WkA360lKaSgYmDTTx1p1Jz3pjEzSH25pT1pDx2pAGfWig0UAFGKKTPNAC55opM0CkB9RfAL/knDf9f0v8lqh+0d/wAk80//ALCsf/oqWr3wB/5Ju3/X9L/Jao/tHf8AJPNP/wCwrH/6KlqWSewUUUUAFFFFABRRRQAUUUUAFFFFABWZf/8AHx/wEVp1m33/AB8fgKzqbGlPcqCng02nCsTccKKbThQAVDLIFHWpWOBWVcz5kwDSAkabJ600MSetV1OTU600Jk61JjikQcU49KdhEbqDwRmoLGFoLqQE5Rwu32xn/wCtVk9KiIxyOtJaDaujQQc809jVeC4UgK3BqZm4zjFVe5NrELtTl6VCTuepl7UxDm6VF2qY9KhNIpCUE0maKBkkYyatDhaihXAzUjsFQ0mBBM3YVAKHbJoFAA3Iq1ZJ5dsPck1XQZarwG2ID0FAmVpj1qKL79SS96iiP7zFHUfQ0U+7TG6U6PpTW6UySB6tWzZWqj96nszwRQtxyLdRstPBzSHkVRB5L8ZdKJttN1lAAY3NvK3cgjK5/EH864TwfBJNrkEMQDtICoz3/wA9a9w8daZ/avgzVLcLlxCZY/8AeT5h/KvNPhRpPmSXOtSE7Ih5MGT1cjk/gOPxrCUbyPQoVrUnfoeliOO2t47eIAJENox3Pc1CTT3J/A9KglYKjH2pvQ5Vq7mbdThNxzWdlpTSzv5twR2FaWl6Y+oSlV+WJfvuRwKhXZvJqKK1rZS3EgSKMu/04rp9P0CGAB7kCST+5/CP8a07Wzhs4hHCm0evc/WpwO1bxgluck6jewiIqLhQFHoopsnOBUhPFRqNzZPSrM0OHApaKXFK5SRXn4BqrbHN1j/Zq1cdDVOyOdQI9EP9Km+pVtDUHAprHJpx6UgHNWQlcTGKTFPNNPSlcdhjd6hPWpZDUBPNMB60401aU9KBMKetRr1qUUCJO1Vbl8DFWT0rKv5gsmKmRcUWLGPe7SEcLx+NXzwOetQ2sflWqA9cZP1pxYk01ohbsGaoTzTj1oA4oGNxgVFIalc4quxyaBjMZp6rQq1Iq0CBVpxwBS8AVXmlwMUgGXEvYVUCdWPWpgu47jTX64FAERHHSlTrQelNBpDOK8cjGpW5PeH/ANmNcTM3Wu48eDFxZP6xsP1rg5zhjXPJe8zpg/dQ/Tx5mqW6j/noK0fGsPmWjEc4HFVvD6ebrURPRAWrT8RASWTA1rFaGMn7x5cOgNKKVl2uR6cUCupIwbDFH86M8UZya1SIYUUZpRz9aYhMHvRS89KOgoFYQ0GjPrR3oGFHeikzQAZpDig0hPtQAGm0uaSgQcd6MUGigAoxQOKWgBOhpaKKQxKKDSUCCijIpeKYCdaKO9BpDEpDS0lAgNMNONIcUxjDTTzTjTG4NSwGkUw085NMNMBDTT3pxpppDGE0UtNPSgQE03rSnig8dKChDyaQiloIFCAaaKDiigBKO4opB1oGO70Un5UZpCPqL4A/8k3b/r+l/ktUf2jv+Seaf/2FY/8A0VLV74A/8k3b/r+l/ktUf2jv+Seaf/2FY/8A0VLSZLPYKKKKQBRRRQAUUUUAFFFFABRRRQAVQvI3afKoxGOwq/RUyjzKxUZcruZHkS/883/75NHky/8APN/++TWvRU+zRftWZPkS/wDPN/8Avk0vkyf883/75NatFHs0HtWY8kMuOIn/AO+TWPPZXfnZFtMR7RmuwopeyQe1fY5BLO6x/wAe03/fs1Olrcj/AJd5f++DXUUU/ZoPaswEt5wP9TJ/3yad9nm/55Sf98mt2ij2aF7RmCbeb/njJ/3yaja2nx/qJP8Avg10VFHs0HtGcg9ve7yRbT+37s1dsxdS2rGWCZWDlQGjIOB0NdFRQqdhuq30MFLebPMMg/4CasCGT/nm/wD3ya1qKfITzmX5MhH+rf8A75NQPBN2ik/75NbdFL2Y/aGELeb/AJ4yf98mnpbS55if/vk1tUU+QPaMzhHIF/1bflUEyTHgRSfgprYopezQe0ZgfZ5yf9TJ/wB8mnC3m/55Sf8AfJrdoo9mg9ozGigl3jMTgf7pq06OR9xvyq/RR7NB7RmNLDKekTn/AICaiigm83JhkA/3TW9RR7NB7RlJI3A+435UwxvnhG/KtCinyIXOZDwy5/1b/wDfJqW2jkUnMbD6qa0qKXsx+0ZVCNn7p/KnbW/un8qsUU+QXOVHiLqVKkgjB47Vyml+H20LSYtMt7ZzHE7tlUPO5if5YH4V21FJ00xqo0rHJNZ3Pa2m/wC+DVW7s7zyG22k7H0EbGu3oqfYruUqzT2PLodI1JpebC5GT3hYD+VdzYWDWVnHAqNkcscdTWxRTjSUQnWcyh5cmfuN+VAjf+435Vfoq+Uz5jPZJMcI35UoicD7rflV+ilygpFARv8A3G/KnbH/ALrflV2ijkQ+cyp4ZSpxG5+imqdhbzrqEzPDIq7MAlCAea6Gil7ND9oyj5b/AN1vyo2P/cb8qvUU+QXOUfLf+435UhjfH3G/Kr9FHIg5zLeKTsjH/gJqLyJc/wCqf/vk1s0Ucgc5kLDL/wA8n/75NBhl/wCeb/8AfJrXop8ouYyUhl7xuP8AgJqURSf3G/KtGijlDmM4xyY+435Viz2l1NqaD7NLs3DLbDjH1rq6KThcanYzjHIf4G+mKaYpM/cb8q06KOQOcy/Jkz9xvyoMMmP9W35VqUUcgc5jNBMT/qn/AO+TTPs03/PJ/wDvk1uUUcgc7MVbab/nm/8A3zTxBKP+WbflWvRRyBzmJLDNjAhc/wDATVb7JcM2TDJ/3ya6SijkQc5zrWs4GBBJ/wB8moTZ3OT+4l/74NdRRRyBznKfY7rP/HvL/wB8Gm/Y7r/n2l/74NdbRRyD5zynxro+p3cFo1tp91MylgRHCzYGPYVws3hnXy3Gh6kfpaSf4V9IUVDopu5SrNK1j5/8OeHNbgmuJZtGv0O3C77ZxnP4VZ1fQtamgZU0fUGJH8Ns5/pXu9FWoJEuo27nyVP4O8TfaHK+HNXIJ6iyk/8AiajPg7xP/wBC5q//AIAyf/E19c0VonYi58jnwf4n/wChb1f/AMAZf/iaP+EO8T448N6v/wCAMv8A8TX1xRT5hHyN/wAId4o/6FzV/wDwBl/+Jpf+EO8UY/5FzV//AABl/wDia+uKKOYD5I/4Q7xOP+Zc1f8A8AZP/iaD4O8Uf9C5q/8A4Ayf/E19b0UcwHyOfB3ij/oXNX/8AZf/AImk/wCEO8UY/wCRb1f/AMAZf/ia+uaKOYD5GPg/xR/0Lmr/APgDL/8AE0n/AAh3ij/oW9X/APAGX/4mvrqijmA+RD4O8U/9C3q//gDL/wDE0h8G+Kf+hb1j/wAAZf8A4mvryijmA+Qv+EM8U/8AQt6x/wCAMv8A8TR/whvin/oW9Y/8AZf/AImvr2ijmA+Qv+EM8U/9C3rH/gDL/wDE0f8ACG+Kcf8AIt6v/wCAMv8A8TX17RRzAfIX/CG+KP8AoW9Y/wDAGX/4ml/4Q3xR/wBC3rH/AIAy/wDxNfXlFHMB8h/8Ib4o/wChb1j/AMAZf/iaP+EN8Uf9C3rH/gDL/wDE19eUUcwHyF/whvin/oW9X/8AAGX/AOJo/wCEN8U/9C1rH/gDL/8AE19e0Ucwj5B/4QzxT/0LWsf+AMv/AMTS/wDCG+KP+ha1j/wBl/8Aia+vaKOYZ8g/8IZ4o/6FvWP/AABl/wDiaP8AhDfFP/Qt6x/4Ay//ABNfX1FHMB8gnwZ4p/6FvWP/AABl/wDiaT/hDPFP/Qt6x/4Ay/8AxNfX9FHMB8ff8IX4p/6FrWP/AABl/wDiaQ+C/FX/AELWsf8AgDL/APE19hUUcwHx4fBfir/oWdY/8AJf/iajPgrxWevhnWf/AAAl/wDia+x6KOYD42/4QnxX/wBCzrP/AIAS/wDxNJ/whPiv/oWNa/8AACX/AOJr7Koo5gPjP/hCfFn/AELGtf8AgBL/APE00+CfFnbwvrX/AIAS/wDxNfZ1FK4HxefBHi3P/Ir61/4AS/8AxNIfBHi3/oV9a/8AACX/AOJr7RoouB8WnwP4t/6FfWv/AAAl/wDiaP8AhB/Fv/Qr61/4AS//ABNfaVFFx3Pi3/hB/FoGP+EX1v8A8F8v/wATSf8ACD+Lf+hW1r/wAl/+Jr7ToouFz4rPgfxb/wBCtrf/AIL5f/iaD4G8W4/5FbW//BfL/wDE19qUUXC58VHwP4ux/wAitrf/AIL5f/iaT/hBvFv/AEK2t/8Agvl/+Jr7WoouFz4p/wCEG8W/9Ctrf/gvl/8AiaD4H8Xf9Ctrf/gvl/8Aia+1qKLhc83+CGmX+k/D822pWNzZz/bJG8q5iaNsELg4YA4rH/aO/wCSeaf/ANhWP/0VLXsFeP8A7R3/ACTzT/8AsKx/+ipaQj2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/9o7/AJJ5p/8A2FY//RUtewV4/wDtHf8AJPNP/wCwrH/6KloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f8A2jv+Seaf/wBhWP8A9FS17BXj/wC0d/yTzT/+wrH/AOipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/wBo7/knmn/9hWP/ANFS17BXj/7R3/JPNP8A+wrH/wCipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/2jv+Seaf8A9hWP/wBFS17BXj/7R3/JPNP/AOwrH/6KloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f/aO/wCSeaf/ANhWP/0VLXsFeP8A7R3/ACTzT/8AsKx/+ipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/ANo7/knmn/8AYVj/APRUtewV4/8AtHf8k80//sKx/wDoqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/8AaO/5J5p//YVj/wDRUtewV4/+0d/yTzT/APsKx/8AoqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/9o7/knmn/APYVj/8ARUtewV4/+0d/yTzT/wDsKx/+ipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/2jv8Aknmn/wDYVj/9FS17BXj/AO0d/wAk80//ALCsf/oqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/wDaO/5J5p//AGFY/wD0VLXsFeP/ALR3/JPNP/7Csf8A6KloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f/AGjv+Seaf/2FY/8A0VLXsFeP/tHf8k80/wD7Csf/AKKloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f/aO/5J5p/wD2FY//AEVLXsFeP/tHf8k80/8A7Csf/oqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/9o7/AJJ5p/8A2FY//RUtewV4/wDtHf8AJPNP/wCwrH/6KloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f8A2jv+Seaf/wBhWP8A9FS17BXj/wC0d/yTzT/+wrH/AOipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/wBo7/knmn/9hWP/ANFS17BXj/7R3/JPNP8A+wrH/wCipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/2jv+Seaf8A9hWP/wBFS17BXj/7R3/JPNP/AOwrH/6KloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f/aO/wCSeaf/ANhWP/0VLXsFeP8A7R3/ACTzT/8AsKx/+ipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/ANo7/knmn/8AYVj/APRUtewV4/8AtHf8k80//sKx/wDoqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/8AaO/5J5p//YVj/wDRUtewV4/+0d/yTzT/APsKx/8AoqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/9o7/knmn/APYVj/8ARUtewV4/+0d/yTzT/wDsKx/+ipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/2jv8Aknmn/wDYVj/9FS17BXj/AO0d/wAk80//ALCsf/oqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/wDaO/5J5p//AGFY/wD0VLXsFeP/ALR3/JPNP/7Csf8A6KloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f/AGjv+Seaf/2FY/8A0VLXsFeP/tHf8k80/wD7Csf/AKKloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f/aO/5J5p/wD2FY//AEVLXsFeP/tHf8k80/8A7Csf/oqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/9o7/AJJ5p/8A2FY//RUtewV4/wDtHf8AJPNP/wCwrH/6KloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f8A2jv+Seaf/wBhWP8A9FS17BXj/wC0d/yTzT/+wrH/AOipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/wBo7/knmn/9hWP/ANFS17BXj/7R3/JPNP8A+wrH/wCipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/2jv+Seaf8A9hWP/wBFS17BXj/7R3/JPNP/AOwrH/6KloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f/aO/wCSeaf/ANhWP/0VLXsFeP8A7R3/ACTzT/8AsKx/+ipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/ANo7/knmn/8AYVj/APRUtewV4/8AtHf8k80//sKx/wDoqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/8AaO/5J5p//YVj/wDRUtewV4/+0d/yTzT/APsKx/8AoqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/9o7/knmn/APYVj/8ARUtewV4/+0d/yTzT/wDsKx/+ipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/2jv8Aknmn/wDYVj/9FS17BXj/AO0d/wAk80//ALCsf/oqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/wDaO/5J5p//AGFY/wD0VLXsFeP/ALR3/JPNP/7Csf8A6KloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f/AGjv+Seaf/2FY/8A0VLXsFeP/tHf8k80/wD7Csf/AKKloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f/aO/5J5p/wD2FY//AEVLXsFeP/tHf8k80/8A7Csf/oqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/9o7/AJJ5p/8A2FY//RUtewV4/wDtHf8AJPNP/wCwrH/6KloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f8A2jv+Seaf/wBhWP8A9FS17BXj/wC0d/yTzT/+wrH/AOipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/wBo7/knmn/9hWP/ANFS17BXj/7R3/JPNP8A+wrH/wCipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/2jv+Seaf8A9hWP/wBFS17BXj/7R3/JPNP/AOwrH/6KloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f/aO/wCSeaf/ANhWP/0VLXsFeP8A7R3/ACTzT/8AsKx/+ipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/ANo7/knmn/8AYVj/APRUtewV4/8AtHf8k80//sKx/wDoqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/8AaO/5J5p//YVj/wDRUtewV4/+0d/yTzT/APsKx/8AoqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/9o7/knmn/APYVj/8ARUtewV4/+0d/yTzT/wDsKx/+ipaAPYKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACvH/2jv8Aknmn/wDYVj/9FS17BXj/AO0d/wAk80//ALCsf/oqWgD2CiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArx/wDaO/5J5p//AGFY/wD0VLXsFeP/ALR3/JPNP/7Csf8A6KloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f/AGjv+Seaf/2FY/8A0VLXsFeP/tHf8k80/wD7Csf/AKKloA9gooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8f/aO/5J5p/wD2FY//AEVLXsFeP/tHf8k80/8A7Csf/oqWgD//2Q==)

Corporate governance statement

The Board is responsible for ensuring that the

activities of the Group and its various businesses

are conducted in compliance with the law,

regulatory requirements and rules, good practices,

ethically and with appropriate and proper

governance and standards.

This includes reviewing internal controls, ensuring that there is an appropriate

balance of skills and experience represented on the Board, compliance with

the applicable UK Corporate Governance Code, which is issued by the

Financial Reporting Council and which is available at www.frc.org.uk, and

maintaining appropriate relations with shareholders and other stakeholders.

The latest financial information for Mitchells & Butlers and its Group of

companies is included in the 2025 Annual Report and Accounts (of which

this Corporate Governance Statement forms part) and which is available

online at: www.mbplc.com/investors.

Shareholder relations

The Board recognises that it is accountable to shareholders for the performance

and activities of the Company. The Company regularly updates the market

on its financial performance, at the half year and full year results in May and

November respectively, and by way of other announcements as required.

The content of these updates is available by webcast on the Company’s

website www.mbplc.com, together with general information about the

Company so as to be available to all shareholders. The Company has a

regular programme of dialogue with its larger shareholders which provides

an opportunity to discuss, on the basis of publicly available information,

the progress of the business.

On a more informal basis, the Chair, the Chief Executive and the Chief Financial

Officer regularly report to the Board the views of larger shareholders about

the Company, and the other Non-Executive Directors are available to meet

shareholders on request and are offered the opportunity to attend meetings

with larger shareholders.

The AGM provides a useful interface with shareholders, many of whom are

also guests in our pubs, bars and restaurants. All proxy votes received in

respect of each resolution at the AGM are counted and the balance for and

against, and any votes withheld, are indicated.

The UK Corporate Governance Code (the ‘Code’) contains best practice

recommendations in relation to corporate governance yet acknowledges

that, in individual cases, these will not all necessarily be appropriate for

particular companies. Accordingly, the Code specifically recognises the

concept of ‘comply or explain’ in relation to divergences from the Code

which reflect the specific circumstances of individual companies.

No changes to the Board were made during the year and the Board currently

consists of nine members, three of whom are independent Non-Executive

Directors (including two female independent Non-Executive Directors).

A more detailed explanation is set out on page 84.

“This statement sets out our report

to shareholders on the status of our

corporate governance arrangements.”

Bob Ivell

Chair

Mitchells & Butlers plc  Annual Report and Accounts 2025

81

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Corporate governance statement continued

Corporate governance arrangements during FY 2025

In FY 2025 the Board maintained its regular set of scheduled meetings.

The details of the number of meetings of the Board and the Audit and

Remuneration Committees in the period are set out on page 66.

The Executive Committee, as the principal operational decision-making

forum of the Group, maintained its monthly cycle of meetings throughout

FY 2025. The outcomes of these meetings were consistently reported to the

Board. The Executive Committee specifically focused on various stakeholder

arrangements, employee engagement, managing supplier arrangements

and overseeing the Group’s pension schemes, as well as managing the

property portfolio.

Employee wellbeing arrangements and workplace implications

The Company has an established wellbeing strategy that encompasses five

pillars of wellbeing: social, environmental, physical, mental and financial.

Within these pillars there are a range of resources and tools available for line

managers and employees to access, including:

•  our employee assistance programme which is run by the Licensed Trade

Charity. They operate a free, 24/7 confidential helpline and a website

available to all employees;

•  an online wellbeing centre that provides access to workout videos,

nutritional advice, financial wellbeing tools and mindfulness and

meditation videos and articles;

•  financial wellbeing tools and support;

•  mental health training available for all line managers, developed in

conjunction with the Samaritans, to assist them in supporting their teams;

•  wellbeing events which are now often held virtually and this will enable

all employees to participate in various activities and workshops; and

•  menopause awareness training for employees and line managers.

Corporate governance code reporting

For FY 2025, the Company has reported under the 2018 Code.

Its requirements include:

1.   enhanced Board engagement with the workforce and wider

stakeholders, including describing how the Company complies with its

obligations to take into account stakeholder views pursuant to Section

172 of the Companies Act 2006;

2.   demonstration of a clear business strategy aligned with a healthy

corporate company culture;

3.  a high-quality and diverse board composition; and

4.   proportionate executive remuneration that supports the long-term

success of the business.

The Board established a Corporate Responsibility Committee in June 2019.

The purpose of this Committee is to allow more executive, leadership and

functional management involvement in key areas of significant importance

including environmental impacts of the Group’s activities, community

relationships and the role of the Company in society. The existence of this

Committee demonstrates a significant commitment to the enhancement of

governance in general and matters such as stakeholder engagement. More

details of this Committee and its membership are set out on page 90 and its

Terms of Reference are on the Company’s website www.mbplc.com.

Alignment to the 2018 Code

As part of its alignment with the 2018 Code, the following operational and

administrative framework is in place.

1. Enhanced Board engagement with the workforce and

wider stakeholders

The 2018 Code recommends that the Board should consider wider

stakeholder views, in particular implementing arrangements for gathering

the views of the workforce. The 2018 Code permits a designated Non-

Executive Director to fill this role and in 2019 the Board designated Dave

Coplin for this role. The purpose of this appointment under the 2018 Code

is to gather employee views, ensure employee views are taken into account

in Board discussions and decision-making, and engage with the workforce

to explain how executive remuneration aligns with the Company’s

remuneration policy. This commenced in FY 2019 with Dave Coplin being

introduced to those executive managers who could help ensure that

meetings and site visits were effective. Progress has continued to date.

Mitchells & Butlers has an Employee Forum with elected representatives

which normally meets with the Executive Directors and members of the

Executive Committee twice a year. Dave Coplin also attends these meetings.

During FY 2025 two meetings were held in March and September.

Questions from the workforce in general are sought through the intranet to

seek areas of concern or enquiry and to enable the Company to respond.

The Employee Forum will, from time to time, be provided with an overview

of how executive pay is aligned with the Company’s strategic objectives.

The Terms of Reference of the Employee Forum reflect this. Further details

on employee engagement can be found in the Report on Directors’

remuneration on page 98.

The results of regular Board roadshows are used to update managers on

performance and the latest developments affecting the Group, and employee

feedback is included in Board papers where appropriate as part of the

decision-making process.

2. A clear business strategy aligned with a healthy corporate

company culture

In July 2018 the Financial Reporting Council published ‘Guidance on the

Strategic Report’, strengthening the link between the purpose of the

Strategic Report and the Directors’ duty under Section 172 of the Companies

Act 2006, to promote the success of the Company. The requirement under

the Companies Act 2006 is that the Strategic Report must inform members

of the Company, and help them assess, how the Directors have performed

their duty under Section 172 to promote the success of the Company. The

revised guidance encourages companies to consider the broader matters

that may impact upon the performance of the Company over the longer term

including the interests of wider stakeholders, and it is now established

Mitchells & Butlers practice that strategic proposals put to the Company’s

Board meetings include a requirement to consider the Directors’ duties

under Section 172. A detailed explanation of the manner in which the Board

has discharged its responsibilities under Section 172 is set out in the

Compliance Statements on page 61.

Annual Report and Accounts 2025  Mitchells & Butlers plc82

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

The specific provisions of Section 172 require Directors to act in the way they

consider, in good faith, would be most likely to promote the success of the

Company for the benefit of its members as a whole and, in doing so, have

regard to the interests of other stakeholders. The specific requirements of

Section 172 are that Boards should consider:

•  the likely consequences of decisions in the long term;

•  the interests of the Company’s employees;

•  the fostering of business relationships with suppliers, customers

and others;

•  the impact of the Company’s operations on the community and

the environment;

•  the desirability of the Company maintaining a reputation for high

standards of business conduct; and

•  the need to act fairly as between members of the Company.

The 2018 Code specifically requires that the Board should understand the

views of the Company’s key stakeholders (including employees, suppliers,

customers and others) and keep stakeholder engagement mechanisms

under review so they remain effective. The 2018 Code also recommends

that there should be regular reporting as to how the Board has complied with

this engagement approach in its decision-making processes and how the

interests of different shareholders have been considered. The 2018 Code

sets out a series of aspects to be taken into account in demonstrating the

Board has complied with its Section 172 responsibilities. These are listed

below, together with Company procedures which align Mitchells & Butlers’

corporate behaviour with the spirit and values of the 2018 Code and how the

Board has employed its oversight of the Company’s purpose. This purpose

is set out in more detail in the Strategic Report.

a. Culture

Mitchells & Butlers has in place a set of PRIDE values of Passion, Respect,

Innovation, Drive and Engagement which underpin its key priorities of

People, Practices, Profits and Guests. The Board observes these PRIDE

values in discharging its everyday responsibilities and considering decisions

and proposals and encourages all levels of the organisation to do so.

b. Strategy

In demonstrating that the Board is promoting the success of the Company

and taking decisions with regard to their long-term impact, the Board must

ensure it has in place, and regularly reviews, its agreed strategy.

Developments arising from the strategy review are followed up, documented

and, on a regular basis, the Board reviews whether the Company is operating

in line with that strategy and/or there needs to be a revision of the strategy to

reflect external, and possibly internal, changes in the dynamics of the business.

Board papers refer to whether they reflect a proposal that is aligned to,

or diverges from, the agreed strategy.

Principle B and Provisions 1 and 2 of the 2018 Code require the Board to:

•  describe how opportunities and risks to the future success of the

business have been considered and addressed, the sustainability of the

Company’s business model and how its governance contributes to the

delivery of its strategy;

•  establish the Company’s purpose, values and strategy, ensure that these

and its culture are aligned and describe the activities the Board takes to

monitor and implement this culture; and

•  describe the Company’s approach to investing in and rewarding its workforce.

Details of how the Board achieves these are given in the Strategic Report on

pages 24 to 64.

c. Training and awareness

There is an induction process for all Directors on appointment and the

Group General Counsel and Company Secretary is available to all Directors,

whether of the Company or any of the subsidiaries, for consultation and

guidance on matters of governance in relation to any aspects of the affairs

of any part of the Group. As circumstances or new areas develop, whether

in the operations of the business or externally, appropriate training will be

considered to ensure that each Director is involved in decision-making and

oversight with the benefit of the correct amount of knowledge as to what is

relevant for consideration.

The induction process ensures that Directors are aware of, and understand,

the requirements under Section 172. Nevertheless, all subsidiary Directors

have received a comprehensive guide to provide training below Board level

in relation to Section 172 requirements, focusing on how such considerations

should be documented in the future, to ensure a proper understanding of

what needs to be considered and what evidence is required to be presented

when putting proposals to the Board.

Ongoing training and guidance on their responsibilities continues to be

provided to subsidiary company Directors.

d. Information

Board paper procedures now contain specific references to the factors

referred to in Section 172 of the Companies Act 2006, so they can be

brought to the Board’s attention where appropriate.

e. Policies and processes

The business has an existing comprehensive suite of policies and processes

across a wide spectrum of its operations and practices and these are updated,

revised and re-communicated regularly.

f. Stakeholder engagement

Engagement with the workforce is addressed above and engagement with

guests is dealt with through the Guest Health initiatives and this is explained

in our Value Creation story on pages 36 to 39. Engagement with key, critical

suppliers is addressed through the supplier segmentation tiering process

where we consult with suppliers on a regular basis. This varies from monthly

interaction to annual reviews, depending on where the supplier appears on

the Company’s tier 1 to tier 4 ranking (which is a multi-factor process involving

criticality, volume, spend size and availability of substitute products).

Mitchells & Butlers plc  Annual Report and Accounts 2025

83

Financial Statements Other Information

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAXvBG8DASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD3+s/U9C0fW/K/tbSrG/8AJz5f2u3SXZnGcbgcZwOnoK0KKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAMvTfDWg6NcNcaXomm2M7IUaS1tUiYrkHBKgHGQDj2FalFFABWfqeg6Prflf2tpNjf+Tny/tVukuzOM43A4zgfkK0KKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAMvTfDWg6NcNcaXomm2M7IUaS1tUiYrkHBKgHGQDj2FalFFABWfqeiadrHlfb7fzvKzs+dlxnGehHoK0KKmcIzXLJXRUJyg+aLszA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+isfqmH/kX3I2+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKp8Xg/QYZBJHYYYdD5z/8AxVblFP6rQX2F9yB4vEP/AJeP72FFFFbnOFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRWX4a1KbWPCuj6pcKiz3llDcSLGCFDOgYgAknGT61qUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS1uyOVxigB9FQea3tR5re1K4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnoqDzW9qPNb2ouBPRUHmt7Uea3tRcCeioPNb2o81vai4E9FQea3tR5re1FwJ6Kg81vajzW9qLgT0VB5re1Hmt7UXAnopkbls5p9MAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf8AYKtf/RS1tzfw1ieBP+SeeGv+wVa/+ilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLW3N/DWJ4E/5J54a/7BVr/wCilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0Utbc38NYngT/knnhr/sFWv/opa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/wAk88Nf9gq1/wDRS1tzfw1ieBP+SeeGv+wVa/8Aopauazo9tq3k/aZb5PK3bfst9NbZzjr5Tru6d845x1NDAtUVgf8ACH6Z/wA/Wt/+Dy9/+O0f8Ifpn/P1rf8A4PL3/wCO1IzforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDforA/4Q/TP+frW/8AweXv/wAdo/4Q/TP+frW//B5e/wDx2gDpIf4qlrL0bR7bSfO+zS3z+bt3far6a5xjPTzXbb17YzxnoK1KpCCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/2CrX/wBFLW3N/DWJ4E/5J54a/wCwVa/+ilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtbF1FHLs8yNHxnG5QcVj+BP+SeeGv8AsFWv/opa25v4aGBU+yW3/PvF/wB8Cj7Jbf8APvF/3wKmoqRkP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FADrWKOLf5caJnGdqgZqxUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/AIE/5J54a/7BVr/6KWtub+GsTwJ/yTzw1/2CrX/0UtHifwT4d8Y/Zf7f0/7Z9l3+T++kj27sbvuMM52r19KANaiuJ/4Ul8PP+he/8nbj/wCOUf8ACkvh5/0L3/k7cf8AxylYDtqK4n/hSXw8/wChe/8AJ24/+OUf8KS+Hn/Qvf8Ak7cf/HKLAdtRXE/8KS+Hn/Qvf+Ttx/8AHKP+FJfDz/oXv/J24/8AjlFgO2orif8AhSXw8/6F7/yduP8A45R/wpL4ef8AQvf+Ttx/8cosB21FcT/wpL4ef9C9/wCTtx/8co/4Ul8PP+he/wDJ24/+OUWA7aiuJ/4Ul8PP+he/8nbj/wCOUf8ACkvh5/0L3/k7cf8AxyiwHbUVxP8AwpL4ef8AQvf+Ttx/8co/4Ul8PP8AoXv/ACduP/jlFgO2orif+FJfDz/oXv8AyduP/jlH/Ckvh5/0L3/k7cf/AByiwHbUVxP/AApL4ef9C9/5O3H/AMco/wCFJfDz/oXv/J24/wDjlFgO2orif+FJfDz/AKF7/wAnbj/45R/wpL4ef9C9/wCTtx/8cosB21FcT/wpL4ef9C9/5O3H/wAco/4Ul8PP+he/8nbj/wCOUWA7aiuJ/wCFJfDz/oXv/J24/wDjlH/Ckvh5/wBC9/5O3H/xyiwHbUVxP/Ckvh5/0L3/AJO3H/xyj/hSXw8/6F7/AMnbj/45RYDtqK4n/hSXw8/6F7/yduP/AI5R/wAKS+Hn/Qvf+Ttx/wDHKLAdtRXE/wDCkvh5/wBC9/5O3H/xyj/hSXw8/wChe/8AJ24/+OUWA7aiuJ/4Ul8PP+he/wDJ24/+OUf8KS+Hn/Qvf+Ttx/8AHKLAdtRXE/8ACkvh5/0L3/k7cf8Axyj/AIUl8PP+he/8nbj/AOOUWA7aiuJ/4Ul8PP8AoXv/ACduP/jlH/Ckvh5/0L3/AJO3H/xyiwHbUVxP/Ckvh5/0L3/k7cf/AByj/hSXw8/6F7/yduP/AI5RYDtqK4n/AIUl8PP+he/8nbj/AOOUf8KS+Hn/AEL3/k7cf/HKLAdtRXE/8KS+Hn/Qvf8Ak7cf/HKP+FJfDz/oXv8AyduP/jlFgO2orif+FJfDz/oXv/J24/8AjlH/AApL4ef9C9/5O3H/AMcosB21FcT/AMKS+Hn/AEL3/k7cf/HKP+FJfDz/AKF7/wAnbj/45RYDtqK4n/hSXw8/6F7/AMnbj/45R/wpL4ef9C9/5O3H/wAcosB21FcT/wAKS+Hn/Qvf+Ttx/wDHKP8AhSXw8/6F7/yduP8A45RYDtqK4n/hSXw8/wChe/8AJ24/+OUf8KS+Hn/Qvf8Ak7cf/HKLAdtRXE/8KS+Hn/Qvf+Ttx/8AHKP+FJfDz/oXv/J24/8AjlFgO2orif8AhSXw8/6F7/yduP8A45R/wpL4ef8AQvf+Ttx/8cosB21FcT/wpL4ef9C9/wCTtx/8co/4Ul8PP+he/wDJ24/+OUWA7aiuJ/4Ul8PP+he/8nbj/wCOUf8ACkvh5/0L3/k7cf8AxyiwHbUVxP8AwpL4ef8AQvf+Ttx/8co/4Ul8PP8AoXv/ACduP/jlFgO2orif+FJfDz/oXv8AyduP/jlH/Ckvh5/0L3/k7cf/AByiwHbUVxP/AApL4ef9C9/5O3H/AMco/wCFJfDz/oXv/J24/wDjlFgO2orif+FJfDz/AKF7/wAnbj/45R/wpL4ef9C9/wCTtx/8cosB21FcT/wpL4ef9C9/5O3H/wAco/4Ul8PP+he/8nbj/wCOUWA7aiuJ/wCFJfDz/oXv/J24/wDjlH/Ckvh5/wBC9/5O3H/xyiwHbUVxP/Ckvh5/0L3/AJO3H/xyj/hSXw8/6F7/AMnbj/45RYDtqK4n/hSXw8/6F7/yduP/AI5R/wAKS+Hn/Qvf+Ttx/wDHKLAdtRXE/wDCkvh5/wBC9/5O3H/xyj/hSXw8/wChe/8AJ24/+OUWA7aiuJ/4Ul8PP+he/wDJ24/+OUf8KS+Hn/Qvf+Ttx/8AHKLAdtRXE/8ACkvh5/0L3/k7cf8Axyj/AIUl8PP+he/8nbj/AOOUWA7aiuJ/4Ul8PP8AoXv/ACduP/jlH/Ckvh5/0L3/AJO3H/xyiwHbUVxP/Ckvh5/0L3/k7cf/AByj/hSXw8/6F7/yduP/AI5RYDtqK4n/AIUl8PP+he/8nbj/AOOUf8KS+Hn/AEL3/k7cf/HKLAdtRXE/8KS+Hn/Qvf8Ak7cf/HKP+FJfDz/oXv8AyduP/jlFgO2orif+FJfDz/oXv/J24/8AjlH/AApL4ef9C9/5O3H/AMcosB21FcT/AMKS+Hn/AEL3/k7cf/HKP+FJfDz/AKF7/wAnbj/45RYDtqK4n/hSXw8/6F7/AMnbj/45R/wpL4ef9C9/5O3H/wAcosB21FcT/wAKS+Hn/Qvf+Ttx/wDHKP8AhSXw8/6F7/yduP8A45RYDtqK4n/hSXw8/wChe/8AJ24/+OUf8KS+Hn/Qvf8Ak7cf/HKLAdtRXE/8KS+Hn/Qvf+Ttx/8AHKP+FJfDz/oXv/J24/8AjlFgO2orif8AhSXw8/6F7/yduP8A45R/wpL4ef8AQvf+Ttx/8cosB21FcT/wpL4ef9C9/wCTtx/8co/4Ul8PP+he/wDJ24/+OUWA7aiuJ/4Ul8PP+he/8nbj/wCOUf8ACkvh5/0L3/k7cf8AxyiwHbUVxP8AwpL4ef8AQvf+Ttx/8co/4Ul8PP8AoXv/ACduP/jlFgO2orif+FJfDz/oXv8AyduP/jlH/Ckvh5/0L3/k7cf/AByiwHbUVxP/AApL4ef9C9/5O3H/AMco/wCFJfDz/oXv/J24/wDjlFgO2orif+FJfDz/AKF7/wAnbj/45R/wpL4ef9C9/wCTtx/8cosB21FcT/wpL4ef9C9/5O3H/wAco/4Ul8PP+he/8nbj/wCOUWA7aiuJ/wCFJfDz/oXv/J24/wDjlH/Ckvh5/wBC9/5O3H/xyiwHbUVxP/Ckvh5/0L3/AJO3H/xyj/hSXw8/6F7/AMnbj/45RYDtqK4n/hSXw8/6F7/yduP/AI5R/wAKS+Hn/Qvf+Ttx/wDHKLAdtRXE/wDCkvh5/wBC9/5O3H/xyj/hSXw8/wChe/8AJ24/+OUWA7aiuJ/4Ul8PP+he/wDJ24/+OUf8KS+Hn/Qvf+Ttx/8AHKLAd3D/ABVLXP8AhjwT4d8Hfav7A0/7H9q2ed++kk3bc7fvscY3N09a6CmAUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv+wVa/8Aopa6Cuf8Cf8AJPPDX/YKtf8A0UtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/wCSeeGv+wVa/wDopa6Cuf8AAn/JPPDX/YKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/AIE/5J54a/7BVr/6KWugrn/An/JPPDX/AGCrX/0UtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilrfZgvWsDwJ/wAk88Nf9gq1/wDRS1tzfw0AO81fWjzV9agopXGT+avrR5q+tQUUXAn81fWjzV9agoouBP5q+tHmr61BRRcCfzV9aPNX1qCii4E/mr60eavrUFFFwJ/NX1o81fWoKKLgT+avrR5q+tQUUXAn81fWjzV9agoouBP5q+tHmr61BRRcCfzV9aPNX1qCii4E/mr60eavrUFFFwJ/NX1o81fWoKKLgT+avrR5q+tQUUXAn81fWjzV9agoouBP5q+tHmr61BRRcCfzV9aPNX1qCii4E/mr60eavrUFFFwJ/NX1o81fWoKKLgT+avrR5q+tQUUXAn81fWjzV9agoouBP5q+tHmr61BRRcCfzV9aPNX1qCii4E/mr60eavrUFFFwJ/NX1o81fWoKKLgT+avrR5q+tQUUXAn81fWjzV9agoouBP5q+tHmr61BRRcCfzV9aPNX1qCii4E/mr60eavrUFFFwJ/NX1o81fWoKKLgT+avrR5q+tQUUXAn81fWjzV9agoouBP5q+tHmr61BRRcCfzV9aPNX1qCii4E/mr60eavrUFFFwJ/NX1o81fWoKKLgT+avrR5q+tQUUXAn81fWjzV9agoouBP5q+tHmr61BRRcCfzV9aPNX1qCii4E/mr60eavrUFFFwJ/NX1o81fWoKKLgT+avrR5q+tQUUXAn81fWjzV9agoouBP5q+tHmr61BRRcCfzV9aPNX1qCii4E/mr60eavrUFFFwJ/NX1o81fWoKKLgT+avrR5q+tQUUXAn81fWjzV9agoouBP5q+tHmr61BRRcCfzV9aPNX1qCii4E/mr60eavrUFFFwJ/NX1o81fWoKKLgT+avrR5q+tQUUXAn81fWjzV9agoouBP5q+tHmr61BRRcCfzV9aPNX1qCii4E/mr60eavrUFFFwJ/NX1o81fWoKKLgT+avrR5q+tQUUXAn81fWjzV9agoouBP5q+tHmr61BRRcCyrBulLUUP8VS0xBRRRQAUUUUAFFFFABRRRQAUUUUAc/wCBP+SeeGv+wVa/+ilrbm/hrE8Cf8k88Nf9gq1/9FLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBLD/ABVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWtub+GsTwJ/yTzw1/2CrX/wBFLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBLD/FUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa25v4axPAn/JPPDX/YKtf/RS1tzfw0MCKiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUASw/wAVS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilq5rM2rxeT/ZVjY3Wd3mfarx4NvTGNsT57+mMDrnin4E/wCSeeGv+wVa/wDopa25v4aGBzf2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1b9FSMwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GrfooAwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+Rq36KAMD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORq36KAMD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kat+igDA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkat+igDA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GrfooAwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GrfooAwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+Rq36KAMD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORq36KAMD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kat+igDA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkat+igDA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GrfooAwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GrfooAwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+Rq36KAMD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORq36KAMD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kat+igDA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkat+igDA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GrfooAwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GrfooAwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+Rq36KAMD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORq36KAMD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kat+igDA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkat+igDA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GrfooAwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GrfooAwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+Rq36KAMD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORq36KAMD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kat+igDA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkat+igDA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GrfooAwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GrfooAwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+Rq36KAMD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORq36KAMD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kat+igDA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkat+igDA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GrfooAwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GrfooAwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+Rq36KAMD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORq36KAMD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kat+igDA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkat+igDA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GrfooAwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GrfooAwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+Rq36KAMD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORq36KAMD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kat+igDA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkat+igDA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GrfooAwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GrfooAwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+Rq36KAMD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORq36KAMD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kat+igDA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkat+igDA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GrfooAwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GrfooAwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+Rq36KAMD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORq36KAMD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kat+igDA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkat+igDA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GrfooAwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GrfooAwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+Rq36KAMD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORq36KAKujTavL539q2Nja42+X9lvHn3dc53RJjt65yemOdSoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0Utbc38NYngT/knnhr/sFWv/opa2LoSHZ5bovXO5Sf6ihgNoqHbc/89Yv+/R/+Ko23P/PWL/v0f/iqkZNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBbh/iqWq9qJBv8AMdG6Y2qR/U1YqkIKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0Utbc38NYngT/AJJ54a/7BVr/AOilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/YKtf/AEUtbF0JDs8t0XrncpP9RWP4E/5J54a/7BVr/wCilrbm/hoYFTbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaipGQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAQ7bn/nrF/36P/xVG25/56xf9+j/APFVNRQBDtuf+esX/fo//FUbbn/nrF/36P8A8VU1FAEO25/56xf9+j/8VRtuf+esX/fo/wDxVTUUAOtRIN/mOjdMbVI/qasVFD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/wCBP+SeeGv+wVa/+ilrbm/hrE8Cf8k88Nf9gq1/9FLWxdIz7NsrpjP3QOfzBoYDaKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpGTUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0AW4f4qlqvaoyb90rvnH3gOPyAqxVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa25v4axPAn/JPPDX/YKtf/RS1tzfw0MCKiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUASw/wAVS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilrYuolk2bi4xn7rlf5GsfwJ/yTzw1/2CrX/0Utbc38NDAqfZo/70v/f1v8aPs0f96X/v63+NTUVIyH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAIfs0f96X/v63+NH2aP8AvS/9/W/xqaigCH7NH/el/wC/rf40fZo/70v/AH9b/GpqKAIfs0f96X/v63+NH2aP+9L/AN/W/wAamooAh+zR/wB6X/v63+NH2aP+9L/39b/GpqKAHWsSx79pc5x95y38zVioof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLW3N/DWJ4E/5J54a/7BVr/wCilrYuolk2bi4xn7rlf5GhgNoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGpGTUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAFuH+Kpar2sSx79pc5x95y38zViqQgooooAKKKKACiiigAooooAKKKKAOf8AAn/JPPDX/YKtf/RS1tzfw1ieBP8Aknnhr/sFWv8A6KWtub+GhgRUUUVIwooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS1f1TRbTWPK+1SXyeVnb9lvp7bOcZz5Tru6d845x1NUPAn/ACTzw1/2CrX/ANFLXQUAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAc9/whek/8/Gt/wDg9vf/AI7R/wAIXpP/AD8a3/4Pb3/47XQ0UAc9/wAIXpP/AD8a3/4Pb3/47R/whek/8/Gt/wDg9vf/AI7XQ0UAZ2l6LaaP5v2WS+fzcbvtV9Pc4xnGPNdtvXtjPGegrRoooAKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UtdBXP+BP+SeeGv8AsFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/2CrX/wBFLXQVz/gT/knnhr/sFWv/AKKWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0UtdBXP+BP8Aknnhr/sFWv8A6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8AAn/JPPDX/YKtf/RS10Fc/wCBP+SeeGv+wVa/+ilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UtdBXP+BP+SeeGv8AsFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/2CrX/wBFLXQVz/gT/knnhr/sFWv/AKKWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0UtdBXP+BP8Aknnhr/sFWv8A6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8AAn/JPPDX/YKtf/RS10Fc/wCBP+SeeGv+wVa/+ilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UtdBXP+BP+SeeGv8AsFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/2CrX/wBFLXQVz/gT/knnhr/sFWv/AKKWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0UtdBXP+BP8Aknnhr/sFWv8A6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8AAn/JPPDX/YKtf/RS10Fc/wCBP+SeeGv+wVa/+ilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UtdBXP+BP+SeeGv8AsFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/2CrX/wBFLXQVz/gT/knnhr/sFWv/AKKWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0UtdBXP+BP8Aknnhr/sFWv8A6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8AAn/JPPDX/YKtf/RS10Fc/wCBP+SeeGv+wVa/+ilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UtdBXP+BP+SeeGv8AsFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/2CrX/wBFLXQVz/gT/knnhr/sFWv/AKKWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0UtdBXP+BP8Aknnhr/sFWv8A6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8AAn/JPPDX/YKtf/RS10Fc/wCBP+SeeGv+wVa/+ilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UtdBXP+BP+SeeGv8AsFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/2CrX/wBFLXQVz/gT/knnhr/sFWv/AKKWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0UtdBXP+BP8Aknnhr/sFWv8A6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8AAn/JPPDX/YKtf/RS10Fc/wCBP+SeeGv+wVa/+ilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UtdBXP+BP+SeeGv8AsFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/2CrX/wBFLXQVz/gT/knnhr/sFWv/AKKWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0UtdBXP+BP8Aknnhr/sFWv8A6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8AAn/JPPDX/YKtf/RS10Fc/wCBP+SeeGv+wVa/+ilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigD//Z)

Corporate governance statement continued

3. Board composition and diversity

a. Board composition

The Board is currently comprised of nine members whose biographies are outlined on pages 70 and 71. These are the Chair, Chief Executive and Chief

Financial Officer, three independent Non-Executive Directors and three Non-Executive Directors. Two independent Non-Executive Directors, representing

22% of the Board’s Directors, are female, one of whom (Jane Moriarty) is also the Senior Independent Director. The Chair, Bob Ivell, has served on the Board

since May 2011. None of the Directors are from a minority ethnic background (as defined in the UK Listing Rules).

The shareholder representative Non-Executive Directors are nominated by Piedmont and Elpida, who, together with Smoothfield, are subsidiaries of

Odyzean, the Company’s largest shareholder, which holds approximately 57% of the Company’s issued share capital. Further information relating to the

Odyzean Group and the specific nomination rights held by Piedmont and Elpida is set out on page 73.

The Board acknowledges that the Chair’s period of tenure on the Board does not meet the best practice recommendations of the UK Corporate Governance Code.

The Board also notes that Dave Coplin has served more than nine years on the Board and so may not be considered independent under Provision 10 of the

2018 Code. However, the Board considers that his performance as a non-executive director continues to be effective and that he remains independent in

character and judgement. The Board considers that there are no relationships or circumstances in place which would be likely to affect, or might appear to

affect, his judgement in the exercise of his role.

The Board also acknowledges that the level of Board diversity does not meet the targets set out in the UK Listing Rules and, whilst this overall composition of

the Board remains a matter for continuous review, it should be noted that in the prospectus published by the Company on 22 February 2021 in connection

with the Open Offer, the Company confirmed that the Odyzean Group had indicated that it: (a) would disregard specific corporate governance requirements

around tenure; (b) intended to review the composition of the Board, which may result in less focus on compliance with UK Corporate Governance Code

recommendations in the future; and (c) the time and cost devoted by the senior management team to public company matters should be reduced. The Company

has received no indication of a change in approach on these issues from the Odyzean Group.

The composition of the Board and executive management is set out in the following tables as required by UKLR 22.2.30R(2). The underlying information was

collected directly from the relevant individuals. Executive management is classed as the Executive Committee, which includes two Board members.

Gender identity and sex

Number of Board members

Percentage of

the Board

Number of senior

positions on the

Board (CEO, CFO,

SID and Chair)

Number in

executive

management

Percentage of

executive

management

Men 78 3 7 70

Women 22 1 3 30

Ethnic background

Number of Board members

Percentage of

the Board

Number of senior

positions on the

Board (CEO, CFO

SID and Chair)

Number in

executive

management

Percentage of

executive

management

White British or other White (including minority-white groups) 100 4 10 100

Mixed/multiple ethnic groups – – – –

Asian/Asian British – – – –

Black/African/Caribbean/Black British – – – –

Other ethnic group – – – –

Not specified/prefer not to say – – – –

b. Board diversity

Principle J of the 2018 Code states that boards are encouraged to ‘promote diversity of gender, social and ethnic backgrounds, cognitive and personal

strengths’ through their appointments and succession planning. The purpose is to ensure that there is a balance of views from different genders and other

experiences and skill sets around the board table so that decision-making can be made with good oversight of all relevant factors.

Dave Coplin has been identified by the Board as the Director responsible for oversight of the Company’s diversity and inclusion arrangements. The Company

has had a Board Diversity Policy in place for some time, but during FY 2019 it was also agreed that annual talent pipeline presentations to the Board should

include the extent to which diversity aspects have been taken into account in development plans/recruitment, and that ethnicity and disability reporting

should be addressed, to the extent that the Company has reliable data.

Gender Pay Gap data is already overseen by the Remuneration Committee and details are set out on page 114 of the Report on Directors’ remuneration.

Annual Report and Accounts 2025  Mitchells & Butlers plc84

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

4. Proportionate executive remuneration

This is dealt with on page 114 of the Report on Directors’ remuneration.

Corporate governance

The Board is committed to high standards of corporate governance.

The Board considers that the Company has complied throughout the year

ended 27 September 2025 with all the Provisions and best practice guidance

of the 2018 Code except certain specific aspects related to the Chair’s tenure,

Board composition, the constitution of a Board Committee and effectiveness

reviews. This Corporate Governance Statement addresses the areas where,

for reasons specific to Mitchells & Butlers, there are divergences from the

2018 Code as described below.

The Audit Committee report and Nomination Committee report, which are

set out on pages 94 to 97 and page 89 respectively of the Annual Report,

also form part of this Corporate Governance Statement and they should all

be considered together.

The Board recognises the importance of good corporate governance in

creating a sustainable, successful and profitable business and details are set

out in this statement of the Company’s corporate governance procedures

and application of the principles of the 2018 Code. There are, however, a

small number of areas where, for reasons specifically related to the Company,

the detailed Provisions of the 2018 Code were not fully complied with in

FY 2025. These areas are kept under regular review. A fundamental aspect

of the 2018 Code is that it contains best practice recommendations in relation

to corporate governance yet acknowledges that, in individual cases, these

will not all necessarily be appropriate for particular companies. Accordingly,

the 2018 Code specifically recognises the concept of ‘comply or explain’ in

relation to divergences from it.

Compliance with the Code

Except for the matters which are explained below (in line with the ‘comply or

explain’ concept), the Company complied fully with the Principles and Provisions

of the 2018 Code throughout the financial period in respect of which this

statement is prepared (and continues to do so as at the date of this statement).

Explanation for non-compliance with parts of the Code

The current Board consists of the two Executive Directors and the Chair,

the three Independent Non-Executive Directors and three representative

directors of the Odyzean Group which holds approximately 57% of the

issued share capital. The Board does not currently intend to change this

arrangement and believes that, despite not strictly complying with the 2018

Code, the current structure strengthens corporate governance as it is both

representative of the Company’s shareholder base and demonstrates the

Odyzean Group’s ongoing commitment and support to the overall strategy

and management of the Company.

The assessment of the composition of the Board and its Committees and the

Chair’s tenure should be considered in the context of the explanation already

set out under the heading of ‘Board composition and diversity’ on page 84.

During the year, there were four separate areas of divergence from full

compliance with the 2018 Code, as set out below by reference to specific

paragraphs in the 2018 Code.

1. Chair’s tenure (Provision 19)

Provision 19 of the 2018 Code states:

“The chair should not remain in post beyond nine years from the date of their

first appointment to the board. To facilitate effective succession planning and

the development of a diverse board, this period can be extended for a limited

time, particularly in those cases where the chair was an existing non-executive

director on appointment. A clear explanation should be provided.”

Bob Ivell was appointed to the Board in May 2011 and, as such, his

appointment extended beyond the normal nine year tenure, which expired

in May 2020. The Board had already reviewed this in advance in 2019 and

concluded that it was appropriate that he should remain in place as Chair.

Mr Ivell’s extensive industry experience and his involvement with such

influential bodies as UK Hospitality have been of great assistance to the

Company in addressing the ongoing challenges of energy prices, inflationary

cost pressures, the demanding trading environment and dampened consumer

confidence. The requirement for a stable and experienced Board in such

circumstances, and it being an inappropriate time for the Board to be

considering changes in the existing arrangements, meant that no further

consideration was given in FY 2025 to Provision 19 of the 2018 Code,

in relation to Bob Ivell’s Chair tenure.

2. Composition of the Board (Provision 11)

Throughout the year, Provision 11 of the 2018 Code, which requires that at

least half the board, excluding the chair, should be non-executive directors

whom the board considers to be independent, was not complied with.

Accordingly, this had consequential implications on the composition of the

Remuneration Committee.

The Board does not comply fully with the requirement for at least half of its

members to be independent, due to the presence of three shareholder

representatives on the Board, representing members of the Odyzean Group.

These shareholders maintain a dialogue via their representatives on the Board,

all of whom are careful to ensure that there is no conflict between that role

and their duty to the Board and other shareholders.

The members of the Odyzean Group made extremely significant investments

in the Company and currently hold approximately 57% of the Company’s

issued share capital. The Board considers their investment objectives to be

fully aligned with those of the Group and of other shareholders. The Board

maintains excellent relations with its major shareholders and considers their

commitment to be a significant factor in the ongoing stability of the Board,

particularly as a result of their strong support of the Board’s long-term

strategy, including the recent Ignite initiatives. Their continued investment

and presence on the Board adds value as the Group works towards common

goals, and in pursuit of the Company’s published strategy. In particular, the

members of the Odyzean Group have been very supportive of the Board’s

actions when the Company had to deal with the forced closure of the business

during the Covid-19 pandemic, followed by the need for an Open Offer in

FY 2021, which they subscribed for in full. Their respective representatives

continued to offer valuable advice and experience while the Board

considered options in the face of such unprecedented circumstances.

The Board intends to continue to work closely with the representatives of its

major shareholders to further the interests of the Company. The Company is

not aware of any changes being proposed to the shareholder representative

profile of the Board in the immediate future.

Mitchells & Butlers plc  Annual Report and Accounts 2025

85

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Corporate governance statement continued

3. Constitution of Committees

Throughout FY 2025, the Company had (and continues to have) fully

functioning Nomination, Audit and Remuneration Committees as required

by the 2018 Code.

Remuneration Committee (Code Provision 32)

The Remuneration Committee is not fully compliant with the relevant

Provisions of the 2018 Code. Provision 32 of the 2018 Code specifies that the

Remuneration Committee should consist of independent Non-Executive

Directors and the Remuneration Committee included the presence of a

representative of a major shareholder who is a member of the Odyzean

Group. As set out on page 73, under the terms of the Deed of Appointment

between the Company and Piedmont, Piedmont is entitled to have a Director

attend, and receive all the papers relating to, meetings of the Remuneration

Committee. The Board has, in the circumstances, agreed that Mr Levy

should be a member of the Committee. The Board has carefully considered

the implications of this arrangement and has concluded that it constitutes a

valid exception under the ‘comply or explain’ regime of the 2018 Code, in

that the shareholder concerned is committed to the progression and growth

of the Company, has made a substantial financial commitment and is fully

supportive of the Group’s strategy. All the shareholder representatives have

significant commercial and financial experience and make a substantial

contribution to the Committees and the Group remains fully committed

to working with them on matters affecting the Group and its activities in

the future.

4. Effectiveness reviews (Provision 21)

As reported on page 69, the Chair has kept the skills, contributions and

experience of the Board members under close review throughout FY 2025.

Provision 21 requires that there should be a formal and rigorous annual

evaluation of the performance of the Board, its committees, the Chair and

individual Directors; that the Chair should consider having a regular externally

facilitated board evaluation; that in FTSE 350 companies this should happen

at least every three years; and that the external evaluator should be identified

in the annual report and a statement made about any other connection it has

with the company or individual directors. None of these evaluations took

place in FY 2025 and the Board will consider if it is appropriate to carry out

any such evaluations, in FY 2026.

The information required by Disclosure Guidance and Transparency Rule

(‘DTR’) 7.1 is set out in the Audit Committee report on pages 94 to 97.

The information required by DTR 7.2 is set out in this Corporate Governance

Statement, other than that required under DTR 7.2.6 which is set out in the

Directors’ report on pages 72 to 79.

Board composition

The Board started the year with nine Directors and the table on page 87 lists

the composition of the Board during the year. There were no changes to the

Board during FY 2025. On 23 October 2025, the Board announced the

retirement of the Chief Financial Officer, Tim Jones, and the appointment of

Emma Harris in his place. These changes are expected to take place in early

summer 2026. No further significant changes to the leadership and oversight

of the Group by its Board and its Committees are currently being considered.

The Board

The Board is responsible to all stakeholders, including its shareholders, for

the strategic direction, development and control of the Group. It approves

strategic plans and annual capital and revenue budgets. It reviews significant

investment proposals and the performance of past investments and maintains

oversight, supervision and control of the Group’s operating and financial

performance. It monitors the Group’s overall system of internal controls,

governance and compliance and ensures that the necessary financial,

technical and human resources are in place for the Company to meet its

objectives. Our website includes a schedule of matters which have been

reserved for the main Board.

During FY 2025 there were eight Board meetings. There were also four

meetings of the Audit Committee, four meetings of the Remuneration

Committee and one meeting of the Nomination Committee. The table in

the Governance at a Glance section on page 66 shows attendance levels at

the Board and Committee meetings held during the year; the numbers in

brackets confirm how many meetings each Director was eligible to attend

during the year.

Except as noted in the table on page 66, full attendance was recorded for

all Directors in respect of all Board and Committee meetings held during

FY 2025, but where Directors are unable to attend a meeting (whether of the

Board or one of its Committees), they are provided with all the papers and

information relating to that meeting and are able to discuss issues arising

directly with the Chair of the Board or Chair of the relevant Committee.

There are eight Board meetings currently planned for FY 2026.

The Company Secretary’s responsibilities include ensuring good information

flows to the Board and between senior management and the Non-Executive

Directors. The Company Secretary is responsible, through the Chair, for

advising the Board on all corporate governance matters and for assisting the

Directors with their professional development. This includes regular corporate

governance and business issues updates, as well as the use of operational

site visits and the provision of external courses where required. The Company

Secretary facilitates a comprehensive induction for newly appointed Directors,

tailored to individual requirements and including guidance on the requirements

of, and Directors’ duties in connection with, the 2018 Code and the Companies

Act 2006 as well as other relevant legislation.

The appointment and removal of the Company Secretary is a matter

reserved for the Board.

Annual Report and Accounts 2025  Mitchells & Butlers plc86

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Directors

The following were Directors of the Company during the year ended 27 September 2025:

Directors who served during the year Date appointed

Date of change of

role

Bob Ivell Independent Non-Executive Director

a

09/05/11 14/07/11

Interim Chair

a

14/07/11 26/10/11

Executive Chair 26/10/11 12/11/12

Non-Executive Chair 12/11/12 –

Amanda Brown Independent Non-Executive Director 04/07/22 –

Keith Browne

b

Non-Executive Director 22/09/16 –

Dave Coplin Independent Non-Executive Director 29/02/16 –

Eddie Irwin

b

Non-Executive Director 21/03/12 –

Tim Jones Chief Financial Officer 18/10/10 –

Josh Levy

c

Non-Executive Director 13/11/15 –

Jane Moriarty Independent Non-Executive Director 27/02/19 25/01/22

Senior Independent Director 25/01/22 –

Phil Urban Chief Executive 27/09/15 –

a. Independent while in the role specified.

b. Nominated shareholder representative of Elpida.

c. Nominated shareholder representative of Piedmont.

At the start of the year, the Board was made up of seven male and two

female Directors and there were no changes during the year, meaning that

at the year end, the Board consisted of seven male and two female Directors.

This is expected to change during FY 2026, when Tim Jones retires and is

replaced by Emma Harris.

The Executive Directors have service contracts. The Chair and each of the

Non-Executive Directors have letters of appointment. Copies of the respective

service contracts or letters of appointment of all the members of the Board

are available on the Company’s website. In addition, they are available for

inspection at the registered office of the Company during normal business

hours and at the place of the Annual General Meeting from at least 15 minutes

before, and until the end of, the meeting.

At the Company’s forthcoming Annual General Meeting in 2026 all the

Directors will be required to stand for annual re-election, in accordance

with the Company’s Articles of Association. Their biographical details as at

27 November 2025 are set out on pages 70 and 71, including their main

commitments outside the Company. In addition, Provision 18 of the 2018

Code requires that the papers accompanying the resolutions to elect or

re-elect directors, set out the specific reasons why the individual director’s

contribution is, and continues to be, important to the Company’s long-term

sustainable success and this information is included in the Notice of Meeting.

Provision 15 of the 2018 Code states that full-time executive directors should

not take on more than one non-executive directorship in a FTSE 100 company

or other significant appointments. The Mitchells & Butlers policy is that

Executive Directors may be permitted to accept one external Non-Executive

Director appointment with the Board’s prior approval and as long as this is

not likely to lead to conflicts of interest. During FY 2025, neither of the

Executive Directors held any such external directorship, nor did they hold

any other significant appointments, as a director or otherwise, and that

remains the case as at the date of this Annual Report.

Division of responsibilities between Chair and Chief Executive

In accordance with Provision 9 of the 2018 Code, the roles of Chair and

Chief Executive should not be exercised by the same individual.

The division of responsibilities between the Chair and the Chief Executive is

clearly established as required by Principle G of the 2018 Code and these are

set out in writing and have been agreed by the Board. In particular, it has been

agreed in writing that the Chair shall be responsible for running the Board

and shall provide advice and assistance to the Chief Executive. He also chairs

the Nomination Committee, is a member of the Remuneration Committee

and attends, by invitation, meetings of the Audit Committee. He also chairs

the Market Disclosure Committee, Corporate Responsibility Committee,

the Property Committee and the Pensions Committee.

It is also agreed in writing that the Chief Executive has responsibility for

all aspects of the Group’s overall commercial, operational and strategic

development. He chairs the Executive Committee (details of which appear

on page 90) and attends the Nomination, Remuneration and Audit Committees

by invitation, not necessarily for the entirety of such meetings depending

upon the subject matter. He is also a member of the Market Disclosure

Committee, the Property Committee and the Pensions Committee.

The segregation of responsibilities between the Chair and the Chief

Executive is set out in the Company’s Corporate Governance Compliance

Statement, which is available on our website, www.mbplc.com.

All other Executive Directors (currently just the Chief Financial Officer) and

all other members of the Executive Committee report to the Chief Executive.

Mitchells & Butlers plc  Annual Report and Accounts 2025

87

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Corporate governance statement continued

Chair

Provision 9 of the 2018 Code provides that the Chair should, on appointment,

meet the independence criteria set out in Provision 10 of the 2018 Code.

Bob Ivell met these independence criteria on appointment.

Bob Ivell was appointed to the role of Executive Chair on 26 October 2011

on the departure of the then Chief Executive and reverted to the role of

Non-Executive Chair on 12 November 2012.

The Chair ensures that appropriate communication is maintained with

shareholders. He ensures that all Directors are fully informed of matters

relevant to their roles. An explanation of the Board’s view on the Chair’s

tenure is set out on page 85.

With effect from 1 January 2026, the Chair’s fee will remain unchanged.

Chief Executive

Phil Urban was appointed Chief Executive on 27 September 2015. He has

responsibility for implementing the strategy agreed by the Board and for the

executive management of the Group.

Senior Independent Director

Jane Moriarty was appointed Senior Independent Director on 25 January 2022.

The Senior Independent Director supports the Chair in the delivery of the

Board’s objectives and ensures that the views of all major shareholders and

stakeholders are conveyed to the Board. Jane Moriarty is available to all

shareholders should they have any concerns if the normal channels of Chair,

Chief Executive or Chief Financial Officer have failed to resolve them, or for

which such contact is inappropriate.

All Directors have the ability to raise any relevant views which they have with

the Senior Independent Director if they feel this is needed.

Non-Executive Directors

The Company has experienced Non-Executive Directors on its Board.

Josh Levy was appointed to the Board as a representative of one of the

Company’s largest shareholders, Piedmont, a member of the Odyzean

Group, and was therefore not regarded as independent in accordance with

the 2018 Code.

Eddie Irwin and Keith Browne were appointed to the Board as representatives

of another of the Company’s largest shareholders, Elpida, which is also

a member of the Odyzean Group, and were therefore not regarded as

independent in accordance with the 2018 Code.

There are currently three independent Non-Executive Directors on the

Board: Dave Coplin, Jane Moriarty and Amanda Brown.

An explanation regarding Dave Coplin’s independence as a Non-Executive

Director having served over nine years on the Board is set out on page 84.

Other than their fees, and reimbursement of taxable expenses which are

disclosed on page 115, the Non-Executive Directors received no remuneration

from the Company during the year.

There will be no increase in the fees of the Non-Executive Directors in

January 2026. This applies to the base fee, the fee paid to Non-Executive

Directors for chairing a Committee, the role of Senior Independent Director,

and the fee paid to Dave Coplin for his role as the Board representative for

‘employee voice’.

When Non-Executive Directors are considered for appointment, the Board

takes into account their other responsibilities in assessing whether they can

commit sufficient time to their prospective directorship. On average, the

Non-Executive Directors spend two to three days per month on Company

business, but this may be more depending on the circumstances from time

to time.

Board information and training

All Directors are briefed by the use of comprehensive papers circulated

in advance of Board meetings and by presentations at those meetings,

in addition to receiving minutes of previous meetings. Their understanding

of the Group’s business is enhanced by business-specific presentations and

operational visits to the Group’s businesses. Separate strategy meetings and

meetings with senior executives and representatives of specific functions,

brands or business units are also held throughout the year.

The training needs of Directors are formally considered on an annual basis

and are also monitored throughout the year with appropriate training being

provided as required, including corporate social responsibility and corporate

governance as well as the environmental impacts of the Company’s activities.

Independent advice

Members of the Board may take independent professional advice in the

furtherance of their duties and the Board has agreed a formal process for

such advice to be made available.

Members of the Board also have access to the advice and services of the

Group General Counsel and Company Secretary, the Company’s legal and

other professional advisers and its external auditor.

The terms of engagement of the Company’s external advisers and its

external auditor are regularly reviewed by the Group General Counsel and

Company Secretary.

Committees

The Audit, Remuneration, Nomination and Corporate Responsibility

Committees have written terms of reference approved by the Board, which

are available on the Company’s website www.mbplc.com. Those terms of

reference are each reviewed annually by the relevant Committee to ensure

they remain appropriate.

Audit Committee

Details of the Audit Committee and its activities during the year are included

in the Audit Committee report on pages 94 to 97 which is incorporated by

reference into this statement.

Remuneration Committee

Details of the Remuneration Committee and its activities during the year are

included in the Report on Directors’ remuneration on pages 98 to 118.

Annual Report and Accounts 2025  Mitchells & Butlers plc88

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Nomination Committee

The Nomination Committee is responsible for nominating, for the approval

of the Board, candidates for appointment to the Board. It is also responsible

for succession planning for the Board and the Executive Committee and

reviewing the output of the Board effectiveness review. In compliance with

the disclosure requirements of Provision 23 of the 2018 Code, there is an

ongoing process of review of the make-up of the Board and for Board

succession, which is carried out by the Nomination Committee and led by

the Chair. The Nomination Committee engages external search agencies

when required and ensures that all candidates are identified and assessed

against pre-determined criteria. Gender balance is dealt with by the

Nomination Committee on a regular basis and includes assessment of

gender balance at senior management level.

The following were members of the Nomination Committee during the year:

Appointment

date

Member at

27/09/25

Bob Ivell (Chair) 11/07/13 Yes

Amanda Brown 04/07/22 Yes

Dave Coplin 29/02/16 Yes

Eddie Irwin 11/07/13 Yes

Jane Moriarty 27/02/19 Yes

In accordance with the disclosure requirement in Provision 23 of the 2018

Code, as at 27 September 2025, the gender balance for those in the senior

management team and their direct reports was split as to 43% female and

57% male. For this purpose, the senior management team comprises the

Executive Committee.

The gender balance of the Executive Committee (which includes two Board

members) is 70% male and 30% female. Further information on the Executive

Committee is given on page 90.

The Nomination Committee recognises the importance of diversity on the

Board, including nominating individuals with varied experiences, skills, and

expertise, to maintain an appropriate balance within the Company and the

wider Group. During FY 2025, the Nomination Committee held a meeting to

discuss the appointment of a new Executive Director and Chief Financial

Officer in FY 2026.

Appointment to the Board

During FY 2025, Tim Jones informed the Board of his intention to retire from

full-time work and step down from his role as an Executive Director and as

Chief Financial Officer of the Company. To find a successor, the Board and

the Nomination Committee initiated an executive search process. The Board

and the Nomination Committee received information on the competitive

market and the necessary skill set. A sub-group was formed to manage the

recruitment process and engage executive search consultants.

The sub-group collaborated with the executive search consultant to develop

a candidate brief, outlining the required competencies, experience, and

knowledge for the position as well as taking into account the Company’s

Diversity and Inclusion policy. Throughout the recruitment process, the

Board and the Nomination Committee were kept informed and had the

opportunity to participate in relevant meetings.

After thorough consideration, Emma Harris was recommended for

appointment to the role of an Executive Director and Chief Financial Officer

of the Company. This decision was based on Emma’s extensive experience in

senior roles within major consumer-focused retail businesses in the UK, and

her proven ability to create shareholder value through strategic thinking,

commercial acumen, and effective partnerships.

Diversity and Inclusion Steering Group and Board

Diversity Policy

The Company has a Diversity and Inclusion Steering Group which examines

the implementation of diversity within the Group. As referred to on page 84,

Dave Coplin has been identified by the Board as the Director with responsibility

for oversight of the Company’s Diversity and Inclusion arrangements.

The Board has approved a Board Diversity Policy, which was reviewed and

approved in October 2022. The key statement and objectives of that policy

are as follows:

Statement:

The Board recognises the benefits of diversity. Diversity of skills, background,

knowledge, international and industry experience, and gender, amongst

many other factors, will be taken into consideration when seeking to appoint

a new Director to the Board. Notwithstanding the foregoing, all Board

appointments will always be made on merit.

Objectives:

•  The Board should ensure an appropriate mix of skills and experience

to ensure an optimum Board and efficient stewardship. All Board

appointments will be made on merit while taking into account individual

competence, skills and expertise measured against identified objective

criteria (including consideration of diversity).

•  The Board should ensure that it comprises Directors who are sufficiently

experienced and independent of character and judgement.

•  The Nomination Committee will continue to review what steps and

recruitment processes are appropriate for achieving diversity on the

Board with due regard being given to the recommendations set out in the

Davies Report, the Hampton-Alexander Review and the 2018 Code.

These will be reviewed on an annual basis.

Progress against the policy:

The Board continues to monitor progress against this policy. In terms of

Board diversity, at the start and end of FY 2025 there were nine Board

Directors, of which two were female (22%). Any future appointments will

always be made on merit and will continue to take into account diversity,

not only in terms of gender, but also in terms of the appropriate mix of skills

and experience. The assessment of the composition of the Board and its

Committees and the Chair’s tenure should be considered in the context

of the explanation already set out under the heading of ‘Board composition

and diversity’ on page 84.

The Company has an Equality, Diversity & Inclusion Policy (last updated in

September 2024), which applies in relation to employees of the Mitchells &

Butlers Group, and which can be found in the Value Creation story on page

37. The aim of the policy is to promote equal opportunities in employment

regardless of age, disability, gender reassignment, marital or civil partner

status, pregnancy or maternity, race (including colour, nationality, ethnic or

national origin), religion or belief, sex, or sexual orientation.

A detailed description of the duties of the Nomination Committee is set out

within its terms of reference which can be viewed at www.mbplc.com/

investors/business-conduct/board-committees/

Market Disclosure Committee

The EU Market Abuse Regulation (‘MAR’) which took effect in July 2016,

brought about substantial changes relating to announcements of material

information about the Company and its affairs, and relating to dealings in

shares or other securities by Directors and other senior managers, including

tighter controls on permitted ‘dealings’ during closed periods and the

handling of information relating to the Company. MAR requires companies

to keep a list of people affected and the previous compliance regime and

timeframe were enhanced.

As a result, a formal standing Committee of the Board was established, the

Market Disclosure Committee, which comprises the Chair, the Chief Executive,

the Chief Financial Officer and an independent Non-Executive Director.

Mitchells & Butlers plc  Annual Report and Accounts 2025

89

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Corporate governance statement continued

Corporate Responsibility Committee

A Corporate Responsibility Committee was established in June 2019 and its

purpose is to allow more executive, leadership and functional management

involvement in matters of corporate responsibility and sustainability. Its Terms

of Reference are on the Company’s website www.mbplc.com.

The Corporate Responsibility Committee comprises Bob Ivell (Chair), Eddie

Irwin, Jane Moriarty, Dave Coplin and Amanda Brown. The Chief Executive,

Phil Urban, is invited to attend regularly.

A multi-disciplinary operational and functional steering committee has been

identified and tasked with carrying out first level oversight of the work plan

and roadmap approved by the Committee in FY 2021.

Property Committee

The Property Committee reviews property transactions which have been

reviewed and recommended by the Portfolio Development Committee,

without the need for submission of transactions to the full Board. The Property

Committee agrees to the overall strategic direction for the management of

the Group’s property portfolio on a regular basis and may decide that a

particular transaction should be referred to the Board for consideration or

approval. The Property Committee comprises Bob Ivell (Committee Chair),

Phil Urban, Tim Jones, Josh Levy, Keith Browne, Jane Moriarty, Amanda

Brown and Nick Pinney.

Pensions Committee

The Board has established a Pensions Committee to supervise and manage

the Company’s relationship with its various pension schemes and their trustees.

The Pensions Committee members are Bob Ivell (Committee Chair), Tim Jones,

Phil Urban, Keith Browne and Josh Levy.

The buy-out of the Executive Plan completed in late 2024 as anticipated.

The focus of the Pensions Committee was to continue monitoring the

performance of the Mitchells & Butlers Pension Plan which moved to a full

buy-in with Standard Life during FY 2023. The current position eliminates all

remaining pensions risk in the Group and no further employer contributions

are therefore being made to either scheme. Over the course of the year

agreement was reached to use any surplus arising in the Mitchells & Butlers

Pension Plan to pay for employer contributions in the defined contribution

section of that Plan.

Executive Committee

The Executive Committee, which is chaired by the Chief Executive, consists

of the Executive Directors and certain other senior executives, namely Nick

Pinney (Group Property Director), Susan Martindale (Group HR Director),

Andrew Freeman (Group General Counsel and Company Secretary),

Chris Hopkins (Commercial and Marketing Director) and David Briggs,

Susan Chappell, Martin Nelson (replacing David Gallacher who retired in

September 2025) and Anna-Marie Mason (the Divisional Directors).

Chris Hopkins has made the decision to retire in January 2026 and Martie Smit

will take on the role of Commercial and Marketing Director.

The Executive Committee ordinarily meets, on average, 12 times per year

and has day-to-day responsibility for the running of the Group’s business.

It develops the Group’s strategy and annual revenue and capital budgets for

Board approval. It reviews and recommends to the Board any significant

investment proposals. This Committee monitors the financial and operational

performance of the Group and allocates resources within the budgets agreed

by the Board. It considers employment issues, ensures the Group has an

appropriate pool of talent and develops senior management workforce

planning and succession plans.

A note of the actions agreed by, and the principal decisions of, the Executive

Committee, is supplied to the Board for information in order that Board

members can keep abreast of operational developments.

General Purposes Committee

The General Purposes Committee comprises any two Executive Directors

or any one Executive Director together with a senior officer from an agreed

and restricted list of senior executives. It is always chaired by an Executive

Director. It attends to business of a routine nature and to administrative

matters, the principles of which have been agreed previously by the Board

or an appropriate Committee.

Portfolio Development Committee

The executive review of property transactions and capital allocation to

significant property matters such as site remodel and conversion plans and

the Company’s real estate strategy is carried out by the Portfolio Development

Committee. This is not a formal Board Committee but comprises the Chief

Executive, the Chief Financial Officer, the Group Property Director, and the

Group General Counsel and Company Secretary. It has delegated authority

to approve certain transactions up to agreed financial limits and, above

those authority levels, it makes recommendations to the Board or the

Property Committee.

Treasury Committee

The treasury operations of the Mitchells & Butlers Group are operated on

a centralised basis under the control of the Group Treasury department.

Although not a formal Board Committee, the Treasury Committee, which

reports to the Chief Financial Officer but is subject to oversight from the

Audit Committee and, ultimately, the Board, has day-to-day responsibility for:

•  liquidity management;

•  investment of surplus cash;

•  funding, cash and banking arrangements;

•  interest rate and currency risk management;

•  guarantees, bonds, indemnities and any financial encumbrances

including charges on assets; and

•  relationships with banks and other market counterparties such as credit

rating agencies.

The Treasury Committee also works closely with the Finance Department to

review the impact of changes in relevant accounting practices and to ensure

that treasury activities are disclosed appropriately in the Company’s accounts.

The Board delegates the monitoring of treasury activity and compliance to

the Treasury Committee. It is responsible for monitoring the effectiveness of

treasury policies and making proposals for any changes to policies or in respect

of the utilisation of new instruments. The approval of the Board, or a designated

committee thereof, is required for any such proposals.

Annual Report and Accounts 2025  Mitchells & Butlers plc90

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Code of ethics

The Company has implemented business conduct guidelines describing

the standards of behaviour expected from those working for the Company

in the form of a code of ethics (the ‘Ethics Code’). The Ethics Code was

re-communicated to all employees in FY 2025 to ensure it was kept clearly

in focus. Its aim is to promote honest and ethical conduct throughout our

business. The Ethics Code requires:

•  compliance with all applicable rules and regulations that apply to the

Company and its officers including compliance with the requirements

of the Bribery Act 2010;

•  the ethical handling of actual or apparent conflicts of interest between

internal and external, personal and professional relationships; and

•  that any hospitality from suppliers must be approved in advance by

appropriate senior management, with a presumption against its acceptance.

The Company takes a zero tolerance approach to bribery and has developed

an extensive Bribery Policy which is included in the Ethics Code. The Ethics

Code requires employees to comply with the Bribery Policy.

The Company also offers an independently-administered, confidential

whistleblowing hotline for any employee wishing to report any concern that

they feel would be inappropriate to raise with their line manager. All

whistleblowing allegations are reported to, and considered by, the Executive

Committee and a summary report (with details of any major concerns) is

supplied to, and considered by, the Audit Committee at each of its meetings.

Principle E and Provision 6 of the 2018 Code require the Board to be clear

how its approach to whistleblowing has changed from an Audit Committee-

led approach to a Board-led approach. Although the Audit Committee

continues to receive regular reports on whistleblowing activity, each set of

full Board papers also includes, as part of the report from the Group Risk

Director, the number and assessment of any whistleblowing reports received

and, where relevant, the actions taken in respect of reports which are, on

investigation, found to be credible.

The Board takes regular account of social, environmental and ethical matters

concerning the Company through regular reports to the Board and

presentations to the Board at its strategy meetings.

Directors’ training includes environmental, social and governance (‘ESG’)

matters and the Company Secretary is responsible for ensuring that

Directors are made aware of and receive regular training in respect of these

important areas. The Chief Executive, Phil Urban, is ultimately responsible

for ESG matters, which includes climate change reporting, which is dealt

with in the next section.

Climate change reporting

1. Reporting

Current mandatory reporting and disclosure requirements

The Task Force on Climate-related Financial Disclosures (‘TCFD’) was

established by the Financial Stability Board in 2015 and published its final

report in June 2017. The report sets out 11 recommended disclosures under

four pillars to promote better disclosure and these are set out below:

TCFD: four recommendations and eleven recommended disclosures

Recommendations

Governance Strategy Risk Management Metrics and Targets

Disclose the organisation’s

governance around climate-

related risks and opportunities

(‘CRO’).

Disclose the actual and potential

impacts of CRO on the

organisation’s businesses, strategy,

and financial planning where such

information is material.

Disclose how the organisation

identifies, assesses and manages

climate-related risks.

Disclose the metrics and targets

used to assess and manage relevant

CRO where such information

is material.

Recommended Disclosures

(a)   Describe the Board’s

oversight of CRO.

(a)   Describe the CRO the

organisation has identified

over the short, medium and

long term.

(a)   Describe the organisation’s

processes for identifying and

assessing climate-related risks.

(a)   Disclose the metrics used by

the organisation to assess CRO

in line with its strategy and risk

management process.

(b)   Describe management’s role

in assessing and managing

CRO.

(b)   Describe the impact of CRO on

the organisation’s businesses,

strategy and financial planning.

(b)   Describe the organisation’s

processes for managing

climate-related risks.

(b)   Disclose Scope 1, Scope 2 and,

if appropriate, Scope 3

greenhouse gas (‘GHG’)

emissions and the related risks.

(c)   Describe the resilience of the

organisation’s strategy, taking

into consideration different

climate-related scenarios,

including a 2°C or lower

scenario.

(c)   Describe how processes for

identifying, assessing and

managing climate-related

risks are integrated into the

organisation’s overall risk

management.

(c)   Describe the targets used by

the organisation to manage

CRO and performance

against targets.

For FY 2025 the Company has continued to monitor climate-related risks and opportunities, in relation to TCFD and to oversee the delivery of strategy to

manage and measure the identified risks and opportunities as described in the FY 2024 disclosure. The results of this are set out on pages 46 to 51 of the

Strategic Report.

We plan to disclose Scope 3 emissions information on the finalisation of our updated pathway and targets to align with FLAG requirements.

Mitchells & Butlers plc  Annual Report and Accounts 2025

91

Financial Statements Other Information

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAXvBG8DASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD3+s/U9C0fW/K/tbSrG/8AJz5f2u3SXZnGcbgcZwOnoK0KKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAMvTfDWg6NcNcaXomm2M7IUaS1tUiYrkHBKgHGQDj2FalFFABWfqeg6Prflf2tpNjf+Tny/tVukuzOM43A4zgfkK0KKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAMvTfDWg6NcNcaXomm2M7IUaS1tUiYrkHBKgHGQDj2FalFFABWfqeiadrHlfb7fzvKzs+dlxnGehHoK0KKmcIzXLJXRUJyg+aLszA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+isfqmH/kX3I2+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKp8Xg/QYZBJHYYYdD5z/8AxVblFP6rQX2F9yB4vEP/AJeP72FFFFbnOFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRWX4a1KbWPCuj6pcKiz3llDcSLGCFDOgYgAknGT61qUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQB//Z)

Corporate governance statement continued

UK Listing Rules

Climate-related disclosure UK Listing Rule 6.6.6R(8) is a continuing

obligation for listed commercial companies in annual reports for periods

commencing on or after 1 January 2021 and thereafter, and requires

companies to disclose:

•  whether they have made disclosures consistent with the four

recommendations and 11 recommended disclosures set out in section C

of the TCFD Final Report in their annual financial report;

•  where these disclosures can be found in the annual report; and

•  a ‘comply or explain’ obligation to explain:

– if they have not included disclosures consistent with all of the TCFD’s

recommendations and/or recommended disclosures, which

disclosures they have not included and the reasons for not including

them; and/or

– why they have included some or all of the disclosures in a document

other than their annual report.

Where not all required TCFD disclosures have been provided, in addition to

explaining why, the annual report also needs to explain:

•  the timeframe for compliance; and

•  the steps the company is taking or plans to take to achieve compliance.

Institutional investor requirements

Institutional investors expect all listed companies to be reporting against all

four TCFD pillars and want those disclosures to be meaningful and will be

instructing their clients accordingly in relation to voting. They also expect

companies to include a statement in their annual report that the directors

have considered material climate-related matters when preparing and

signing-off the company’s accounts.

2. Actions taken by the Company

Executive ownership

The Board tasked Phil Urban with spearheading the Company’s approach to

tackling climate change reporting across the organisation since he also chairs

the Executive Committee so can ensure focus at Executive Committee level.

Strategy

The Board is mindful of the business impacts relevant to the sector, and due

consideration of such is included when considering changes made across the

business in relation to climate change obligations. Going forward, this important

issue will continue to form part of the considerations taken into account by

the Board when it is evaluating strategic decision and investment priorities.

Capital expenditure proposals submitted to the Board include appropriate

details on such aspects.

Governance

Climate change issues are discussed at Board level and the Board has

specifically requested the Corporate Responsibility Committee to focus on

ESG/sustainability matters. The Company’s required climate response/

transformation is a feature of agendas, with priority being given to ensuring

enough time is dedicated to the discussion. The Corporate Responsibility

Committee approved, and recommended to the Board, the Group’s

sustainability roadmap through which it identified and agreed how to

manage climate-related issues. These initiatives were first addressed in

FY 2022 when TCFD compliance became compulsory for the Company

and is ongoing.

Risk and scenario analysis

During FY 2022, the Company developed a rigorous climate change scenario

impact analysis. In FY 2023 we reassessed all of the climate-related risks

identified in the FY 2022 process, as well as an analysis of any emerging risks.

The established risk assessment framework was used to assess the materiality

of climate risks. Climate risk analysis is now part of the ongoing risk management

process, with identified risks reviewed at Risk Committee meetings as well as

the opportunity to present any emerging risks. No additional climate risks

have been added to the register during FY 2025.

The Audit Committee is tasked with ensuring it is satisfied that the scenarios

are sufficiently challenging, diverse and relevant, and also ensuring through

this process and the Risk Committee that its risk monitoring activity

appropriately addresses climate change risks for the Company. Further

details are set out on pages 46 to 51 of the Strategic Report.

Information, reporting and assurance

The Board considers it good practice to assess whether climate-related

management information is robust and fit for purpose. Pages 46 to 51 of the

Strategic Report set out the extent to which the Group relies on external

data, and the emissions table on page 79 of the Directors’ report relies on

external expertise, which is reviewed internally, and that is considered by

the Board to be reliable and credible.

The Risk Committee considers the findings of reporting reviews such as the

FRC’s climate change thematic review and during the year we have updated

our quantitative analysis of climate-related financial risks and opportunities

to reflect the most recent data on future weather patterns released by the

Met Office. An independent review was conducted by our internal auditors

of the policies and processes in place to support the calculation and reporting

of sustainability-related key performance indicators. There is currently no

external assurance to which the Company’s metrics are subjected, but this

aspect is being actively considered by the Risk Committee.

The Board is responsible for the Company’s internal risk management system,

in respect of which more details can be found in the ‘Risks and uncertainties’

section of this report, and in the following section of this statement.

Internal control and risk management

The Board has carried out a robust assessment of the Company’s emerging

and principal risks. The Board has completed its assessment, and has

presented a description of its principal risks, what procedures are in place to

identify emerging risks, and an explanation of how these are being managed

or mitigated, on pages 52 to 59.

The Board has overall responsibility for the Group’s system of internal control

and risk management and for reviewing its effectiveness. In order to discharge

that responsibility, the Board has established the procedures necessary to

apply the 2018 Code for the period under review and to the date of approval

of the Annual Report. Such procedures are in line with the Financial

Reporting Council’s ‘Guidance on Risk Management, Internal Control and

Related Financial and Business Reporting’ and are regularly reviewed by

the Audit Committee.

Annual Report and Accounts 2025  Mitchells & Butlers plc92

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

The key features of the Group’s internal control and risk management

systems include:

•  Processes, including monitoring by the Board, in respect of:

i.   financial performance within a comprehensive financial planning,

accounting and reporting framework;

ii.   strategic plan achievement;

iii.   capital investment and asset management performance, with detailed

appraisal, authorisation and post-investment reviews; and

iv.   consumer insight data and actions to assess the evolution of brands and

formats to ensure that they continue to be appealing and relevant to the

Group’s guests.

•  An overall governance framework including:

i.  clearly defined delegations of authority and reporting lines;

ii.   a comprehensive set of policies and procedures that employees are

required to follow; and

iii.   the Group’s Ethics Code, in respect of which an annual confirmation

of compliance is sought from all corporate employees.

•  The Risk Committee, a sub-committee of the Executive Committee,

which assists the Board, the Audit Committee and the Executive Committee

in managing the processes for identifying, evaluating, monitoring and

mitigating risks. The Risk Committee, which continues to meet regularly,

is chaired by the Group General Counsel and Company Secretary and

comprises Executive Committee members and other members of senior

management from a cross-section of functions.

The primary responsibilities of the Risk Committee are to:

i.   advise the Executive Committee on the Company’s overall risk appetite

and risk strategy, taking account of the current and prospective operating,

legal, macroeconomic and financial environments;

ii.   advise the Executive Committee on the current and emerging risk

exposures of the Company in the context of the Board’s overall risk

appetite and risk strategy;

iii.  promote the management of risk throughout the organisation;

iv.   review and monitor the Company’s capability and processes to identify

and manage risks;

v.   consider the identified key risks faced by the Company and new and

emerging risks and consider the adequacy of mitigation plans in respect

of such risks; and

vi.   where mitigation plans are regarded to be inadequate, recommend

improvement actions.

The Group’s risks identified by the processes that are managed by the

Risk Committee are described in the ‘Risks and uncertainties’ section on

pages 52 to 59.

More details of the work of the Risk Committee are included in the Audit

Committee report on pages 94 to 97.

•  Examination of business processes on a risk basis including reports from

the internal audit function, known as Group Assurance, which reports

directly to the Audit Committee.

The Group also has in place systems, including policies and procedures, for

exercising control and managing risk in respect of financial reporting and the

preparation of consolidated accounts. These systems, policies and procedures:

i.   govern the maintenance of accounting records that, in reasonable detail,

accurately and fairly reflect transactions;

ii.   require reported information to be reviewed and reconciled, with

monitoring by the Audit Committee and the Board; and

iii.   provide reasonable assurance that transactions are recorded as

necessary to permit the preparation of financial statements in accordance

with International Financial Reporting Standards (‘IFRS’) or UK Generally

Accepted Accounting Practice, as appropriate. Please also refer to the

Statement of Directors’ responsibilities in respect of the Annual Report

and Accounts, on page 80.

In accordance with the 2018 Code, during the year the Audit Committee

completed its annual review of the effectiveness of the Group’s risk

management and internal control systems, including financial, operational

and compliance controls.

The system of internal control is designed to manage, rather than eliminate,

the risk of failure to achieve business objectives and, as such, it can only

provide reasonable and not absolute assurance against material misstatement

or loss. In that context, in the opinion of the Audit Committee, the review did

not indicate that the system was ineffective or unsatisfactory. To the extent

that weaknesses in internal controls were identified, the Audit Committee

reviewed the audit findings, together with the remedial action plans that

were put in place, and sought confirmation that all actions were closed out

in a timely manner. Through this process, material audit findings were

presented to the Audit Committee, the necessary follow-up reviews were

completed and the results were reported to the Audit Committee, to ensure

appropriate mitigation plans had been actioned. Please refer to the Audit

Committee report, on pages 94 to 97.

The Audit Committee is not aware of any change to this status up to the date

of approval of this Annual Report.

With regard to insurance against risk, it is not practicable to insure against

every risk to the fullest extent. The Group regularly reviews both the type

and amount of external insurance that it buys with guidance from an external

independent broker, bearing in mind the availability of such cover, its cost

and the likelihood and magnitude of the risks involved and the mitigation

which insurance might provide.

Mitchells & Butlers plc  Annual Report and Accounts 2025

93

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Audit Committee report

During recent years, as the purpose and

effectiveness of external and internal audit

procedures came under increasing public

scrutiny, the Committee has ensured it has

maintained an appropriate level of engagement

with the Chief Financial Officer and the Group

Risk Director, other key individuals and their

teams who collectively provide an appreciation

and rigorous insight into how the Group

functions and reports. The Committee is very

grateful for the insight these interactions provide

and this, in turn, significantly assists the Committee

in executing its oversight role and ensuring

confidence in reporting to the wider Board.

Engagement with external auditors, internal auditors and

other third-party advisers

The Committee continued to engage formally, regularly and at an appropriate

level of detail with our external auditors, internal auditors (also externally

resourced) and other third-party advisers as necessary. This has enabled

the Committee to maintain an appropriate understanding of how our

auditors and advisers interact and test our comprehensive risk functions.

The Committee’s engagement during the auditing and advisory process

enables it to have confidence in their collective fieldwork conclusions.

The Committee also ensured that the Group provided adequate resources to

ensure that any additional non-audit services required during the year were

obtained, where necessary, and the Financial Reporting Council’s (‘FRC’)

evolving reporting requirements were adhered to.

Effectiveness of internal controls and Group assurance and

risk function

The above efforts provided the Committee with a clear and detailed

understanding of the principal financial and operational risks throughout

the period (please also refer to the Group’s risks and uncertainties, detailed

on pages 52 to 59). The Committee continued to focus on challenging the

effectiveness of internal controls, the robustness of assurance and risk

management processes and in assessing the importance of, and acting as

required upon, all reported information received from our external and

internal auditors and third-party advisers.

The Committee remains committed to maintaining an open and

constructive dialogue on relevant audit matters with all shareholders.

Therefore, should you have any comments or questions on any aspects of

this report, or indeed the wider financial statements, may I respectfully ask

you to please email myself, care of Adrian Brannan, Group Risk Director,

at company.secretariat@mbplc.com

“On behalf of the Board, I present

the report of the Audit Committee

for the financial period ended

27 September 2025.”

Jane Moriarty

Chair of the Audit Committee

Annual Report and Accounts 2025  Mitchells & Butlers plc94

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAXvBG4DASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD2D/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36K5/qmH/kX3I6PrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/Jfeynp2l2ek27QWMPlRM5cruLc4AzyT6CrlFFbxioq0VZGMpSk+aTuwrHvfCXhvU7yS8v/D+lXV1JjfNPZRu7YGBliMngAfhWxRTJOf8A+EE8H/8AQqaH/wCC6H/4mj/hBPB//QqaH/4Lof8A4mugooA5/wD4QTwf/wBCpof/AILof/iaP+EE8H/9Cpof/guh/wDia6CigDn/APhBPB//AEKmh/8Aguh/+Jo/4QTwf/0Kmh/+C6H/AOJroKKAOf8A+EE8H/8AQqaH/wCC6H/4mj/hBPB//QqaH/4Lof8A4mugooA5/wD4QTwf/wBCpof/AILof/iaP+EE8H/9Cpof/guh/wDia6CigDn/APhBPB//AEKmh/8Aguh/+Jo/4QTwf/0Kmh/+C6H/AOJroKKAOf8A+EE8H/8AQqaH/wCC6H/4mj/hBPB//QqaH/4Lof8A4mugooA5/wD4QTwf/wBCpof/AILof/iaP+EE8H/9Cpof/guh/wDia6CigDn/APhBPB//AEKmh/8Aguh/+Jo/4QTwf/0Kmh/+C6H/AOJroKKAKem6TpujW7W+l6faWMDOXaO1hWJS2AMkKAM4AGfYVcoooAKw5/BfhW6uJbi48NaNNPK5eSSSwiZnYnJJJXJJPOa3KKAOf/4QTwf/ANCpof8A4Lof/iaP+EE8H/8AQqaH/wCC6H/4mugooA5//hBPB/8A0Kmh/wDguh/+Jo/4QTwf/wBCpof/AILof/ia6CigDn/+EE8H/wDQqaH/AOC6H/4mj/hBPB//AEKmh/8Aguh/+JroKKAOf/4QTwf/ANCpof8A4Lof/iaP+EE8H/8AQqaH/wCC6H/4mugooA5//hBPB/8A0Kmh/wDguh/+Jo/4QTwf/wBCpof/AILof/ia6CigDn/+EE8H/wDQqaH/AOC6H/4mj/hBPB//AEKmh/8Aguh/+JroKKAOf/4QTwf/ANCpof8A4Lof/iaP+EE8H/8AQqaH/wCC6H/4mugooA5//hBPB/8A0Kmh/wDguh/+Jo/4QTwf/wBCpof/AILof/ia6CigDn/+EE8H/wDQqaH/AOC6H/4mj/hBPB//AEKmh/8Aguh/+JroKKAKem6TpujW7W+l6faWMDOXaO1hWJS2AMkKAM4AGfYVcoooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKK4P4teNdS8CeFbXVNLhtZZ5b1LdluUZl2lHbICsDnKDv60Ad5RRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/wDsKx/+ipa9grx/9o7/AJJ5p/8A2FY//RUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/AO0d/wAk80//ALCsf/oqWvYK8f8A2jv+Seaf/wBhWP8A9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/ALR3/JPNP/7Csf8A6Klr2CvH/wBo7/knmn/9hWP/ANFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/wD7Csf/AKKlr2CvH/2jv+Seaf8A9hWP/wBFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/8A7Csf/oqWvYK8f/aO/wCSeaf/ANhWP/0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/wDtHf8AJPNP/wCwrH/6Klr2CvH/ANo7/knmn/8AYVj/APRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/wC0d/yTzT/+wrH/AOipa9grx/8AaO/5J5p//YVj/wDRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP8A+wrH/wCipa9grx/9o7/knmn/APYVj/8ARUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP/AOwrH/6Klr2CvH/2jv8Aknmn/wDYVj/9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP8A7R3/ACTzT/8AsKx/+ipa9grx/wDaO/5J5p//AGFY/wD0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/8AtHf8k80//sKx/wDoqWvYK8f/AGjv+Seaf/2FY/8A0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/APsKx/8AoqWvYK8f/aO/5J5p/wD2FY//AEVLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/wDsKx/+ipa9grx/9o7/AJJ5p/8A2FY//RUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/AO0d/wAk80//ALCsf/oqWvYK8f8A2jv+Seaf/wBhWP8A9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/ALR3/JPNP/7Csf8A6Klr2CvH/wBo7/knmn/9hWP/ANFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/wD7Csf/AKKlr2CvH/2jv+Seaf8A9hWP/wBFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/8A7Csf/oqWvYK8f/aO/wCSeaf/ANhWP/0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/wDtHf8AJPNP/wCwrH/6Klr2CvH/ANo7/knmn/8AYVj/APRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/wC0d/yTzT/+wrH/AOipa9grx/8AaO/5J5p//YVj/wDRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP8A+wrH/wCipa9grx/9o7/knmn/APYVj/8ARUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP/AOwrH/6Klr2CvH/2jv8Aknmn/wDYVj/9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP8A7R3/ACTzT/8AsKx/+ipa9grx/wDaO/5J5p//AGFY/wD0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/8AtHf8k80//sKx/wDoqWvYK8f/AGjv+Seaf/2FY/8A0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/APsKx/8AoqWvYK8f/aO/5J5p/wD2FY//AEVLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/wDsKx/+ipa9grx/9o7/AJJ5p/8A2FY//RUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/AO0d/wAk80//ALCsf/oqWvYK8f8A2jv+Seaf/wBhWP8A9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/ALR3/JPNP/7Csf8A6Klr2CvH/wBo7/knmn/9hWP/ANFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/wD7Csf/AKKlr2CvH/2jv+Seaf8A9hWP/wBFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/8A7Csf/oqWvYK8f/aO/wCSeaf/ANhWP/0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/wDtHf8AJPNP/wCwrH/6Klr2CvH/ANo7/knmn/8AYVj/APRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/wC0d/yTzT/+wrH/AOipa9grx/8AaO/5J5p//YVj/wDRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP8A+wrH/wCipa9grx/9o7/knmn/APYVj/8ARUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP/AOwrH/6Klr2CvH/2jv8Aknmn/wDYVj/9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP8A7R3/ACTzT/8AsKx/+ipa9grx/wDaO/5J5p//AGFY/wD0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/8AtHf8k80//sKx/wDoqWvYK8f/AGjv+Seaf/2FY/8A0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/APsKx/8AoqWvYK8f/aO/5J5p/wD2FY//AEVLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/wDsKx/+ipa9grx/9o7/AJJ5p/8A2FY//RUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/AO0d/wAk80//ALCsf/oqWvYK8f8A2jv+Seaf/wBhWP8A9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/ALR3/JPNP/7Csf8A6Klr2CvH/wBo7/knmn/9hWP/ANFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/wD7Csf/AKKlr2CvH/2jv+Seaf8A9hWP/wBFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/8A7Csf/oqWvYK8f/aO/wCSeaf/ANhWP/0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/wDtHf8AJPNP/wCwrH/6Klr2CvH/ANo7/knmn/8AYVj/APRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/wC0d/yTzT/+wrH/AOipa9grx/8AaO/5J5p//YVj/wDRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP8A+wrH/wCipa9grx/9o7/knmn/APYVj/8ARUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP/AOwrH/6Klr2CvH/2jv8Aknmn/wDYVj/9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP8A7R3/ACTzT/8AsKx/+ipa9grx/wDaO/5J5p//AGFY/wD0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/8AtHf8k80//sKx/wDoqWvYK8f/AGjv+Seaf/2FY/8A0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/APsKx/8AoqWvYK8f/aO/5J5p/wD2FY//AEVLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/wDsKx/+ipa9grx/9o7/AJJ5p/8A2FY//RUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/AO0d/wAk80//ALCsf/oqWvYK8f8A2jv+Seaf/wBhWP8A9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/ALR3/JPNP/7Csf8A6Klr2CvH/wBo7/knmn/9hWP/ANFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/wD7Csf/AKKlr2CvH/2jv+Seaf8A9hWP/wBFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/8A7Csf/oqWvYK8f/aO/wCSeaf/ANhWP/0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/wDtHf8AJPNP/wCwrH/6Klr2CvH/ANo7/knmn/8AYVj/APRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/wC0d/yTzT/+wrH/AOipa9grx/8AaO/5J5p//YVj/wDRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP8A+wrH/wCipa9grx/9o7/knmn/APYVj/8ARUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP/AOwrH/6Klr2CvH/2jv8Aknmn/wDYVj/9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP8A7R3/ACTzT/8AsKx/+ipa9grx/wDaO/5J5p//AGFY/wD0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/8AtHf8k80//sKx/wDoqWvYK8f/AGjv+Seaf/2FY/8A0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/APsKx/8AoqWvYK8f/aO/5J5p/wD2FY//AEVLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/wDsKx/+ipa9grx/9o7/AJJ5p/8A2FY//RUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/AO0d/wAk80//ALCsf/oqWvYK8f8A2jv+Seaf/wBhWP8A9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/ALR3/JPNP/7Csf8A6Klr2CvH/wBo7/knmn/9hWP/ANFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/wD7Csf/AKKlr2CvH/2jv+Seaf8A9hWP/wBFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/8A7Csf/oqWvYK8f/aO/wCSeaf/ANhWP/0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/wDtHf8AJPNP/wCwrH/6Klr2CvH/ANo7/knmn/8AYVj/APRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/wC0d/yTzT/+wrH/AOipa9grx/8AaO/5J5p//YVj/wDRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP8A+wrH/wCipa9grx/9o7/knmn/APYVj/8ARUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP/AOwrH/6Klr2CvH/2jv8Aknmn/wDYVj/9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP8A7R3/ACTzT/8AsKx/+ipa9grx/wDaO/5J5p//AGFY/wD0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/8AtHf8k80//sKx/wDoqWvYK8f/AGjv+Seaf/2FY/8A0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/APsKx/8AoqWvYK8f/aO/5J5p/wD2FY//AEVLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/wDsKx/+ipa9grx/9o7/AJJ5p/8A2FY//RUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/AO0d/wAk80//ALCsf/oqWvYK8f8A2jv+Seaf/wBhWP8A9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/ALR3/JPNP/7Csf8A6Klr2CvH/wBo7/knmn/9hWP/ANFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/wD7Csf/AKKlr2CvH/2jv+Seaf8A9hWP/wBFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/8A7Csf/oqWvYK8f/aO/wCSeaf/ANhWP/0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/wDtHf8AJPNP/wCwrH/6Klr2CvH/ANo7/knmn/8AYVj/APRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/wC0d/yTzT/+wrH/AOipa9grx/8AaO/5J5p//YVj/wDRUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP8A+wrH/wCipa9grx/9o7/knmn/APYVj/8ARUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/7R3/JPNP/AOwrH/6Klr2CvH/2jv8Aknmn/wDYVj/9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP8A7R3/ACTzT/8AsKx/+ipa9grx/wDaO/5J5p//AGFY/wD0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/8AtHf8k80//sKx/wDoqWvYK8f/AGjv+Seaf/2FY/8A0VLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/APsKx/8AoqWvYK8f/aO/5J5p/wD2FY//AEVLQB7BRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAV4/+0d/yTzT/wDsKx/+ipa9grx/9o7/AJJ5p/8A2FY//RUtAHsFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABXj/AO0d/wAk80//ALCsf/oqWvYK8f8A2jv+Seaf/wBhWP8A9FS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/ALR3/JPNP/7Csf8A6Klr2CvH/wBo7/knmn/9hWP/ANFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/wD7Csf/AKKlr2CvH/2jv+Seaf8A9hWP/wBFS0AewUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFeP/tHf8k80/8A7Csf/oqWvYK8f/aO/wCSeaf/ANhWP/0VLQB//9k=)

Remit and membership of the Audit Committee

The main purpose of the Audit Committee is to review and maintain

oversight of the Group’s corporate governance, particularly with respect

to financial reporting, internal control and risk management. The Audit

Committee’s responsibilities also include:

•  reviewing the processes for detecting fraud, misconduct and internal

control weaknesses;

•  reviewing the effectiveness of the Group Assurance function; and

•  overseeing the relationship with the external and internal auditors and

other third-party advisers.

At the date of the 2025 Annual Report, the Audit Committee comprised

three independent Non-Executive Directors: Jane Moriarty (Chair of the

Audit Committee), Amanda Brown and Dave Coplin. The Board notes that

Dave Coplin has served more than nine years on the Board and so may

not be considered independent under Provision 10 of the 2018 Code.

However, the Board considers that his performance as a non-executive

director continues to be effective and that he remains independent in character

and judgement. The Board considers that there are no relationships or

circumstances in place which would be likely to affect, or might appear to

affect, his judgement in the exercise of his role. In accordance with 2018

Code Provision 24 the Board considers that Jane Moriarty has significant,

recent and relevant financial experience. Biographies of all of the members

of the Audit Committee, including a summary of their respective experience,

appear on pages 70 and 71.

The Audit Committee met at least quarterly during FY 2025. In each case,

appropriate papers were distributed to the Committee members and other

invited attendees, including, where and to the extent appropriate,

representatives of the external audit firm, the internal Group Assurance

function and other third-party advisers.

When appropriate, the Audit Committee augments the skills and experience

of its members with advice from internal and external audit professionals,

for example, on matters such as developments in financial reporting. Audit

Committee meetings are also attended, by invitation, by other members of

the Board including the Chair of the Company, the Chief Executive and the

Chief Financial Officer, the Group General Counsel and Company Secretary,

the Group Risk Director and representatives of the external auditor, KPMG

LLP. The Audit Committee also has the opportunity to meet privately with

the external auditor not less than twice a year, without any member of

management present, in relation to audit matters.

The remuneration of the members of the Audit Committee is set out in the

Report on Directors’ remuneration on page 115.

Summary terms of reference

A copy of the Audit Committee’s terms of reference is publicly available

within the Investor section of the Group’s website: www.mbplc.com/pdf/

audit\_committee\_terms.pdf

The Audit Committee’s terms of reference were approved by the

Committee and adopted by the Board in 2013. Those terms of reference

specifically provide that they will be reviewed annually. They have been

reviewed and updated as appropriate each year since and no changes

were felt to be needed when they were reviewed in September 2025.

Accordingly, in FY 2025 no material changes were made to the terms of

reference of the Audit Committee, but the work of the Audit Committee

will be kept under review with the expectation that any such matters which

come to light are included in the next annual review.

The Audit Committee is authorised by the Board to review any activity within

the business. It is authorised to seek any information it requires from, and

require the attendance at any of its meetings of, any Director, any member of

management and any employees, who are expected to co-operate with any

request made by the Audit Committee.

The Audit Committee is authorised by the Board to obtain, at the Group’s

expense, external legal or other independent professional advice and secure

the attendance of outsiders with relevant experience and expertise, if it

considers this necessary.

The Chair of the Audit Committee reports to the Board meeting following

each Committee meeting on the Committee’s work and the Board receives

a copy of the minutes of each meeting.

The role and responsibilities of the Audit Committee are to:

•  review the Group’s public statements on internal control, risk management

and corporate governance compliance;

•  review the Group’s processes for detecting fraud, misconduct and control

weaknesses and to consider the Group’s response to any such occurrence;

•  review management’s evaluation of any change in internal controls over

financial reporting;

•  review with management, and the external auditor, Group financial

statements required under UK legislation before submission to the Board;

•  establish, review and maintain the role and effectiveness of the internal

audit function, Group Assurance and the risk function, whose objective is

to provide independent assurance over the Group’s significant processes

and controls, including those in respect of the Group’s principal risks;

•  assume direct responsibility for the appointment, compensation,

resignation, dismissal and the overseeing of the external auditor,

including review of the external audit, its cost and effectiveness;

•  pre-approve non-audit work to be carried out by the external auditor and

the fees to be paid for that work, together with the monitoring of the

external auditor’s independence;

•  oversee the process for dealing with complaints received by the Group

regarding accounting, internal accounting controls or auditing matters

and any confidential, anonymous submission by employees of concerns

regarding questionable accounting or auditing matters; and

•  adopt and oversee a specific Code of Ethics for all employees which is

consistent with the Group’s overall statement of business ethics.

Key activities of the Audit Committee

Audit matters are reviewed at quarterly Audit Committee meetings

throughout the year at which detailed reports are presented for review.

The Audit Committee commissions reports from external advisers, the

Group Risk Director or Group management, either after consideration of

the Group’s key risks or in response to developing issues.

During the year, in order to fulfil the roles and responsibilities of the Audit

Committee, the following matters were considered:

•  the suitability of the Group’s accounting policies and practices;

•  half year and full year financial results;

•  the scope and cost of the external audit;

•  the external auditor’s full year report;

•  the reappointment of the external auditor, KPMG LLP;

•  any non-audit work carried out by the auditor and trends in the non-audit

fees in accordance with the Committee’s policy to ensure the

safeguarding of audit independence;

•  the co-ordination of the activities and the work programmes of the

internal and external audit functions;

•  the arrangements in respect of Group Assurance including its resourcing,

external support, the scope of the annual internal audit plan for FY 2025,

the level of achievement of that plan and the scope of the annual internal

audit plan for FY 2026;

•  periodic internal control and assurance reports from Group Assurance;

•  the Group’s risk management framework for the identification and

control of key risks, its risk and assurance mitigation plan and the annual

assessment of effectiveness of controls;

•  review of the Corporate Viability Disclosure on pages 60 and 61;

•  compliance with the Group’s Code of Ethics;

•  corporate governance developments;

•  the status of material litigation involving the Group; and

•  reports on allegations made via the Group’s whistleblowing procedures

and the effectiveness of these procedures, including a summary of

reports received during FY 2025.

Mitchells & Butlers plc  Annual Report and Accounts 2025

95

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Audit Committee report continued

Disclosure of significant and other judgements

The Audit Committee has reviewed the key judgements applied in the

preparation of the consolidated financial statements, which are described

in the relevant accounting policies and detailed notes to the consolidated

financial statements on pages 133 to 182.

The Audit Committee’s review included consideration of the following areas

and key accounting judgements:

•  Going concern – the headroom on the covenants across both the secured

and unsecured estates and Group liquidity have been reviewed in detail

by management and assessed by the Audit Committee. The Corporate

Viability Disclosure is on pages 60 and 61.

•  Property, plant and equipment valuation – the assumptions used by

management to value the long leasehold and freehold estate including:

estimated fair maintainable trading levels; brand multiples and use of

spot valuations, to ensure a consistent valuation methodology is in place.

The revaluation methodology is determined by using management

judgement, with advice taken from third-party valuation experts.

•  Impairment of short leasehold properties and right-of-use assets

and goodwill – Short leasehold properties, right-of-use assets, allocated

corporate assets and unlicensed land and buildings and goodwill are

held at cost less depreciation and impairment. Impairment includes

management judgement to determine site level profit and cash flow

forecasts, and the appropriate allocation of overhead costs to those cash

flows. In addition, the value in use calculation includes estimations of the

discount rate and long-term growth rate.

•  Separately disclosed items – judgement is used to determine those

items which should be separately disclosed to allow an understanding of

the adjusted trading performance of the Group. Separately disclosed

items are explained and analysed in note 2.2 of the financial statements

on pages 136 and 137. This judgement includes assessment of whether

an item is of sufficient size or of a nature that is not consistent with normal

trading activities.

•  Pension – judgement is used to determine the value of pension surplus

that has been recognised estimating the expected value of the surplus to

the Company.

Effectiveness of internal audit

The Audit Committee is responsible for monitoring and reviewing the

effectiveness of the Group’s internal audit function. The Audit Committee

meets regularly with management and with the Group Risk Director and

the internal auditor to review the effectiveness of internal controls and

risk management and receives reports from the Group Risk Director on

a quarterly basis.

During each financial year, the Audit Committee completes its annual review

of the effectiveness of the Group’s system of internal controls and internal

audit function, including financial, operational, compliance and risk

management systems.

The annual internal audit plan is approved by the Audit Committee and is

kept under review on a regular basis, by the Group Risk Director, in order to

reflect the changing business needs and to ensure new and emerging risks

are considered. The Audit Committee is informed of any amendments made

to the internal audit plan on a quarterly basis. The FY 2025 internal audit plan

was developed through a review of formal risk assessments, in conjunction

with the Risk Committee and the Executive Committee, together with

consideration of the Group’s key business processes and functions that could

be subject to audit. A similar approach has been employed in relation to the

FY 2026 internal audit plan. The principal objectives of the internal audit plan

for FY 2025 were, and remain for FY 2026:

•  to provide confidence that existing and emerging key risks are being

managed effectively;

•  to confirm that controls over core business functions and processes are

operating as intended; and

•  to confirm that major projects and significant business change programmes

are being adequately controlled.

Findings from all audit reports issued by the Group Assurance function are

reviewed by the Audit Committee. Internal audit recommendations are closely

monitored from implementation through to closure via a recommendation

tracking system, which efficiently assists the overall monitoring of internal

audit recommendations to ensure these are successfully implemented in

a timely manner. A summary of the status of the implementation of internal

audit recommendations is made every period to the Executive Committee

and Board and quarterly to the Audit Committee.

Risk management framework

As disclosed in the ‘Risk and uncertainties’ section on pages 52 to 59 the

Risk Committee continues to meet on a quarterly basis to review the key risks

facing the business. Membership of the Risk Committee, which includes

representation from each of the key business functions, is detailed below:

•  Group General Counsel and Company Secretary (Chair of the

Risk Committee)

•  Chief Financial Officer

•  Commercial and Marketing Director

•  Divisional Director (Operations)

•  Group HR Director

•  Director of Business Change & Technology

•  Group Risk Director

•  Head of Legal

•  Head of Safety

Key risks identified are reviewed and assessed on a quarterly basis in terms

of their likelihood and impact, and are measured on the Group’s ‘Key Risk

Heat Map’, in conjunction with associated risk mitigation plans. In addition,

the Risk Committee review includes an assessment of the material relevance

of emerging risks and the continued relevance of previously identified risks.

During FY 2025, Risk Committee meetings continued to include a cross-

functional, detailed review of the Group’s key risks. This process continues to

prove to be effective and adds value to the continued development and

progression of the Group’s approach to evaluating new and existing risks,

supported by robust mitigation plans.

Actions arising from Risk Committee meetings are followed up by the Group

Risk Director. The Audit Committee reviews the Risk Committee minutes in

addition to undertaking a quarterly review of the Group’s ‘Key Risk Heat Map’.

Annual Report and Accounts 2025  Mitchells & Butlers plc96

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Confidential reporting

The Group’s whistleblowing policy enables staff, in confidence, to raise

concerns about possible improprieties in financial and other matters and to

do so without fear of reprisal. Details of the policy are set out in the Group’s

Code of Ethics. The Audit Committee receives quarterly reports on

whistleblowing incidents and remains satisfied that the procedures in place

are satisfactory to enable independent investigation and follow up action

of all matters reported. The Board also receives a report on whistleblowing

in the Group General Counsel and Company Secretary’s regular report to

Board meetings.

External auditor appointment

Following shareholder and Board approval, KPMG LLP was appointed as the

auditor in 2022, following a formal tender process in 2020 to ensure the

continued objectivity, independence and value for money of the statutory

audit. KPMG LLP is therefore responsible for undertaking the FY 2025 audit.

The Audit Committee has considered the guidance in relation to rotation

including the proposed transition rules which will be considered when

recommending the appointment of the auditor in future years. The Group

has complied throughout FY 2025 with the provisions of The Statutory Audit

Services for Large Companies Market Investigation (Mandatory Use of

Competitive Tender Processes and Audit Committee Responsibilities)

Order 2014.

External auditor’s independence

The external auditor should not provide non-audit services where it might

impair their independence or objectivity to do so. The Audit Committee has

established a policy to safeguard the independence and objectivity of the

Group’s external auditor. That policy was reviewed in FY 2025 and a copy of

it is appended to the Audit Committee’s terms of reference and is available

on the Group’s website.

Pursuant to that policy, services that have been pre-approved by the Audit

Committee (e.g. covenant reporting) do not exceed in any year more than

70% of the average audit fee paid to that audit firm over the past three years,

unless prior approval has been obtained from the FRC.

The Audit Committee remains confident that the objectivity and independence

of the external auditor are not in any way impaired by reason of the non-audit

services which they provide to the Group.

That policy also includes an extensive list of services which the audit firm may

not provide or may only provide in very limited circumstances where the Group

and the audit firm agree that there would be no impact on the impartiality of

the external audit firm.

Details of the remuneration paid to the external auditor, and the split

between audit and non-audit services, are set out in note 2.3 of the financial

statements on pages 137 to 139.

External audit annual assessment

The Audit Committee assesses annually the qualification, expertise,

resources and independence of the Group’s external auditor and the overall

effectiveness of the audit process. The Chief Financial Officer, Group General

Counsel and Company Secretary, Chair of the Audit Committee and Group

Risk Director meet with the external auditor to discuss the audit, significant

risks and any key issues included on the Audit Committee’s agenda during

the year.

Fair, balanced and understandable statement

One of the key governance requirements of the Annual Report and Accounts

is for the report and accounts, taken as a whole, to be fair, balanced and

understandable, and that they provide the information necessary for

shareholders to assess the Group’s position, performance, business model

and strategy. Therefore, upon review of the financial statements, the Audit

Committee and the Board have confirmed that they are satisfied with the

overall fairness, balance and clarity of the Annual Report and Accounts,

which is underpinned by the following:

•  review of the formal review processes at all levels to ensure the Annual

Report and Accounts are factually correct;

•  clear guidance being issued to all contributors to ensure a consistent

approach; and

•  formal minutes of the Year End Working Group comprised of relevant

internal functional representatives and appropriate external advisers.

Jane Moriarty

Chair of the Audit Committee

27 November 2025

Mitchells & Butlers plc  Annual Report and Accounts 2025

97

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Report on Directors’

remuneration

“I am pleased to present the

Directors’ Remuneration

Report in respect of the

financial period which ended

on 27 September 2025, during

which we have maintained our

outperformance against the

market, despite the sector facing

significant challenges.”

Amanda Brown

Chair of the Remuneration Committee

Dear Shareholder,

I am pleased to present this year’s Directors’

Remuneration Report on behalf of the

Remuneration Committee (‘the Committee’).

The report provides context and insight into our

pay arrangements for Executive Directors and

Non-Executive Directors, including the assessment

of FY 2025 performance and pay. The report,

together with this letter, will be put to an advisory

vote at the 2026 AGM.

87.7

Best ever employee

engagement score

4.60

Record guest review score

£330m

Adjusted Operating Profit

a

3%

Average market

outperformance over

the year

4.3%

Like-for-like sales growth

Annual Report and Accounts 2025  Mitchells & Butlers plc98

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

2025 remuneration in the context of our business performance

and outcomes for our key stakeholders

The UK hospitality sector continues to face significant challenges, with

increased wage costs, higher employer national insurance contributions and

increasing food inflation. In spite of these external pressures the team have

continued to find innovative ways to improve performance and mitigate costs,

whilst supporting employees looking after guests and investing in the business.

As a result of these actions Mitchells & Butlers’ performance has again been

very strong, with like-for-like sales outperforming the market consistently

throughout the year, a pattern of outperformance that has been maintained

for a number of years. Sales performance was particularly good over the

festive period and continued to be resilient throughout the remainder of the

year, with our diverse portfolio of brands enabling us to grow sales across the

segments of the market. Overall like-for-like sales increased by 4.3%, and our

market outperformance over the year was c. 3%

b

. Despite the significant

increase in costs, our Ignite programme has once again been instrumental

to our ability to mitigate the cost pressures the business has faced with over

40 initiatives underway, focusing on activity to improve sales or better control

costs. It is therefore particularly pleasing that despite the considerable cost

headwinds, we have been able to improve our margins by 0.2 ppts. The

business is generating strong cash flows and has a strengthening balance

sheet, with net debt continuing to fall. Our strong financial foundations mean

that we have been able to increase the pace of our capital plan this year with

over 200 conversions and remodels being completed and delivering record

returns. As a result, these factors in combination have enabled us to deliver an

Adjusted Operating Profit in line with the top end of consensus expectations.

Last year I explained how pleased I was that as well as delivering financial

results, we had also scored highly on all stakeholder measures. I am therefore

delighted that 2025 has seen a further increase in Guest Health, Employee

Engagement and Safety scores, further evidencing the clear link between

engaged employees and satisfied guests and the financial performance of

the business. The business continues to work towards our sustainability

targets which focus on reducing Scope 1, 2 & 3 emissions, to zero by 2040,

to have zero operational waste into landfill by 2030 and for a 50% reduction

in food waste by 2030. There are a number of initiatives underway to deliver

these targets, with the roll out of solar panels, electrification of kitchens and

the introduction of remote energy consumption controls being examples

that have been undertaken during FY 2025.

The coming year will see a further material increase in cost headwinds,

over and above the level experienced in FY 2025, particularly driven by

higher levels of food inflation, and as a result we expect cost inflation to be

c. £130m. However, as noted above and throughout the Annual Report, the

business has good momentum, a healthy balance sheet and a proven track

record of overcoming cost challenges successfully through our range of

Ignite initiatives, the strength of our portfolio of brands and an ambitious

capital plan.

The Committee has, as usual, considered executive remuneration in the light

of outcomes for the wider workforce, our shareholders and other stakeholders

by taking a fair and balanced approach to remuneration.

Remuneration in FY 2025

Annual Bonus

Financial measures – Adjusted Operating Profit (outcome 53.7%

out of 70%)

At the time the financial targets were set, the macroeconomic outlook was

more settled with some cost inflation beginning to flatten, but wage costs

anticipated to rise. Challenging financial targets were set by the Committee

taking into account all of these factors. Labour cost increases proved to be

even higher than anticipated, driven notably by the increase in employer

national insurance contributions which was announced after these targets

had already been set. To deliver an on-target performance, the business

needed to offset at least £100m of cost inflation through sales growth and

improved cost efficiencies.

Total sales across the period were £2,711m, an increase of 3.9% and

on a like-for-like basis sales increased by 4.3%

a

. Our sales performance

outperformed the market

b

consistently over the year, and FY 2025

represented the ninth year in which the business has delivered sales

ahead of the market.

Adjusted Operating Profit over the year was £330m; an increase of 5.8%

on the prior year, and near the top of the range of consensus forecasts

which had already been increased through the year. This performance was

ahead of the target set by the Committee (£325m) driven by a good sales

performance over the year, improved cost efficiencies and excellent returns

from our capital plan.

Non-financial measures – (outcome 30% out of 30%)

The non-financial measures encompass Guest Health, Employee

Engagement and Safety.

Guest Health performance is measured as a combination of online review

scores and guest complaints. Over the year our online review scores have

averaged 4.60, representing a best ever score for this measure. Record low

scores have also been achieved for guest complaints, which are measured

as a ratio of complaints received for every 1,000 meals served. The average

number of complaints received per 1,000 meals over the year was just 0.52.

This combined performance has resulted in a maximum payment for the

guest element.

Employee engagement is measured at two points during the year, in

February and June, giving two different reference points to measure

employee satisfaction. This year around two thirds of employees completed

a survey and the overall score across the two surveys was 87.7, a record high

for employee engagement, and an increase of almost two points on the prior

year score, which itself was a record score. As a result a maximum payment

is due for this element.

Our safety measure encompasses four areas of safety; Food Hygiene

(as measured by the National Food Hygiene Rating System), Food Practices,

Allergens and Fire Safety. The measure assesses the percentage of our

businesses that have scored at least a 4 or 5 rating in each of the elements in

a combined score. The target set at the start of the year was for an overall

performance of 97.5% of all ratings to be at a 4 or 5. The year end performance

was 98% resulting in an on-target/maximum payment for this element.

a.  The Directors use a number of alternative performance measures (APMs)

that are considered critical to aid the understanding of the Group’s performance.

Key measures are explained on pages 189 to 191 of this Report.

b. As measured by the CGA Business Tracker.

Mitchells & Butlers plc  Annual Report and Accounts 2025

99

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Final Bonus Outcome

The Committee undertook a quality of earnings assessment to ensure that

the overall bonus outcome was fully representative of the overall performance

of the business across the financial period. The bonus outcome reflects

another strong performance over the financial period, driven by continued

sales growth ahead of the sector as a whole. This strong sales performance,

combined with improved cost efficiencies and excellent returns from our

capital plan, enabled the business to grow profits at a slightly better rate

than expected.

We are proud of the performance over the year, which was achieved

through hard work and in a manner which is consistent with the experience

of all stakeholders, including that of our employees and customers as

evidenced above.

In taking all these factors into account, the Committee was satisfied that

the overall formulaic outcome against our targets was consistent with our

performance over the year and as such no discretion was exercised when

determining the resultant annual bonuses. As a result of this review of

performance, bonuses of 83.7% of base pay (which is also 83.7% of the

maximum) were awarded to our CEO and CFO respectively.

FY 2023 RSP Vesting

During FY 2023, share awards were made to Phil Urban and Tim Jones

under the Restricted Share Plan (‘RSP’) to the value of 100% of their

respective salaries.

Vesting of the RSP was subject to the satisfactory assessment of performance

against three qualitative underpins, discussed in further detail on page 111.

The Committee is satisfied that these have been met and, as such, the 2023

RSP award will vest on 1 December 2025.

In addition, the Committee reviewed whether the Executive Directors might

unduly benefit from a windfall gain on these awards. As explained at the date

of grant, the prevailing share price used for the 2023/25 RSP award reflected

the challenging trading conditions facing the business at that time. The fall in

share price was due to overall market sentiment about the industry and not

directly linked to the underlying performance of the business. The increase

in value over the three-year vesting period for the 2023/25 RSP reflects

the strong underlying performance of the business in spite of these

difficult trading conditions. The Mitchells & Butlers’ share price has also

outperformed the wider market and peers in the FTSE All Share Travel and

Leisure index. The Mitchells & Butlers’ share price has increased by 24.8%

p.a. over the period whereas the FTSE All Share Travel and Leisure index has

grown by 13.8% p.a. and the FTSE 250 by 5.8% p.a. The share price also did

not follow the typical short-term ‘V-shape’ recovery that is often associated

with ‘windfall gains’ and instead has recovered over time, reflecting strong,

sustained performance driven by management actions. The Committee also

assessed the share prices at which prior RSP awards have been granted and

vested over the last five years and took into consideration the value gained

and lost by participants over this period. After careful consideration the

Committee concluded that participants will not benefit from a windfall gain

on the FY 2023 RSP awards and therefore has determined that no

adjustment is required.

Board changes

As announced in October 2025, during FY 2025, Tim Jones indicated to the

Board his intention to retire from full time work and step down as CFO, and

from the Board, in the summer of 2026. The Committee has determined that

Tim will be treated as a good leaver and full details of his leaving arrangements

will be disclosed in the FY 2026 remuneration report. Tim has been

fundamental to the success of Mitchells & Butlers over his 15 year tenure

and will be missed by all of his colleagues.

We were pleased to announce the appointment of Emma Harris as CFO with

the expectation that she will join the business in time to enable a smooth

handover from Tim. Emma is currently Finance Director – Food, Retail &

Property at Marks and Spencer Group plc. She brings extensive experience

from working in a variety of senior roles in major consumer-focused retail

businesses in the UK, with a track record of creating shareholder value

through partnering, commerciality and critical thinking.

Details of her remuneration on joining the business are shown in the table

below. Her remuneration package has been set in line with the Directors’

Remuneration Policy approved by shareholders in 2024 and in setting the

package the Committee took account of a number of factors, including her

experience, skill set and appropriate market benchmarks.

Element Quantum

Salary £520,000

Pension & Benefits Pension contribution aligned with that of the

wider workforce at 4% of salary.

Benefits in line with the Remuneration Policy.

Annual Bonus Maximum opportunity of 100% of salary. For

FY 2026, the maximum opportunity will be

pro-rated to reflect Emma’s period in the role.

In line with the Remuneration Policy, 50% of the

award to be deferred as shares and released in

two equal tranches, after 12 and 24 months.

Performance Share

Plan

Maximum opportunity of 200% of salary.

The award will be pro-rated to reflect Emma’s

period in the role.

Buy-out Awards Emma will also receive buy-out awards for

remuneration which will be forfeited when she

leaves her current employer. These awards will

remain subject to performance conditions,

where appropriate, and will not exceed the value

of the forfeited awards as at the time of grant.

The form of the buy-out awards (cash or shares)

will match the form of the corresponding

forfeited award and where the forfeited award

was subject to performance conditions, the

buy-out award will also be subject to

performance conditions. This will be based on

either the Marks and Spencer Group plc

performance or Mitchells & Butlers’

performance depending upon the vesting

timeline of the forfeited award. Mitchells &

Butlers’ shares acquired from a buy-out award

will be subject to the shareholding and deferral

requirements of the current Policy.

Full details of any buy-out awards will be fully

disclosed in the FY 2026 remuneration report

and at the time of grant.

Report on Directors’ remuneration continued

Annual Report and Accounts 2025  Mitchells & Butlers plc100

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Remuneration for FY 2026

Fixed Pay (Base Pay, Pensions and Benefits)

In reviewing Executive Directors’ salaries, the Committee took account of

market positioning and the level of increases applied to Executive Directors

in other organisations, but most importantly felt that the increases applied to

Executives should be below that of other colleagues and especially those in

frontline positions.

Overall pay increases have been 6.7% over the year with hourly paid frontline

employees who are typically the lowest paid employees in the Group, seeing

the largest increases.

With effect from 1 January 2026 Phil Urban’s salary will increase to £647,600

(3.5%) and Tim Jones’s to £541,500 (3.5%). As Tim is expected to work until

summer 2026, the majority of the financial year, he is eligible for a salary increase.

As noted above, on appointment Emma Harris’s salary will be £520,000.

Executive Directors’ pension contributions remain aligned with that of the

wider workforce at 4%.

There are no changes to the benefits available to Executive Directors.

Annual Bonus

The Committee believes that the annual bonus scheme for FY 2025 was

successful in driving the right behaviours across the business, and as such

has determined that the annual bonus scheme for FY 2026 will be unchanged.

The maximum opportunity will remain at 100% of salary for our Executive

Directors. Tim Jones’s annual bonus will be pro-rated based on his time in

employment in the financial year, with 50% deferred into shares in line with

normal practice. As noted above, Emma Harris’s bonus opportunity will also

be pro-rated to reflect her time in the role.

Performance Share Plan (‘PSP’) award FY 2026 to FY 2028

A PSP award is due to be made in respect of the FY 2026 to FY 2028

performance period. No changes are proposed to the opportunity level or

the measures and weightings for Executive Directors. Tim Jones’s PSP award

will be pro-rated based on his time in employment from the start of the

performance period.

Therefore, the overall opportunity for Executive Directors will remain at

200% of base salary and the measures and weightings (as a percentage of

maximum) will apply as follows: Operating Cashflow (70%), Earnings Per

Share (‘EPS’) growth (20%), and a sustainability measure based on reduction

in Scope 1, 2 & 3 emissions (10%). Full details of the proposed performance

measures and targets are set out on page 112.

In conclusion, FY 2025 has been another strong year for the business in what

is a challenging market with an uncertain outlook. The Committee is satisfied

that the Remuneration Policy approved at the 2024 AGM is operating as

intended and supports appropriate outcomes for the performance of the

business over the year, whilst being cognisant of the wider economic context

including appropriate governance considerations.

The remainder of the report sets out in more detail our overall approach to

Executive Remuneration, and how this aligns to the strategy of the business

and the interests of our stakeholders. I look forward to your continued

engagement and feedback and hope you will join the Board in supporting

our FY 2025 outcomes at the 2026 AGM.

Remuneration Policy renewal and approach for FY 2026

Our Remuneration Policy was approved by our shareholders at the 2024

AGM, with a vote in favour of more than 95%. During the course of FY 2026

we will be reviewing our Policy, ahead of its renewal at the 2027 AGM, to

ensure that it continues to support our strategic priorities and provides an

appropriate level of reward to attract and retain high-calibre individuals,

taking into account market positioning and the strong performance and

growth of the business over the last few years. We will engage with stakeholders

during FY 2026 in relation to our proposed approach to the new Policy in

advance of its finalisation.

Amanda Brown

Chair of the Remuneration Committee

27 November 2025

Mitchells & Butlers plc  Annual Report and Accounts 2025

101

Financial Statements Other Information

![](data:image/jpeg;base64,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)

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

£613

£89

£15

£509

£624

£91

£15

£518

£759

£89

£15

£509

£146

£1,925

£91

£16

£516

£423

£879

£553

£70

£15

£468

£624

£76

£14

£534

£807

£64

£15

£546

£182

£1,578

£40

£15

£581

£390

£552

£1,804

£599

£565

£26

£15

£599

£

2,298

£518

£1,120

£25

£16

£619

£515

£75

£15

£425

£526

£76

£16

£434

£638

£75

£16

£425

£122

£1,392

£76

£16

£432

£354

£514

£465

£59

£15

£391

£524

£63

£14

£447

£677

£53

£15

£457

£152

£1,511

£501

£472

£22

£15

£501

£1

,924

£433

£937

£21

£15

£518

£1,324

£462

£326

£34

£16

£486

2016 2017 2018 2019 2020 2021 2022 20242023 2025

Remuneration at a glance

Report on Directors’ remuneration continued

Remuneration key:

Base pay  Benefits  Pension   Annual bonus   Long-term incentives

Phil Urban

Chief Executive

(£’000)

Tim Jones

Chief Financial Officer

(£’000)

FY 2025 Performance

The following ‘Remuneration at a Glance’ section provides a short summary that demonstrates that our overall approach to Executive Remuneration has

been and continues to be measured, well balanced and appropriate.

Summary of Executive Directors’ Total Remuneration

The charts below set out the CEO and CFO earnings history from 2016 onwards, the latter being the first full year Phil Urban was in place as CEO.

The Committee continued to review the appropriateness of remuneration decisions, and in particular variable remuneration outcomes. In doing so, it considered

overall business performance as well as the wider experience of our key stakeholders, namely our customers, colleagues, supplier partners and shareholders,

and our wider communities. Balancing the needs of all our stakeholders continues to be at the heart of our purpose. In particular, the Committee considered

the following factors throughout the year in determining remuneration decisions:

Key stakeholder Factors considered by the Committee

Customers •  Year-on-year improvements in Guest Health scores

•  Very strong safety scores and focus on allergens

Colleagues •  The number of eligible employees receiving a bonus payout in the year

•  Number of apprentices in learning

•  Investments in pay and benefits

•  Health and wellbeing initiatives including mental health support in conjunction with the Samaritans

•  Establishing of employee network groups to support our diversity and inclusion agenda

Suppliers •  Close working relationships maintained during supply chain challenges

•  Accreditations e.g. Tier 3 Business Benchmark on Farm Animal Welfare rating

Shareholders •  Sales performance consistently ahead of the market

•  Strong profit growth and improved cashflow performance

•  Continued to pay down debt

Community •  Strategic partnership with Social Bite

Appropriateness of remuneration decisions

Annual Report and Accounts 2025  Mitchells & Butlers plc102

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Current shareholding Shareholding requirementsOwned shares

Outstanding unvested shares not subject to further performance conditions

Outstanding unvested shares subject to further performance conditions/underpins

How Executive Directors are building towards shareholding requirement

The table below shows the current shareholding as a percentage of base pay, what the shareholding as a percentage of base pay would be once unvested

shares not subject to further performance conditions are released (such as deferred bonus shares), and then the shareholding taking into account unvested

shares that are subject to performance conditions. Shareholdings are calculated based on the average share price over the final three months of the financial

period; for FY 2025 this was 271.5p (FY 2024 299.7p).

Mitchells & Butlers’ remuneration principles

When determining Executive Director remuneration policy, the

Remuneration Committee addresses each of the factors under Provision 40

of the 2018 UK Corporate Governance Code and these are also reflected in

our principles:

Shareholder alignment

A high proportion of reward is delivered in the form of equity, ensuring

Executives have strong alignment with shareholders.

Competitive

Providing reward that promotes the long-term success of the business

whilst enabling the attraction, retention and motivation of high-calibre

senior Executives.

Performance-linked

A significant proportion of an Executive Director’s reward is linked to

performance, with a clear line of sight between the outcomes of the business

and the delivery of shareholder value.

Straightforward

The remuneration structure is simple to understand for participants and

shareholders, and is aligned to the strategic priorities of the business.

These same principles apply throughout the organisation and are adapted as

appropriate for specific employee groups with a different emphasis on certain

principles in comparison to Executive Directors. This is illustrated in the table

on page 107 which sets out remuneration below Executive Director level.

For senior management, a much greater proportion of the overall reward

package is performance-linked and therefore is variable and at risk, whereas

for our hourly paid colleagues a greater weighting applies to the competitive

and straightforward principles as these factors are more important to the

attraction and retention of these employees.

291% 370% 967%

276% 354% 951%

200%

250%

Phil Urban (Current salary £625,725)

Tim Jones (Current salary £523,250)

Mitchells & Butlers plc  Annual Report and Accounts 2025

103

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Report on Directors’ remuneration continued

Alignment of Executive pay to strategy

The table below sets out how the three strategic priorities of the business align to Executive remuneration:

Strategic priority Link to Executive remuneration

Annual

Bonus PSP

Building a more

balanced business

Strong operating performance supports the

delivery and sustainability of the capital plan

and estate optimisation.

Adjusted Operating Profit delivery is the main component

of the annual bonus plan.

Operating Cashflow supports cumulative cash generation

to enable debt repayment whilst EPS incentivises profit

recovery.

A more balanced business delivers brands

and food and drink offers in an environment

that guests want to enjoy.

The Guest Health element of the annual bonus plan

provides a strong indicator of the success of each business.

There is a clear correlation between strong Guest Health

performance and sales performance.

High-quality engaged teams are fundamental

to the success of any business.

The engagement element of the annual bonus plan

measures how our teams feel about working for Mitchells

& Butlers and, in turn, the service they provide to guests.

Instilling a more

commercial culture

A commercial culture improves controls,

efficiency, purchasing and pricing, driving

both improved cashflow and operating

performance.

Adjusted Operating Profit delivery is the main component

of the annual bonus plan.

Cashflow is the main component of the PSP.

Commercial decisions must be guest-focused

and benefit from the input of customer

feedback.

The Guest Health metric quickly demonstrates where

decisions are right or wrong and Executives are

incentivised to react.

Developing and evolving a commercial

culture requires high levels of employee

engagement and business awareness.

The employee engagement element of the annual bonus

plan supports and underpins the development of culture.

Driving an

innovation agenda

Innovation at small and large scale is an

engine for improved sales and, therefore,

cash and profit generation.

Adjusted Operating Profit delivery is the main component

of the annual bonus plan.

Operating Cashflow and EPS make up the majority of the

PSP performance assessment.

Guests’ expectations continue to increase,

demanding higher standards of service and

digital capability.

The Guest Health element of the annual plan provides

valuable actionable feedback and incentivises action.

Innovation involves change, and delivery of

change requires strong employee

engagement.

The employee engagement element of the annual bonus

plan incentivises action to maintain and improve employee

engagement.

Annual Report and Accounts 2025  Mitchells & Butlers plc104

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Overview of remuneration policy and its implementation

for FY 2026

The key elements of our remuneration policy are shown below, along with details of how we plan to implement the policy specifically for 2026 and if any of the

elements impact on future remuneration.

Policy 2026 2027 2028 2029 2030 Implementation for 2026

Base pay

Increases in line with wider workforce,

except for exceptional circumstances.

Base pay

Effective

1 Jan 2025

Effective

1 Jan 2026

%

increase

Phil Urban 625,725 647,300 3.5

Tim Jones 523,250 541,500 3.5

Average

employee

increase

6.7%

(actual)

5%

(projected)

Benefits

Benefits normally include (but are not

limited to) private healthcare, life

assurance, annual health check,

employee assistance programme, use of

a Company vehicle or cash equivalent,

and discounts on food and associated

drinks purchased in our businesses.

Private healthcare is provided for the

Executive, spouse or partner and

dependent children.

In line with FY 2025.

Pension

Executive Directors’ contributions

aligned with the wider workforce

pension rate (currently 4% of salary).

Unchanged

Phil Urban: 4% of salary.

Tim Jones: 4% of salary.

Short-term

incentives

Normal maximum of 100% of salary.

At least 50% of performance conditions

to be based on financial measures, the

remainder based on non-financial or

personal business objectives.

50% of the award to be deferred as

shares and released in two equal

tranches, after 12 and 24 months.

The following maximum opportunities will

apply in FY 2026 (unchanged).

Phil Urban: 100% of salary.

Tim Jones: 100% of salary.

Long-term

incentives

Normal maximum of 200% of salary,

exceptional maximum of 250% of salary.

Performance will be measured over no

less than three financial years.

At least 70% of the award will be based

on the achievement of financial

measures, the remainder based on

non-financial, strategic or ESG

measures.

Vesting after three years, with a

two-year holding period post-vesting.

The following maximum opportunities will

apply in FY 2026 (unchanged).

Phil Urban: 200% of salary.

Tim Jones: 200% of salary.

Performance measures for FY 2026-28 are:

Operating Cashflow – (70%)

Adjusted EPS – (20%)

Sustainability (Scope 1, 2 &3) – (10%)

Shareholding

requirement

250% of salary for the CEO; 200% of

salary for all other Executive Directors.

All Executive Directors are required to

maintain shareholding requirements in

full for two years post-cessation.

Base pay

At start of

FY 2025

At start of

FY 2026

Phil Urban 246% 291%

Tim Jones 229% 246%

Mitchells & Butlers plc  Annual Report and Accounts 2025

105

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Report on Directors’ remuneration continued

Illustrations of remuneration policy

The charts below show an estimate of the remuneration that could be

received by Executive Directors under the remuneration policy. The charts

also show the impact of a 50% increase in share price on the LTIP outcome.

Chief Executive

£689,504

£1,660,904

£2,632,304

£3,279,904

Minimum

41.5%

19.5%

39.0%

26.2%

24.6%

49.2%

21.0%

19.7%

39.6%

19.7%

£1,804,000

35.5%

33.2%

£2,298,000

28.7%

22.5%

48.8%

31.3%

On-target Maximum

FY 2025

Actual

FY 2024

Actual

Maximum

+50% Share

price gain

100%

Chief Financial Officer

£578,160

£1,390,410

£2,202,660

£2,744,160

Minimum

41.6%

19.5%

38.9%

26.2%

24.6%

49.2%

21.1%

19.7%

39.5%

19.7%

£1,512,000

35.6%

33.1%

£1,907,000

28.2%

22.7%

49.1%

31.3%

On-target Maximum

FY 2025

Actual

FY 2024

Actual

Maximum

+50% Share

price gain

100%

The performance scenarios demonstrate the proportion of maximum

remuneration which would be payable in respect of each remuneration

element at each of the performance levels. In developing these scenarios,

the following assumptions have been made:

Minimum

Only the fixed elements of remuneration are payable. The fixed element

consists of base salary, benefits and pension. Base salary is the salary

effective from 1 January 2026. Benefits are based on actual FY 2025 figures

and include company car, healthcare and taxable expenses. Pension is

aligned with the rate available to the wider workforce (4%).

On-target

In addition to the minimum, this reflects the amount payable for on-target

performance under the short- and long-term incentive plans:

•  50% of maximum (50% of base salary for the Chief Executive and Chief

Financial Officer) is payable under the short-term incentive plan; and

•  50% of maximum (100% of base salary for the Chief Executive and Chief

Financial Officer) is payable under the PSP.

Maximum

In addition to the minimum, maximum payment is achieved under both the

short- and long-term incentive plans such that:

•  100% of base salary is payable under the short-term incentive plan for the

Chief Executive and Chief Financial Officer; and

•  200% of base salary for the Chief Executive and Chief Financial Officer is

payable under the PSP.

Share price gain

This shows the impact a 50% increase in the share price would have on the

maximum PSP outcome.

Share price gain    Long-term incentives

Short-term incentives    Fixed pay

Share price gain    Long-term incentives

Short-term incentives    Fixed pay

Annual Report and Accounts 2025  Mitchells & Butlers plc106

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

How our policy cascades to colleagues and

workforce engagement

Remuneration below Executive Director level

The table below demonstrates how the key elements of Executive pay align with the wider UK workforce:

Job Group

(Number of employees) Base pay Annual bonus Long-term incentives All-employee share plans

Executive Directors (2) Pay broadly around

mid-market levels.

Overall, increases (in

percentage terms)

consistent across all

salaried employee groups.

Bonus schemes for all

schemes align to the

business scorecard.

The majority of bonus

opportunity is linked to

financial performance.

Measures and targets for

long-term incentive plans

consistent for all

participants.

All employees can

participate in any of the

all-employee share

schemes, subject to

qualifying service, building

a stake in the business.

Executive Committee (8)

Senior management (c. 40)

Retail Support Centre

(c. 1,200)

Retail managers (c. 5,400)

Retail team members

(c. 41,000)

Pay set in line with market

requirements and closely

monitored.

Base pay for many

employees is ahead of the

statutory minimums.

Many employees benefit

from tips and service

charges, and in line with the

Employment (Allocation of

Tips) Act 2023 100% of

these earnings are passed

on to employees.

Our pay approach is aimed at providing regular and

predictable earnings through competitive base pay for our

retail team members. This is valued more highly than variable

pay elements by retail team members and is in line with our

‘competitive’ and ‘straightforward’ remuneration principles.

Workforce engagement

We welcome and encourage feedback from employees on a broad range of topics including business improvement, engagement and remuneration.

This feedback is gathered in a number of ways throughout the year as shown in the illustration below:

Remuneration Committee

Employee survey

Outcomes reviewed by

the Remuneration

Committee and taken

into account when

setting remuneration

policy.

CEO and CFO

roadshows

The CEO and CFO hold

regular roadshows that

allow both support centre

colleagues and General

Managers an opportunity

to discuss business issues

and provide feedback.

Employee forum

Elected representatives

have direct access to the

Executive Committee as

part of the forum and

where necessary

Executive remuneration

matters are brought to

the attention of the

Remuneration

Committee Chair.

Overview of pay and

policy decisions

Committee members are

updated on employee

terms and conditions and

made aware of significant

changes to policies and

other pay-related

matters.

Nominated

Non-Executive

Director

A Non-Executive

Director (Dave Coplin)

has been appointed to

engage with employees

and report back to the

Board. Dave Coplin is a

member of the

Remuneration

Committee.

Mitchells & Butlers plc  Annual Report and Accounts 2025

107

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Report on Directors’ remuneration continued

The Committee is regularly updated on pay and conditions applying to

Group employees alongside other workforce-related matters.

Where significant changes are proposed to employment conditions and

policies elsewhere in the Group, or there are important employee-related

projects underway, these are highlighted for the attention of the Committee

at an early stage. Over the course of FY 2025, these updates have focused on

employee engagement, the implementation of the new tips code of practice,

progress against our diversity and inclusion agenda and the roll out of a new

talent management system that will help to support the development of our

people. The Committee has also been kept informed of the potential impact

of the Government’s Employee Rights Bill, which is expected to have a

material impact on our employees once it is passed into law.

The Committee takes into account the base pay review budget applicable

to other employees when considering the pay of Executive Directors. The

Committee considers a broad range of reference points when determining

policy and pay levels. These include external market benchmarks as well as

internal reference points. Any such reference points are set in an appropriate

context and are not considered in isolation.

Obtaining and understanding the views of our employees, including in

relation to Executive Remuneration, is an important consideration for the

Committee when developing and operating our overall approach to

remuneration across Mitchells & Butlers. In addition to our approach to

communicating with our employees, we also welcome feedback and all

employees are invited to take part in our employee engagement surveys.

These provide all employees with an opportunity to give anonymous

feedback on a wide range of topics of interest or concern to them.

The Committee reviews these results and any significant concerns over

remuneration would be considered separately by the Committee and,

if appropriate, taken into account when determining the remuneration

approach and its implementation.

An employee forum is normally held twice every year, which gives an

opportunity for employees to ask questions of senior management via

elected representatives, and which from FY 2020 has been attended by

Dave Coplin. In 2025, two forums were held in March 2025 and September

2025. The Executive team finds these forums very valuable, as the format

allows for a more in-depth discussion and understanding that is not possible

through other channels such as surveys.

In addition, in his role as the nominated Non-Executive Director, Dave Coplin

undertakes a number of activities ranging from visits to our businesses to

meet and discuss issues with employees, to focus groups with specific employee

groups. Dave meets regularly with members of the Human Resources team

and is also supporting the business in how it may utilise technology to better

communicate with all employees; in particular Dave has had input into the

replacement of our HR and Payroll system in 2026 and the ongoing

development of our employee communications app.

The views of employees in relation to Executive remuneration have been

sought in the past and this issue was not proved to be an area of interest or

concern for employees at this time. Our engagement survey has a section

that allows employees to anonymously raise any concerns they may have on

any matter, and in 2025 there were over 20,000 comments recorded, none

of which related to senior management pay.

Annual Report and Accounts 2025  Mitchells & Butlers plc108

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

This section details the remuneration payable to the Executive and Non-Executive Directors (including the Company Chair) for the financial period ended

27 September 2025 and how we intend to implement our remuneration policy for FY 2026. This report, along with the Chair’s annual statement, will be

subject to a single advisory vote at the 2026 AGM.

Pay outcomes

The tables and related disclosures set out on pages 109 to 116 on Directors’ remuneration, deferred annual bonus share awards (‘STDIP’), PSP and RSP share

options, Share Incentive Plan, Save as You Earn Plan (‘SAYE’) and pension benefits have been audited by KPMG LLP where explicitly indicated.

Executive Directors’ remuneration

The table below sets out the single figure remuneration received by the Executive Directors during the reporting year and prior year.

Executive Directors (audited by KPMG)

Basic salaries

£000

Taxable benefits

a

£000

Short-term

incentives

£000

Pension-related benefits

b

£000

Long-term

incentives

c

£000

FY

2025

FY

2024

FY

2025

FY

2024

FY

2025

FY

2024

FY

2025

FY

2024

FY

2025

FY

2024

Phil Urban 619 599 16 15 518 599 25 26 1,120 565

Tim Jones 518 501 15 16 433 501 21 22 937 472

Sub-total Executive Directors  1,137 1,100 31 31 951 1,100 46 48 2,057 1,037

Other

d

£000

Total

remuneration

£000

Total

fixed pay

£000

Total

variable pay

£000

FY

2025

FY

2024

FY

2025

FY

2024

FY

2025

FY

2024

FY

2025

FY

2024

Phil Urban 2.5 2.5 2,300.5 1,806.5 662.5 642.5 1,638.0 1,164.0

Tim Jones 2.0 2.0 1,926.0 1,514.0 556.0 541.0 1,370.0 973.0

Sub-total Executive Directors  4.5 4.5 4,226.5 3,320.5 1,218.5 1,183.5 3,008.0 2,137.0

a.  Taxable benefits for the year comprised car allowance, healthcare and taxable expenses.

b. Based on the value of supplements paid in lieu of contributions to the Company scheme.

c.  The value of the RSP vesting is based on the average share price in the last three months of the financial period (271.5p) multiplied by the number of shares vesting. The increase

in Mitchells & Butlers’ share price over the period from when the RSP was granted in December 2022 to the end of FY 2025 has had an impact on the value of the 2023 PSP.

£568,411 of the CEO’s total pay and £475,651 of the CFO’s total pay is attributable to share price increase. The FY 2024 figure has been restated to reflect the actual value on

vesting based on a share price of 249p.

d. Includes free shares awarded under the SIP.

Annual bonus

Details of the measures and targets applying to the 2025 annual bonus plan are set out below:

Threshold – 95%

of Target

(% of salary

payable)

Target

(% of salary

payable)

Maximum – 103%

of Target

(% of salary

payable)

Outcome

(% of salary

payable)

Adjusted Operating Profit

(70%) (52 weeks)

£312m

(7.5%)

£325m

(35%)

£334.8m

(70%)

£330m

a

(53.7%)

Threshold   Target    Performance (Score)

Calculation of outcome

(% of salary payable)

Outcome

(% of salary

payable)

Guest Health (15%) Each element is scored 1 if better than target,

0 if between threshold and target,

and -1 if below threshold.

2

Social Media Score

4.45 4.54 4.60 (1)

•  If the sum of these scores is +2 then maximum

bonus is paid (15%).

•  If the sum of these scores is +1 then an

on-target payment would be made (7.5%).

•  If the sum of these scores is 0 then threshold

bonus is paid (3.75%).

(15%)

Complaints Ratio

0.66 0.56 0.52 (1)

Annual report on remuneration

Mitchells & Butlers plc  Annual Report and Accounts 2025

109

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Report on Directors’ remuneration continued

Threshold

(% of salary

payable)

Target

(% of salary

payable)

Maximum

(% of salary

payable)

Outcome

(% of salary

payable)

Employee Engagement

(10%)

83.5

(2.5%)

85

(5%)

86.3

(10%)

87.7

(10%)

Combined Safety Score

(5%)

97.5%

(5%)

98%

(5%)

a.  Payout is on a straight-line basis between points.

Financial measures

Adjusted Operating Profit (Outcome 53.7% out of 70%)

At the time the financial targets were set, the macroeconomic outlook was

more settled with some cost inflation beginning to flatten, but wage costs

were anticipated to rise. Challenging financial targets were set by the

Committee taking into account all of these factors. Labour cost increases

proved to be even higher than anticipated, driven notably by the increase in

employer national insurance contributions which was announced after these

targets had already been set. To deliver an on-target performance, the

business needed to offset at least £100m of cost inflation through sales

growth and improved cost efficiencies.

Total sales across the period were £2,711m, an increase of 3.9% and on

alike-for-like basis sales increased by 4.3%

a

. Our sales performance

outperformed the market

b

consistently over the year, and FY 2025

represented further year in which the business has delivered sales ahead

of the market.

Adjusted Operating Profit over the year was £330m; an increase of 5.8% on

the prior year, and in line with consensus forecasts which had already been

increased through the year. This performance was ahead of the target set by

the Committee (£325m), driven by a good sales performance over the year,

improved cost efficiencies and excellent returns from our capital plan.

a. The Directors use a number of alternative performance measures (APMs)

that are considered critical to aid the understanding of the Group’s performance.

Key measures are explained on pages 189 to 191 of this Report.

b. As measured by the CGA Business Tracker.

Non-financial measures

The non-financial measures encompass Guest Health, Employee

Engagement and Safety.

Guest Health (15% out of 15%)

Guest Health performance is measured as a combination of online review

scores and guest complaints. Over the year our online review scores have

averaged 4.60, representing a best ever score for this measure. Record low

scores have also been achieved for guest complaints, which are measured as

a ratio of complaints received for every 1,000 meals served. The average

number of complaints received per 1,000 meals over the year was just 0.52.

This combined performance has resulted in a maximum payment for the

guest element.

Employee Engagement (10% out of 10%)

Employee engagement is measured at two points during the year, in

February and June, giving two different reference points to measure

employee satisfaction. This year around two thirds of employees completed

a survey and the overall score across the two surveys was 87.7, a record high

for employee engagement, and an increase of almost two points on the prior

year score, which itself was a record score. As a result a maximum payment is

due for this element.

Safety (5% out of 5%)

Our safety measure encompasses four areas of safety; Food Hygiene

(as measured by the National Food Hygiene Rating System), Food Practices,

Allergens and Fire Safety. The measure assesses the percentage of our

businesses that have scored at least a 4 or 5 rating in each of the elements in

a combined score. The target set at the start of the year was for an overall

performance of 97.5% of all ratings to be at a 4 or 5. The year end performance

was 98% resulting in an on-target/maximum payment for this element.

Overall outcome

The total bonus awarded to Executive Directors is 83.7% of salary,

resulting in bonus payments of £518,171 and £433,308 to Phil Urban and

Tim Jones respectively.

In line with our policy, half of any bonus award will be deferred into shares

under the Short Term Deferred Incentive Plan (‘STDIP’), which will be

released in two equal amounts after 12 and 24 months. Bonus Share awards

are subject to continued employment at the time the awards are granted.

These shares must be retained until the shareholding requirement is met and

are subject to a post-cessation holding period.

Annual Report and Accounts 2025  Mitchells & Butlers plc110

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Long-term incentives vesting during the year

FY 2023–25 RSP vesting

During FY 2023 share awards were made to Phil Urban and Tim Jones under the terms of the RSP to the value of 100% of their respective salaries.

Awards were subject to a performance underpin, meaning that the Committee took into account the following factors (amongst other things) when

determining whether to exercise its discretion to adjust the number of shares vesting:

Underpin condition Commentary

•  if any adjustments have been made to annual

bonus outcomes for each of the three years

covered by the vesting period for awards

under the RSP;

No adjustments were made to any bonus outcomes during the vesting period.

The approval of any annual bonus payout is subject to a robust quality of earnings assessment

that considers all aspects of scorecard performance and a range of other performance factors to

determine if the annual bonus outcome was consistent with overall business performance. This annual

assessment is then used as a basis to assess performance against these factors over the course of the

RSP vesting period.

•  whether there has been material damage to

the reputation of the Company (in such

circumstances, responsibility and hence any

adjustments to the level of vesting may be

allocated collectively or individually to

participants); and

There were no issues that caused material damage to the reputation of the Company.

•  that the business has a stable and appropriate

capital structure in place to enable execution

of the Company’s strategic priorities.

The Board believes that the business continues to have a stable capital structure that has strengthened

over the course of the FY 2023–25 period.

Therefore, having reviewed each underpin condition, the Committee determined that awards should vest in full.

The Committee reviewed whether the Executive Directors might unduly benefit from a windfall gain on these awards. As explained at the date of grant,

the prevailing share price used for the 2023/25 RSP award reflected the challenging trading conditions facing the business at that time. The fall in share price

was due to overall market sentiment and not directly linked to the underlying performance of the business. The increase in value over the three-year vesting

period for the 2023/25 RSP reflects the strong underlying performance of the business despite significant headwinds. The Mitchells & Butlers’ share price

has also outperformed the wider market and peers in the FTSE All Share Travel and Leisure index. The Mitchells & Butlers’ share price has increased by 24.8%

p.a. over the period whereas the FTSE All Share Travel and Leisure index has grown by 13.8% p.a. and the FTSE 250 by 5.8% p.a. The share price also did not

follow the typical short-term ‘V-shape’ recovery that is often associated with ‘windfall gains’ and instead has recovered over time, reflecting strong, sustained

performance driven by management actions. The Committee also assessed the share prices at which prior RSP awards have been granted and vested over

the last five years and took into consideration the value gained and lost by participants over this period. After careful consideration the Committee concluded

that participants will not benefit from a windfall gain on the FY 2023 RSP awards and therefore has determined that no adjustment is required.

Long-term incentive awards made during FY 2025

An award for FY 2025-27 was made to the Chief Executive and the Chief Financial Officer in December 2024 in accordance with the rules of the PSP and

within the remuneration policy approved at the January 2024 AGM.

The performance condition has three independent elements: Operating Cashflow (70%); Earnings Per Share (‘EPS’) growth (20%); and a sustainability

measure based on reduction in Scope 1, 2 & 3 emissions (10%).

The Committee undertook a thorough review of the performance measures and targets that will apply and disclosed this in last years report. For completeness

these are summarised in the table below:

FY 2025 – 2027 PSP performance conditions

Weighting (% of

maximum) Threshold Maximum

Operating Cashflow (£m) 70% 1,370 1,448

EPS Growth (% CAGR) 20% 4.1 6.9

Sustainability – reduction in Scope 1, 2 & 3 emissions tCO

2

e 10% -41,891 -41,891

Full details of awards made to Executive Directors under the PSP are set out below (audited by KPMG):

Executive Directors

Nil Cost Options

awarded during

the year to

27/09/25

Basis of award

(% of basic

annual salary)

Award

date

Market price

per share used

to determine

the award

(p)

a

Actual/

planned

vesting date

Latest

lapse date

b

Face value

c

£

Phil Urban 494,908 200 3/12/24 2.455 Nov 27 Mar 2028 1,254,592

Tim Jones 413,849 200 3/12/24 2.455 Nov 27 Mar 2028 1,049,107

Total 908,757 2,303,699

a.  Market price is the average of the middle market quotations on the three days prior to the award being made.

b. The date on which vested shares will lapse if not exercised.

c.  Face value is the maximum number of shares that may vest (excluding any dividend shares that may accrue) multiplied by the middle market quotation of a Mitchells & Butlers’

share on the day the award was made (253.5p).

Mitchells & Butlers plc  Annual Report and Accounts 2025

111

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Report on Directors’ remuneration continued

All-employee SIP and Sharesave

The table below shows the awards made to Directors under the free share element of the SIP during the year and under Sharesave Scheme (‘SAYE’)

(audited by KPMG).

SIP

Executive Director

Shares

awarded

during

the year

to 27/9/25

Award

date

Market price

per share

at award

(p)

Normal

vesting

date

Market price

per share

at normal

vesting date

(p)

Lapsed

during

period

Phil Urban 801 26/6/25 284p 26/6/28 n/a –

Tim Jones 665 26/6/25 284p 26/6/28 n/a –

Total 1,466

Directors’ entitlements under the Partnership Share element of the SIP are set out as part of the Directors’ interests table on page 116.

SAYE

Director

Shares

awarded

during

the year

to 27/9/25

Award

date

Option Price

(p)

Earliest Exercise

date

Last Expiry date

(p)

Phil Urban 6,746 26/06/25 272 1/10/28 31/3/29

Total 6,746

Executive Directors: Implementation of remuneration policy in FY 2026

Fixed Pay (Base Pay, Pensions and Benefits)

The current level of inflation is putting pressure on pay increases. Overall pay increases have been 6.7% over the year with hourly paid frontline employees

who are typically the lowest paid employees in the Group, seeing the largest increases.

With effect from 1 January 2026 Phil Urban’s salary will increase to £647,600 (3.5%) and Tim Jones’s to £541,500 (3.5%).

The pension allowance paid to Executive Directors remains at 4%, in line with the general workforce.

There are no changes to the benefits available to Executive Directors.

Annual Bonus

The Committee believes that the annual bonus scheme for FY 2025 was successful in driving the right behaviours across the business and as such has

determined that the annual bonus scheme for FY 2026 will be the same and will be structured as follows:

•  The maximum earnings opportunity will remain at 100% of base salary.

•  Adjusted Operating Profit will continue to account for 70% of the overall opportunity.

The remaining 30% of the annual bonus plan will be allocated against the business scorecard as follows:

– 15% for Guest Health (reputation.com scores and guest complaints).

– 10% for employee engagement.

– 5% for overall safety performance.

•  The non-financial elements will only be payable if a threshold level of financial performance is achieved. For FY 2026 this will be unchanged at 97.5%

of Adjusted Operating Profit.

Targets are not being disclosed on the basis that they are considered commercially sensitive but will be disclosed in next year’s report.

Executive Directors are also aware that the Committee may take into account other factors when assessing if any bonus may be paid as part of our established

quality of earnings assessment. In particular this assessment will review the overall financial performance of the Group over the year to ensure that any payout

resulting from the approach to target setting above, is consistent with overall performance across the year.

Performance Share Plan (‘PSP’) award FY 2026 to FY 2028

A PSP award is due to be made in respect of the 2026–2028 performance period.

The Committee has undertaken a thorough review of the performance measures that will apply and these are summarised in the table below:

2026 – 2028 PSP performance conditions

Weighting (% of

maximum) Threshold Maximum

Operating Cashflow (£m) 70% 1,454 1,535

EPS Growth (% CAGR) 20% 3.1 5.9

Sustainability – reduction in Scope 1, 2 & 3 emissions tCO

2

e  10% 61,883 76,581

Annual Report and Accounts 2025  Mitchells & Butlers plc112

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Additional remuneration disclosures (audited by KPMG)

Payment for loss of office

No payments for loss of office were made in the year ended 27 September 2025.

Payments to past Directors

No payments were made to any past Directors in the year ended 27 September 2025.

Total shareholder return from September 2015 to September 2025 (rebased to 100)

This graph shows the value, by 27 September 2025, of £100 invested in Mitchells & Butlers plc on 27 September 2015, compared with the value of £100

invested in the FTSE 250 and the FTSE All Share Travel and Leisure indices.

200

100

150

50

0

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Mitchells & Butlers plc FTSE 250 FTSE All Share Travel and Leisure Source: Datastream (Thomson Reuters)

CEO earnings history

Year ended 24/09/16 30/09/17 29/09/18 28/09/19 26/09/20 25/09/21 24/09/22 30/09/23 28/09/24 27/09/25

Phil Urban

Single figure remuneration (£000) 613 770 819 1,684 553 627 810 1,573 1,806.5 2,300.5

Annual bonus outcome (% of max) – 28 39 82 – – 33 95 100 83.7

LTIP vesting outcome (% of max) – – – 47.5 – – – 100 100 100

Pay ratios

The table below sets out the Chief Executive pay ratio at the median, 25th and 75th percentiles for 2025. Data is also presented for 2018 as Mitchells & Butlers

has disclosed the pay ratio between the Chief Executive and the median pay of other employees for the last seven years, despite not needing to comply with

this requirement until the 2020 Annual Report.

Chief Executive pay ratio

Financial period Method P25 (lower quartile) P50 (median) P75 (upper quartile)

2025 Option C 108:1 106:1 100:1

2024 Option C 92:1 92:1 87:1

2023 Option C 86:1 82:1 78:1

2022 Option C 53:1 47:1 45:1

2021 Option C 41:1 38:1 36:1

2020 Option C 37:1 35:1 35:1

2019 Option C 120:1 112:1 106:1

2018 Option C 61:1 58:1 52:1

The lower quartile, median and upper quartile employees were calculated based on full-time equivalent base pay data as at 27 September 2025. This calculation

methodology was selected as the data was felt to be the most accurate way of identifying the best equivalents of P25, P50 and P75 and, therefore, the most

accurate measurement of our pay ratios. Of the three allowable methodologies under the legislation, this method is classed as ‘Option C’. Option A was

considered but given the high levels of team member turnover, it was felt more appropriate to adopt the approach set out above.

The employee pay data has been reviewed and the Committee is satisfied that it fairly reflects the relevant quartiles given the very large proportion of hourly

paid team members employed by Mitchells & Butlers (c. 85% of the total workforce). The three representative employees used to calculate the pay ratios are

hourly paid and the base pay elements were calculated using a full-time equivalent hourly working week of 35 hours. Hourly paid employees do not participate in

the annual bonus plan or long-term incentive plan and in most cases do not have any taxable benefits. Employee pay does not include earnings from tips and

service charges, from which many employees benefit. The calculations are based on the single figure methodology and exclude the value of any awards

under the free share element of the SIP.

Mitchells & Butlers plc  Annual Report and Accounts 2025

113

Financial Statements Other Information

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAXvBG8DASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD3+s/U9C0fW/K/tbSrG/8AJz5f2u3SXZnGcbgcZwOnoK0KKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAMvTfDWg6NcNcaXomm2M7IUaS1tUiYrkHBKgHGQDj2FalFFABWfqeg6Prflf2tpNjf+Tny/tVukuzOM43A4zgfkK0KKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAMvTfDWg6NcNcaXomm2M7IUaS1tUiYrkHBKgHGQDj2FalFFABWfqeiadrHlfb7fzvKzs+dlxnGehHoK0KKmcIzXLJXRUJyg+aLszA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+isfqmH/kX3I2+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKp8Xg/QYZBJHYYYdD5z/8AxVblFP6rQX2F9yB4vEP/AJeP72FFFFbnOFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRWX4a1KbWPCuj6pcKiz3llDcSLGCFDOgYgAknGT61qUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtbkrFcYNAElFQeY/r+lHmP6/pSuBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6KjiYtnJqSmAUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv+wVa/8Aopa25v4axPAn/JPPDX/YKtf/AEUtbc38NDAioooqRhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAEsP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/wCBP+SeeGv+wVa/+ilrbm/hrE8Cf8k88Nf9gq1/9FLVzWZtXi8n+yrGxus7vM+1XjwbemMbYnz39MYHXPAwLVFYH2vxd/0A9E/8HEv/AMjUfa/F3/QD0T/wcS//ACNUjN+isD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kagDforA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkagDforA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GoA36KwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GoA36KwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+RqAN+isD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORqAN+isD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kagDforA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkagDforA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GoA36KwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GoA36KwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+RqAN+isD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORqAN+isD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kagDforA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkagDforA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GoA36KwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GoA36KwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+RqAN+isD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORqAN+isD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kagDforA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkagDforA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GoA36KwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GoA36KwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+RqAN+isD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORqAN+isD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kagDforA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkagDforA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GoA36KwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GoA36KwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+RqAN+isD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORqAN+isD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kagDforA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkagDforA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GoA36KwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GoA36KwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+RqAN+isD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORqAN+isD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kagDforA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkagDforA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GoA36KwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GoA36KwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+RqAN+isD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORqAN+isD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kagDforA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkagDforA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GoA36KwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GoA36KwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+RqAN+isD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORqAN+isD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kagDforA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkagDforA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GoA36KwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GoA36KwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+RqAN+isD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORqAN+isD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kagDforA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkagDforA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GoA36KwPtfi7/AKAeif8Ag4l/+RqPtfi7/oB6J/4OJf8A5GoA36KwPtfi7/oB6J/4OJf/AJGo+1+Lv+gHon/g4l/+RqAN+isD7X4u/wCgHon/AIOJf/kaj7X4u/6Aeif+DiX/AORqAN+isD7X4u/6Aeif+DiX/wCRqPtfi7/oB6J/4OJf/kagDforA+1+Lv8AoB6J/wCDiX/5Go+1+Lv+gHon/g4l/wDkagDforA+1+Lv+gHon/g4l/8Akaj7X4u/6Aeif+DiX/5GoA6SH+Kpay9Gm1eXzv7VsbG1xt8v7LePPu65zuiTHb1zk9Mc6lUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/wCBP+SeeGv+wVa/+ilrbm/hrE8Cf8k88Nf9gq1/9FLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBLD/ABVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWti6Eh2eW6L1zuUn+orH8Cf8AJPPDX/YKtf8A0Utbc38NDAqbbn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FSMh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAh23P/PWL/v0f/iqNtz/z1i/79H/4qpqKAIdtz/z1i/79H/4qjbc/89Yv+/R/+KqaigCHbc/89Yv+/R/+Ko23P/PWL/v0f/iqmooAdaiQb/MdG6Y2qR/U1YqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLW3N/DWJ4E/5J54a/7BVr/6KWr2rW2r3Hk/2Vf2Nrt3eZ9qs3n3dMY2ypjv65yOmOQCxRWL/Z3i7/oO6J/4Jpf/AJKo/s7xd/0HdE/8E0v/AMlUrDNqisX+zvF3/Qd0T/wTS/8AyVR/Z3i7/oO6J/4Jpf8A5KosBtUVi/2d4u/6Duif+CaX/wCSqP7O8Xf9B3RP/BNL/wDJVFgNqisX+zvF3/Qd0T/wTS//ACVR/Z3i7/oO6J/4Jpf/AJKosBtUVi/2d4u/6Duif+CaX/5Ko/s7xd/0HdE/8E0v/wAlUWA2qKxf7O8Xf9B3RP8AwTS//JVH9neLv+g7on/gml/+SqLAbVFYv9neLv8AoO6J/wCCaX/5Ko/s7xd/0HdE/wDBNL/8lUWA2qKxf7O8Xf8AQd0T/wAE0v8A8lUf2d4u/wCg7on/AIJpf/kqiwG1RWL/AGd4u/6Duif+CaX/AOSqP7O8Xf8AQd0T/wAE0v8A8lUWA2qKxf7O8Xf9B3RP/BNL/wDJVH9neLv+g7on/gml/wDkqiwG1RWL/Z3i7/oO6J/4Jpf/AJKo/s7xd/0HdE/8E0v/AMlUWA2qKxf7O8Xf9B3RP/BNL/8AJVH9neLv+g7on/gml/8AkqiwG1RWL/Z3i7/oO6J/4Jpf/kqj+zvF3/Qd0T/wTS//ACVRYDaorF/s7xd/0HdE/wDBNL/8lUf2d4u/6Duif+CaX/5KosBtUVi/2d4u/wCg7on/AIJpf/kqj+zvF3/Qd0T/AME0v/yVRYDaorF/s7xd/wBB3RP/AATS/wDyVR/Z3i7/AKDuif8Agml/+SqLAbVFYv8AZ3i7/oO6J/4Jpf8A5Ko/s7xd/wBB3RP/AATS/wDyVRYDaorF/s7xd/0HdE/8E0v/AMlUf2d4u/6Duif+CaX/AOSqLAbVFYv9neLv+g7on/gml/8Akqj+zvF3/Qd0T/wTS/8AyVRYDaorF/s7xd/0HdE/8E0v/wAlUf2d4u/6Duif+CaX/wCSqLAbVFYv9neLv+g7on/gml/+SqP7O8Xf9B3RP/BNL/8AJVFgNqisX+zvF3/Qd0T/AME0v/yVR/Z3i7/oO6J/4Jpf/kqiwG1RWL/Z3i7/AKDuif8Agml/+SqP7O8Xf9B3RP8AwTS//JVFgNqisX+zvF3/AEHdE/8ABNL/APJVH9neLv8AoO6J/wCCaX/5KosBtUVi/wBneLv+g7on/gml/wDkqj+zvF3/AEHdE/8ABNL/APJVFgNqisX+zvF3/Qd0T/wTS/8AyVR/Z3i7/oO6J/4Jpf8A5KosBtUVi/2d4u/6Duif+CaX/wCSqP7O8Xf9B3RP/BNL/wDJVFgNqisX+zvF3/Qd0T/wTS//ACVR/Z3i7/oO6J/4Jpf/AJKosBtUVi/2d4u/6Duif+CaX/5Ko/s7xd/0HdE/8E0v/wAlUWA2qKxf7O8Xf9B3RP8AwTS//JVH9neLv+g7on/gml/+SqLAbVFYv9neLv8AoO6J/wCCaX/5Ko/s7xd/0HdE/wDBNL/8lUWA2qKxf7O8Xf8AQd0T/wAE0v8A8lUf2d4u/wCg7on/AIJpf/kqiwG1RWL/AGd4u/6Duif+CaX/AOSqP7O8Xf8AQd0T/wAE0v8A8lUWA2qKxf7O8Xf9B3RP/BNL/wDJVH9neLv+g7on/gml/wDkqiwG1RWL/Z3i7/oO6J/4Jpf/AJKo/s7xd/0HdE/8E0v/AMlUWA2qKxf7O8Xf9B3RP/BNL/8AJVH9neLv+g7on/gml/8AkqiwG1RWL/Z3i7/oO6J/4Jpf/kqj+zvF3/Qd0T/wTS//ACVRYDaorF/s7xd/0HdE/wDBNL/8lUf2d4u/6Duif+CaX/5KosBtUVi/2d4u/wCg7on/AIJpf/kqj+zvF3/Qd0T/AME0v/yVRYDaorF/s7xd/wBB3RP/AATS/wDyVR/Z3i7/AKDuif8Agml/+SqLAbVFYv8AZ3i7/oO6J/4Jpf8A5Ko/s7xd/wBB3RP/AATS/wDyVRYDaorF/s7xd/0HdE/8E0v/AMlUf2d4u/6Duif+CaX/AOSqLAbVFYv9neLv+g7on/gml/8Akqj+zvF3/Qd0T/wTS/8AyVRYDaorF/s7xd/0HdE/8E0v/wAlUf2d4u/6Duif+CaX/wCSqLAbVFYv9neLv+g7on/gml/+SqP7O8Xf9B3RP/BNL/8AJVFgNqisX+zvF3/Qd0T/AME0v/yVR/Z3i7/oO6J/4Jpf/kqiwG1RWL/Z3i7/AKDuif8Agml/+SqP7O8Xf9B3RP8AwTS//JVFgNqisX+zvF3/AEHdE/8ABNL/APJVH9neLv8AoO6J/wCCaX/5KosBtUVi/wBneLv+g7on/gml/wDkqj+zvF3/AEHdE/8ABNL/APJVFgNqisX+zvF3/Qd0T/wTS/8AyVR/Z3i7/oO6J/4Jpf8A5KosBtUVi/2d4u/6Duif+CaX/wCSqP7O8Xf9B3RP/BNL/wDJVFgNqisX+zvF3/Qd0T/wTS//ACVR/Z3i7/oO6J/4Jpf/AJKosBtUVi/2d4u/6Duif+CaX/5Ko/s7xd/0HdE/8E0v/wAlUWA2qKxf7O8Xf9B3RP8AwTS//JVH9neLv+g7on/gml/+SqLAbVFYv9neLv8AoO6J/wCCaX/5Ko/s7xd/0HdE/wDBNL/8lUWA2qKxf7O8Xf8AQd0T/wAE0v8A8lUf2d4u/wCg7on/AIJpf/kqiwG1RWL/AGd4u/6Duif+CaX/AOSqP7O8Xf8AQd0T/wAE0v8A8lUWA2qKxf7O8Xf9B3RP/BNL/wDJVH9neLv+g7on/gml/wDkqiwG1RWL/Z3i7/oO6J/4Jpf/AJKo/s7xd/0HdE/8E0v/AMlUWA2qKxf7O8Xf9B3RP/BNL/8AJVH9neLv+g7on/gml/8AkqiwG1RWL/Z3i7/oO6J/4Jpf/kqj+zvF3/Qd0T/wTS//ACVRYDaorF/s7xd/0HdE/wDBNL/8lUf2d4u/6Duif+CaX/5KosBtUVi/2d4u/wCg7on/AIJpf/kqj+zvF3/Qd0T/AME0v/yVRYDaorF/s7xd/wBB3RP/AATS/wDyVR/Z3i7/AKDuif8Agml/+SqLAb8P8VS1m6Tbavb+d/at/Y3W7b5f2WzeDb1zndK+e3pjB6540qYgooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa25v4aAJaKq5PrRk+tK4FqiquT60ZPrRcC1RVXJ9aMn1ouBaoqrk+tGT60XAtUVVyfWjJ9aLgWqKq5PrRk+tFwLVFVcn1oyfWi4FqiquT60ZPrRcC1RVXJ9aMn1ouBaoqrk+tGT60XAtUVVyfWjJ9aLgWqKq5PrRk+tFwLVFVcn1oyfWi4FqiquT60ZPrRcC1RVXJ9aMn1ouBaoqrk+tGT60XAtUVVyfWjJ9aLgWqKq5PrRk+tFwLVFVcn1oyfWi4FqiquT60ZPrRcC1RVXJ9aMn1ouBaoqrk+tGT60XAtUVVyfWjJ9aLgWqKq5PrRk+tFwLVFVcn1oyfWi4FqiquT60ZPrRcC1RVXJ9aMn1ouBaoqrk+tGT60XAtUVVyfWjJ9aLgWqKq5PrRk+tFwLVFVcn1oyfWi4FqiquT60ZPrRcC1RVXJ9aMn1ouBaoqrk+tGT60XAtUVVyfWjJ9aLgWqKq5PrRk+tFwLVFVcn1oyfWi4FqiquT60ZPrRcC1RVXJ9aMn1ouBaoqrk+tGT60XAtUVVyfWjJ9aLgWqKq5PrRk+tFwLVFVcn1oyfWi4FqiquT60ZPrRcC1RVXJ9aMn1ouBaoqrk+tGT60XAtUVVyfWjJ9aLgWqKq5PrRk+tFwLVFVcn1oyfWi4FqiquT60ZPrRcC1RVXJ9aMn1ouBaoqrk+tGT60XAtUVVyfWjJ9aLgWqKq5PrRk+tFwLVFVcn1oyfWi4FqiquT60ZPrRcC1RVXJ9aMn1ouBaoqrk+tGT60XAtUVVyfWjJ9aLgWqKq5PrRk+tFwLVFVcn1oyfWi4FqiquT60ZPrRcC1RVXJ9aMn1ouBaoqrk+tGT60XAtUVVyfWjJ9aLgWqKRfuD6UtMAooooAKKKKACiiigAooooA5/wJ/wAk88Nf9gq1/wDRS1tzfw1ieBP+SeeGv+wVa/8Aopa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKyL3WL61u3hh8N6peRrjE8ElqEfIB4DzK3HTkDp6c1X/AOEg1P8A6E7W/wDv9Zf/ACRQBv0Vgf8ACQan/wBCdrf/AH+sv/kij/hINT/6E7W/+/1l/wDJFAG/RWB/wkGp/wDQna3/AN/rL/5Io/4SDU/+hO1v/v8AWX/yRQBv0Vgf8JBqf/Qna3/3+sv/AJIo/wCEg1P/AKE7W/8Av9Zf/JFAG/RWB/wkGp/9Cdrf/f6y/wDkij/hINT/AOhO1v8A7/WX/wAkUAb9FYH/AAkGp/8AQna3/wB/rL/5Io/4SDU/+hO1v/v9Zf8AyRQBv0Vgf8JBqf8A0J2t/wDf6y/+SKP+Eg1P/oTtb/7/AFl/8kUAb9FYH/CQan/0J2t/9/rL/wCSKP8AhINT/wChO1v/AL/WX/yRQBv0Vgf8JBqf/Qna3/3+sv8A5Io/4SDU/wDoTtb/AO/1l/8AJFAG/RWB/wAJBqf/AEJ2t/8Af6y/+SKP+Eg1P/oTtb/7/WX/AMkUAb9FYH/CQan/ANCdrf8A3+sv/kij/hINT/6E7W/+/wBZf/JFAG/RWB/wkGp/9Cdrf/f6y/8AkiteyuJbq0Saazns5GzmCcoXTBI5KMy89eCevrxQBYorEn1zUYriSNPCmsTIjlVljltArgH7w3Tg4PXkA+oFR/8ACQan/wBCdrf/AH+sv/kigDforA/4SDU/+hO1v/v9Zf8AyRR/wkGp/wDQna3/AN/rL/5IoA36KwP+Eg1P/oTtb/7/AFl/8kUf8JBqf/Qna3/3+sv/AJIoA36KwP8AhINT/wChO1v/AL/WX/yRR/wkGp/9Cdrf/f6y/wDkigDforA/4SDU/wDoTtb/AO/1l/8AJFH/AAkGp/8AQna3/wB/rL/5IoA36KwP+Eg1P/oTtb/7/WX/AMkUf8JBqf8A0J2t/wDf6y/+SKAN+isD/hINT/6E7W/+/wBZf/JFH/CQan/0J2t/9/rL/wCSKAN+isD/AISDU/8AoTtb/wC/1l/8kUf8JBqf/Qna3/3+sv8A5IoA36KwP+Eg1P8A6E7W/wDv9Zf/ACRR/wAJBqf/AEJ2t/8Af6y/+SKAN+isD/hINT/6E7W/+/1l/wDJFH/CQan/ANCdrf8A3+sv/kigDfoqOeRobeSVIZJ3RSyxRlQzkD7o3EDJ6ckD3FYn/CQan/0J2t/9/rL/AOSKAN+isD/hINT/AOhO1v8A7/WX/wAkUf8ACQan/wBCdrf/AH+sv/kigDforA/4SDU/+hO1v/v9Zf8AyRR/wkGp/wDQna3/AN/rL/5IoA36KwP+Eg1P/oTtb/7/AFl/8kUf8JBqf/Qna3/3+sv/AJIoA36KwP8AhINT/wChO1v/AL/WX/yRR/wkGp/9Cdrf/f6y/wDkigDforA/4SDU/wDoTtb/AO/1l/8AJFH/AAkGp/8AQna3/wB/rL/5IoA36KwP+Eg1P/oTtb/7/WX/AMkUf8JBqf8A0J2t/wDf6y/+SKAN+isD/hINT/6E7W/+/wBZf/JFH/CQan/0J2t/9/rL/wCSKAN+isD/AISDU/8AoTtb/wC/1l/8kUf8JBqf/Qna3/3+sv8A5IoA36KwP+Eg1P8A6E7W/wDv9Zf/ACRR/wAJBqf/AEJ2t/8Af6y/+SKAN+iszTtUvL24aO40HUdPQIWEtzJbspOR8o8uVznnPTHB56VPqN5PZW6yW+m3WoOW2mK2aJWAwfmPmOgxxjrnnpQBcorA/wCEg1P/AKE7W/8Av9Zf/JFH/CQan/0J2t/9/rL/AOSKAN+isD/hINT/AOhO1v8A7/WX/wAkUf8ACQan/wBCdrf/AH+sv/kigDforA/4SDU/+hO1v/v9Zf8AyRR/wkGp/wDQna3/AN/rL/5IoA36KwP+Eg1P/oTtb/7/AFl/8kUf8JBqf/Qna3/3+sv/AJIoA36KwP8AhINT/wChO1v/AL/WX/yRR/wkGp/9Cdrf/f6y/wDkigDforA/4SDU/wDoTtb/AO/1l/8AJFH/AAkGp/8AQna3/wB/rL/5IoA36KwP+Eg1P/oTtb/7/WX/AMkUf8JBqf8A0J2t/wDf6y/+SKAN+isD/hINT/6E7W/+/wBZf/JFH/CQan/0J2t/9/rL/wCSKAN+isD/AISDU/8AoTtb/wC/1l/8kUf8JBqf/Qna3/3+sv8A5IoA36KwP+Eg1P8A6E7W/wDv9Zf/ACRWpp15Pe27SXGm3WnuHKiK5aJmIwPmHlu4xzjrng8dKALdFZF7rF9a3bww+G9UvI1xieCS1CPkA8B5lbjpyB09Oar/APCQan/0J2t/9/rL/wCSKAN+isD/AISDU/8AoTtb/wC/1l/8kUf8JBqf/Qna3/3+sv8A5IoA36KwP+Eg1P8A6E7W/wDv9Zf/ACRR/wAJBqf/AEJ2t/8Af6y/+SKAN+isD/hINT/6E7W/+/1l/wDJFH/CQan/ANCdrf8A3+sv/kigDforA/4SDU/+hO1v/v8AWX/yRR/wkGp/9Cdrf/f6y/8AkigDforA/wCEg1P/AKE7W/8Av9Zf/JFH/CQan/0J2t/9/rL/AOSKAN+isD/hINT/AOhO1v8A7/WX/wAkUf8ACQan/wBCdrf/AH+sv/kigDforA/4SDU/+hO1v/v9Zf8AyRR/wkGp/wDQna3/AN/rL/5IoA36KwP+Eg1P/oTtb/7/AFl/8kUf8JBqf/Qna3/3+sv/AJIoA36KwP8AhINT/wChO1v/AL/WX/yRR/wkGp/9Cdrf/f6y/wDkigDqE+4PpS1FayNNaQyvC8Duis0UhUshI+6dpIyOnBI9CalqhBRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilrbm/hrE8Cf8AJPPDX/YKtf8A0Utbc38NDAioooqRhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBZT7g+lLSJ9wfSlqhBRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWtub+GsTwJ/yTzw1/2CrX/wBFLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAWU+4PpS0ifcH0paoQUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilrbm/hrE8Cf8k88Nf8AYKtf/RS1c1nWLbSfJ+0xXz+bu2/ZbGa5xjHXykbb174zzjoaGBaorA/4TDTP+fXW/wDwR3v/AMao/wCEw0z/AJ9db/8ABHe//GqkZv0Vgf8ACYaZ/wA+ut/+CO9/+NUf8Jhpn/Prrf8A4I73/wCNUAb9FYH/AAmGmf8APrrf/gjvf/jVH/CYaZ/z663/AOCO9/8AjVAG/RWB/wAJhpn/AD663/4I73/41R/wmGmf8+ut/wDgjvf/AI1QBv0Vgf8ACYaZ/wA+ut/+CO9/+NUf8Jhpn/Prrf8A4I73/wCNUAb9FYH/AAmGmf8APrrf/gjvf/jVH/CYaZ/z663/AOCO9/8AjVAG/RWB/wAJhpn/AD663/4I73/41R/wmGmf8+ut/wDgjvf/AI1QBv0Vgf8ACYaZ/wA+ut/+CO9/+NUf8Jhpn/Prrf8A4I73/wCNUAb9FYH/AAmGmf8APrrf/gjvf/jVH/CYaZ/z663/AOCO9/8AjVAG/RWB/wAJhpn/AD663/4I73/41R/wmGmf8+ut/wDgjvf/AI1QBv0Vgf8ACYaZ/wA+ut/+CO9/+NUf8Jhpn/Prrf8A4I73/wCNUAb9FYH/AAmGmf8APrrf/gjvf/jVH/CYaZ/z663/AOCO9/8AjVAG/RWCPF2mnpaa5/4Ir3/41S/8Jdp3/Pprn/givf8A41QBu0Vhf8Jdp3/Pprn/AIIr3/41R/wl2nf8+muf+CK9/wDjVAG7RWF/wl2nf8+muf8Agivf/jVH/CXad/z6a5/4Ir3/AONUAbtFYX/CXad/z6a5/wCCK9/+NUf8Jdp3/Pprn/givf8A41QBu0Vhf8Jdp3/Pprn/AIIr3/41R/wl2nf8+muf+CK9/wDjVAG7RWF/wl2nf8+muf8Agivf/jVH/CXad/z6a5/4Ir3/AONUAbtFYX/CXad/z6a5/wCCK9/+NUf8Jdp3/Pprn/givf8A41QBu0Vhf8Jdp3/Pprn/AIIr3/41R/wl2nf8+muf+CK9/wDjVAG7RWF/wl2nf8+muf8Agivf/jVH/CXad/z6a5/4Ir3/AONUAbtFYX/CXad/z6a5/wCCK9/+NUf8Jdp3/Pprn/givf8A41QBu0Vhf8Jdp3/Pprn/AIIr3/41R/wl2nf8+muf+CK9/wDjVAG7RWF/wl2nf8+muf8Agivf/jVIfF+mA82ut/8Agjvf/jVAG9RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QBv0Vgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVAG/RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QBv0Vgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVAG/RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QBv0Vgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVAG/RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QBv0Vgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVAG/RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QBv0Vgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVAG/RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QBv0Vgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVAG/RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QBv0Vgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVAG/RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QBv0Vgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVAG/RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QBv0Vgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVAG/RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QBv0Vgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVAG/RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QBv0Vgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVAG/RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QBv0Vgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVAG/RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QBv0Vgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVAG/RWB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NUAb9FYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41QB1CfcH0paitZluLSGdA4SRFdRJGyMARnlWAKn2IBHepaoQUUUUAFFFFABRRRQAUUUUAc/4E/wCSeeGv+wVa/wDopa25v4axPAn/ACTzw1/2CrX/ANFLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAE8X+rFPpkX+rFPqhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVBJ/rDU9QSf6w0mAyiiikMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAo70Ud6ACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAo7UUdqACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAsp9wfSlpE+4PpS1QgooooAKKKKACiiigAooooA5/wJ/wAk88Nf9gq1/wDRS1sXRkGzy0RuudzEf0NY/gT/AJJ54a/7BVr/AOilrbm/hoYFTdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJqaipGQ7rn/nlF/wB/T/8AE0brn/nlF/39P/xNTUUAQ7rn/nlF/wB/T/8AE0brn/nlF/39P/xNTUUAQ7rn/nlF/wB/T/8AE0brn/nlF/39P/xNTUUAQ7rn/nlF/wB/T/8AE0brn/nlF/39P/xNTUUAQ7rn/nlF/wB/T/8AE0brn/nlF/39P/xNTUUAQ7rn/nlF/wB/T/8AE0brn/nlF/39P/xNTUUAQ7rn/nlF/wB/T/8AE0brn/nlF/39P/xNTUUAQ7rn/nlF/wB/T/8AE0brn/nlF/39P/xNTUUAQ7rn/nlF/wB/T/8AE0brn/nlF/39P/xNTUUAQ7rn/nlF/wB/T/8AE0brn/nlF/39P/xNTUUAQ7rn/nlF/wB/T/8AE0brn/nlF/39P/xNTUUAEb3WwYhh/wC/p/8Aiafvu/8AnjD/AN/j/wDE1JF/qxT6oRBvu/8AnjD/AN/j/wDE0b7v/njD/wB/j/8AE1PRQBBvu/8AnjD/AN/j/wDE0b7v/njD/wB/j/8AE1PRQBBvu/8AnjD/AN/j/wDE0b7v/njD/wB/j/8AE1PRQBBvu/8AnjD/AN/j/wDE0b7v/njD/wB/j/8AE1PRQBBvu/8AnjD/AN/j/wDE0b7v/njD/wB/j/8AE1PRQBBvu/8AnjD/AN/j/wDE0b7v/njD/wB/j/8AE1PRQBBvu/8AnjD/AN/j/wDE0b7v/njD/wB/j/8AE1PRQBBvu/8AnjD/AN/j/wDE0b7v/njD/wB/j/8AE1PRQBBvu/8AnjD/AN/j/wDE0b7v/njD/wB/j/8AE1PRQBBvu/8AnjD/AN/j/wDE0b7v/njD/wB/j/8AE1PRQBBvu/8AnjD/AN/j/wDE1BI1zvOYYf8Av6f/AImr1QSf6w0mBW3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamopDId1z/zyi/7+n/4mjdc/88ov+/p/+JqaigCHdc/88ov+/p/+Jo3XP/PKL/v6f/iamooAh3XP/PKL/v6f/iaN1z/zyi/7+n/4mpqKAId1z/zyi/7+n/4mjdc/88ov+/p/+JqaigCHdc/88ov+/p/+Jo3XP/PKL/v6f/iamooAh3XP/PKL/v6f/iaN1z/zyi/7+n/4mpqKAId1z/zyi/7+n/4mjdc/88ov+/p/+JqaigCHdc/88ov+/p/+Jo3XP/PKL/v6f/iamooAh3XP/PKL/v6f/iaN1z/zyi/7+n/4mpqO9AEO65/55Rf9/T/8TRuuf+eUX/f0/wDxNTUUAQ7rn/nlF/39P/xNG65/55Rf9/T/APE1NRQBDuuf+eUX/f0//E0brn/nlF/39P8A8TU1FAEO65/55Rf9/T/8TRuuf+eUX/f0/wDxNTUUAQ7rn/nlF/39P/xNG65/55Rf9/T/APE1NRQBDuuf+eUX/f0//E0brn/nlF/39P8A8TU1FAEO65/55Rf9/T/8TRuuf+eUX/f0/wDxNTUUAQ7rn/nlF/39P/xNG65/55Rf9/T/APE1NRQBDuuf+eUX/f0//E0brn/nlF/39P8A8TU1FAEO65/55Rf9/T/8TRuuf+eUX/f0/wDxNTUUAQ7rn/nlF/39P/xNG65/55Rf9/T/APE1NR2oAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamooAsR58tdwAOBkA5p1In3B9KWqEFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv+wVa/8Aopa25v4axPAn/JPPDX/YKtf/AEUtbF0JDs8t0XrncpP9RQwG0VDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVUjJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqALsX+rFPqrGl1sGJof+/R/+Kp+y7/57Q/8Afk//ABVUInoqDZd/89of+/J/+Ko2Xf8Az2h/78n/AOKoAnoqDZd/89of+/J/+Ko2Xf8Az2h/78n/AOKoAnoqDZd/89of+/J/+Ko2Xf8Az2h/78n/AOKoAnoqDZd/89of+/J/+Ko2Xf8Az2h/78n/AOKoAnoqDZd/89of+/J/+Ko2Xf8Az2h/78n/AOKoAnoqDZd/89of+/J/+Ko2Xf8Az2h/78n/AOKoAnoqDZd/89of+/J/+Ko2Xf8Az2h/78n/AOKoAnoqDZd/89of+/J/+Ko2Xf8Az2h/78n/AOKoAnoqDZd/89of+/J/+Ko2Xf8Az2h/78n/AOKoAnoqDZd/89of+/J/+Ko2Xf8Az2h/78n/AOKoAnqCT/WGjZd/89of+/J/+KqCRbneczQ/9+j/APFUmBJRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVIZNRUO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFUATUVDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVAE1FQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVQBNRUO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFUATUVDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVAE1FQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVQBNRUO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFUATUVDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVAE1Heodtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqgCaiodtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqgCaiodtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqgCaiodtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqgCaiodtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqgCaiodtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqgCaiodtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqgCaiodtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqgCaiodtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqgCaiodtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqgCaiodtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqgCajtUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBfT7g+lLTY8+Wu4gnAyQMU6qEFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv8AsFWv/opa25v4axPAn/JPPDX/AGCrX/0Utbc38NDAioooqRhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUATxf6sU+mRf6sU+qEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUEn+sNT1BJ/rDSYDKKKKQwooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACjvRR3oAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACjtRR2oAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigCyn3B9KWkT7g+lLVCCiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UtbF0JDs8t0XrncpP9RWP4E/5J54a/wCwVa/+ilrbm/hoYFTbc/8APWL/AL9H/wCKo23P/PWL/v0f/iqmoqRkO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAEaXWwYmh/79H/4qn7Lv/ntD/35P/xVSRf6sU+qEQbLv/ntD/35P/xVGy7/AOe0P/fk/wDxVT0UAQbLv/ntD/35P/xVGy7/AOe0P/fk/wDxVT0UAQbLv/ntD/35P/xVGy7/AOe0P/fk/wDxVT0UAQbLv/ntD/35P/xVGy7/AOe0P/fk/wDxVT0UAQbLv/ntD/35P/xVGy7/AOe0P/fk/wDxVT0UAQbLv/ntD/35P/xVGy7/AOe0P/fk/wDxVT0UAQbLv/ntD/35P/xVGy7/AOe0P/fk/wDxVT0UAQbLv/ntD/35P/xVGy7/AOe0P/fk/wDxVT0UAQbLv/ntD/35P/xVGy7/AOe0P/fk/wDxVT0UAQbLv/ntD/35P/xVGy7/AOe0P/fk/wDxVT0UAQbLv/ntD/35P/xVQSLc7zmaH/v0f/iqvVBJ/rDSYFbbc/8APWL/AL9H/wCKo23P/PWL/v0f/iqmopDIdtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqpqKAIdtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqpqKAIdtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqpqKAIdtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqpqKAIdtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqpqKAIdtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqpqKAIdtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqpqKAIdtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqpqKAIdtz/AM9Yv+/R/wDiqNtz/wA9Yv8Av0f/AIqpqO9AEO25/wCesX/fo/8AxVG25/56xf8Afo//ABVTUUAQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFVNRQBDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVU1FAEO25/wCesX/fo/8AxVG25/56xf8Afo//ABVTUUAQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFVNRQBDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVU1FAEO25/wCesX/fo/8AxVG25/56xf8Afo//ABVTUUAQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFVNRQBDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVU1FAEO25/wCesX/fo/8AxVG25/56xf8Afo//ABVTUUAQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFVNR2oAh23P/AD1i/wC/R/8AiqNtz/z1i/79H/4qpqKAIdtz/wA9Yv8Av0f/AIqjbc/89Yv+/R/+KqaigCHbc/8APWL/AL9H/wCKo23P/PWL/v0f/iqmooAh23P/AD1i/wC/R/8AiqNtz/z1i/79H/4qpqKAIdtz/wA9Yv8Av0f/AIqjbc/89Yv+/R/+KqaigCHbc/8APWL/AL9H/wCKo23P/PWL/v0f/iqmooAh23P/AD1i/wC/R/8AiqNtz/z1i/79H/4qpqKAIdtz/wA9Yv8Av0f/AIqjbc/89Yv+/R/+KqaigCHbc/8APWL/AL9H/wCKo23P/PWL/v0f/iqmooAh23P/AD1i/wC/R/8AiqNtz/z1i/79H/4qpqKAIdtz/wA9Yv8Av0f/AIqjbc/89Yv+/R/+KqaigCHbc/8APWL/AL9H/wCKo23P/PWL/v0f/iqmooAh23P/AD1i/wC/R/8AiqNtz/z1i/79H/4qpqKAIdtz/wA9Yv8Av0f/AIqjbc/89Yv+/R/+KqaigCHbc/8APWL/AL9H/wCKo23P/PWL/v0f/iqmooAh23P/AD1i/wC/R/8AiqNtz/z1i/79H/4qpqKAIdtz/wA9Yv8Av0f/AIqjbc/89Yv+/R/+KqaigCHbc/8APWL/AL9H/wCKo23P/PWL/v0f/iqmooAh23P/AD1i/wC/R/8AiqNtz/z1i/79H/4qpqKAIdtz/wA9Yv8Av0f/AIqjbc/89Yv+/R/+KqaigCxHny13EE4GSBinUifcH0paoQUUUUAFFFFABRRRQAUUUUAc/wCBP+SeeGv+wVa/+ilrbm/hrE8Cf8k88Nf9gq1/9FLWxdIz7NsrpjP3QOfzBoYDaKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpGTUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0ATUVD5Mn/PzL+S//ABNHkyf8/Mv5L/8AE0ATUVD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE0AXYv9WKfVWOCTYP9LmH4J/8AE0/yJP8An7m/JP8A4mqET0VB5En/AD9zfkn/AMTR5En/AD9zfkn/AMTQBPRUHkSf8/c35J/8TR5En/P3N+Sf/E0AT0VB5En/AD9zfkn/AMTR5En/AD9zfkn/AMTQBPRUHkSf8/c35J/8TR5En/P3N+Sf/E0AT0VB5En/AD9zfkn/AMTR5En/AD9zfkn/AMTQBPRUHkSf8/c35J/8TR5En/P3N+Sf/E0AT0VB5En/AD9zfkn/AMTR5En/AD9zfkn/AMTQBPRUHkSf8/c35J/8TR5En/P3N+Sf/E0AT0VB5En/AD9zfkn/AMTR5En/AD9zfkn/AMTQBPRUHkSf8/c35J/8TR5En/P3N+Sf/E0AT1BJ/rDR5En/AD9zfkn/AMTUEkMm8/6VMfwT/wCJpMCSiofJk/5+ZfyX/wCJo8mT/n5l/Jf/AImkMmoqHyZP+fmX8l/+Jo8mT/n5l/Jf/iaAJqKh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJoAmoqHyZP+fmX8l/+Jo8mT/n5l/Jf/iaAJqKh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJoAmoqHyZP+fmX8l/+Jo8mT/n5l/Jf/iaAJqKh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJoAmoqHyZP+fmX8l/+Jo8mT/n5l/Jf/iaAJqKh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJoAmo71D5Mn/PzL+S//E0eTJ/z8y/kv/xNAE1FQ+TJ/wA/Mv5L/wDE0eTJ/wA/Mv5L/wDE0ATUVD5Mn/PzL+S//E0eTJ/z8y/kv/xNAE1FQ+TJ/wA/Mv5L/wDE0eTJ/wA/Mv5L/wDE0ATUVD5Mn/PzL+S//E0eTJ/z8y/kv/xNAE1FQ+TJ/wA/Mv5L/wDE0eTJ/wA/Mv5L/wDE0ATUVD5Mn/PzL+S//E0eTJ/z8y/kv/xNAE1FQ+TJ/wA/Mv5L/wDE0eTJ/wA/Mv5L/wDE0ATUVD5Mn/PzL+S//E0eTJ/z8y/kv/xNAE1FQ+TJ/wA/Mv5L/wDE0eTJ/wA/Mv5L/wDE0ATUVD5Mn/PzL+S//E0eTJ/z8y/kv/xNAE1HaofJk/5+ZfyX/wCJo8mT/n5l/Jf/AImgCaiofJk/5+ZfyX/4mjyZP+fmX8l/+JoAmoqHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJoAmoqHyZP+fmX8l/+Jo8mT/n5l/Jf/iaAJqKh8mT/n5l/Jf/AImjyZP+fmX8l/8AiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/5+ZfyX/wCJo8mT/n5l/Jf/AImgCaiofJk/5+ZfyX/4mjyZP+fmX8l/+JoAmoqHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJoAmoqHyZP+fmX8l/+Jo8mT/n5l/Jf/iaAJqKh8mT/n5l/Jf/AImjyZP+fmX8l/8AiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/5+ZfyX/wCJo8mT/n5l/Jf/AImgCaiofJk/5+ZfyX/4mjyZP+fmX8l/+JoAmoqHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJoAmoqHyZP+fmX8l/+Jo8mT/n5l/Jf/iaAJqKh8mT/n5l/Jf/AImjyZP+fmX8l/8AiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/5+ZfyX/wCJo8mT/n5l/Jf/AImgCaiofJk/5+ZfyX/4mjyZP+fmX8l/+JoAmoqHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJoAvp9wfSlpsYxGoJJIA5PenVQgooooAKKKKACiiigAooooA5/wACf8k88Nf9gq1/9FLW3N/DWJ4E/wCSeeGv+wVa/wDopa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAni/wBWKfTIv9WKfVCCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAqCT/WGp6gk/1hpMBlFFFIYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABR3oo70AFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABR2oo7UAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBZT7g+lLSJ9wfSlqhBRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilrYuolk2bi4xn7rlf5GsfwJ/yTzw1/wBgq1/9FLW3N/DQwKn2aP8AvS/9/W/xo+zR/wB6X/v63+NTUVIyH7NH/el/7+t/jR9mj/vS/wDf1v8AGpqKAIfs0f8Ael/7+t/jR9mj/vS/9/W/xqaigCH7NH/el/7+t/jR9mj/AL0v/f1v8amooAh+zR/3pf8Av63+NH2aP+9L/wB/W/xqaigCH7NH/el/7+t/jR9mj/vS/wDf1v8AGpqKAIfs0f8Ael/7+t/jR9mj/vS/9/W/xqaigCH7NH/el/7+t/jR9mj/AL0v/f1v8amooAh+zR/3pf8Av63+NH2aP+9L/wB/W/xqaigCH7NH/el/7+t/jR9mj/vS/wDf1v8AGpqKAIfs0f8Ael/7+t/jR9mj/vS/9/W/xqaigCH7NH/el/7+t/jR9mj/AL0v/f1v8amooAI7SMoPmm/7/P8A40/7JH/em/7/AL/41JF/qxT6oRB9kj/vTf8Af9/8aPskf96b/v8Av/jU9FAEH2SP+9N/3/f/ABo+yR/3pv8Av+/+NT0UAQfZI/703/f9/wDGj7JH/em/7/v/AI1PRQBB9kj/AL03/f8Af/Gj7JH/AHpv+/7/AONT0UAQfZI/703/AH/f/Gj7JH/em/7/AL/41PRQBB9kj/vTf9/3/wAaPskf96b/AL/v/jU9FAEH2SP+9N/3/f8Axo+yR/3pv+/7/wCNT0UAQfZI/wC9N/3/AH/xo+yR/wB6b/v+/wDjU9FAEH2SP+9N/wB/3/xo+yR/3pv+/wC/+NT0UAQfZI/703/f9/8AGj7JH/em/wC/7/41PRQBB9kj/vTf9/3/AMagktYw5+ab/v8AP/jV6oJP9YaTArfZo/70v/f1v8aPs0f96X/v63+NTUUhkP2aP+9L/wB/W/xo+zR/3pf+/rf41NRQBD9mj/vS/wDf1v8AGj7NH/el/wC/rf41NRQBD9mj/vS/9/W/xo+zR/3pf+/rf41NRQBD9mj/AL0v/f1v8aPs0f8Ael/7+t/jU1FAEP2aP+9L/wB/W/xo+zR/3pf+/rf41NRQBD9mj/vS/wDf1v8AGj7NH/el/wC/rf41NRQBD9mj/vS/9/W/xo+zR/3pf+/rf41NRQBD9mj/AL0v/f1v8aPs0f8Ael/7+t/jU1FAEP2aP+9L/wB/W/xo+zR/3pf+/rf41NR3oAh+zR/3pf8Av63+NH2aP+9L/wB/W/xqaigCH7NH/el/7+t/jR9mj/vS/wDf1v8AGpqKAIfs0f8Ael/7+t/jR9mj/vS/9/W/xqaigCH7NH/el/7+t/jR9mj/AL0v/f1v8amooAh+zR/3pf8Av63+NH2aP+9L/wB/W/xqaigCH7NH/el/7+t/jR9mj/vS/wDf1v8AGpqKAIfs0f8Ael/7+t/jR9mj/vS/9/W/xqaigCH7NH/el/7+t/jR9mj/AL0v/f1v8amooAh+zR/3pf8Av63+NH2aP+9L/wB/W/xqaigCH7NH/el/7+t/jR9mj/vS/wDf1v8AGpqKAIfs0f8Ael/7+t/jR9mj/vS/9/W/xqajtQBD9mj/AL0v/f1v8aPs0f8Ael/7+t/jU1FAEP2aP+9L/wB/W/xo+zR/3pf+/rf41NRQBD9mj/vS/wDf1v8AGj7NH/el/wC/rf41NRQBD9mj/vS/9/W/xo+zR/3pf+/rf41NRQBD9mj/AL0v/f1v8aPs0f8Ael/7+t/jU1FAEP2aP+9L/wB/W/xo+zR/3pf+/rf41NRQBD9mj/vS/wDf1v8AGj7NH/el/wC/rf41NRQBD9mj/vS/9/W/xo+zR/3pf+/rf41NRQBD9mj/AL0v/f1v8aPs0f8Ael/7+t/jU1FAEP2aP+9L/wB/W/xo+zR/3pf+/rf41NRQBD9mj/vS/wDf1v8AGj7NH/el/wC/rf41NRQBD9mj/vS/9/W/xo+zR/3pf+/rf41NRQBD9mj/AL0v/f1v8aPs0f8Ael/7+t/jU1FAEP2aP+9L/wB/W/xo+zR/3pf+/rf41NRQBD9mj/vS/wDf1v8AGj7NH/el/wC/rf41NRQBD9mj/vS/9/W/xo+zR/3pf+/rf41NRQBD9mj/AL0v/f1v8aPs0f8Ael/7+t/jU1FAEP2aP+9L/wB/W/xo+zR/3pf+/rf41NRQBD9mj/vS/wDf1v8AGj7NH/el/wC/rf41NRQBD9mj/vS/9/W/xo+zR/3pf+/rf41NRQBYjG2NQM4AA5OadSJ9wfSlqhBRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWtub+GsTwJ/yTzw1/2CrX/wBFLWxdRLJs3FxjP3XK/wAjQwG0VD9mj/vS/wDf1v8AGj7NH/el/wC/rf41Iyaiofs0f96X/v63+NH2aP8AvS/9/W/xoAmoqH7NH/el/wC/rf40fZo/70v/AH9b/GgCaiofs0f96X/v63+NH2aP+9L/AN/W/wAaAJqKh+zR/wB6X/v63+NH2aP+9L/39b/GgCaiofs0f96X/v63+NH2aP8AvS/9/W/xoAmoqH7NH/el/wC/rf40fZo/70v/AH9b/GgCaiofs0f96X/v63+NH2aP+9L/AN/W/wAaAJqKh+zR/wB6X/v63+NH2aP+9L/39b/GgCaiofs0f96X/v63+NH2aP8AvS/9/W/xoAmoqH7NH/el/wC/rf40fZo/70v/AH9b/GgCaiofs0f96X/v63+NH2aP+9L/AN/W/wAaALsX+rFPqrHaRlB803/f5/8AGn/ZI/703/f9/wDGqET0VB9kj/vTf9/3/wAaPskf96b/AL/v/jQBPRUH2SP+9N/3/f8Axo+yR/3pv+/7/wCNAE9FQfZI/wC9N/3/AH/xo+yR/wB6b/v+/wDjQBPRUH2SP+9N/wB/3/xo+yR/3pv+/wC/+NAE9FQfZI/703/f9/8AGj7JH/em/wC/7/40AT0VB9kj/vTf9/3/AMaPskf96b/v+/8AjQBPRUH2SP8AvTf9/wB/8aPskf8Aem/7/v8A40AT0VB9kj/vTf8Af9/8aPskf96b/v8Av/jQBPRUH2SP+9N/3/f/ABo+yR/3pv8Av+/+NAE9FQfZI/703/f9/wDGj7JH/em/7/v/AI0AT1BJ/rDR9kj/AL03/f8Af/GoJLWMOfmm/wC/z/40mBJRUP2aP+9L/wB/W/xo+zR/3pf+/rf40hk1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1Heofs0f96X/v63+NH2aP+9L/AN/W/wAaAJqKh+zR/wB6X/v63+NH2aP+9L/39b/GgCaiofs0f96X/v63+NH2aP8AvS/9/W/xoAmoqH7NH/el/wC/rf40fZo/70v/AH9b/GgCaiofs0f96X/v63+NH2aP+9L/AN/W/wAaAJqKh+zR/wB6X/v63+NH2aP+9L/39b/GgCaiofs0f96X/v63+NH2aP8AvS/9/W/xoAmoqH7NH/el/wC/rf40fZo/70v/AH9b/GgCaiofs0f96X/v63+NH2aP+9L/AN/W/wAaAJqKh+zR/wB6X/v63+NH2aP+9L/39b/GgCaiofs0f96X/v63+NH2aP8AvS/9/W/xoAmo7VD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAF9PuD6UtNjG2NQM4AA5OadVCCiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0Utbc38NYngT/knnhr/sFWv/opa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAni/1Yp9Mi/1Yp9UIKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACoJP8AWGp6gk/1hpMBlFFFIYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABR3oo70AFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABR2oo7UAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBZT7g+lLSJ9wfSlqhBRRRQAUUUUAFFFFABRRRQBz/AIE/5J54a/7BVr/6KWti6ijl2eZGj4zjcoOKx/An/JPPDX/YKtf/AEUtbc38NDAqfZLb/n3i/wC+BR9ktv8An3i/74FTUVIyH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKACOytSgzbQ/9+xT/sVp/wA+sP8A37FSRf6sU+qEQfYrT/n1h/79ij7Faf8APrD/AN+xU9FAEH2K0/59Yf8Av2KPsVp/z6w/9+xU9FAEH2K0/wCfWH/v2KPsVp/z6w/9+xU9FAEH2K0/59Yf+/Yo+xWn/PrD/wB+xU9FAEH2K0/59Yf+/Yo+xWn/AD6w/wDfsVPRQBB9itP+fWH/AL9ij7Faf8+sP/fsVPRQBB9itP8An1h/79ij7Faf8+sP/fsVPRQBB9itP+fWH/v2KPsVp/z6w/8AfsVPRQBB9itP+fWH/v2KPsVp/wA+sP8A37FT0UAQfYrT/n1h/wC/Yo+xWn/PrD/37FT0UAQfYrT/AJ9Yf+/YqCS0tg5xbw/98Cr1QSf6w0mBW+yW3/PvF/3wKPslt/z7xf8AfAqaikMh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmooAh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmooAh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmooAh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmooAh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmooAh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmooAh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmooAh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmooAh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmo70AQ/ZLb/n3i/74FH2S2/594v8AvgVNRQBD9ktv+feL/vgUfZLb/n3i/wC+BU1FAEP2S2/594v++BR9ktv+feL/AL4FTUUAQ/ZLb/n3i/74FH2S2/594v8AvgVNRQBD9ktv+feL/vgUfZLb/n3i/wC+BU1FAEP2S2/594v++BR9ktv+feL/AL4FTUUAQ/ZLb/n3i/74FH2S2/594v8AvgVNRQBD9ktv+feL/vgUfZLb/n3i/wC+BU1FAEP2S2/594v++BR9ktv+feL/AL4FTUUAQ/ZLb/n3i/74FH2S2/594v8AvgVNRQBD9ktv+feL/vgUfZLb/n3i/wC+BU1HagCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAsRgLGqqAAAAAO1OpE+4PpS1QgooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLWxdSxxbPMkRM5xuYDNY/gT/knnhr/sFWv/AKKWtub+GhgVPtdt/wA/EX/fYo+123/PxF/32KmoqRkP2u2/5+Iv++xR9rtv+fiL/vsVNRQBD9rtv+fiL/vsUfa7b/n4i/77FTUUAQ/a7b/n4i/77FH2u2/5+Iv++xU1FAEP2u2/5+Iv++xR9rtv+fiL/vsVNRQBD9rtv+fiL/vsUfa7b/n4i/77FTUUAQ/a7b/n4i/77FH2u2/5+Iv++xU1FAEP2u2/5+Iv++xR9rtv+fiL/vsVNRQBD9rtv+fiL/vsUfa7b/n4i/77FTUUAQ/a7b/n4i/77FH2u2/5+Iv++xU1FAEP2u2/5+Iv++xR9rtv+fiL/vsVNRQBD9rtv+fiL/vsUfa7b/n4i/77FTUUAEd7ahBm5h/7+Cn/AG20/wCfqH/v4Kki/wBWKfVCIPttp/z9Q/8AfwUfbbT/AJ+of+/gqeigCD7baf8AP1D/AN/BR9ttP+fqH/v4KnooAg+22n/P1D/38FH220/5+of+/gqeigCD7baf8/UP/fwUfbbT/n6h/wC/gqeigCD7baf8/UP/AH8FH220/wCfqH/v4KnooAg+22n/AD9Q/wDfwUfbbT/n6h/7+Cp6KAIPttp/z9Q/9/BR9ttP+fqH/v4KnooAg+22n/P1D/38FH220/5+of8Av4KnooAg+22n/P1D/wB/BR9ttP8An6h/7+Cp6KAIPttp/wA/UP8A38FH220/5+of+/gqeigCD7baf8/UP/fwVBJd2xc4uIf++xV6oJP9YaTArfa7b/n4i/77FH2u2/5+Iv8AvsVNRSGQ/a7b/n4i/wC+xR9rtv8An4i/77FTUUAQ/a7b/n4i/wC+xR9rtv8An4i/77FTUUAQ/a7b/n4i/wC+xR9rtv8An4i/77FTUUAQ/a7b/n4i/wC+xR9rtv8An4i/77FTUUAQ/a7b/n4i/wC+xR9rtv8An4i/77FTUUAQ/a7b/n4i/wC+xR9rtv8An4i/77FTUUAQ/a7b/n4i/wC+xR9rtv8An4i/77FTUUAQ/a7b/n4i/wC+xR9rtv8An4i/77FTUUAQ/a7b/n4i/wC+xR9rtv8An4i/77FTUd6AIftdt/z8Rf8AfYo+123/AD8Rf99ipqKAIftdt/z8Rf8AfYo+123/AD8Rf99ipqKAIftdt/z8Rf8AfYo+123/AD8Rf99ipqKAIftdt/z8Rf8AfYo+123/AD8Rf99ipqKAIftdt/z8Rf8AfYo+123/AD8Rf99ipqKAIftdt/z8Rf8AfYo+123/AD8Rf99ipqKAIftdt/z8Rf8AfYo+123/AD8Rf99ipqKAIftdt/z8Rf8AfYo+123/AD8Rf99ipqKAIftdt/z8Rf8AfYo+123/AD8Rf99ipqKAIftdt/z8Rf8AfYo+123/AD8Rf99ipqKAIftdt/z8Rf8AfYo+123/AD8Rf99ipqO1AEP2u2/5+Iv++xR9rtv+fiL/AL7FTUUAQ/a7b/n4i/77FH2u2/5+Iv8AvsVNRQBD9rtv+fiL/vsUfa7b/n4i/wC+xU1FAEP2u2/5+Iv++xR9rtv+fiL/AL7FTUUAQ/a7b/n4i/77FH2u2/5+Iv8AvsVNRQBD9rtv+fiL/vsUfa7b/n4i/wC+xU1FAEP2u2/5+Iv++xR9rtv+fiL/AL7FTUUAQ/a7b/n4i/77FH2u2/5+Iv8AvsVNRQBD9rtv+fiL/vsUfa7b/n4i/wC+xU1FAEP2u2/5+Iv++xR9rtv+fiL/AL7FTUUAQ/a7b/n4i/77FH2u2/5+Iv8AvsVNRQBD9rtv+fiL/vsUfa7b/n4i/wC+xU1FAEP2u2/5+Iv++xR9rtv+fiL/AL7FTUUAQ/a7b/n4i/77FH2u2/5+Iv8AvsVNRQBD9rtv+fiL/vsUfa7b/n4i/wC+xU1FAEP2u2/5+Iv++xR9rtv+fiL/AL7FTUUAQ/a7b/n4i/77FH2u2/5+Iv8AvsVNRQBD9rtv+fiL/vsUfa7b/n4i/wC+xU1FAEP2u2/5+Iv++xR9rtv+fiL/AL7FTUUAQ/a7b/n4i/77FH2u2/5+Iv8AvsVNRQBYjIaNWUgggEEd6dSJ9wfSlqhBRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWtub+GsTwJ/yTzw1/wBgq1/9FLWxdSxxbPMkRM5xuYDNDAbRUP2u2/5+Iv8AvsUfa7b/AJ+Iv++xUjJqKh+123/PxF/32KPtdt/z8Rf99igCaioftdt/z8Rf99ij7Xbf8/EX/fYoAmoqH7Xbf8/EX/fYo+123/PxF/32KAJqKh+123/PxF/32KPtdt/z8Rf99igCaioftdt/z8Rf99ij7Xbf8/EX/fYoAmoqH7Xbf8/EX/fYo+123/PxF/32KAJqKh+123/PxF/32KPtdt/z8Rf99igCaioftdt/z8Rf99ij7Xbf8/EX/fYoAmoqH7Xbf8/EX/fYo+123/PxF/32KAJqKh+123/PxF/32KPtdt/z8Rf99igCaioftdt/z8Rf99ij7Xbf8/EX/fYoAuxf6sU+qsd7ahBm5h/7+Cn/AG20/wCfqH/v4KoRPRUH220/5+of+/go+22n/P1D/wB/BQBPRUH220/5+of+/go+22n/AD9Q/wDfwUAT0VB9ttP+fqH/AL+Cj7baf8/UP/fwUAT0VB9ttP8An6h/7+Cj7baf8/UP/fwUAT0VB9ttP+fqH/v4KPttp/z9Q/8AfwUAT0VB9ttP+fqH/v4KPttp/wA/UP8A38FAE9FQfbbT/n6h/wC/go+22n/P1D/38FAE9FQfbbT/AJ+of+/go+22n/P1D/38FAE9FQfbbT/n6h/7+Cj7baf8/UP/AH8FAE9FQfbbT/n6h/7+Cj7baf8AP1D/AN/BQBPUEn+sNH220/5+of8Av4Kgku7YucXEP/fYpMCSioftdt/z8Rf99ij7Xbf8/EX/AH2KQyaioftdt/z8Rf8AfYo+123/AD8Rf99igCaioftdt/z8Rf8AfYo+123/AD8Rf99igCaioftdt/z8Rf8AfYo+123/AD8Rf99igCaioftdt/z8Rf8AfYo+123/AD8Rf99igCaioftdt/z8Rf8AfYo+123/AD8Rf99igCaioftdt/z8Rf8AfYo+123/AD8Rf99igCaioftdt/z8Rf8AfYo+123/AD8Rf99igCaioftdt/z8Rf8AfYo+123/AD8Rf99igCajvUP2u2/5+Iv++xR9rtv+fiL/AL7FAE1FQ/a7b/n4i/77FH2u2/5+Iv8AvsUATUVD9rtv+fiL/vsUfa7b/n4i/wC+xQBNRUP2u2/5+Iv++xR9rtv+fiL/AL7FAE1FQ/a7b/n4i/77FH2u2/5+Iv8AvsUATUVD9rtv+fiL/vsUfa7b/n4i/wC+xQBNRUP2u2/5+Iv++xR9rtv+fiL/AL7FAE1FQ/a7b/n4i/77FH2u2/5+Iv8AvsUATUVD9rtv+fiL/vsUfa7b/n4i/wC+xQBNRUP2u2/5+Iv++xR9rtv+fiL/AL7FAE1FQ/a7b/n4i/77FH2u2/5+Iv8AvsUATUdqh+123/PxF/32KPtdt/z8Rf8AfYoAmoqH7Xbf8/EX/fYo+123/PxF/wB9igCaioftdt/z8Rf99ij7Xbf8/EX/AH2KAJqKh+123/PxF/32KPtdt/z8Rf8AfYoAmoqH7Xbf8/EX/fYo+123/PxF/wB9igCaioftdt/z8Rf99ij7Xbf8/EX/AH2KAJqKh+123/PxF/32KPtdt/z8Rf8AfYoAmoqH7Xbf8/EX/fYo+123/PxF/wB9igCaioftdt/z8Rf99ij7Xbf8/EX/AH2KAJqKh+123/PxF/32KPtdt/z8Rf8AfYoAmoqH7Xbf8/EX/fYo+123/PxF/wB9igCaioftdt/z8Rf99ij7Xbf8/EX/AH2KAJqKh+123/PxF/32KPtdt/z8Rf8AfYoAmoqH7Xbf8/EX/fYo+123/PxF/wB9igCaioftdt/z8Rf99ij7Xbf8/EX/AH2KAJqKh+123/PxF/32KPtdt/z8Rf8AfYoAmoqH7Xbf8/EX/fYo+123/PxF/wB9igCaioftdt/z8Rf99ij7Xbf8/EX/AH2KAJqKh+123/PxF/32KPtdt/z8Rf8AfYoAmoqH7Xbf8/EX/fYo+123/PxF/wB9igCaioftdt/z8Rf99ij7Xbf8/EX/AH2KAL6fcH0pabGQ0aspBBAII706qEFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv8AsFWv/opa25v4axPAn/JPPDX/AGCrX/0Utbc38NDAioooqRhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUATxf6sU+mRf6sU+qEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUEn+sNT1BJ/rDSYDKKKKQwooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACjvRR3oAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACjtRR2oAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigCyn3B9KWkT7g+lLVCCiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UtbF1KsezcHOc/dQt/IVj+BP+SeeGv+wVa/8Aopa25v4aGBU+0x/3Zf8Av03+FH2mP+7L/wB+m/wqaipGQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4VNRQBD9pj/uy/8Afpv8KPtMf92X/v03+FTUUAQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FTUUAQ/aY/7sv/fpv8KPtMf92X/v03+FTUUAQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4VNRQBD9pj/uy/8Afpv8KPtMf92X/v03+FTUUAQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FTUUAQ/aY/7sv/fpv8KPtMf92X/v03+FTUUAQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4VNRQBD9pj/uy/8Afpv8KPtMf92X/v03+FTUUAQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FTUUAEd3GEHyzf8Afl/8Kf8Aa4/7s3/fh/8ACpIv9WKfVCIPtcf92b/vw/8AhR9rj/uzf9+H/wAKnooAg+1x/wB2b/vw/wDhR9rj/uzf9+H/AMKnooAg+1x/3Zv+/D/4Ufa4/wC7N/34f/Cp6KAIPtcf92b/AL8P/hR9rj/uzf8Afh/8KnooAg+1x/3Zv+/D/wCFH2uP+7N/34f/AAqeigCD7XH/AHZv+/D/AOFH2uP+7N/34f8AwqeigCD7XH/dm/78P/hR9rj/ALs3/fh/8KnooAg+1x/3Zv8Avw/+FH2uP+7N/wB+H/wqeigCD7XH/dm/78P/AIUfa4/7s3/fh/8ACp6KAIPtcf8Adm/78P8A4Ufa4/7s3/fh/wDCp6KAIPtcf92b/vw/+FQSXUZc/LN/35f/AAq9UEn+sNJgVvtMf92X/v03+FH2mP8Auy/9+m/wqaikMh+0x/3Zf+/Tf4UfaY/7sv8A36b/AAqaigCH7TH/AHZf+/Tf4UfaY/7sv/fpv8KmooAh+0x/3Zf+/Tf4UfaY/wC7L/36b/CpqKAIftMf92X/AL9N/hR9pj/uy/8Afpv8KmooAh+0x/3Zf+/Tf4UfaY/7sv8A36b/AAqaigCH7TH/AHZf+/Tf4UfaY/7sv/fpv8KmooAh+0x/3Zf+/Tf4UfaY/wC7L/36b/CpqKAIftMf92X/AL9N/hR9pj/uy/8Afpv8KmooAh+0x/3Zf+/Tf4UfaY/7sv8A36b/AAqajvQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNR2oAh+0x/3Zf8Av03+FH2mP+7L/wB+m/wqaigCH7TH/dl/79N/hR9pj/uy/wDfpv8ACpqKAIftMf8Adl/79N/hR9pj/uy/9+m/wqaigCH7TH/dl/79N/hR9pj/ALsv/fpv8KmooAh+0x/3Zf8Av03+FH2mP+7L/wB+m/wqaigCH7TH/dl/79N/hR9pj/uy/wDfpv8ACpqKAIftMf8Adl/79N/hR9pj/uy/9+m/wqaigCH7TH/dl/79N/hR9pj/ALsv/fpv8KmooAh+0x/3Zf8Av03+FH2mP+7L/wB+m/wqaigCH7TH/dl/79N/hR9pj/uy/wDfpv8ACpqKAIftMf8Adl/79N/hR9pj/uy/9+m/wqaigCH7TH/dl/79N/hR9pj/ALsv/fpv8KmooAh+0x/3Zf8Av03+FH2mP+7L/wB+m/wqaigCH7TH/dl/79N/hR9pj/uy/wDfpv8ACpqKAIftMf8Adl/79N/hR9pj/uy/9+m/wqaigCH7TH/dl/79N/hR9pj/ALsv/fpv8KmooAh+0x/3Zf8Av03+FH2mP+7L/wB+m/wqaigCH7TH/dl/79N/hR9pj/uy/wDfpv8ACpqKAIftMf8Adl/79N/hR9pj/uy/9+m/wqaigCH7TH/dl/79N/hR9pj/ALsv/fpv8KmooAsRndGpGcEA8jFOpE+4PpS1QgooooAKKKKACiiigAooooA5/wACf8k88Nf9gq1/9FLW3N/DWJ4E/wCSeeGv+wVa/wDopa2Lp2TZtid85+6Rx+ZFDAbRUPnSf8+0v5r/APFUedJ/z7S/mv8A8VUjJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAuxf6sU+qsc8mwf6JMfxT/4qn+fJ/wA+k35p/wDFVQieioPPk/59JvzT/wCKo8+T/n0m/NP/AIqgCeioPPk/59JvzT/4qjz5P+fSb80/+KoAnoqDz5P+fSb80/8AiqPPk/59JvzT/wCKoAnoqDz5P+fSb80/+Ko8+T/n0m/NP/iqAJ6Kg8+T/n0m/NP/AIqjz5P+fSb80/8AiqAJ6Kg8+T/n0m/NP/iqPPk/59JvzT/4qgCeioPPk/59JvzT/wCKo8+T/n0m/NP/AIqgCeioPPk/59JvzT/4qjz5P+fSb80/+KoAnoqDz5P+fSb80/8AiqPPk/59JvzT/wCKoAnoqDz5P+fSb80/+Ko8+T/n0m/NP/iqAJ6gk/1ho8+T/n0m/NP/AIqoJJpN5/0WYfin/wAVSYElFQ+dJ/z7S/mv/wAVR50n/PtL+a//ABVIZNRUPnSf8+0v5r/8VR50n/PtL+a//FUATUVD50n/AD7S/mv/AMVR50n/AD7S/mv/AMVQBNRUPnSf8+0v5r/8VR50n/PtL+a//FUATUVD50n/AD7S/mv/AMVR50n/AD7S/mv/AMVQBNRUPnSf8+0v5r/8VR50n/PtL+a//FUATUVD50n/AD7S/mv/AMVR50n/AD7S/mv/AMVQBNRUPnSf8+0v5r/8VR50n/PtL+a//FUATUVD50n/AD7S/mv/AMVR50n/AD7S/mv/AMVQBNR3qHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/n2l/Nf/AIqjzpP+faX81/8AiqAJqKh86T/n2l/Nf/iqPOk/59pfzX/4qgCaiofOk/59pfzX/wCKo86T/n2l/Nf/AIqgCaiofOk/59pfzX/4qjzpP+faX81/+KoAmoqHzpP+faX81/8AiqPOk/59pfzX/wCKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/n2l/Nf/AIqjzpP+faX81/8AiqAJqKh86T/n2l/Nf/iqPOk/59pfzX/4qgCaiofOk/59pfzX/wCKo86T/n2l/Nf/AIqgCaiofOk/59pfzX/4qjzpP+faX81/+KoAmo7VD50n/PtL+a//ABVHnSf8+0v5r/8AFUATUVD50n/PtL+a/wDxVHnSf8+0v5r/APFUATUVD50n/PtL+a//ABVHnSf8+0v5r/8AFUATUVD50n/PtL+a/wDxVHnSf8+0v5r/APFUATUVD50n/PtL+a//ABVHnSf8+0v5r/8AFUATUVD50n/PtL+a/wDxVHnSf8+0v5r/APFUATUVD50n/PtL+a//ABVHnSf8+0v5r/8AFUATUVD50n/PtL+a/wDxVHnSf8+0v5r/APFUATUVD50n/PtL+a//ABVHnSf8+0v5r/8AFUATUVD50n/PtL+a/wDxVHnSf8+0v5r/APFUATUVD50n/PtL+a//ABVHnSf8+0v5r/8AFUATUVD50n/PtL+a/wDxVHnSf8+0v5r/APFUATUVD50n/PtL+a//ABVHnSf8+0v5r/8AFUATUVD50n/PtL+a/wDxVHnSf8+0v5r/APFUATUVD50n/PtL+a//ABVHnSf8+0v5r/8AFUATUVD50n/PtL+a/wDxVHnSf8+0v5r/APFUATUVD50n/PtL+a//ABVHnSf8+0v5r/8AFUATUVD50n/PtL+a/wDxVHnSf8+0v5r/APFUATUVD50n/PtL+a//ABVHnSf8+0v5r/8AFUATUVD50n/PtL+a/wDxVHnSf8+0v5r/APFUATUVD50n/PtL+a//ABVHnSf8+0v5r/8AFUAX0+4PpS02M5jUkEEgcHtTqoQUUUUAFFFFABRRRQAUUUUAc/4E/wCSeeGv+wVa/wDopa25v4axPAn/ACTzw1/2CrX/ANFLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAE8X+rFPpkX+rFPqhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVBJ/rDU9QSf6w0mAyiiikMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAo70Ud6ACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAo7UUdqACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAsp9wfSlpE+4PpS1QgooooAKKKKACiiigAooooA5/wJ/wAk88Nf9gq1/wDRS0zxV4nPhz7JjQdc1Xz9/wDyCrPz/L27fv8AIxndx64PpT/An/JPPDX/AGCrX/0UtdBQB5z/AMLOb/oQ/HH/AIKP/s6P+FnN/wBCH44/8FH/ANnXo1FKwHnP/Czm/wChD8cf+Cj/AOzo/wCFnN/0Ifjj/wAFH/2dejUUWA85/wCFnN/0Ifjj/wAFH/2dH/Czm/6EPxx/4KP/ALOvRqKLAec/8LOb/oQ/HH/go/8As6P+FnN/0Ifjj/wUf/Z16NRRYDzn/hZzf9CH44/8FH/2dH/Czm/6EPxx/wCCj/7OvRqKLAec/wDCzm/6EPxx/wCCj/7Oj/hZzf8AQh+OP/BR/wDZ16NRRYDzn/hZzf8AQh+OP/BR/wDZ0f8ACzm/6EPxx/4KP/s69GoosB5z/wALOb/oQ/HH/go/+zo/4Wc3/Qh+OP8AwUf/AGdejUUWA85/4Wc3/Qh+OP8AwUf/AGdH/Czm/wChD8cf+Cj/AOzr0aiiwHnP/Czm/wChD8cf+Cj/AOzo/wCFnN/0Ifjj/wAFH/2dejUUWA85/wCFnN/0Ifjj/wAFH/2dH/Czm/6EPxx/4KP/ALOvRqKLAec/8LOb/oQ/HH/go/8As6P+FnN/0Ifjj/wUf/Z16NRRYDz5PikVXB8B+OP/AAT/AP2dL/wtP/qQvHP/AIJ//s69Aopgef8A/C0/+pC8c/8Agn/+zo/4Wn/1IXjn/wAE/wD9nXoFFAHn/wDwtP8A6kLxz/4J/wD7Oj/haf8A1IXjn/wT/wD2degUUAef/wDC0/8AqQvHP/gn/wDs6P8Ahaf/AFIXjn/wT/8A2degUUAef/8AC0/+pC8c/wDgn/8As6P+Fp/9SF45/wDBP/8AZ16BRQB5/wD8LT/6kLxz/wCCf/7Oj/haf/UheOf/AAT/AP2degUUAef/APC0/wDqQvHP/gn/APs6P+Fp/wDUheOf/BP/APZ16BRQB5//AMLT/wCpC8c/+Cf/AOzo/wCFp/8AUheOf/BP/wDZ16BRQB5//wALT/6kLxz/AOCf/wCzo/4Wn/1IXjn/AME//wBnXoFFAHn/APwtP/qQvHP/AIJ//s6P+Fp/9SF45/8ABP8A/Z16BRQB5/8A8LT/AOpC8c/+Cf8A+zo/4Wn/ANSF45/8E/8A9nXoFFAHn/8AwtP/AKkLxz/4J/8A7Oo3+J5ZiR4D8cf+Cj/7OvRKKAPOf+FnN/0Ifjj/AMFH/wBnR/ws5v8AoQ/HH/go/wDs69GopWA85/4Wc3/Qh+OP/BR/9nR/ws5v+hD8cf8Ago/+zr0aiiwHnP8Aws5v+hD8cf8Ago/+zo/4Wc3/AEIfjj/wUf8A2dejUUWA85/4Wc3/AEIfjj/wUf8A2dH/AAs5v+hD8cf+Cj/7OvRqKLAec/8ACzm/6EPxx/4KP/s6P+FnN/0Ifjj/AMFH/wBnXo1FFgPOf+FnN/0Ifjj/AMFH/wBnR/ws5v8AoQ/HH/go/wDs69GoosB5z/ws5v8AoQ/HH/go/wDs6P8AhZzf9CH44/8ABR/9nXo1FFgPOf8AhZzf9CH44/8ABR/9nR/ws5v+hD8cf+Cj/wCzr0aiiwHnP/Czm/6EPxx/4KP/ALOj/hZzf9CH44/8FH/2dejUUWA85/4Wc3/Qh+OP/BR/9nR/ws5v+hD8cf8Ago/+zr0aiiwHnP8Aws5v+hD8cf8Ago/+zo/4Wc3/AEIfjj/wUf8A2dejUUWA85/4Wc3/AEIfjj/wUf8A2dH/AAs5v+hD8cf+Cj/7OvRqKLAec/8ACzm/6EPxx/4KP/s6P+FnN/0Ifjj/AMFH/wBnXo1FFgPOf+FnN/0Ifjj/AMFH/wBnR/ws5v8AoQ/HH/go/wDs69GoosB5z/ws5v8AoQ/HH/go/wDs6P8AhZzf9CH44/8ABR/9nXo1FFgPOf8AhZzf9CH44/8ABR/9nR/ws5v+hD8cf+Cj/wCzr0aiiwHnP/Czm/6EPxx/4KP/ALOj/hZzf9CH44/8FH/2dejUUWA85/4Wc3/Qh+OP/BR/9nR/ws5v+hD8cf8Ago/+zr0aiiwHnP8Aws5v+hD8cf8Ago/+zo/4Wc3/AEIfjj/wUf8A2dejUUWA85/4Wc3/AEIfjj/wUf8A2dH/AAs5v+hD8cf+Cj/7OvRqKLAec/8ACzm/6EPxx/4KP/s6P+FnN/0Ifjj/AMFH/wBnXo1FFgPOf+FnN/0Ifjj/AMFH/wBnR/ws5v8AoQ/HH/go/wDs69GoosB5z/ws5v8AoQ/HH/go/wDs6P8AhZzf9CH44/8ABR/9nXo1FFgPOf8AhZzf9CH44/8ABR/9nR/ws5v+hD8cf+Cj/wCzr0aiiwHnP/Czm/6EPxx/4KP/ALOj/hZzf9CH44/8FH/2dejUUWA85/4Wc3/Qh+OP/BR/9nR/ws5v+hD8cf8Ago/+zr0aiiwHnP8Aws5v+hD8cf8Ago/+zo/4Wc3/AEIfjj/wUf8A2dejUUWA85/4Wc3/AEIfjj/wUf8A2dH/AAs5v+hD8cf+Cj/7OvRqKLAec/8ACzm/6EPxx/4KP/s6P+FnN/0Ifjj/AMFH/wBnXo1FFgPOf+FnN/0Ifjj/AMFH/wBnR/ws5v8AoQ/HH/go/wDs69GoosB5z/ws5v8AoQ/HH/go/wDs6P8AhZzf9CH44/8ABR/9nXo1FFgPOf8AhZzf9CH44/8ABR/9nR/ws5v+hD8cf+Cj/wCzr0aiiwHnP/Czm/6EPxx/4KP/ALOj/hZzf9CH44/8FH/2dejUUWA85/4Wc3/Qh+OP/BR/9nR/ws5v+hD8cf8Ago/+zr0aiiwHnP8Aws5v+hD8cf8Ago/+zo/4Wc3/AEIfjj/wUf8A2dejUUWA85/4Wc3/AEIfjj/wUf8A2dH/AAs5v+hD8cf+Cj/7OvRqKLAec/8ACzm/6EPxx/4KP/s6P+FnN/0Ifjj/AMFH/wBnXo1FFgPOf+FnN/0Ifjj/AMFH/wBnR/ws5v8AoQ/HH/go/wDs69GoosB5z/ws5v8AoQ/HH/go/wDs6P8AhZzf9CH44/8ABR/9nXo1FFgPOf8AhZzf9CH44/8ABR/9nR/ws5v+hD8cf+Cj/wCzr0aiiwHnP/Czm/6EPxx/4KP/ALOj/hZzf9CH44/8FH/2dejUUWArafdfbdNtbv7PPb+fCkvk3CbJI9wB2uvZhnBHY1ZoopgFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilroK5/wJ/wAk88Nf9gq1/wDRS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilroK5/wACf8k88Nf9gq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtbkpIxgkUASUVW3N/eP50bm/vH86VwLNFVtzf3j+dG5v7x/Oi4Fmiq25v7x/Ojc394/nRcCzRVbc394/nRub+8fzouBZoqtub+8fzo3N/eP50XAs0VW3N/eP50bm/vH86LgWaKrbm/vH86Nzf3j+dFwLNFVtzf3j+dG5v7x/Oi4Fmiq25v7x/Ojc394/nRcCzRVbc394/nRub+8fzouBZoqtub+8fzo3N/eP50XAs0VW3N/eP50bm/vH86LgWaKrbm/vH86Nzf3j+dFwLNFVtzf3j+dG5v7x/Oi4Fmiq25v7x/Ojc394/nRcCzRVbc394/nRub+8fzouBZoqtub+8fzo3N/eP50XAs0VW3N/eP50bm/vH86LgWaKrbm/vH86Nzf3j+dFwLNFVtzf3j+dG5v7x/Oi4Fmiq25v7x/Ojc394/nRcCzRVbc394/nRub+8fzouBZoqtub+8fzo3N/eP50XAs0VW3N/eP50bm/vH86LgWaKrbm/vH86Nzf3j+dFwLNFVtzf3j+dG5v7x/Oi4Fmiq25v7x/Ojc394/nRcCzRVbc394/nRub+8fzouBZoqtub+8fzo3N/eP50XAs0VW3N/eP50bm/vH86LgWaKrbm/vH86Nzf3j+dFwLNFVtzf3j+dG5v7x/Oi4Fmiq25v7x/Ojc394/nRcCzRVbc394/nRub+8fzouBZoqtub+8fzo3N/eP50XAs0VW3N/eP50bm/vH86LgWaKrbm/vH86Nzf3j+dFwLNFVtzf3j+dG5v7x/Oi4Fmiq25v7x/Ojc394/nRcCzRVbc394/nRub+8fzouBZoqtub+8fzo3N/eP50XAs0VW3N/eP50bm/vH86LgWaKrbm/vH86Nzf3j+dFwLNFVtzf3j+dG5v7x/Oi4Fmiq25v7x/Ojc394/nRcCzRVbc394/nRub+8fzouBZoqtub+8fzo3N/eP50XAs0VW3N/eP50bm/vH86LgWaKrbm/vH86Nzf3j+dFwLNFVtzf3j+dG5v7x/Oi4Fmiq25v7x/Ojc394/nRcCzRVbc394/nRub+8fzouBZoqtub+8fzo3N/eP50XAs0VW3N/eP50bm/vH86LgWaKrbm/vH86Nzf3j+dFwLNFVtzf3j+dG5v7x/Oi4Fmiq25v7x/Ojc394/nRcCzRVbc394/nRub+8fzouBZoqtub+8fzo3N/eP50XAs0VW3N/eP50bm/vH86LgWaKrbm/vH86Nzf3j+dFwLNFVtzf3j+dG5v7x/Oi4Fmiq25v7x/Ojc394/nRcCzRVbc394/nRub+8fzouBZoqOIk5ySakpgFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWtub+GsTwJ/yTzw1/2CrX/wBFLW3N/DQwIJTIInMSq0gU7FdtoJ7AnBwPfBrC+1+Lv+gHon/g4l/+Rq36KkZgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNW7EZDEhlVVkKjeqNuAPcA4GR74FOooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/YKtf/AEUtbc38NYngT/knnhr/ALBVr/6KWtub+GhgRUUUVIwooooAKKKKACiiigAooqtqFw9ppl1cxhS8MLyKG6EgEjNKTUU2xxi5NJFmivOP+Fgar/z72X/fDf8AxVH/AAsDVf8An3sv++G/+Krzf7Ww3d/cen/Y+K7L7z0eivOP+Fgar/z72X/fDf8AxVH/AAsDVf8An3sv++G/+Ko/tbDd39wf2Piuy+89Horzj/hYGq/8+9l/3w3/AMVR/wALA1X/AJ97L/vhv/iqP7Ww3d/cH9j4rsvvPR6K84/4WBqv/PvZf98N/wDFVpaD4w1DVNat7KeG1WOTdkorA8KT3Y+lXDNMPOSgm7vTYmplWJhBzklZa7na0UUV6B5oUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBLD/FUtRQ/wAVS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilrbm/hrE8Cf8AJPPDX/YKtf8A0Utbc38NDAioooqRhRRRQAUUUUAFFFFABVHWv+QDqP8A16yf+gmr1Uda/wCQDqP/AF6yf+gms6v8OXozSj/Ej6o8booor4c++CiiigAooooAK3fB3/I1WX/A/wD0Bqwq3fB3/I1WX/A//QGrfC/x4eq/M5sX/u9T0f5HqtFZfiWWSDwrrE0Mjxyx2UzI6MQysEJBBHQ185f8JX4i/wCg/qn/AIGSf4199Rw7qptM/PK+KVFpNXufUNFfL3/CV+Iv+g/qn/gZJ/jR/wAJX4i/6D+qf+Bkn+NbfUJdzD+0Y/yn1DRXy9/wlfiL/oP6p/4GSf40f8JX4i/6D+qf+Bkn+NH1CXcP7Rj/ACn1DRXy9/wlfiL/AKD+qf8AgZJ/jR/wlfiL/oP6p/4GSf40fUJdw/tGP8p9Q0V4N8OvEGtX3jzTbe71e/uIH83dFLcu6tiJyMgnB5ANe81zVqLpS5WzqoVlWjzJBRRRWJuFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAEsP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilrbm/hrE8Cf8k88Nf8AYKtf/RS1tzfw0MCtPMtvbyzuHKRoXYRxs7EAZ4VQSx9gCT2rE/4TDTP+fXW//BHe/wDxqt+ipGYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41W/RQBgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVb9FAGB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NVv0UAYH/CYaZ/z663/4I73/AONVV1PxVp1xpN5AlvrAeSB0UyaNdooJUjlmiAUe5IA711NUda/5AOo/9esn/oJqKv8ADl6M0o/xI+qPG6KKK+GPvgooooAKKKKACtXw3eRWGv211Ms7RpvyIIHmc5UjhEBY9ew9+lZVbvg7/karL/gf/oDVvhf48PVfmc2L/wB3qej/ACOj8R+KtOuPC+rwJb6wHkspkUyaNdooJQjlmiAUe5IA718819Q+K/8AkT9b/wCvCf8A9FtXy9X6RgPhZ+YZj8UQooorvPOCiiigAooooA6b4e3kVh45066mWdo083IggeZzmJxwiAsevYe/Svc/+Ew0z/n11v8A8Ed7/wDGq8U+GH/JRNK/7bf+inr6Krysd/EXp/mexl/8J+v+Rgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVb9FcR3mB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVbcEy3FvFOgcJIgdRJGyMARnlWAKn2IBHepKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLW3N/DWJ4E/5J54a/7BVr/6KWtub+GhgRUUUVIwooooAKKKKACiiigAqjrX/IB1H/r1k/8AQTV6qOtf8gHUf+vWT/0E1nV/hy9GaUf4kfVHjdFFFfDn3wUUUUAFFFFABW74O/5Gqy/4H/6A1YVbvg7/AJGqy/4H/wCgNW+F/jw9V+ZzYv8A3ep6P8jvvFf/ACJ+t/8AXhP/AOi2r5er6h8V/wDIn63/ANeE/wD6Lavl6v0jAfCz8wzH4ohRRRXeecFFFFABRRRQB13ww/5KJpX/AG2/9FPX0VXzr8MP+SiaV/22/wDRT19FV5WO/iL0/wAz2Mv/AIT9f8goooriO8KKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/2CrX/wBFLW3N/DWJ4E/5J54a/wCwVa/+ilrbm/hoYEVFFFSMKKKKACiiigAooooAKo61/wAgHUf+vWT/ANBNXqo61/yAdR/69ZP/AEE1nV/hy9GaUf4kfVHjdFFFfDn3wUUUUAFFFFABW74O/wCRqsv+B/8AoDVhVu+Dv+Rqsv8Agf8A6A1b4X+PD1X5nNi/93qej/I77xX/AMifrf8A14T/APotq+Xq+ofFf/In63/14T/+i2r5er9IwHws/MMx+KIUUUV3nnBRRRQAUUUUAdd8MP8Akomlf9tv/RT19FV86/DD/komlf8Abb/0U9fRVeVjv4i9P8z2Mv8A4T9f8goooriO8KKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/wAk88Nf9gq1/wDRS1tzfw1ieBP+SeeGv+wVa/8Aopa25v4aGBFRUc8EN1by29xEk0EqFJI5FDK6kYIIPBBHasT/AIQbwj/0K2if+C+L/wCJqRm/RWB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE0Ab9FYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TQBv0Vgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNAG/VHWv8AkA6j/wBesn/oJrO/4Qbwj/0K2if+C+L/AOJqrqfg3wva6TeXFv4b0eGeKB3jkjsYlZGCkgghcgg96ir/AA5ejNKP8SPqjzaiiivhj74KKKKACiiigArd8Hf8jVZf8D/9AasKtXw3Y2mpa/bWl/awXVtJv3wzxh0bCkjKng8gH8K3wv8AHh6r8zmxf+71PR/kejeK/wDkT9b/AOvCf/0W1fL1fQ3iPwb4XtfC+r3Fv4b0eGeKymeOSOxiVkYISCCFyCD3r55r9IwHws/MMx+KIUUUV3nnBRRRQAUUUUAdd8MP+SiaV/22/wDRT19FV82/D2xtNS8c6daX9rBdW0nm74Z4w6NiJyMqeDyAfwr3P/hBvCP/AEK2if8Agvi/+Jrysd/EXp/mexl/8J+v+Rv0Vgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNcR3m/RWB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E0Ab9FYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATQBv0Vgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNAG/RWB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE0Ab9FYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TQBv0Vgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNAG/RWB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E0Ab9FYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATQBv0Vgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNAG/RWB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE0Ab9FYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TQBv0Vgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNAG/RWB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E0Ab9FYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATQBv0Vgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNAG/RWB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE0Ab9FYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TQBv0Vgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNAG/RWB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E0Ab9FYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATQBv0Vgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNAG/RWB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE0Ab9FYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TQBv0Vgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNAG/RWB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E0Ab9FYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATQBv0Vgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNAG/RWB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE0Ab9FYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TQBv0Vgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNAG/RWB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E0Ab9FYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATQBv0Vgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNAG/RWB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE0Ab9FYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TQBv0Vgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNAG/RWB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E0Ab9FYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATQBv0Vgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNAG/RWB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE0Ab9FYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TQBv0Vgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNAG/RWB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E0Ab9FYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATQBv0Vgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNAG/RWB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE0Ab9FYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TQBv0Vgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNAG/RWB/wg3hH/AKFbRP8AwXxf/E1twQQ2tvFb28SQwRIEjjjUKqKBgAAcAAdqALMP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/wCBP+SeeGv+wVa/+ilrbm/hrE8Cf8k88Nf9gq1/9FLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAVR1r/kA6j/16yf+gmr1Uda/5AOo/wDXrJ/6Cazq/wAOXozSj/Ej6o8booor4c++CiiigAooooAK3fB3/I1WX/A//QGrCrd8Hf8AI1WX/A//AEBq3wv8eHqvzObF/wC71PR/kd94r/5E/W/+vCf/ANFtXy9X1D4r/wCRP1v/AK8J/wD0W1fL1fpGA+Fn5hmPxRCiiiu884KKKKACiiigDrvhh/yUTSv+23/op6+iq+dfhh/yUTSv+23/AKKevoqvKx38Ren+Z7GX/wAJ+v8AkFFFFcR3hRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBLD/FUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv8AsFWv/opa25v4axPAn/JPPDX/AGCrX/0Utbc38NDAioooqRhRRRQAUUUUAFFFFABVHWv+QDqP/XrJ/wCgmr1Uda/5AOo/9esn/oJrOr/Dl6M0o/xI+qPG6KKK+HPvgooooAKKKKACt3wd/wAjVZf8D/8AQGrCrd8Hf8jVZf8AA/8A0Bq3wv8AHh6r8zmxf+71PR/kd94r/wCRP1v/AK8J/wD0W1fL1fUPiv8A5E/W/wDrwn/9FtXy9X6RgPhZ+YZj8UQooorvPOCiiigAooooA674Yf8AJRNK/wC23/op6+iq+dfhh/yUTSv+23/op6+iq8rHfxF6f5nsZf8Awn6/5BRRRXEd4UUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUASw/wAVS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilrbm/hrE8Cf8k88Nf9gq1/8ARS1tzfw0MCKio5xM1vKtu6RzlCI3kQuqtjglQQSM9sjPqKxPsni7/oOaJ/4J5f8A5JqRm/RWB9k8Xf8AQc0T/wAE8v8A8k0fZPF3/Qc0T/wTy/8AyTQBv0VgfZPF3/Qc0T/wTy//ACTR9k8Xf9BzRP8AwTy//JNAG/RWB9k8Xf8AQc0T/wAE8v8A8k0fZPF3/Qc0T/wTy/8AyTQBv1R1r/kA6j/16yf+gms77J4u/wCg5on/AIJ5f/kmqup2vihdJvGuNY0eSAQOZEj0qVGZdpyAxuCAcd8HHoair/Dl6M0o/wASPqjzaiiivhj74KKKKACiiigArd8Hf8jVZf8AA/8A0Bqwq1fDaXcmv2y2E8EFyd+ySeEyoPlOcqGUnjP8Q/HpW+F/jw9V+ZzYv/d6no/yPRvFf/In63/14T/+i2r5er6G8R2vihfC+rtcaxo8kAspjIkelSozLsOQGNwQDjvg49DXzzX6RgPhZ+YZj8UQooorvPOCiiigAooooA674Yf8lE0r/tt/6Kevoqvm34epdyeOdOWwngguT5uySeEyoP3T5yoZSeM/xD8ele5/ZPF3/Qc0T/wTy/8AyTXlY7+IvT/M9jL/AOE/X/I36KwPsni7/oOaJ/4J5f8A5Jo+yeLv+g5on/gnl/8AkmuI7zforA+yeLv+g5on/gnl/wDkmj7J4u/6Dmif+CeX/wCSaAN+isD7J4u/6Dmif+CeX/5Jo+yeLv8AoOaJ/wCCeX/5JoA36KwPsni7/oOaJ/4J5f8A5Jo+yeLv+g5on/gnl/8AkmgDforA+yeLv+g5on/gnl/+SaPsni7/AKDmif8Agnl/+SaAN+isD7J4u/6Dmif+CeX/AOSaPsni7/oOaJ/4J5f/AJJoA36KwPsni7/oOaJ/4J5f/kmj7J4u/wCg5on/AIJ5f/kmgDforA+yeLv+g5on/gnl/wDkmj7J4u/6Dmif+CeX/wCSaAN+isD7J4u/6Dmif+CeX/5Jo+yeLv8AoOaJ/wCCeX/5JoA36KwPsni7/oOaJ/4J5f8A5Jo+yeLv+g5on/gnl/8AkmgDforA+yeLv+g5on/gnl/+SaPsni7/AKDmif8Agnl/+SaAN+isD7J4u/6Dmif+CeX/AOSaPsni7/oOaJ/4J5f/AJJoA36KwPsni7/oOaJ/4J5f/kmj7J4u/wCg5on/AIJ5f/kmgDforA+yeLv+g5on/gnl/wDkmj7J4u/6Dmif+CeX/wCSaAN+isD7J4u/6Dmif+CeX/5Jo+yeLv8AoOaJ/wCCeX/5JoA36KwPsni7/oOaJ/4J5f8A5Jo+yeLv+g5on/gnl/8AkmgDforA+yeLv+g5on/gnl/+SaPsni7/AKDmif8Agnl/+SaAN+isD7J4u/6Dmif+CeX/AOSaPsni7/oOaJ/4J5f/AJJoA36KwPsni7/oOaJ/4J5f/kmj7J4u/wCg5on/AIJ5f/kmgDforA+yeLv+g5on/gnl/wDkmj7J4u/6Dmif+CeX/wCSaAN+isD7J4u/6Dmif+CeX/5Jo+yeLv8AoOaJ/wCCeX/5JoA36KwPsni7/oOaJ/4J5f8A5Jo+yeLv+g5on/gnl/8AkmgDforA+yeLv+g5on/gnl/+SaPsni7/AKDmif8Agnl/+SaAN+isD7J4u/6Dmif+CeX/AOSaPsni7/oOaJ/4J5f/AJJoA36KwPsni7/oOaJ/4J5f/kmj7J4u/wCg5on/AIJ5f/kmgDforA+yeLv+g5on/gnl/wDkmj7J4u/6Dmif+CeX/wCSaAN+isD7J4u/6Dmif+CeX/5Jo+yeLv8AoOaJ/wCCeX/5JoA36KwPsni7/oOaJ/4J5f8A5Jo+yeLv+g5on/gnl/8AkmgDforA+yeLv+g5on/gnl/+SaPsni7/AKDmif8Agnl/+SaAN+isD7J4u/6Dmif+CeX/AOSaPsni7/oOaJ/4J5f/AJJoA36KwPsni7/oOaJ/4J5f/kmj7J4u/wCg5on/AIJ5f/kmgDforA+yeLv+g5on/gnl/wDkmj7J4u/6Dmif+CeX/wCSaAN+isD7J4u/6Dmif+CeX/5Jo+yeLv8AoOaJ/wCCeX/5JoA36KwPsni7/oOaJ/4J5f8A5Jo+yeLv+g5on/gnl/8AkmgDforA+yeLv+g5on/gnl/+SaPsni7/AKDmif8Agnl/+SaAN+isD7J4u/6Dmif+CeX/AOSaPsni7/oOaJ/4J5f/AJJoA36KwPsni7/oOaJ/4J5f/kmj7J4u/wCg5on/AIJ5f/kmgDforA+yeLv+g5on/gnl/wDkmj7J4u/6Dmif+CeX/wCSaAN+isD7J4u/6Dmif+CeX/5Jo+yeLv8AoOaJ/wCCeX/5JoA36KwPsni7/oOaJ/4J5f8A5Jo+yeLv+g5on/gnl/8AkmgDforA+yeLv+g5on/gnl/+SaPsni7/AKDmif8Agnl/+SaAN+isD7J4u/6Dmif+CeX/AOSaPsni7/oOaJ/4J5f/AJJoA36KwPsni7/oOaJ/4J5f/kmj7J4u/wCg5on/AIJ5f/kmgDforA+yeLv+g5on/gnl/wDkmj7J4u/6Dmif+CeX/wCSaAN+isD7J4u/6Dmif+CeX/5Jo+yeLv8AoOaJ/wCCeX/5JoA36KwPsni7/oOaJ/4J5f8A5Jo+yeLv+g5on/gnl/8AkmgDforA+yeLv+g5on/gnl/+SaPsni7/AKDmif8Agnl/+SaAN+isD7J4u/6Dmif+CeX/AOSaPsni7/oOaJ/4J5f/AJJoA36KwPsni7/oOaJ/4J5f/kmj7J4u/wCg5on/AIJ5f/kmgDforA+yeLv+g5on/gnl/wDkmtuATLbxLcOkk4QCR40KKzY5IUkkDPbJx6mgCzD/ABVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWtub+GsTwJ/yTzw1/2CrX/wBFLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAVR1r/AJAOo/8AXrJ/6CavVR1r/kA6j/16yf8AoJrOr/Dl6M0o/wASPqjxuiiivhz74KKKKACiiigArd8Hf8jVZf8AA/8A0Bqwq3fB3/I1WX/A/wD0Bq3wv8eHqvzObF/7vU9H+R33iv8A5E/W/wDrwn/9FtXy9X1D4r/5E/W/+vCf/wBFtXy9X6RgPhZ+YZj8UQooorvPOCiiigAooooA674Yf8lE0r/tt/6KevoqvnX4Yf8AJRNK/wC23/op6+iq8rHfxF6f5nsZf/Cfr/kFFFFcR3hRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBLD/FUtRQ/wAVS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilrbm/hrE8Cf8AJPPDX/YKtf8A0Utbc38NDAioooqRhRRRQAUUUUAFFFFABVHWv+QDqP8A16yf+gmr1Uda/wCQDqP/AF6yf+gms6v8OXozSj/Ej6o8booor4c++CiiigAooooAK3fB3/I1WX/A/wD0Bqwq3fB3/I1WX/A//QGrfC/x4eq/M5sX/u9T0f5HfeK/+RP1v/rwn/8ARbV8vV9Q+K/+RP1v/rwn/wDRbV8vV+kYD4WfmGY/FEKKKK7zzgooooAKKKKAOu+GH/JRNK/7bf8Aop6+iq+dfhh/yUTSv+23/op6+iq8rHfxF6f5nsZf/Cfr/kFFFFcR3hRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBLD/FUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa25v4axPAn/JPPDX/YKtf/RS1tzfw0MCKio55Ght5ZEhed0QssUZUM5A+6NxAyenJA9SKxP+Eg1P/oTtb/7/AFl/8kVIzforA/4SDU/+hO1v/v8AWX/yRR/wkGp/9Cdrf/f6y/8AkigDforA/wCEg1P/AKE7W/8Av9Zf/JFH/CQan/0J2t/9/rL/AOSKAN+isD/hINT/AOhO1v8A7/WX/wAkUf8ACQan/wBCdrf/AH+sv/kigDfqjrX/ACAdR/69ZP8A0E1nf8JBqf8A0J2t/wDf6y/+SKq6nrmozaTeRP4V1iBHgdWlkltCqAqfmO2cnA68An0BqKv8OXozSj/Ej6o82ooor4Y++CiiigAooooAK3fB3/I1WX/A/wD0Bqwq1fDdxLa6/bTQ2c95Iu/EEBQO+VI4Lsq8deSOnrxW+F/jw9V+ZzYv/d6no/yPRvFf/In63/14T/8Aotq+Xq+hvEeuajN4X1eJ/CusQI9lMrSyS2hVAUPzHbOTgdeAT6A1881+kYD4WfmGY/FEKKKK7zzgooooAKKKKAOu+GH/ACUTSv8Att/6Kevoqvm34e3Etr4506aGznvJF83EEBQO+YnHBdlXjryR09eK9z/4SDU/+hO1v/v9Zf8AyRXlY7+IvT/M9jL/AOE/X/I36KwP+Eg1P/oTtb/7/WX/AMkUf8JBqf8A0J2t/wDf6y/+SK4jvN+isD/hINT/AOhO1v8A7/WX/wAkUf8ACQan/wBCdrf/AH+sv/kigDforA/4SDU/+hO1v/v9Zf8AyRR/wkGp/wDQna3/AN/rL/5IoA36KwP+Eg1P/oTtb/7/AFl/8kUf8JBqf/Qna3/3+sv/AJIoA36KwP8AhINT/wChO1v/AL/WX/yRR/wkGp/9Cdrf/f6y/wDkigDforA/4SDU/wDoTtb/AO/1l/8AJFH/AAkGp/8AQna3/wB/rL/5IoA36KwP+Eg1P/oTtb/7/WX/AMkUf8JBqf8A0J2t/wDf6y/+SKAN+isD/hINT/6E7W/+/wBZf/JFH/CQan/0J2t/9/rL/wCSKAN+isD/AISDU/8AoTtb/wC/1l/8kUf8JBqf/Qna3/3+sv8A5IoA36KwP+Eg1P8A6E7W/wDv9Zf/ACRR/wAJBqf/AEJ2t/8Af6y/+SKAN+isD/hINT/6E7W/+/1l/wDJFH/CQan/ANCdrf8A3+sv/kigDforA/4SDU/+hO1v/v8AWX/yRR/wkGp/9Cdrf/f6y/8AkigDforA/wCEg1P/AKE7W/8Av9Zf/JFH/CQan/0J2t/9/rL/AOSKAN+isD/hINT/AOhO1v8A7/WX/wAkUf8ACQan/wBCdrf/AH+sv/kigDforA/4SDU/+hO1v/v9Zf8AyRR/wkGp/wDQna3/AN/rL/5IoA36KwP+Eg1P/oTtb/7/AFl/8kUf8JBqf/Qna3/3+sv/AJIoA36KwP8AhINT/wChO1v/AL/WX/yRR/wkGp/9Cdrf/f6y/wDkigDforA/4SDU/wDoTtb/AO/1l/8AJFH/AAkGp/8AQna3/wB/rL/5IoA36KwP+Eg1P/oTtb/7/WX/AMkUf8JBqf8A0J2t/wDf6y/+SKAN+isD/hINT/6E7W/+/wBZf/JFH/CQan/0J2t/9/rL/wCSKAN+isD/AISDU/8AoTtb/wC/1l/8kUf8JBqf/Qna3/3+sv8A5IoA36KwP+Eg1P8A6E7W/wDv9Zf/ACRR/wAJBqf/AEJ2t/8Af6y/+SKAN+isD/hINT/6E7W/+/1l/wDJFH/CQan/ANCdrf8A3+sv/kigDforA/4SDU/+hO1v/v8AWX/yRR/wkGp/9Cdrf/f6y/8AkigDforA/wCEg1P/AKE7W/8Av9Zf/JFH/CQan/0J2t/9/rL/AOSKAN+isD/hINT/AOhO1v8A7/WX/wAkUf8ACQan/wBCdrf/AH+sv/kigDforA/4SDU/+hO1v/v9Zf8AyRR/wkGp/wDQna3/AN/rL/5IoA36KwP+Eg1P/oTtb/7/AFl/8kUf8JBqf/Qna3/3+sv/AJIoA36KwP8AhINT/wChO1v/AL/WX/yRR/wkGp/9Cdrf/f6y/wDkigDforA/4SDU/wDoTtb/AO/1l/8AJFH/AAkGp/8AQna3/wB/rL/5IoA36KwP+Eg1P/oTtb/7/WX/AMkUf8JBqf8A0J2t/wDf6y/+SKAN+isD/hINT/6E7W/+/wBZf/JFH/CQan/0J2t/9/rL/wCSKAN+isD/AISDU/8AoTtb/wC/1l/8kUf8JBqf/Qna3/3+sv8A5IoA36KwP+Eg1P8A6E7W/wDv9Zf/ACRR/wAJBqf/AEJ2t/8Af6y/+SKAN+isD/hINT/6E7W/+/1l/wDJFH/CQan/ANCdrf8A3+sv/kigDforA/4SDU/+hO1v/v8AWX/yRR/wkGp/9Cdrf/f6y/8AkigDforA/wCEg1P/AKE7W/8Av9Zf/JFH/CQan/0J2t/9/rL/AOSKAN+isD/hINT/AOhO1v8A7/WX/wAkVh/8LRtP+hd1v/yW/wDj1ROrTp/HJL1ZpTo1KnwRb9Fc7uiuE/4Wjaf9C7rf/kt/8eo/4Wjaf9C7rf8A5Lf/AB6s/rVD+dfejT6piP8An2/uZ3dFcJ/wtG0/6F3W/wDyW/8Aj1H/AAtG0/6F3W//ACW/+PUfWqH86+9B9UxH/Pt/czu6K4T/AIWjaf8AQu63/wCS3/x6j/haNp/0Lut/+S3/AMeo+tUP5196D6piP+fb+5nd0Vw8HxLguJ44IvDettJIwRFzajJJwP8AlvWpd+Kr2xs57u48I62kEEbSyN5lmdqqMk4Fxk8CtKdSFT4Gn6amVSlOl/ETXrodJRXmX/C79B/6A2t/9+4P/jtH/C79B/6A2t/9+4P/AI7XR7Gp/K/uOf29L+Zfeem0V5l/wu/Qf+gNrf8A37g/+O0f8Lv0H/oDa3/37g/+O0exqfyv7g9vS/mX3nptFeZf8Lv0H/oDa3/37g/+O0f8Lv0H/oDa3/37g/8AjtHsan8r+4Pb0v5l956bRXmX/C79B/6A2t/9+4P/AI7VzS/i3p2s6jFp+n6Brc11LnYmLZc4BY8mYDoDSdKoldxY1Wpt2Ul956DRWB/wkGp/9Cdrf/f6y/8Akij/AISDU/8AoTtb/wC/1l/8kVmaG/RWB/wkGp/9Cdrf/f6y/wDkij/hINT/AOhO1v8A7/WX/wAkUAb9FYH/AAkGp/8AQna3/wB/rL/5Io/4SDU/+hO1v/v9Zf8AyRQBv0Vgf8JBqf8A0J2t/wDf6y/+SK24JGmt4pHheB3QM0UhUshI+6dpIyOnBI9CaALMP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP8Aknnhr/sFWv8A6KWtub+GsTwJ/wAk88Nf9gq1/wDRS1tzfw0MCKiiipGFFFFABRRRQAUUUUAFUda/5AOo/wDXrJ/6CavVR1r/AJAOo/8AXrJ/6Cazq/w5ejNKP8SPqjxuiiivhz74KKKKACiiigArd8Hf8jVZf8D/APQGrCrd8Hf8jVZf8D/9Aat8L/Hh6r8zmxf+71PR/kd94r/5E/W/+vCf/wBFtXy9X1D4r/5E/W/+vCf/ANFtXy9X6RgPhZ+YZj8UQooorvPOCiiigAooooA674Yf8lE0r/tt/wCinr6Kr51+GH/JRNK/7bf+inr6Krysd/EXp/mexl/8J+v+QUUUVxHeFFFFABRRRQAUUUUAFFFFABRRRQAUVFdXCWlpNcyBikMbSMF6kAZOK5n/AIWBpX/Pve/98L/8VWNXEUqTtUlY3pYarWTdONzq6K5T/hYGlf8APve/98L/APFUf8LA0r/n3vf++F/+KrL6/hv50a/2fiv5GdXRXKf8LA0r/n3vf++F/wDiqP8AhYGlf8+97/3wv/xVH1/DfzoP7PxX8jOrorlP+FgaV/z73v8A3wv/AMVR/wALA0r/AJ973/vhf/iqPr+G/nQf2fiv5GdXRXP6b4w0/VNQisoIbpZJM4LqoHAJ7MfSugrelWhVXNB3RhVo1KMuWorMKKKK0MgooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8Nr3KvDa8HO/wDl38/0Poch/wCXny/UKKKK8E+hCiiigAooooAvaL/yHtO/6+o//QhXpviv/kT9b/68J/8A0W1eZaL/AMh7Tv8Ar6j/APQhXpviv/kT9b/68J//AEW1fSZF8MvVHy/EHxR9GfL1FFFfdH58FFFFABRRRQAV13ww/wCSiaV/22/9FPXI113ww/5KJpX/AG2/9FPWdb+HL0ZrQ/ix9UfRVFFFeCfRBRRRQAUUUUAFFFFAEsP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilrbm/hrE8Cf8k88Nf8AYKtf/RS1tzfw0MCKiiipGFFFFABRRRQAUUUUAFUda/5AOo/9esn/AKCavVR1r/kA6j/16yf+gms6v8OXozSj/Ej6o8booor4c++CiiigAooooAK3fB3/ACNVl/wP/wBAasKt3wd/yNVl/wAD/wDQGrfC/wAeHqvzObF/7vU9H+R33iv/AJE/W/8Arwn/APRbV8vV9Q+K/wDkT9b/AOvCf/0W1fL1fpGA+Fn5hmPxRCiiiu884KKKKACiiigDrvhh/wAlE0r/ALbf+inr6Kr51+GH/JRNK/7bf+inr6Krysd/EXp/mexl/wDCfr/kFFFFcR3hRRRQAUUUUAFFFFABRRRQAUUUUAUda/5AOo/9esn/AKCa8br2TWv+QDqP/XrJ/wCgmvG6+dzr+JH0Ppci/hz9QooorxT3QooooAKKKKAN3wd/yNVl/wAD/wDQGrvvFf8AyJ+t/wDXhP8A+i2rgfB3/I1WX/A//QGrvvFf/In63/14T/8Aotq+oyP+F/29+iPk8/8A43/bv6s+XqKKK+2PggooooAKKKKACuu+GH/JRNK/7bf+inrka674Yf8AJRNK/wC23/op6zrfw5ejNaH8WPqj6KooorwT6IKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAK8Nr3KvDa8HO/+Xfz/AEPoch/5efL9QooorwT6EKKKKACiiigC9ov/ACHtO/6+o/8A0IV6b4r/AORP1v8A68J//RbV5lov/Ie07/r6j/8AQhXpviv/AJE/W/8Arwn/APRbV9JkXwy9UfL8QfFH0Z8vUUUV90fnwUUUUAFFFFABXXfDD/komlf9tv8A0U9cjXXfDD/komlf9tv/AEU9Z1v4cvRmtD+LH1R9FUUUV4J9EFFFFABRRRQAUUUUASw/xVLUUP8AFUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/wCSeeGv+wVa/wDopa25v4axPAn/ACTzw1/2CrX/ANFLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAVR1r/kA6j/ANesn/oJq9VHWv8AkA6j/wBesn/oJrOr/Dl6M0o/xI+qPG6KKK+HPvgooooAKKKKACt3wd/yNVl/wP8A9AasKt3wd/yNVl/wP/0Bq3wv8eHqvzObF/7vU9H+R33iv/kT9b/68J//AEW1fL1fUPiv/kT9b/68J/8A0W1fL1fpGA+Fn5hmPxRCiiiu884KKKKACiiigDrvhh/yUTSv+23/AKKevoqvnX4Yf8lE0r/tt/6KevoqvKx38Ren+Z7GX/wn6/5BRQTgZPSo/Ph/56p/30K4jvJKKj8+H/nqn/fQo8+H/nqn/fQoAkoqPz4f+eqf99Cjz4f+eqf99CgCSio/Ph/56p/30KPPh/56p/30KAJKKj8+H/nqn/fQo8+H/nqn/fQoAkopiyxscLIhPoGFPoAo61/yAdR/69ZP/QTXjdeya1/yAdR/69ZP/QTXjdfO51/Ej6H0uRfw5+oUUUV4p7oUUUUAFFFFAG74O/5Gqy/4H/6A1d94r/5E/W/+vCf/ANFtXA+Dv+Rqsv8Agf8A6A1d94r/AORP1v8A68J//RbV9Rkf8L/t79EfJ5//ABv+3f1Z8vUUUV9sfBBRRRQAUUUUAFdd8MP+SiaV/wBtv/RT1yNdd8MP+SiaV/22/wDRT1nW/hy9Ga0P4sfVH0VRRRXgn0QUVH58P/PVP++hR58P/PVP++hQBJRUfnw/89U/76FHnw/89U/76FAElFR+fD/z1T/voUefD/z1T/voUASUVH58P/PVP++hR58P/PVP++hQBJRUfnw/89U/76FKs0bHCyISewYUAPooooAKKo/21pX/AEE7L/v+v+NH9taV/wBBOy/7/r/jWftaf8y+809jU/lf3F6iqP8AbWlf9BOy/wC/6/40f21pX/QTsv8Av+v+NHtaf8y+8PY1P5X9xeoqj/bWlf8AQTsv+/6/40f21pX/AEE7L/v+v+NHtaf8y+8PY1P5X9xeoqj/AG1pX/QTsv8Av+v+NOTV9MlkWOPUbR3YhVVZ1JJPQAZp+1h/MvvD2VT+V/cXKKZLLHBC800iRxRqWd3YBVUckknoKy/+Er8O/wDQf0v/AMDI/wDGtFFvZGTkluzXorI/4Svw7/0H9L/8DI/8aP8AhK/Dv/Qf0v8A8DI/8afJLsTzx7mvRWR/wlfh3/oP6X/4GR/40f8ACV+Hf+g/pf8A4GR/40ckuwc8e5r0Vkf8JX4d/wCg/pf/AIGR/wCNH/CV+Hf+g/pf/gZH/jRyS7Bzx7mvRWda+INFvrlLe01ewuJ3ztiiuUdmwMnAByeATWjSaa3KTT2Ciio/Ph/56p/30KQySio/Ph/56p/30KPPh/56p/30KAJKKj8+H/nqn/fQo8+H/nqn/fQoAkoqPz4f+eqf99Cjz4f+eqf99CgCSio/Ph/56p/30KPPh/56p/30KAJKKYJomOFkQk9gwp9ABXhte5V4bXg53/y7+f6H0OQ/8vPl+oUUUV4J9CFFFFABRRRQBe0X/kPad/19R/8AoQr03xX/AMifrf8A14T/APotq8y0X/kPad/19R/+hCvTfFf/ACJ+t/8AXhP/AOi2r6TIvhl6o+X4g+KPoz5eooor7o/PgooooAKKKKACuu+GH/JRNK/7bf8Aop65Guu+GH/JRNK/7bf+inrOt/Dl6M1ofxY+qPoqiiivBPogooooAKKKKACiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0Utbc38NYngT/knnhr/sFWv/AKKWtub+GhgVp4Ibq3lt7iJJoJUKSRyKGV1IwQQeCCO1Yn/CDeEf+hW0T/wXxf8AxNb9FSMwP+EG8I/9Cton/gvi/wDiaP8AhBvCP/QraJ/4L4v/AImt+igDA/4Qbwj/ANCton/gvi/+Jo/4Qbwj/wBCton/AIL4v/ia36KAMD/hBvCP/QraJ/4L4v8A4mj/AIQbwj/0K2if+C+L/wCJrfooAwP+EG8I/wDQraJ/4L4v/iaP+EG8I/8AQraJ/wCC+L/4mt+igDA/4Qbwj/0K2if+C+L/AOJo/wCEG8I/9Cton/gvi/8Aia36KAMD/hBvCP8A0K2if+C+L/4mj/hBvCP/AEK2if8Agvi/+JrfooAwP+EG8I/9Cton/gvi/wDiaP8AhBvCP/QraJ/4L4v/AImt+igDA/4Qbwj/ANCton/gvi/+Jo/4Qbwj/wBCton/AIL4v/ia36KAMD/hBvCP/QraJ/4L4v8A4mj/AIQbwj/0K2if+C+L/wCJrfooAwP+EG8I/wDQraJ/4L4v/iaP+EG8I/8AQraJ/wCC+L/4mt+igDA/4Qbwj/0K2if+C+L/AOJo/wCEG8I/9Cton/gvi/8Aia36KAMD/hBvCP8A0K2if+C+L/4mj/hBvCP/AEK2if8Agvi/+JrfooAwP+EG8I/9Cton/gvi/wDiaP8AhBvCP/QraJ/4L4v/AImt+igDA/4Qbwj/ANCton/gvi/+Jo/4Qbwj/wBCton/AIL4v/ia36KAMD/hBvCP/QraJ/4L4v8A4mj/AIQbwj/0K2if+C+L/wCJrfooAwP+EG8I/wDQraJ/4L4v/iaP+EG8I/8AQraJ/wCC+L/4mt+igDA/4Qbwj/0K2if+C+L/AOJo/wCEG8I/9Cton/gvi/8Aia36KAMD/hBvCP8A0K2if+C+L/4mj/hBvCP/AEK2if8Agvi/+JrfooAwP+EG8I/9Cton/gvi/wDiaP8AhBvCP/QraJ/4L4v/AImt+igDA/4Qbwj/ANCton/gvi/+Jo/4Qbwj/wBCton/AIL4v/ia36KAMD/hBvCP/QraJ/4L4v8A4mj/AIQbwj/0K2if+C+L/wCJrfooAwP+EG8I/wDQraJ/4L4v/iaP+EG8I/8AQraJ/wCC+L/4mt+igDA/4Qbwj/0K2if+C+L/AOJo/wCEG8I/9Cton/gvi/8Aia36KAMD/hBvCP8A0K2if+C+L/4mj/hBvCP/AEK2if8Agvi/+JrfooAwP+EG8I/9Cton/gvi/wDiaP8AhBvCP/QraJ/4L4v/AImt+igDA/4Qbwj/ANCton/gvi/+Jo/4Qbwj/wBCton/AIL4v/ia36KAMD/hBvCP/QraJ/4L4v8A4mj/AIQbwj/0K2if+C+L/wCJrfooAwP+EG8I/wDQraJ/4L4v/iaP+EG8I/8AQraJ/wCC+L/4mt+igDA/4Qbwj/0K2if+C+L/AOJo/wCEG8I/9Cton/gvi/8Aia36KAMD/hBvCP8A0K2if+C+L/4mj/hBvCP/AEK2if8Agvi/+JrfooAwP+EG8I/9Cton/gvi/wDiaP8AhBvCP/QraJ/4L4v/AImt+igDA/4Qbwj/ANCton/gvi/+Jo/4Qbwj/wBCton/AIL4v/ia36KAMD/hBvCP/QraJ/4L4v8A4mj/AIQbwj/0K2if+C+L/wCJrfooAwP+EG8I/wDQraJ/4L4v/iaP+EG8I/8AQraJ/wCC+L/4mt+igDA/4Qbwj/0K2if+C+L/AOJo/wCEG8I/9Cton/gvi/8Aia36KAMD/hBvCP8A0K2if+C+L/4mj/hBvCP/AEK2if8Agvi/+JrfooAwP+EG8I/9Cton/gvi/wDiaP8AhBvCP/QraJ/4L4v/AImt+igDA/4Qbwj/ANCton/gvi/+Jo/4Qbwj/wBCton/AIL4v/ia36KAMD/hBvCP/QraJ/4L4v8A4mj/AIQbwj/0K2if+C+L/wCJrfooAwP+EG8I/wDQraJ/4L4v/iaP+EG8I/8AQraJ/wCC+L/4mt+igDA/4Qbwj/0K2if+C+L/AOJo/wCEG8I/9Cton/gvi/8Aia36KAMD/hBvCP8A0K2if+C+L/4mj/hBvCP/AEK2if8Agvi/+JrfooAwP+EG8I/9Cton/gvi/wDiaP8AhBvCP/QraJ/4L4v/AImt+igDA/4Qbwj/ANCton/gvi/+Jo/4Qbwj/wBCton/AIL4v/ia36KAMD/hBvCP/QraJ/4L4v8A4mj/AIQbwj/0K2if+C+L/wCJrfooAwP+EG8I/wDQraJ/4L4v/iaP+EG8I/8AQraJ/wCC+L/4mt+igDA/4Qbwj/0K2if+C+L/AOJo/wCEG8I/9Cton/gvi/8Aia36KAMD/hBvCP8A0K2if+C+L/4mj/hBvCP/AEK2if8Agvi/+JrfooAwP+EG8I/9Cton/gvi/wDiaP8AhBvCP/QraJ/4L4v/AImt+igDA/4Qbwj/ANCton/gvi/+Jo/4Qbwj/wBCton/AIL4v/ia36KAMD/hBvCP/QraJ/4L4v8A4mj/AIQbwj/0K2if+C+L/wCJrfooAwP+EG8I/wDQraJ/4L4v/iaP+EG8I/8AQraJ/wCC+L/4mt+igDA/4Qbwj/0K2if+C+L/AOJo/wCEG8I/9Cton/gvi/8Aia36KAMD/hBvCP8A0K2if+C+L/4mj/hBvCP/AEK2if8Agvi/+JrfooAwP+EG8I/9Cton/gvi/wDiaP8AhBvCP/QraJ/4L4v/AImt+igDA/4Qbwj/ANCton/gvi/+Jo/4Qbwj/wBCton/AIL4v/ia36KAMD/hBvCP/QraJ/4L4v8A4mj/AIQbwj/0K2if+C+L/wCJrfooAwP+EG8I/wDQraJ/4L4v/iaP+EG8I/8AQraJ/wCC+L/4mt+igDA/4Qbwj/0K2if+C+L/AOJo/wCEG8I/9Cton/gvi/8Aia36KAMD/hBvCP8A0K2if+C+L/4mj/hBvCP/AEK2if8Agvi/+JrfooAwP+EG8I/9Cton/gvi/wDiaP8AhBvCP/QraJ/4L4v/AImt+igDA/4Qbwj/ANCton/gvi/+Jo/4Qbwj/wBCton/AIL4v/ia36KAMD/hBvCP/QraJ/4L4v8A4mtuCCG1t4re3iSGCJAkccahVRQMAADgADtUlFAEsP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv+wVa/8Aopa25v4axPAn/JPPDX/YKtf/AEUtbc38NDAioooqRhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAEsP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/wCBP+SeeGv+wVa/+ilrbm/hrE8Cf8k88Nf9gq1/9FLW3N/DQwMzWv8AkA6j/wBesn/oJrxuvbp4Y7iCSCVd0cilHXOMgjBrH/4Q7Qf+fD/yM/8A8VXkZhgamJlFwa07/wDDHsZbj6WFhKM09e3/AA4eDv8AkVbL/gf/AKG1blQWdnb6faJa2sflwpnauScZOTyeepqevQoQdOlGD3SSPNrzVSrKa2bb/EKKKK1MgooooAKKKKACiiigD5Hr6K+GH/JO9K/7bf8Ao16P+FYeDv8AoD/+TM3/AMXXR6Xpdno2nRafp8Pk2sWdibi2MkseSSepNduJxMKsOWJwYXCzozcpNbFuiiiuI7wooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wACf8k88Nf9gq1/9FLW3N/DWJ4E/wCSeeGv+wVa/wDopa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/2CrX/wBFLW3N/DWJ4E/5J54a/wCwVa/+ilrfZQ3UUAVqKseWnp+tHlp6frSsMr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwFeirHlp6frR5aen60WAr0VY8tPT9aPLT0/WiwDIf4qlpFUL0FLTEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWugrn/An/ACTzw1/2CrX/ANFLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP8Aknnhr/sFWv8A6KWugrn/AAJ/yTzw1/2CrX/0UtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAc/wCBP+SeeGv+wVa/+ilroK5/wJ/yTzw1/wBgq1/9FLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv8AsFWv/opa6Cuf8Cf8k88Nf9gq1/8ARS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWugrn/An/ACTzw1/2CrX/ANFLXQUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP8Aknnhr/sFWv8A6KWugrn/AAJ/yTzw1/2CrX/0UtdBQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAf/9k=)

Report on Directors’ remuneration continued

Pay details for the individuals are set out below:

Chief Executive

(£)

P25 (lower quartile)

(£)

P50 (median)

(£)

P75 (upper quartile)

(£)

Salary  619,328 21,003 21,721 22,535

Total pay 2,298,146 21,228 21,721 22,962

On a total pay basis, the ratio of workforce pay to the Chief Executive’s total pay has increased, reflecting the higher levels of variable pay from the annual

bonus plan and the vesting under the RSP. The Committee believes that the ratio is broadly consistent with that of other organisations in the hospitality and

retail sectors. The overall trend in the median ratio aligns with the movement in the single total figure of remuneration over time.

Hourly-paid employees do not participate in the annual bonus plan, whereas salaried employees do participate in an annual bonus plan (c. 5,000 employees).

The median pay ratio is consistent with pay and progression policy for UK employees. More broadly, pay in the hospitality sector is lower than many other

sectors and this will be an influencing factor in the overall pay ratio, despite significant increases in pay rates over the last few years.

Gender Pay Gap

The 2025 mean Gender Pay Gap for the Group is 5.4% (2024 5.9%) and the median Gender Pay Gap is 1.7% (2024 1.7%). The mean bonus gap is 26.5%

(2024 25.5%) and the median bonus gap is 0.0% (2024 0.0%).

Year-on-year change in remuneration of Directors compared to an average employee

2025 2024 2023 2022 2021

Salary/

Fees

%

Bonus

%

Benefits

%

Salary/

Fees

%

Bonus

%

Benefits

%

Salary/

Fees

%

Bonus

%

Benefits

%

Salary/

Fees

%

Bonus

%

Benefits

%

Salary/

Fees

%

Bonus

%

Benefits

%

Average employee 7.1 -16.4 4.7 9.7 7.0 -4.5 8.7 422.3 -6.3 5.6 32.2 -14.0 1.2 81.6 6.3

Executive Directors

Phil Urban 3.4 -13.5 0.0 3.0 8.5 0.0 6.5 202.9 4.3 2.2 100.0 3.1 0.00 0.00 -1.4

Tim Jones 3.4 -13.5 0.0 3.0 8.4 2.6 6.5 203.0 2.2 2.2 100.0 5.9 0.00 0.00 -3.3

Non-Executive Directors

Bob Ivell 0.0 – -2.2 -0.9 – 16.7 4.8 – 180.0 0.0 0.0 -60.4 0.0 0.0 -25.4

Eddie Irwin 0.0 – 0 -0.9 – –  4.8 – – 0.0 0.0 0.0 0.0 0.0 0

Dave Coplin 0.0 – 134.4 -0.9 – 36.1 4.8 – 967.9 0.0 0.0 -93.2 0.0 0.0 -74.0

Josh Levy 0.0 – -59.2 -0.9 – –  4.8 – – 0.0 0.0 -100.0 0.0 0.0 225.1

Keith Browne 0.0 – 0 -0.9 – –  4.8 – – 0.0 0.0 0.0 0.0 0.0 -59.2

Jane Moriarty  0.0 – -44.4 -0.9 – 98.2 8.7 – 197.3 34.8 0.0 -54.3 24.5 0.0 443.9

Amanda Brown 0.0 – -7.2 -0.9 –  – 354.0 – – 100.0 0.0 0.0 n/a n/a n/a

Salaries and fees are based on rates at the year end date on a full time equivalent (‘FTE’) basis. Hourly paid employees do not participate in any bonus scheme

and in most cases are not eligible for taxable benefits. The figures shown for these elements are based on the year-on-year change for eligible employees.

The figures for Executive Directors do not include LTIP awards or pension benefits that are disclosed in the single figure table. The benefit figures for

Non-Executive Directors relate to taxable expenses as detailed in the single figure table on page 115.

Relative importance of spend on pay (£m)

Figures shown for wages and salaries consist of all earnings, including bonus. In FY 2025, £2.8m (0.3%) was paid to Executive and Non-Executive Directors

(2024 £3m (0.35%)).

0%

-1%

907 197 199852 140 127

1

1

1,000

200

400

0

600

800

FY 2025 FY 2024

\* From note 2.3 to the consolidated financial statements. \*\* Business Rates, Corporation Tax, Employer’s NI.

There were no shareholder dividends or share buybacks in FY 2025.

Wages and salaries\* Principal taxes\*\* Pension deficit contributions Debt service

6.5%

10.2%

Annual Report and Accounts 2025  Mitchells & Butlers plc114

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Fees for external directorships

No external non-executive directorships were held by either Executive Director during the year to 27 September 2025.

Chair and Non-Executive Directors

Non-Executive Directors (audited by KPMG)

The table below set out the single figure remuneration received by the Non-Executive Directors during the reporting year and prior year.

Fees

£000

Taxable

benefits

a

£000

Short-term

incentives

£000

Pension-

related benefits

£000

Long-term

incentives

£000

Other

£000

Total

remuneration

£000

Total

fixed pay

£000

Total

variable pay

£000

FY

2025

FY

2024

FY

2025

FY

2024

FY

2025

FY

2024

FY

2025

FY

2024

FY

2025

FY

2024

FY

2025

FY

2024

FY

2025

FY

2024

FY

2025

FY

2024

FY

2025

FY

2024

Bob Ivell 295 295 3 2  – – – – – – – – 298 297 298 297 – –

Eddie Irwin 55 55 – – – – – – – – – – 55 55 55 55 – –

Josh Levy 55 55 0.3 0.5 – – – – – – – – 55.3 55.5 55.3 55.5 – –

Dave Coplin 68 68 3 1 – – – – – – – – 71 69 71 69 – –

Keith Browne 55 55 – – – – – – – – – – 55 55 55 55 – –

Jane Moriarty 82 82 2 3 – – – – – – – – 84 85 84 85 – –

Amanda Brown 68 68 1 1 – – – – – – – – 69 69 69 69 – –

Sub-total

Non-Executive

Directors

678 678 9.3 7.5 – – – – – – – – 687.3 685.5 687.3 685.5 – –

Total Executive

Directors and

Non-Executive

Directors

1,815 1,778 40.3 38.5 951 1,100 46 48 2,057 1,037 4.5 4.5 4,913.8 4,006 1,905.8 1,869 3,008 2,137

a.  Taxable benefits for Non-Executive Directors include cash payments made or accounted for by the Company relating to the reimbursement of expenses (and the value of

personal tax on those expenses).

Non-Executive Directors: Implementation of remuneration policy in FY 2026

The Chair’s fee and those of the Non Executive Directors were increased in January 2022. No increase will apply in 2026.

Directors’ shareholdings and share interests

RSP, PSP, STDIP and SAYE

The table below sets out details of the Executive Directors’ outstanding awards under the RSP, PSP, STDIP and Sharesave (‘SAYE’) (audited by KPMG).

Executive Director Scheme

Number of

shares at

28 September

2024

Granted

during the

period

Lapsed

during the

period

Exercised

during the

period

Number of

shares at

27 September

2025

Phil Urban RSP 639,300 – – 226,810 412,490

PSP 467,307 494,908 – – 962,215

STDIP 155,572 121,200 – 94,824 181,948

SAYE 7,031 6,746 7,031 – 6,746

Total  1,269,210 622,854 7,031 321,634 1,563,399

Tim Jones RSP 534,925 – – 189,750 345,175

PSP 390,769 413,849 – – 804,618

STDIP 130,180 101,366 – 79,396 152,150

SAYE – – – – –

Total  1,055,874 515,215 – 269,146 1,301,943

Directors’ interests

Executive Directors are expected to hold Mitchells & Butlers’ shares in line with the shareholding guideline set out in the approved remuneration policy.

This requires the Chief Executive to accumulate Mitchells & Butlers’ shares to the value of a minimum of 250% of salary (200% of salary for the CFO) through

the retention of shares arising from share schemes (on a net of tax basis) or through market purchases. Phil Urban’s shareholding at 27 September 2025 was

291% of his basic annual salary (2024 246%) and as a result Phil Urban has met the shareholding guideline. Tim Jones’s shareholding was 274% of his basic

annual salary (2024 229%) and as a result Tim Jones has also met the shareholding guideline. Shareholdings are calculated based on the average share price

over the final three months of the financial period; for FY 2025 this was 271.5p (FY 2024 299.7p). In line with the remuneration policy, no shares can be sold

until the guideline is met and post-cessation holding requirements are in place.

Mitchells & Butlers plc  Annual Report and Accounts 2025

115

Financial Statements Other Information

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAXvBG8DASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD3+s/U9C0fW/K/tbSrG/8AJz5f2u3SXZnGcbgcZwOnoK0KKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAOf/wCEE8H/APQqaH/4Lof/AImj/hBPB/8A0Kmh/wDguh/+JroKKAMvTfDWg6NcNcaXomm2M7IUaS1tUiYrkHBKgHGQDj2FalFFABWfqeg6Prflf2tpNjf+Tny/tVukuzOM43A4zgfkK0KKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAOf/AOEE8H/9Cpof/guh/wDiaP8AhBPB/wD0Kmh/+C6H/wCJroKKAMvTfDWg6NcNcaXomm2M7IUaS1tUiYrkHBKgHGQDj2FalFFABWfqeiadrHlfb7fzvKzs+dlxnGehHoK0KKmcIzXLJXRUJyg+aLszA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+isfqmH/kX3I2+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKo/wCEK8Pf9A//AMjSf/FVv0UfVMP/ACL7kH1zEf8APyX3swP+EK8Pf9A//wAjSf8AxVH/AAhXh7/oH/8AkaT/AOKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv8AoH/+RpP/AIqj/hCvD3/QP/8AI0n/AMVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf8AQP8A/I0n/wAVR/whXh7/AKB//kaT/wCKrfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf8A+RpP/iqP+EK8Pf8AQP8A/I0n/wAVW/RR9Uw/8i+5B9cxH/PyX3swP+EK8Pf9A/8A8jSf/FUf8IV4e/6B/wD5Gk/+Krfoo+qYf+Rfcg+uYj/n5L72YH/CFeHv+gf/AORpP/iqP+EK8Pf9A/8A8jSf/FVv0UfVMP8AyL7kH1zEf8/JfezA/wCEK8Pf9A//AMjSf/FUf8IV4e/6B/8A5Gk/+Krfoo+qYf8AkX3IPrmI/wCfkvvZgf8ACFeHv+gf/wCRpP8A4qj/AIQrw9/0D/8AyNJ/8VW/RR9Uw/8AIvuQfXMR/wA/JfezA/4Qrw9/0D//ACNJ/wDFUf8ACFeHv+gf/wCRpP8A4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/wCgf/5Gk/8AiqP+EK8Pf9A//wAjSf8AxVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/wBA/wD8jSf/ABVH/CFeHv8AoH/+RpP/AIqt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/wD5Gk/+Ko/4Qrw9/wBA/wD8jSf/ABVb9FH1TD/yL7kH1zEf8/JfezA/4Qrw9/0D/wDyNJ/8VR/whXh7/oH/APkaT/4qt+ij6ph/5F9yD65iP+fkvvZgf8IV4e/6B/8A5Gk/+Ko/4Qrw9/0D/wDyNJ/8VW/RR9Uw/wDIvuQfXMR/z8l97MD/AIQrw9/0D/8AyNJ/8VR/whXh7/oH/wDkaT/4qt+ij6ph/wCRfcg+uYj/AJ+S+9mB/wAIV4e/6B//AJGk/wDiqP8AhCvD3/QP/wDI0n/xVb9FH1TD/wAi+5B9cxH/AD8l97MD/hCvD3/QP/8AI0n/AMVR/wAIV4e/6B//AJGk/wDiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/AKB//kaT/wCKo/4Qrw9/0D//ACNJ/wDFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/AED/APyNJ/8AFUf8IV4e/wCgf/5Gk/8Aiq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/APkaT/4qj/hCvD3/AED/APyNJ/8AFVv0UfVMP/IvuQfXMR/z8l97MD/hCvD3/QP/API0n/xVH/CFeHv+gf8A+RpP/iq36KPqmH/kX3IPrmI/5+S+9mB/whXh7/oH/wDkaT/4qj/hCvD3/QP/API0n/xVb9FH1TD/AMi+5B9cxH/PyX3swP8AhCvD3/QP/wDI0n/xVH/CFeHv+gf/AORpP/iq36KPqmH/AJF9yD65iP8An5L72YH/AAhXh7/oH/8AkaT/AOKp8Xg/QYZBJHYYYdD5z/8AxVblFP6rQX2F9yB4vEP/AJeP72FFFFbnOFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRWX4a1KbWPCuj6pcKiz3llDcSLGCFDOgYgAknGT61qUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa6Cuf8Cf8k88Nf8AYKtf/RS10FABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWugrn/An/JPPDX/YKtf/AEUtbkrFcYNAElFQeY/r+lHmP6/pSuBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6Kg8x/X9KPMf1/Si4E9FQeY/r+lHmP6/pRcCeioPMf1/SjzH9f0ouBPRUHmP6/pR5j+v6UXAnoqDzH9f0o8x/X9KLgT0VB5j+v6UeY/r+lFwJ6KjiYtnJqSmAUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv+wVa/8Aopa25v4axPAn/JPPDX/YKtf/AEUtbc38NDAioooqRhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAEsP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/wCBP+SeeGv+wVa/+ilrbm/hrE8Cf8k88Nf9gq1/9FLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBLD/ABVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWtub+GsTwJ/yTzw1/2CrX/wBFLW3N/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQBLD/FUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP8AgT/knnhr/sFWv/opa25v4axPAn/JPPDX/YKtf/RS1tzfw0MCKiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFV72xs9StHtL+1guraTG+GeMOjYORlTweQD+FZH/CDeEf+hW0T/wXxf8AxNAG/RWB/wAIN4R/6FbRP/BfF/8AE0f8IN4R/wChW0T/AMF8X/xNAG/RWB/wg3hH/oVtE/8ABfF/8TR/wg3hH/oVtE/8F8X/AMTQBv0Vgf8ACDeEf+hW0T/wXxf/ABNH/CDeEf8AoVtE/wDBfF/8TQBv0Vgf8IN4R/6FbRP/AAXxf/E0f8IN4R/6FbRP/BfF/wDE0Ab9FYH/AAg3hH/oVtE/8F8X/wATR/wg3hH/AKFbRP8AwXxf/E0Ab9FYH/CDeEf+hW0T/wAF8X/xNH/CDeEf+hW0T/wXxf8AxNAG/RWB/wAIN4R/6FbRP/BfF/8AE0f8IN4R/wChW0T/AMF8X/xNAG/RWB/wg3hH/oVtE/8ABfF/8TR/wg3hH/oVtE/8F8X/AMTQBv0VQ0zQ9I0Xzf7K0qxsPNx5n2W3SLfjOM7QM4yfzNR6j4b0LV7hbjU9F069nVQgkubVJGC5JxlgTjJPHvQBp0Vgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNAG/RWB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E0Ab9FYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATQBv0Vgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNAG/RWB/wg3hH/oVtE/8F8X/AMTVzTvDmhaPcNcaZounWU7IUaS2tUjYrkHBKgHGQOPYUAadFUNT0PSNa8r+1dKsb/ys+X9qt0l2ZxnG4HGcD8hWf/wg3hH/AKFbRP8AwXxf/E0Ab9FYH/CDeEf+hW0T/wAF8X/xNH/CDeEf+hW0T/wXxf8AxNAG/RWB/wAIN4R/6FbRP/BfF/8AE0f8IN4R/wChW0T/AMF8X/xNAG/RWB/wg3hH/oVtE/8ABfF/8TR/wg3hH/oVtE/8F8X/AMTQBv0Vgf8ACDeEf+hW0T/wXxf/ABNH/CDeEf8AoVtE/wDBfF/8TQBv0Vgf8IN4R/6FbRP/AAXxf/E0f8IN4R/6FbRP/BfF/wDE0Ab9FYH/AAg3hH/oVtE/8F8X/wATR/wg3hH/AKFbRP8AwXxf/E0Ab9FYH/CDeEf+hW0T/wAF8X/xNH/CDeEf+hW0T/wXxf8AxNAG/RWRZeFfDum3aXdhoGl2tzHnZNBZxo65BBwwGRwSPxq/e2NnqVo9pf2kF1bSY3wzxh0bByMqeDyAfwoAsUVgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNAG/RWB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E0Ab9FYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATQBv0Vgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNAG/RWB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE0Ab9FYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TQBv0Vgf8IN4R/6FbRP/BfF/wDE1JB4N8L2txFcW/hvR4Z4nDxyR2MSsjA5BBC5BB70AbdFV72xs9StHtL+1guraTG+GeMOjYORlTweQD+FZH/CDeEf+hW0T/wXxf8AxNAG/RWB/wAIN4R/6FbRP/BfF/8AE0f8IN4R/wChW0T/AMF8X/xNAG/RWB/wg3hH/oVtE/8ABfF/8TR/wg3hH/oVtE/8F8X/AMTQBv0Vgf8ACDeEf+hW0T/wXxf/ABNH/CDeEf8AoVtE/wDBfF/8TQBv0Vgf8IN4R/6FbRP/AAXxf/E0f8IN4R/6FbRP/BfF/wDE0Ab9FYH/AAg3hH/oVtE/8F8X/wATR/wg3hH/AKFbRP8AwXxf/E0Ab9FYH/CDeEf+hW0T/wAF8X/xNH/CDeEf+hW0T/wXxf8AxNAG/RWB/wAIN4R/6FbRP/BfF/8AE0f8IN4R/wChW0T/AMF8X/xNAG/RWB/wg3hH/oVtE/8ABfF/8TR/wg3hH/oVtE/8F8X/AMTQBv0Vgf8ACDeEf+hW0T/wXxf/ABNH/CDeEf8AoVtE/wDBfF/8TQBv0Vmad4c0LR7hrjTNF06ynZCjSW1qkbFcg4JUA4yBx7CpNS0PSNa8r+1dKsb7ys+X9qt0l2ZxnG4HGcD8hQBforA/4Qbwj/0K2if+C+L/AOJo/wCEG8I/9Cton/gvi/8AiaAN+isD/hBvCP8A0K2if+C+L/4mj/hBvCP/AEK2if8Agvi/+JoA36KwP+EG8I/9Cton/gvi/wDiaP8AhBvCP/QraJ/4L4v/AImgDforA/4Qbwj/ANCton/gvi/+Jo/4Qbwj/wBCton/AIL4v/iaAN+isD/hBvCP/QraJ/4L4v8A4mrFl4V8O6bdpd2GgaXa3Medk0FnGjrkEHDAZHBI/GgDXoqpqOladrFutvqdha3sCuHWO5hWRQ2CMgMCM4J59zWX/wAIN4R/6FbRP/BfF/8AE0Ab9FYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TQBv0Vgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNAG/RWB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E0Ab9FYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATQBv0Vgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNAG/RWB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE0Ab9FYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TQBv0Vgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNAG/RWB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E0AdJD/FUtZejaHpGi+d/ZWlWNh5u3zPstukW/GcZ2gZxk/ma1KpCCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLW3N/DWJ4E/5J54a/7BVr/6KWrms6hc2Hk/ZtHvtR37t32V4V8vGOvmyJ1z2z0OccZGBaorA/4SDU/+hO1v/v8AWX/yRR/wkGp/9Cdrf/f6y/8AkipGb9FYH/CQan/0J2t/9/rL/wCSKP8AhINT/wChO1v/AL/WX/yRQBv0Vgf8JBqf/Qna3/3+sv8A5Io/4SDU/wDoTtb/AO/1l/8AJFAG/RWB/wAJBqf/AEJ2t/8Af6y/+SKP+Eg1P/oTtb/7/WX/AMkUAb9FYH/CQan/ANCdrf8A3+sv/kij/hINT/6E7W/+/wBZf/JFAG/RWB/wkGp/9Cdrf/f6y/8Akij/AISDU/8AoTtb/wC/1l/8kUAb9FYH/CQan/0J2t/9/rL/AOSKP+Eg1P8A6E7W/wDv9Zf/ACRQBv0VgjX9UJwPB2t5/wCu1l/8kU7+3NW/6E3W/wDv9Zf/ACRQBuUVh/25q3/Qm63/AN/rL/5Io/tzVv8AoTdb/wC/1l/8kUwNyisP+3NW/wChN1v/AL/WX/yRR/bmrf8AQm63/wB/rL/5IoA3KKw/7c1b/oTdb/7/AFl/8kUf25q3/Qm63/3+sv8A5IoA3KKw/wC3NW/6E3W/+/1l/wDJFH9uat/0Jut/9/rL/wCSKANyisI67qqjJ8Ha3/3+sv8A5Ipv/CQan/0J2t/9/rL/AOSKQG/RWB/wkGp/9Cdrf/f6y/8Akij/AISDU/8AoTtb/wC/1l/8kUAb9FYH/CQan/0J2t/9/rL/AOSKP+Eg1P8A6E7W/wDv9Zf/ACRQBv0Vgf8ACQan/wBCdrf/AH+sv/kij/hINT/6E7W/+/1l/wDJFAG/RWB/wkGp/wDQna3/AN/rL/5Ipw13VWGR4O1v/v8AWX/yRQBu0Vh/25q3/Qm63/3+sv8A5Io/tzVv+hN1v/v9Zf8AyRTA3KKw/wC3NW/6E3W/+/1l/wDJFH9uat/0Jut/9/rL/wCSKANyisE6/qinB8Ha3/3+sv8A5IpP+Eg1P/oTtb/7/WX/AMkUgN+isD/hINT/AOhO1v8A7/WX/wAkUf8ACQan/wBCdrf/AH+sv/kigDforA/4SDU/+hO1v/v9Zf8AyRR/wkGp/wDQna3/AN/rL/5IoA36Kwl17VG6eDtb/wC/1l/8kUv9uat/0Jut/wDf6y/+SKANyisP+3NW/wChN1v/AL/WX/yRR/bmrf8AQm63/wB/rL/5IpgblFYf9uat/wBCbrf/AH+sv/kij+3NW/6E3W/+/wBZf/JFAG5RWH/bmrf9Cbrf/f6y/wDkij+3NW/6E3W/+/1l/wDJFAG5RWH/AG5q3/Qm63/3+sv/AJIpn/CQan/0J2t/9/rL/wCSKQG/RWB/wkGp/wDQna3/AN/rL/5Io/4SDU/+hO1v/v8AWX/yRQBv0Vgf8JBqf/Qna3/3+sv/AJIo/wCEg1P/AKE7W/8Av9Zf/JFAG/RWB/wkGp/9Cdrf/f6y/wDkij/hINT/AOhO1v8A7/WX/wAkUAb9FYH/AAkGp/8AQna3/wB/rL/5IpRr+qMcDwdrf/f6y/8AkigDeorD/tzVv+hN1v8A7/WX/wAkUf25q3/Qm63/AN/rL/5IpgblFYf9uat/0Jut/wDf6y/+SKP7c1b/AKE3W/8Av9Zf/JFAG5RWH/bmrf8AQm63/wB/rL/5Io/tzVv+hN1v/v8AWX/yRQBuUVhHXdVAyfBut4/67WX/AMkU3/hINT/6E7W/+/1l/wDJFIDforA/4SDU/wDoTtb/AO/1l/8AJFH/AAkGp/8AQna3/wB/rL/5IoA36KwP+Eg1P/oTtb/7/WX/AMkUf8JBqf8A0J2t/wDf6y/+SKAN+isD/hINT/6E7W/+/wBZf/JFH/CQan/0J2t/9/rL/wCSKAN+isEa/qhOB4O1vP8A12sv/kinf25q3/Qm63/3+sv/AJIoA3KKw/7c1b/oTdb/AO/1l/8AJFH9uat/0Jut/wDf6y/+SKYG5RWH/bmrf9Cbrf8A3+sv/kij+3NW/wChN1v/AL/WX/yRQBuUVh/25q3/AEJut/8Af6y/+SKP7c1b/oTdb/7/AFl/8kUAblFYf9uat/0Jut/9/rL/AOSKP7c1b/oTdb/7/WX/AMkUAblFYf8Abmrf9Cbrf/f6y/8AkimnXtUU4Pg7W/8Av9Zf/JFIDeorA/4SDU/+hO1v/v8AWX/yRR/wkGp/9Cdrf/f6y/8AkigDforA/wCEg1P/AKE7W/8Av9Zf/JFH/CQan/0J2t/9/rL/AOSKAN+isD/hINT/AOhO1v8A7/WX/wAkUf8ACQan/wBCdrf/AH+sv/kigDforA/4SDU/+hO1v/v9Zf8AyRR/wkGp/wDQna3/AN/rL/5IoA36KwP+Eg1P/oTtb/7/AFl/8kU5de1Rung7W/8Av9Zf/JFAG7RWH/bmrf8AQm63/wB/rL/5Io/tzVv+hN1v/v8AWX/yRTA3KKw/7c1b/oTdb/7/AFl/8kUf25q3/Qm63/3+sv8A5IoA3KKwTr2qL18Ha3/3+sv/AJIpP+Eg1P8A6E7W/wDv9Zf/ACRSA36KwP8AhINT/wChO1v/AL/WX/yRR/wkGp/9Cdrf/f6y/wDkigDforA/4SDU/wDoTtb/AO/1l/8AJFH/AAkGp/8AQna3/wB/rL/5IoA36KwRr2qMcDwdrf8A3+sv/kinf25q3/Qm63/3+sv/AJIoA3KKw/7c1b/oTdb/AO/1l/8AJFH9uat/0Jut/wDf6y/+SKYG5RWH/bmrf9Cbrf8A3+sv/kij+3NW/wChN1v/AL/WX/yRQBuUVh/25q3/AEJut/8Af6y/+SKP7c1b/oTdb/7/AFl/8kUAblFYf9uat/0Jut/9/rL/AOSKP7c1b/oTdb/7/WX/AMkUAblFYf8Abmrf9Cbrf/f6y/8AkimnX9UBwfB2t5/67WX/AMkUgN6isD/hINT/AOhO1v8A7/WX/wAkUf8ACQan/wBCdrf/AH+sv/kigDforA/4SDU/+hO1v/v9Zf8AyRR/wkGp/wDQna3/AN/rL/5IoA36KwP+Eg1P/oTtb/7/AFl/8kUf8JBqf/Qna3/3+sv/AJIoA36KwP8AhINT/wChO1v/AL/WX/yRR/wkGp/9Cdrf/f6y/wDkigDpIf4qlrL0bULm/wDO+06Pfads27ftTwt5mc9PKkfpjvjqMZ5xqVSEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilrbm/hrE8Cf8AJPPDX/YKtf8A0Utbc38NDAioooqRhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAD4/9YKnqCP8A1gqemhBRRRTAKKKKACiiigAooooAZL9yoKnl+5UFJjCiiikAUUUUAFFFFABU8X3KgqeL7lNAPooopiCiiigCCX79Mp8v36ZSGFFFFIAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKq1aqrSYBRRRSGFFFFABRRRQAU+L79Mp8X36AJ6KKKoQUUUUAFFFFADZP9War1Yk/1ZqvSYwooopAFFFFABRRRQA+P/WCp6gj/wBYKnpoQUUUUwCiiigAooooAKKKKACoZvvD6VNUM33h9KTAjooopDCiiigAooooAKKKKACpYf4qiqWH+KmgJaKKKYgooooAhm6io6km6io6TGFFFFIAooooAkh++fpU1Qw/fP0qamhBRRRTAKKKKACiiigAooooAKgk/wBYanqCT/WGkwGUUUUhhRRRQAUUUUAFFFFAEsP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilrbm/hrE8Cf8k88Nf8AYKtf/RS1tzfw0MCKiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAPj/ANYKnqCP/WCp6aEFFFFMAooooAKKKKACiiigBkv3KgqeX7lQUmMKKKKQBRRRQAUUUUAFTxfcqCp4vuU0A+iiimIKKKKAIJfv0yny/fplIYUUUUgCiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAqrVqqtJgFFFFIYUUUUAFFFFABT4vv0ynxffoAnoooqhBRRRQAUUUUANk/wBWar1Yk/1ZqvSYwooopAFFFFABRRRQA+P/AFgqeoI/9YKnpoQUUUUwCiiigAooooAKKKKACoZvvD6VNUM33h9KTAjooopDCiiigAooooAKKKKACpYf4qiqWH+KmgJaKKKYgooooAhm6io6km6io6TGFFFFIAooooAkh++fpU1Qw/fP0qamhBRRRTAKKKKACiiigAooooAKgk/1hqeoJP8AWGkwGUUUUhhRRRQAUUUUAFFFFAEsP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP8Aknnhr/sFWv8A6KWtub+GsTwJ/wAk88Nf9gq1/wDRS1sXUUcuzzI0fGcblBxQwG0VD9ktv+feL/vgUfZLb/n3i/74FSMmoqH7Jbf8+8X/AHwKPslt/wA+8X/fAoAmoqH7Jbf8+8X/AHwKPslt/wA+8X/fAoAmoqH7Jbf8+8X/AHwKPslt/wA+8X/fAoAmoqH7Jbf8+8X/AHwKPslt/wA+8X/fAoAmoqH7Jbf8+8X/AHwKPslt/wA+8X/fAoAmoqH7Jbf8+8X/AHwKPslt/wA+8X/fAoAsx/6wVPVGO0ti4zbw/wDfAqf7Faf8+sP/AH7FNCJ6Kg+xWn/PrD/37FH2K0/59Yf+/YpgT0VB9itP+fWH/v2KPsVp/wA+sP8A37FAE9FQfYrT/n1h/wC/Yo+xWn/PrD/37FAE9FQfYrT/AJ9Yf+/Yo+xWn/PrD/37FAEkv3Kgoks7UJxbQ/8AfsVD9ktv+feL/vgUmMmoqH7Jbf8APvF/3wKPslt/z7xf98CkBNRUP2S2/wCfeL/vgUfZLb/n3i/74FAE1FQ/ZLb/AJ94v++BR9ktv+feL/vgUATVPF9yqX2S2/594v8AvgVNHZ2pTm2h/wC/YpoC1RUH2K0/59Yf+/Yo+xWn/PrD/wB+xTET0VB9itP+fWH/AL9ij7Faf8+sP/fsUAEv36ZTJLO2D8W8P/fApn2S2/594v8AvgUhk1FQ/ZLb/n3i/wC+BR9ktv8An3i/74FICaiofslt/wA+8X/fAo+yW3/PvF/3wKALcP8AFUtVIrO1Oc20J/4AKk+xWn/PrD/37FUhE9FQfYrT/n1h/wC/Yo+xWn/PrD/37FAE9FQfYrT/AJ9Yf+/Yo+xWn/PrD/37FAE9FQfYrT/n1h/79ij7Faf8+sP/AH7FAE9Vaf8AYrT/AJ9Yf+/Yqt9ktv8An3i/74FJgTUVD9ktv+feL/vgUfZLb/n3i/74FIZNRUP2S2/594v++BR9ktv+feL/AL4FAE1FQ/ZLb/n3i/74FH2S2/594v8AvgUATU+L79Vvslt/z7xf98Cnx2dsX5t4f++BTAu0VB9itP8An1h/79ij7Faf8+sP/fsUxE9FQfYrT/n1h/79ij7Faf8APrD/AN+xQBPRUH2K0/59Yf8Av2KPsVp/z6w/9+xQBLJ/qzVelksrUIcW0P8A37FQfZLb/n3i/wC+BSYyaiofslt/z7xf98Cj7Jbf8+8X/fApATUVD9ktv+feL/vgUfZLb/n3i/74FAE1FQ/ZLb/n3i/74FH2S2/594v++BQBZj/1gqeqMdpbFxm3h/74FT/YrT/n1h/79imhE9FQfYrT/n1h/wC/Yo+xWn/PrD/37FMCeioPsVp/z6w/9+xR9itP+fWH/v2KAJ6Kg+xWn/PrD/37FH2K0/59Yf8Av2KAJ6Kg+xWn/PrD/wB+xR9itP8An1h/79igCeoZvvD6Un2K0/59Yf8Av2Kils7UMMW0I4/uCkwHUVD9ktv+feL/AL4FH2S2/wCfeL/vgUhk1FQ/ZLb/AJ94v++BR9ktv+feL/vgUATUVD9ktv8An3i/74FH2S2/594v++BQBNRUP2S2/wCfeL/vgUfZLb/n3i/74FAE1Sw/xVU+yW3/AD7xf98CpYrO1Oc20J/4AKaAt0VB9itP+fWH/v2KPsVp/wA+sP8A37FMRPRUH2K0/wCfWH/v2KPsVp/z6w/9+xQAs3UVHTZbO1BGLaEf8AFR/ZLb/n3i/wC+BSYyaiofslt/z7xf98Cj7Jbf8+8X/fApATUVD9ktv+feL/vgUfZLb/n3i/74FAFqH75+lTVSis7Ysc20J4/uCpvsVp/z6w/9+xTQieioPsVp/wA+sP8A37FH2K0/59Yf+/YpgT0VB9itP+fWH/v2KPsVp/z6w/8AfsUAT0VB9itP+fWH/v2KPsVp/wA+sP8A37FAE9FQfYrT/n1h/wC/Yo+xWn/PrD/37FAE9QSf6w0fYrT/AJ9Yf+/YqCS0tg5xbw/98CkwJKKh+yW3/PvF/wB8Cj7Jbf8APvF/3wKQyaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgC3D/ABVLVe1iji3+XGiZxnaoGasVSEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWtub+GsTwJ/yTzw1/wBgq1/9FLWxdSxxbPMkRM5xuYDNDAbRUP2u2/5+Iv8AvsUfa7b/AJ+Iv++xUjJqKh+123/PxF/32KPtdt/z8Rf99igCaioftdt/z8Rf99ij7Xbf8/EX/fYoAmoqH7Xbf8/EX/fYo+123/PxF/32KAJqKh+123/PxF/32KPtdt/z8Rf99igCaioftdt/z8Rf99ij7Xbf8/EX/fYoAmoqH7Xbf8/EX/fYo+123/PxF/32KALMf+sFT1Rju7YOM3EP/fYqf7baf8/UP/fwU0InoqD7baf8/UP/AH8FH220/wCfqH/v4KYE9FQfbbT/AJ+of+/go+22n/P1D/38FAE9FQfbbT/n6h/7+Cj7baf8/UP/AH8FAE9FQfbbT/n6h/7+Cj7baf8AP1D/AN/BQBJL9yoKJLy1KcXMP/fwVD9rtv8An4i/77FJjJqKh+123/PxF/32KPtdt/z8Rf8AfYpATUVD9rtv+fiL/vsUfa7b/n4i/wC+xQBNRUP2u2/5+Iv++xR9rtv+fiL/AL7FAE1Txfcql9rtv+fiL/vsVNHeWoTm5h/7+CmgLVFQfbbT/n6h/wC/go+22n/P1D/38FMRPRUH220/5+of+/go+22n/P1D/wB/BQAS/fplMkvLYvxcQ/8AfYpn2u2/5+Iv++xSGTUVD9rtv+fiL/vsUfa7b/n4i/77FICaioftdt/z8Rf99ij7Xbf8/EX/AH2KALcP8VS1UivLUZzcwj/gYqT7baf8/UP/AH8FUhE9FQfbbT/n6h/7+Cj7baf8/UP/AH8FAE9FQfbbT/n6h/7+Cj7baf8AP1D/AN/BQBPRUH220/5+of8Av4KPttp/z9Q/9/BQBPVWn/bbT/n6h/7+Cq32u2/5+Iv++xSYE1FQ/a7b/n4i/wC+xR9rtv8An4i/77FIZNRUP2u2/wCfiL/vsUfa7b/n4i/77FAE1FQ/a7b/AJ+Iv++xR9rtv+fiL/vsUATU+L79Vvtdt/z8Rf8AfYp8d5bB+biH/vsUwLtFQfbbT/n6h/7+Cj7baf8AP1D/AN/BTET0VB9ttP8An6h/7+Cj7baf8/UP/fwUAT0VB9ttP+fqH/v4KPttp/z9Q/8AfwUASyf6s1XpZL21KHFzD/38FQfa7b/n4i/77FJjJqKh+123/PxF/wB9ij7Xbf8APxF/32KQE1FQ/a7b/n4i/wC+xR9rtv8An4i/77FAE1FQ/a7b/n4i/wC+xR9rtv8An4i/77FAFmP/AFgqeqMd3bBxm4h/77FT/bbT/n6h/wC/gpoRPRUH220/5+of+/go+22n/P1D/wB/BTAnoqD7baf8/UP/AH8FH220/wCfqH/v4KAJ6Kg+22n/AD9Q/wDfwUfbbT/n6h/7+CgCeioPttp/z9Q/9/BR9ttP+fqH/v4KAJ6hm+8PpSfbbT/n6h/7+Copby1LDFzCeP74pMB1FQ/a7b/n4i/77FH2u2/5+Iv++xSGTUVD9rtv+fiL/vsUfa7b/n4i/wC+xQBNRUP2u2/5+Iv++xR9rtv+fiL/AL7FAE1FQ/a7b/n4i/77FH2u2/5+Iv8AvsUATVLD/FVT7Xbf8/EX/fYqWK8tRnNzCP8AgYpoC3RUH220/wCfqH/v4KPttp/z9Q/9/BTET0VB9ttP+fqH/v4KPttp/wA/UP8A38FACzdRUdNlvLUkYuYT/wADFR/a7b/n4i/77FJjJqKh+123/PxF/wB9ij7Xbf8APxF/32KQE1FQ/a7b/n4i/wC+xR9rtv8An4i/77FAFqH75+lTVSivLYMc3MI4/vipvttp/wA/UP8A38FNCJ6Kg+22n/P1D/38FH220/5+of8Av4KYE9FQfbbT/n6h/wC/go+22n/P1D/38FAE9FQfbbT/AJ+of+/go+22n/P1D/38FAE9FQfbbT/n6h/7+Cj7baf8/UP/AH8FAE9QSf6w0fbbT/n6h/7+CoJLu2LnFxD/AN9ikwJKKh+123/PxF/32KPtdt/z8Rf99ikMmoqH7Xbf8/EX/fYo+123/PxF/wB9igCaioftdt/z8Rf99ij7Xbf8/EX/AH2KAJqKh+123/PxF/32KPtdt/z8Rf8AfYoAtw/xVLVe1ljl3+XIj4xnawOKsVSEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilrbm/hrE8Cf8AJPPDX/YKtf8A0Utbc38NDAioooqRhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFAD4/9YKnqCP8A1gqemhBRRRTAKKKKACiiigAooooAZL9yoKnl+5UFJjCiiikAUUUUAFFFFABU8X3KgqeL7lNAPooopiCiiigCCX79Mp8v36ZSGFFFFIAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKq1aqrSYBRRRSGFFFFABRRRQAU+L79Mp8X36AJ6KKKoQUUUUAFFFFADZP9War1Yk/1ZqvSYwooopAFFFFABRRRQA+P/WCp6gj/wBYKnpoQUUUUwCiiigAooooAKKKKACoZvvD6VNUM33h9KTAjooopDCiiigAooooAKKKKACpYf4qiqWH+KmgJaKKKYgooooAhm6io6km6io6TGFFFFIAooooAkh++fpU1Qw/fP0qamhBRRRTAKKKKACiiigAooooAKgk/wBYanqCT/WGkwGUUUUhhRRRQAUUUUAFFFFAEsP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/wCwVa/+ilrYupVj2bg5zn7qFv5CsfwJ/wAk88Nf9gq1/wDRS1tzfw0MCp9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRUjIftMf92X/v03+FH2mP8Auy/9+m/wqaigCH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CpqKAIftMf92X/v03+FH2mP+7L/AN+m/wAKmooAh+0x/wB2X/v03+FH2mP+7L/36b/CpqKAIftMf92X/v03+FH2mP8Auy/9+m/wqaigCH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CpqKAI47qMOPlm/78v/AIVP9rj/ALs3/fh/8KI/9YKnpoRB9rj/ALs3/fh/8KPtcf8Adm/78P8A4VPRTAg+1x/3Zv8Avw/+FH2uP+7N/wB+H/wqeigCD7XH/dm/78P/AIUfa4/7s3/fh/8ACp6KAIPtcf8Adm/78P8A4Ufa4/7s3/fh/wDCp6KAKsl3GU+7N/35f/CoftMf92X/AL9N/hV2X7lQUmMh+0x/3Zf+/Tf4UfaY/wC7L/36b/CpqKQEP2mP+7L/AN+m/wAKPtMf92X/AL9N/hU1FAEP2mP+7L/36b/Cj7TH/dl/79N/hU1FAEP2mP8Auy/9+m/wqaO7jCfdm/78v/hRU8X3KaAj+1x/3Zv+/D/4Ufa4/wC7N/34f/Cp6KYiD7XH/dm/78P/AIUfa4/7s3/fh/8ACp6KAKUl1GX+7N/35f8Awpn2mP8Auy/9+m/wqzL9+mUhkP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRSAh+0x/3Zf+/Tf4UfaY/7sv8A36b/AAqaigBIrqMZ+Wb/AL8v/hUn2uP+7N/34f8Awp0P8VS1SEQfa4/7s3/fh/8ACj7XH/dm/wC/D/4VPRQBB9rj/uzf9+H/AMKPtcf92b/vw/8AhU9FAEH2uP8Auzf9+H/wo+1x/wB2b/vw/wDhU9FAEH2uP+7N/wB+H/wqt9pj/uy/9+m/wrQqrSYEP2mP+7L/AN+m/wAKPtMf92X/AL9N/hU1FIZD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACnx3UYf7s3/fl/8ACn0+L79MA+1x/wB2b/vw/wDhR9rj/uzf9+H/AMKnopiIPtcf92b/AL8P/hR9rj/uzf8Afh/8KnooAg+1x/3Zv+/D/wCFH2uP+7N/34f/AAqeigCtJdxlD8s3/fl/8Kg+0x/3Zf8Av03+FXpP9War0mMh+0x/3Zf+/Tf4UfaY/wC7L/36b/CpqKQEP2mP+7L/AN+m/wAKPtMf92X/AL9N/hU1FAEP2mP+7L/36b/Cj7TH/dl/79N/hU1FAEcd1GHHyzf9+X/wqf7XH/dm/wC/D/4UR/6wVPTQiD7XH/dm/wC/D/4Ufa4/7s3/AH4f/Cp6KYEH2uP+7N/34f8Awo+1x/3Zv+/D/wCFT0UAQfa4/wC7N/34f/Cj7XH/AHZv+/D/AOFT0UAQfa4/7s3/AH4f/Cj7XH/dm/78P/hU9FAEH2uP+7N/34f/AAqKW6jLD5Zun/PF/wDCrlQzfeH0pMCr9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FIZD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wqWK6jGflm/wC/L/4UtSw/xU0A37XH/dm/78P/AIUfa4/7s3/fh/8ACp6KYiD7XH/dm/78P/hR9rj/ALs3/fh/8KnooApy3UZI+Wb/AL8v/hUf2mP+7L/36b/CrU3UVHSYyH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CpqKQEP2mP+7L/36b/Cj7TH/dl/79N/hU1FADIrqMMflm6f88X/AMKm+1x/3Zv+/D/4UsP3z9KmpoRB9rj/ALs3/fh/8KPtcf8Adm/78P8A4VPRTAg+1x/3Zv8Avw/+FH2uP+7N/wB+H/wqeigCD7XH/dm/78P/AIUfa4/7s3/fh/8ACp6KAIPtcf8Adm/78P8A4Ufa4/7s3/fh/wDCp6KAIPtcf92b/vw/+FQSXUZc/LN/35f/AAq9UEn+sNJgVvtMf92X/v03+FH2mP8Auy/9+m/wqaikMh+0x/3Zf+/Tf4UfaY/7sv8A36b/AAqaigCH7TH/AHZf+/Tf4UfaY/7sv/fpv8KmooAh+0x/3Zf+/Tf4UfaY/wC7L/36b/CpqKAHWsqyb9ocYx95Cv8AMVYqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wACf8k88Nf9gq1/9FLW3N/DWJ4E/wCSeeGv+wVa/wDopa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKAHx/6wVPUEf+sFT00IKKKKYBRRRQAUUUUAFFFFADJfuVBU8v3KgpMYUUUUgCiiigAooooAKni+5UFTxfcpoB9FFFMQUUUUAQS/fplPl+/TKQwooopAFFFFAEsP8VS1FD/FUtUhBRRRQAUUUUAFFFFABVWrVVaTAKKKKQwooooAKKKKACnxffplPi+/QBPRRRVCCiiigAooooAbJ/qzVerEn+rNV6TGFFFFIAooooAKKKKAHx/6wVPUEf8ArBU9NCCiiimAUUUUAFFFFABRRRQAVDN94fSpqhm+8PpSYEdFFFIYUUUUAFFFFABRRRQAVLD/ABVFUsP8VNAS0UUUxBRRRQBDN1FR1JN1FR0mMKKKKQBRRRQBJD98/Spqhh++fpU1NCCiiimAUUUUAFFFFABRRRQAVBJ/rDU9QSf6w0mAyiiikMKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/YKtf/AEUtbc38NYngT/knnhr/ALBVr/6KWtub+GhgRUUUVIwooooAKKKKACiiigAooooAKKKKACiiigB8f+sFT1BH/rBU9NCCiiimAUUUUAFFFFABRRRQAyX7lQVPL9yoKTGFFFFIAooooAKKKKACp4vuVBU8X3KaAfRRRTEFFFFAEEv36ZT5fv0ykMKKKKQBRRRQBLD/ABVLUUP8VS1SEFFFFABRRRQAUUUUAFVatVVpMAooopDCiiigAooooAKfF9+mU+L79AE9FFFUIKKKKACiiigBsn+rNV6sSf6s1XpMYUUUUgCiiigAooooAfH/AKwVPUEf+sFT00IKKKKYBRRRQAUUUUAFFFFABUM33h9KmqGb7w+lJgR0UUUhhRRRQAUUUUAFFFFABUsP8VRVLD/FTQEtFFFMQUUUUAQzdRUdSTdRUdJjCiiikAUUUUASQ/fP0qaoYfvn6VNTQgooopgFFFFABRRRQAUUUUAFQSf6w1PUEn+sNJgMooopDCiiigAooooAKKKKAJYf4qlqKH+KpapCCiiigAooooAKKKKACiiigAooooA5/wACf8k88Nf9gq1/9FLWxdIz7NsrpjP3QOfzBrH8Cf8AJPPDX/YKtf8A0Utbc38NDAqeTJ/z8y/kv/xNHkyf8/Mv5L/8TU1FSMh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/5+ZfyX/wCJo8mT/n5l/Jf/AImpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/n5l/Jf/AImjyZP+fmX8l/8AiamooAjjgk3j/Sph+Cf/ABNT+RJ/z9zfkn/xNEf+sFT00Ig8iT/n7m/JP/iaPIk/5+5vyT/4mp6KYEHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNT0UAQeRJ/z9zfkn/xNHkSf8/c35J/8TU9FAEHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNT0UAVZIJNn/H3MfwT/AOJqHyZP+fmX8l/+Jq7L9yoKTGQ+TJ/z8y/kv/xNHkyf8/Mv5L/8TU1FICHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mpo4JNn/H3MPwT/AOJoqeL7lNAR+RJ/z9zfkn/xNHkSf8/c35J/8TU9FMRB5En/AD9zfkn/AMTR5En/AD9zfkn/AMTU9FAFKSCTf/x9TH8E/wDiaZ5Mn/PzL+S//E1Zl+/TKQyHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJqaikBD5Mn/PzL+S//E0eTJ/z8y/kv/xNTUUAJFBIc/6VMPwT/wCJqTyJP+fub8k/+Jp0P8VS1SEQeRJ/z9zfkn/xNHkSf8/c35J/8TU9FAEHkSf8/c35J/8AE0eRJ/z9zfkn/wATU9FAEHkSf8/c35J/8TR5En/P3N+Sf/E1PRQBB5En/P3N+Sf/ABNVvJk/5+ZfyX/4mtCqtJgQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUhkPkyf8APzL+S/8AxNHkyf8APzL+S/8AxNTUUAQ+TJ/z8y/kv/xNHkyf8/Mv5L/8TU1FAEPkyf8APzL+S/8AxNPjgk3/APH1MPwT/wCJp9Pi+/TAPIk/5+5vyT/4mjyJP+fub8k/+JqeimIg8iT/AJ+5vyT/AOJo8iT/AJ+5vyT/AOJqeigCDyJP+fub8k/+Jo8iT/n7m/JP/ianooArSQSbD/pc35J/8TUHkyf8/Mv5L/8AE1ek/wBWar0mMh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKQEPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TU1FAEPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATU1FAEccEm8f6VMPwT/4mp/Ik/wCfub8k/wDiaI/9YKnpoRB5En/P3N+Sf/E0eRJ/z9zfkn/xNT0UwIPIk/5+5vyT/wCJo8iT/n7m/JP/AImp6KAIPIk/5+5vyT/4mjyJP+fub8k/+JqeigCDyJP+fub8k/8AiaPIk/5+5vyT/wCJqeigCDyJP+fub8k/+JqKWCQMP9KmPHon/wATVyoZvvD6UmBV8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaikMh8mT/n5l/Jf/AImjyZP+fmX8l/8AiamooAh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/5+ZfyX/wCJo8mT/n5l/Jf/AImpqKAIfJk/5+ZfyX/4mpYoJDn/AEqYfgn/AMTS1LD/ABU0A3yJP+fub8k/+Jo8iT/n7m/JP/ianopiIPIk/wCfub8k/wDiaPIk/wCfub8k/wDianooApywSAj/AEqY/gn/AMTUfkyf8/Mv5L/8TVqbqKjpMZD5Mn/PzL+S/wDxNHkyf8/Mv5L/APE1NRSAh8mT/n5l/Jf/AImjyZP+fmX8l/8AiamooAZFBIWP+lTDj0T/AOJqbyJP+fub8k/+JpYfvn6VNTQiDyJP+fub8k/+Jo8iT/n7m/JP/ianopgQeRJ/z9zfkn/xNHkSf8/c35J/8TU9FAEHkSf8/c35J/8AE0eRJ/z9zfkn/wATU9FAEHkSf8/c35J/8TR5En/P3N+Sf/E1PRQBB5En/P3N+Sf/ABNQSQSbz/pUx/BP/iavVBJ/rDSYFbyZP+fmX8l/+Jo8mT/n5l/Jf/iamopDIfJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiamooAh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiamooAdaoyb90rvnH3gOPyAqxUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/sFWv/AKKWtub+GsTwJ/yTzw1/2CrX/wBFLWxdRLJs3FxjP3XK/wAjQwG0VD9mj/vS/wDf1v8AGj7NH/el/wC/rf41Iyaiofs0f96X/v63+NH2aP8AvS/9/W/xoAmoqH7NH/el/wC/rf40fZo/70v/AH9b/GgCaiofs0f96X/v63+NH2aP+9L/AN/W/wAaAJqKh+zR/wB6X/v63+NH2aP+9L/39b/GgCaiofs0f96X/v63+NH2aP8AvS/9/W/xoAmoqH7NH/el/wC/rf40fZo/70v/AH9b/GgCzH/rBU9UY7WMuPmm/wC/z/41P9kj/vTf9/3/AMaaET0VB9kj/vTf9/3/AMaPskf96b/v+/8AjTAnoqD7JH/em/7/AL/40fZI/wC9N/3/AH/xoAnoqD7JH/em/wC/7/40fZI/703/AH/f/GgCeioPskf96b/v+/8AjR9kj/vTf9/3/wAaAJJfuVBRJaRhPvTf9/n/AMah+zR/3pf+/rf40mMmoqH7NH/el/7+t/jR9mj/AL0v/f1v8aQE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1Txfcql9mj/vS/9/W/xqaO0jKfem/7/P8A400BaoqD7JH/AHpv+/7/AONH2SP+9N/3/f8AxpiJ6Kg+yR/3pv8Av+/+NH2SP+9N/wB/3/xoAJfv0ymSWsYf703/AH+f/GmfZo/70v8A39b/ABpDJqKh+zR/3pf+/rf40fZo/wC9L/39b/GkBNRUP2aP+9L/AN/W/wAaPs0f96X/AL+t/jQBbh/iqWqkVrGc/NN/3+f/ABqT7JH/AHpv+/7/AONUhE9FQfZI/wC9N/3/AH/xo+yR/wB6b/v+/wDjQBPRUH2SP+9N/wB/3/xo+yR/3pv+/wC/+NAE9FQfZI/703/f9/8AGj7JH/em/wC/7/40AT1Vp/2SP+9N/wB/3/xqt9mj/vS/9/W/xpMCaiofs0f96X/v63+NH2aP+9L/AN/W/wAaQyaiofs0f96X/v63+NH2aP8AvS/9/W/xoAmoqH7NH/el/wC/rf40fZo/70v/AH9b/GgCanxffqt9mj/vS/8Af1v8afHaxl/vTf8Af5/8aYF2ioPskf8Aem/7/v8A40fZI/703/f9/wDGmInoqD7JH/em/wC/7/40fZI/703/AH/f/GgCeioPskf96b/v+/8AjR9kj/vTf9/3/wAaAJZP9War0slpGEPzTf8Af5/8ag+zR/3pf+/rf40mMmoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGkBNRUP2aP8AvS/9/W/xo+zR/wB6X/v63+NAE1FQ/Zo/70v/AH9b/Gj7NH/el/7+t/jQBZj/ANYKnqjHaxlx803/AH+f/Gp/skf96b/v+/8AjTQieioPskf96b/v+/8AjR9kj/vTf9/3/wAaYE9FQfZI/wC9N/3/AH/xo+yR/wB6b/v+/wDjQBPRUH2SP+9N/wB/3/xo+yR/3pv+/wC/+NAE9FQfZI/703/f9/8AGj7JH/em/wC/7/40AT1DN94fSk+yR/3pv+/7/wCNRS2sYYfNN0/57P8A40mA6iofs0f96X/v63+NH2aP+9L/AN/W/wAaQyaiofs0f96X/v63+NH2aP8AvS/9/W/xoAmoqH7NH/el/wC/rf40fZo/70v/AH9b/GgCaiofs0f96X/v63+NH2aP+9L/AN/W/wAaAJqlh/iqp9mj/vS/9/W/xqWK1jOfmm/7/P8A400BboqD7JH/AHpv+/7/AONH2SP+9N/3/f8AxpiJ6Kg+yR/3pv8Av+/+NH2SP+9N/wB/3/xoAWbqKjpstrGCPmm/7/P/AI1H9mj/AL0v/f1v8aTGTUVD9mj/AL0v/f1v8aPs0f8Ael/7+t/jSAmoqH7NH/el/wC/rf40fZo/70v/AH9b/GgC1D98/SpqpRWsZY/NN0/57P8A41N9kj/vTf8Af9/8aaET0VB9kj/vTf8Af9/8aPskf96b/v8Av/jTAnoqD7JH/em/7/v/AI0fZI/703/f9/8AGgCeioPskf8Aem/7/v8A40fZI/703/f9/wDGgCeioPskf96b/v8Av/jR9kj/AL03/f8Af/GgCeoJP9YaPskf96b/AL/v/jUElrGHPzTf9/n/AMaTAkoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGkMmoqH7NH/el/7+t/jR9mj/AL0v/f1v8aAJqKh+zR/3pf8Av63+NH2aP+9L/wB/W/xoAmoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGgC3D/FUtV7WJY9+0uc4+85b+ZqxVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP8Aknnhr/sFWv8A6KWtub+GsTwJ/wAk88Nf9gq1/wDRS1tzfw0MCKiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAPj/1gqeoI/wDWCp6aEFFFFMAooooAKKKKACiiigBkv3KgqeX7lQUmMKKKKQBRRRQAUUUUAFTxfcqCp4vuU0A+iiimIKKKKAIJfv0yny/fplIYUUUUgCiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAqrVqqtJgFFFFIYUUUUAFFFFABT4vv0ynxffoAnoooqhBRRRQAUUUUANk/1ZqvViT/Vmq9JjCiiikAUUUUAFFFFAD4/9YKnqCP/AFgqemhBRRRTAKKKKACiiigAooooAKhm+8PpU1QzfeH0pMCOiiikMKKKKACiiigAooooAKlh/iqKpYf4qaAlooopiCiiigCGbqKjqSbqKjpMYUUUUgCiiigCSH75+lTVDD98/SpqaEFFFFMAooooAKKKKACiiigAqCT/AFhqeoJP9YaTAZRRRSGFFFFABRRRQAUUUUASw/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/knnhr/ALBVr/6KWti6ijl2eZGj4zjcoOKx/An/ACTzw1/2CrX/ANFLW3N/DQwKn2S2/wCfeL/vgUfZLb/n3i/74FTUVIyH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAIfslt/z7xf98Cj7Jbf8+8X/AHwKmooAh+yW3/PvF/3wKPslt/z7xf8AfAqaigCOO0ti4zbw/wDfAqf7Faf8+sP/AH7FEf8ArBU9NCIPsVp/z6w/9+xR9itP+fWH/v2KnopgQfYrT/n1h/79ij7Faf8APrD/AN+xU9FAEH2K0/59Yf8Av2KPsVp/z6w/9+xU9FAEH2K0/wCfWH/v2KPsVp/z6w/9+xU9FAFWSztQnFtD/wB+xUP2S2/594v++BV2X7lQUmMh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmopAQ/ZLb/n3i/wC+BR9ktv8An3i/74FTUUAQ/ZLb/n3i/wC+BR9ktv8An3i/74FTUUAQ/ZLb/n3i/wC+BU0dnalObaH/AL9iip4vuU0BH9itP+fWH/v2KPsVp/z6w/8AfsVPRTEQfYrT/n1h/wC/Yo+xWn/PrD/37FT0UAUpLO2D8W8P/fApn2S2/wCfeL/vgVZl+/TKQyH7Jbf8+8X/AHwKPslt/wA+8X/fAqaikBD9ktv+feL/AL4FH2S2/wCfeL/vgVNRQAkVnanObaE/8AFSfYrT/n1h/wC/Yp0P8VS1SEQfYrT/AJ9Yf+/Yo+xWn/PrD/37FT0UAQfYrT/n1h/79ij7Faf8+sP/AH7FT0UAQfYrT/n1h/79ij7Faf8APrD/AN+xU9FAEH2K0/59Yf8Av2KrfZLb/n3i/wC+BWhVWkwIfslt/wA+8X/fAo+yW3/PvF/3wKmopDIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKfHZ2xfm3h/74FPp8X36YB9itP+fWH/AL9ij7Faf8+sP/fsVPRTEQfYrT/n1h/79ij7Faf8+sP/AH7FT0UAQfYrT/n1h/79ij7Faf8APrD/AN+xU9FAFaSytQhxbQ/9+xUH2S2/594v++BV6T/Vmq9JjIfslt/z7xf98Cj7Jbf8+8X/AHwKmopAQ/ZLb/n3i/74FH2S2/594v8AvgVNRQBD9ktv+feL/vgUfZLb/n3i/wC+BU1FAEcdpbFxm3h/74FT/YrT/n1h/wC/Yoj/ANYKnpoRB9itP+fWH/v2KPsVp/z6w/8AfsVPRTAg+xWn/PrD/wB+xR9itP8An1h/79ip6KAIPsVp/wA+sP8A37FH2K0/59Yf+/YqeigCD7Faf8+sP/fsUfYrT/n1h/79ip6KAIPsVp/z6w/9+xUUtnahhi2hHH9wVcqGb7w+lJgVfslt/wA+8X/fAo+yW3/PvF/3wKmopDIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98CpYrO1Oc20J/4AKWpYf4qaAb9itP8An1h/79ij7Faf8+sP/fsVPRTEQfYrT/n1h/79ij7Faf8APrD/AN+xU9FAFOWztQRi2hH/AAAVH9ktv+feL/vgVam6io6TGQ/ZLb/n3i/74FH2S2/594v++BU1FICH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKAGRWdsWObaE8f3BU32K0/wCfWH/v2KWH75+lTU0Ig+xWn/PrD/37FH2K0/59Yf8Av2KnopgQfYrT/n1h/wC/Yo+xWn/PrD/37FT0UAQfYrT/AJ9Yf+/Yo+xWn/PrD/37FT0UAQfYrT/n1h/79ij7Faf8+sP/AH7FT0UAQfYrT/n1h/79ioJLS2DnFvD/AN8Cr1QSf6w0mBW+yW3/AD7xf98Cj7Jbf8+8X/fAqaikMh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAdaxRxb/AC40TOM7VAzVioof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0Utbc38NYngT/knnhr/sFWv/opa2LqKOXZ5kaPjONyg4oYDaKh+yW3/PvF/wB8Cj7Jbf8APvF/3wKkZNRUP2S2/wCfeL/vgUfZLb/n3i/74FAE1FQ/ZLb/AJ94v++BR9ktv+feL/vgUATUVD9ktv8An3i/74FH2S2/594v++BQBNRUP2S2/wCfeL/vgUfZLb/n3i/74FAE1FQ/ZLb/AJ94v++BR9ktv+feL/vgUATUVD9ktv8An3i/74FH2S2/594v++BQBZj/ANYKnqjHaWxcZt4f++BU/wBitP8An1h/79imhE9FQfYrT/n1h/79ij7Faf8APrD/AN+xTAnoqD7Faf8APrD/AN+xR9itP+fWH/v2KAJ6Kg+xWn/PrD/37FH2K0/59Yf+/YoAnoqD7Faf8+sP/fsUfYrT/n1h/wC/YoAkl+5UFElnahOLaH/v2Kh+yW3/AD7xf98Ckxk1FQ/ZLb/n3i/74FH2S2/594v++BSAmoqH7Jbf8+8X/fAo+yW3/PvF/wB8CgCaiofslt/z7xf98Cj7Jbf8+8X/AHwKAJqni+5VL7Jbf8+8X/fAqaOztSnNtD/37FNAWqKg+xWn/PrD/wB+xR9itP8An1h/79imInoqD7Faf8+sP/fsUfYrT/n1h/79igAl+/TKZJZ2wfi3h/74FM+yW3/PvF/3wKQyaiofslt/z7xf98Cj7Jbf8+8X/fApATUVD9ktv+feL/vgUfZLb/n3i/74FAFuH+KpaqRWdqc5toT/AMAFSfYrT/n1h/79iqQieioPsVp/z6w/9+xR9itP+fWH/v2KAJ6Kg+xWn/PrD/37FH2K0/59Yf8Av2KAJ6Kg+xWn/PrD/wB+xR9itP8An1h/79igCeqtP+xWn/PrD/37FVvslt/z7xf98CkwJqKh+yW3/PvF/wB8Cj7Jbf8APvF/3wKQyaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmp8X36rfZLb/n3i/74FPjs7Yvzbw/98CmBdoqD7Faf8+sP/fsUfYrT/n1h/wC/YpiJ6Kg+xWn/AD6w/wDfsUfYrT/n1h/79igCeioPsVp/z6w/9+xR9itP+fWH/v2KAJZP9War0sllahDi2h/79ioPslt/z7xf98Ckxk1FQ/ZLb/n3i/74FH2S2/594v8AvgUgJqKh+yW3/PvF/wB8Cj7Jbf8APvF/3wKAJqKh+yW3/PvF/wB8Cj7Jbf8APvF/3wKALMf+sFT1RjtLYuM28P8A3wKn+xWn/PrD/wB+xTQieioPsVp/z6w/9+xR9itP+fWH/v2KYE9FQfYrT/n1h/79ij7Faf8APrD/AN+xQBPRUH2K0/59Yf8Av2KPsVp/z6w/9+xQBPRUH2K0/wCfWH/v2KPsVp/z6w/9+xQBPUM33h9KT7Faf8+sP/fsVFLZ2oYYtoRx/cFJgOoqH7Jbf8+8X/fAo+yW3/PvF/3wKQyaiofslt/z7xf98Cj7Jbf8+8X/AHwKAJqKh+yW3/PvF/3wKPslt/z7xf8AfAoAmoqH7Jbf8+8X/fAo+yW3/PvF/wB8CgCapYf4qqfZLb/n3i/74FSxWdqc5toT/wAAFNAW6Kg+xWn/AD6w/wDfsUfYrT/n1h/79imInoqD7Faf8+sP/fsUfYrT/n1h/wC/YoAWbqKjpstnagjFtCP+ACo/slt/z7xf98Ckxk1FQ/ZLb/n3i/74FH2S2/594v8AvgUgJqKh+yW3/PvF/wB8Cj7Jbf8APvF/3wKALUP3z9KmqlFZ2xY5toTx/cFTfYrT/n1h/wC/YpoRPRUH2K0/59Yf+/Yo+xWn/PrD/wB+xTAnoqD7Faf8+sP/AH7FH2K0/wCfWH/v2KAJ6Kg+xWn/AD6w/wDfsUfYrT/n1h/79igCeioPsVp/z6w/9+xR9itP+fWH/v2KAJ6gk/1ho+xWn/PrD/37FQSWlsHOLeH/AL4FJgSUVD9ktv8An3i/74FH2S2/594v++BSGTUVD9ktv+feL/vgUfZLb/n3i/74FAE1FQ/ZLb/n3i/74FH2S2/594v++BQBNRUP2S2/594v++BR9ktv+feL/vgUAW4f4qlqvaxRxb/LjRM4ztUDNWKpCCiiigAooooAKKKKACiiigAooooA5/wJ/wAk88Nf9gq1/wDRS1tzfw1ieBP+SeeGv+wVa/8Aopa2LqWOLZ5kiJnONzAZoYDaKh+123/PxF/32KPtdt/z8Rf99ipGTUVD9rtv+fiL/vsUfa7b/n4i/wC+xQBNRUP2u2/5+Iv++xR9rtv+fiL/AL7FAE1FQ/a7b/n4i/77FH2u2/5+Iv8AvsUATUVD9rtv+fiL/vsUfa7b/n4i/wC+xQBNRUP2u2/5+Iv++xR9rtv+fiL/AL7FAE1FQ/a7b/n4i/77FH2u2/5+Iv8AvsUAWY/9YKnqjHd2wcZuIf8AvsVP9ttP+fqH/v4KaET0VB9ttP8An6h/7+Cj7baf8/UP/fwUwJ6Kg+22n/P1D/38FH220/5+of8Av4KAJ6Kg+22n/P1D/wB/BR9ttP8An6h/7+CgCeioPttp/wA/UP8A38FH220/5+of+/goAkl+5UFEl5alOLmH/v4Kh+123/PxF/32KTGTUVD9rtv+fiL/AL7FH2u2/wCfiL/vsUgJqKh+123/AD8Rf99ij7Xbf8/EX/fYoAmoqH7Xbf8APxF/32KPtdt/z8Rf99igCap4vuVS+123/PxF/wB9ipo7y1Cc3MP/AH8FNAWqKg+22n/P1D/38FH220/5+of+/gpiJ6Kg+22n/P1D/wB/BR9ttP8An6h/7+CgAl+/TKZJeWxfi4h/77FM+123/PxF/wB9ikMmoqH7Xbf8/EX/AH2KPtdt/wA/EX/fYpATUVD9rtv+fiL/AL7FH2u2/wCfiL/vsUAW4f4qlqpFeWozm5hH/AxUn220/wCfqH/v4KpCJ6Kg+22n/P1D/wB/BR9ttP8An6h/7+CgCeioPttp/wA/UP8A38FH220/5+of+/goAnoqD7baf8/UP/fwUfbbT/n6h/7+CgCeqtP+22n/AD9Q/wDfwVW+123/AD8Rf99ikwJqKh+123/PxF/32KPtdt/z8Rf99ikMmoqH7Xbf8/EX/fYo+123/PxF/wB9igCaioftdt/z8Rf99ij7Xbf8/EX/AH2KAJqfF9+q32u2/wCfiL/vsU+O8tg/NxD/AN9imBdoqD7baf8AP1D/AN/BR9ttP+fqH/v4KYieioPttp/z9Q/9/BR9ttP+fqH/AL+CgCeioPttp/z9Q/8AfwUfbbT/AJ+of+/goAlk/wBWar0sl7alDi5h/wC/gqD7Xbf8/EX/AH2KTGTUVD9rtv8An4i/77FH2u2/5+Iv++xSAmoqH7Xbf8/EX/fYo+123/PxF/32KAJqKh+123/PxF/32KPtdt/z8Rf99igCzH/rBU9UY7u2DjNxD/32Kn+22n/P1D/38FNCJ6Kg+22n/P1D/wB/BR9ttP8An6h/7+CmBPRUH220/wCfqH/v4KPttp/z9Q/9/BQBPRUH220/5+of+/go+22n/P1D/wB/BQBPRUH220/5+of+/go+22n/AD9Q/wDfwUAT1DN94fSk+22n/P1D/wB/BUUt5alhi5hPH98UmA6ioftdt/z8Rf8AfYo+123/AD8Rf99ikMmoqH7Xbf8APxF/32KPtdt/z8Rf99igCaioftdt/wA/EX/fYo+123/PxF/32KAJqKh+123/AD8Rf99ij7Xbf8/EX/fYoAmqWH+Kqn2u2/5+Iv8AvsVLFeWozm5hH/AxTQFuioPttp/z9Q/9/BR9ttP+fqH/AL+CmInoqD7baf8AP1D/AN/BR9ttP+fqH/v4KAFm6io6bLeWpIxcwn/gYqP7Xbf8/EX/AH2KTGTUVD9rtv8An4i/77FH2u2/5+Iv++xSAmoqH7Xbf8/EX/fYo+123/PxF/32KALUP3z9KmqlFeWwY5uYRx/fFTfbbT/n6h/7+CmhE9FQfbbT/n6h/wC/go+22n/P1D/38FMCeioPttp/z9Q/9/BR9ttP+fqH/v4KAJ6Kg+22n/P1D/38FH220/5+of8Av4KAJ6Kg+22n/P1D/wB/BR9ttP8An6h/7+CgCeoJP9YaPttp/wA/UP8A38FQSXdsXOLiH/vsUmBJRUP2u2/5+Iv++xR9rtv+fiL/AL7FIZNRUP2u2/5+Iv8AvsUfa7b/AJ+Iv++xQBNRUP2u2/5+Iv8AvsUfa7b/AJ+Iv++xQBNRUP2u2/5+Iv8AvsUfa7b/AJ+Iv++xQBbh/iqWq9rLHLv8uRHxjO1gcVYqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0Utbc38NYngT/knnhr/sFWv/opa25v4aGBFRRRUjCiiigAooooAKKKKACiiigAooooAKKKKAHx/wCsFT1BH/rBU9NCCiiimAUUUUAFFFFABRRRQAyX7lQVPL9yoKTGFFFFIAooooAKKKKACp4vuVBU8X3KaAfRRRTEFFFFAEEv36ZT5fv0ykMKKKKQBRRRQBLD/FUtRQ/xVLVIQUUUUAFFFFABRRRQAVVq1VWkwCiiikMKKKKACiiigAp8X36ZT4vv0AT0UUVQgooooAKKKKAGyf6s1XqxJ/qzVekxhRRRSAKKKKACiiigB8f+sFT1BH/rBU9NCCiiimAUUUUAFFFFABRRRQAVDN94fSpqhm+8PpSYEdFFFIYUUUUAFFFFABRRRQAVLD/FUVSw/wAVNAS0UUUxBRRRQBDN1FR1JN1FR0mMKKKKQBRRRQBJD98/Spqhh++fpU1NCCiiimAUUUUAFFFFABRRRQAVBJ/rDU9QSf6w0mAyiiikMKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLWxdSrHs3BznP3ULfyFY/gT/knnhr/sFWv/opa25v4aGBU+0x/wB2X/v03+FH2mP+7L/36b/CpqKkZD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBHHdRhx8s3/fl/8Kn+1x/3Zv8Avw/+FEf+sFT00Ig+1x/3Zv8Avw/+FH2uP+7N/wB+H/wqeimBB9rj/uzf9+H/AMKPtcf92b/vw/8AhU9FAEH2uP8Auzf9+H/wo+1x/wB2b/vw/wDhU9FAEH2uP+7N/wB+H/wo+1x/3Zv+/D/4VPRQBVku4yn3Zv8Avy/+FQ/aY/7sv/fpv8Kuy/cqCkxkP2mP+7L/AN+m/wAKPtMf92X/AL9N/hU1FICH7TH/AHZf+/Tf4UfaY/7sv/fpv8KmooAh+0x/3Zf+/Tf4UfaY/wC7L/36b/CpqKAIftMf92X/AL9N/hU0d3GE+7N/35f/AAoqeL7lNAR/a4/7s3/fh/8ACj7XH/dm/wC/D/4VPRTEQfa4/wC7N/34f/Cj7XH/AHZv+/D/AOFT0UAUpLqMv92b/vy/+FM+0x/3Zf8Av03+FWZfv0ykMh+0x/3Zf+/Tf4UfaY/7sv8A36b/AAqaikBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FACRXUYz8s3/fl/wDCpPtcf92b/vw/+FOh/iqWqQiD7XH/AHZv+/D/AOFH2uP+7N/34f8AwqeigCD7XH/dm/78P/hR9rj/ALs3/fh/8KnooAg+1x/3Zv8Avw/+FH2uP+7N/wB+H/wqeigCD7XH/dm/78P/AIVW+0x/3Zf+/Tf4VoVVpMCH7TH/AHZf+/Tf4UfaY/7sv/fpv8KmopDIftMf92X/AL9N/hR9pj/uy/8Afpv8KmooAh+0x/3Zf+/Tf4UfaY/7sv8A36b/AAqaigCH7TH/AHZf+/Tf4U+O6jD/AHZv+/L/AOFPp8X36YB9rj/uzf8Afh/8KPtcf92b/vw/+FT0UxEH2uP+7N/34f8Awo+1x/3Zv+/D/wCFT0UAQfa4/wC7N/34f/Cj7XH/AHZv+/D/AOFT0UAVpLuMoflm/wC/L/4VB9pj/uy/9+m/wq9J/qzVekxkP2mP+7L/AN+m/wAKPtMf92X/AL9N/hU1FICH7TH/AHZf+/Tf4UfaY/7sv/fpv8KmooAh+0x/3Zf+/Tf4UfaY/wC7L/36b/CpqKAI47qMOPlm/wC/L/4VP9rj/uzf9+H/AMKI/wDWCp6aEQfa4/7s3/fh/wDCj7XH/dm/78P/AIVPRTAg+1x/3Zv+/D/4Ufa4/wC7N/34f/Cp6KAIPtcf92b/AL8P/hR9rj/uzf8Afh/8KnooAg+1x/3Zv+/D/wCFH2uP+7N/34f/AAqeigCD7XH/AHZv+/D/AOFRS3UZYfLN0/54v/hVyoZvvD6UmBV+0x/3Zf8Av03+FH2mP+7L/wB+m/wqaikMh+0x/wB2X/v03+FH2mP+7L/36b/CpqKAIftMf92X/v03+FH2mP8Auy/9+m/wqaigCH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CpqKAIftMf92X/v03+FSxXUYz8s3/fl/wDClqWH+KmgG/a4/wC7N/34f/Cj7XH/AHZv+/D/AOFT0UxEH2uP+7N/34f/AAo+1x/3Zv8Avw/+FT0UAU5bqMkfLN/35f8AwqP7TH/dl/79N/hVqbqKjpMZD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRSAh+0x/3Zf+/Tf4UfaY/wC7L/36b/CpqKAGRXUYY/LN0/54v/hU32uP+7N/34f/AApYfvn6VNTQiD7XH/dm/wC/D/4Ufa4/7s3/AH4f/Cp6KYEH2uP+7N/34f8Awo+1x/3Zv+/D/wCFT0UAQfa4/wC7N/34f/Cj7XH/AHZv+/D/AOFT0UAQfa4/7s3/AH4f/Cj7XH/dm/78P/hU9FAEH2uP+7N/34f/AAqCS6jLn5Zv+/L/AOFXqgk/1hpMCt9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRSGQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4VNRQBD9pj/uy/8Afpv8KPtMf92X/v03+FTUUAQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FTUUAOtZVk37Q4xj7yFf5irFRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv8AsFWv/opa25v4axPAn/JPPDX/AGCrX/0UtbF1KsezcHOc/dQt/IUMBtFQ/aY/7sv/AH6b/Cj7TH/dl/79N/hUjJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAsx/wCsFT1Rjuow4+Wb/vy/+FT/AGuP+7N/34f/AApoRPRUH2uP+7N/34f/AAo+1x/3Zv8Avw/+FMCeioPtcf8Adm/78P8A4Ufa4/7s3/fh/wDCgCeioPtcf92b/vw/+FH2uP8Auzf9+H/woAnoqD7XH/dm/wC/D/4Ufa4/7s3/AH4f/CgCSX7lQUSXcZT7s3/fl/8ACoftMf8Adl/79N/hSYyaioftMf8Adl/79N/hR9pj/uy/9+m/wpATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1Txfcql9pj/uy/wDfpv8ACpo7uMJ92b/vy/8AhTQFqioPtcf92b/vw/8AhR9rj/uzf9+H/wAKYieioPtcf92b/vw/+FH2uP8Auzf9+H/woAJfv0ymSXUZf7s3/fl/8KZ9pj/uy/8Afpv8KQyaioftMf8Adl/79N/hR9pj/uy/9+m/wpATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAFuH+KpaqRXUYz8s3/AH5f/CpPtcf92b/vw/8AhVIRPRUH2uP+7N/34f8Awo+1x/3Zv+/D/wCFAE9FQfa4/wC7N/34f/Cj7XH/AHZv+/D/AOFAE9FQfa4/7s3/AH4f/Cj7XH/dm/78P/hQBPVWn/a4/wC7N/34f/Cq32mP+7L/AN+m/wAKTAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CkMmoqH7TH/AHZf+/Tf4UfaY/7sv/fpv8KAJqKh+0x/3Zf+/Tf4UfaY/wC7L/36b/CgCanxffqt9pj/ALsv/fpv8KfHdRh/uzf9+X/wpgXaKg+1x/3Zv+/D/wCFH2uP+7N/34f/AApiJ6Kg+1x/3Zv+/D/4Ufa4/wC7N/34f/CgCeioPtcf92b/AL8P/hR9rj/uzf8Afh/8KAJZP9War0sl3GUPyzf9+X/wqD7TH/dl/wC/Tf4UmMmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CkBNRUP2mP+7L/36b/Cj7TH/dl/79N/hQBNRUP2mP8Auy/9+m/wo+0x/wB2X/v03+FAFmP/AFgqeqMd1GHHyzf9+X/wqf7XH/dm/wC/D/4U0InoqD7XH/dm/wC/D/4Ufa4/7s3/AH4f/CmBPRUH2uP+7N/34f8Awo+1x/3Zv+/D/wCFAE9FQfa4/wC7N/34f/Cj7XH/AHZv+/D/AOFAE9FQfa4/7s3/AH4f/Cj7XH/dm/78P/hQBPUM33h9KT7XH/dm/wC/D/4VFLdRlh8s3T/ni/8AhSYDqKh+0x/3Zf8Av03+FH2mP+7L/wB+m/wpDJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCapYf4qqfaY/7sv8A36b/AAqWK6jGflm/78v/AIU0BboqD7XH/dm/78P/AIUfa4/7s3/fh/8ACmInoqD7XH/dm/78P/hR9rj/ALs3/fh/8KAFm6io6bLdRkj5Zv8Avy/+FR/aY/7sv/fpv8KTGTUVD9pj/uy/9+m/wo+0x/3Zf+/Tf4UgJqKh+0x/3Zf+/Tf4UfaY/wC7L/36b/CgC1D98/SpqpRXUYY/LN0/54v/AIVN9rj/ALs3/fh/8KaET0VB9rj/ALs3/fh/8KPtcf8Adm/78P8A4UwJ6Kg+1x/3Zv8Avw/+FH2uP+7N/wB+H/woAnoqD7XH/dm/78P/AIUfa4/7s3/fh/8ACgCeioPtcf8Adm/78P8A4Ufa4/7s3/fh/wDCgCeoJP8AWGj7XH/dm/78P/hUEl1GXPyzf9+X/wAKTAkoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CkMmoqH7TH/AHZf+/Tf4UfaY/7sv/fpv8KAJqKh+0x/3Zf+/Tf4UfaY/wC7L/36b/CgCaioftMf92X/AL9N/hR9pj/uy/8Afpv8KALcP8VS1XtZVk37Q4xj7yFf5irFUhBRRRQAUUUUAFFFFABRRRQAUUUUAc/4E/5J54a/7BVr/wCilrbm/hrE8Cf8k88Nf9gq1/8ARS1tzfw0MCKiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAPj/1gqeoI/8AWCp6aEFFFFMAooooAKKKKACiiigBkv3KgqeX7lQUmMKKKKQBRRRQAUUUUAFTxfcqCp4vuU0A+iiimIKKKKAIJfv0yny/fplIYUUUUgCiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAqrVqqtJgFFFFIYUUUUAFFFFABT4vv0ynxffoAnoooqhBRRRQAUUUUANk/1ZqvViT/AFZqvSYwooopAFFFFABRRRQA+P8A1gqeoI/9YKnpoQUUUUwCiiigAooooAKKKKACoZvvD6VNUM33h9KTAjooopDCiiigAooooAKKKKACpYf4qiqWH+KmgJaKKKYgooooAhm6io6km6io6TGFFFFIAooooAkh++fpU1Qw/fP0qamhBRRRTAKKKKACiiigAooooAKgk/1hqeoJP9YaTAZRRRSGFFFFABRRRQAUUUUASw/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/AIE/5J54a/7BVr/6KWrms6hc2Hk/ZtHvtR37t32V4V8vGOvmyJ1z2z0OccZp+BP+SeeGv+wVa/8Aopa25v4aGBzf/CQan/0J2t/9/rL/AOSKP+Eg1P8A6E7W/wDv9Zf/ACRW/RUjMD/hINT/AOhO1v8A7/WX/wAkUf8ACQan/wBCdrf/AH+sv/kit+igDA/4SDU/+hO1v/v9Zf8AyRR/wkGp/wDQna3/AN/rL/5IrfooAwP+Eg1P/oTtb/7/AFl/8kUf8JBqf/Qna3/3+sv/AJIrfooAwP8AhINT/wChO1v/AL/WX/yRR/wkGp/9Cdrf/f6y/wDkit+igDA/4SDU/wDoTtb/AO/1l/8AJFH/AAkGp/8AQna3/wB/rL/5IrfooAwP+Eg1P/oTtb/7/WX/AMkUf8JBqf8A0J2t/wDf6y/+SK36KAMOPxBqe8f8Udrh/wC21l/8kVN/wkOqf9CZrn/f6y/+SK2Y/wDWCp6aEc//AMJDqn/Qma5/3+sv/kij/hIdU/6EzXP+/wBZf/JFdBRTA5//AISHVP8AoTNc/wC/1l/8kUf8JDqn/Qma5/3+sv8A5IroKKAOf/4SHVP+hM1z/v8AWX/yRR/wkOqf9CZrn/f6y/8AkiugooA5/wD4SHVP+hM1z/v9Zf8AyRR/wkOqf9CZrn/f6y/+SK6CigDnJPEOp7P+RN1wf9trL/5IqH/hINT/AOhO1v8A7/WX/wAkV00v3KgpMZgf8JBqf/Qna3/3+sv/AJIo/wCEg1P/AKE7W/8Av9Zf/JFb9FIDA/4SDU/+hO1v/v8AWX/yRR/wkGp/9Cdrf/f6y/8Akit+igDA/wCEg1P/AKE7W/8Av9Zf/JFH/CQan/0J2t/9/rL/AOSK36KAMD/hINT/AOhO1v8A7/WX/wAkVNH4h1PZ/wAibrh/7bWX/wAkVs1PF9ymgML/AISHVP8AoTNc/wC/1l/8kUf8JDqn/Qma5/3+sv8A5IroKKYjn/8AhIdU/wChM1z/AL/WX/yRR/wkOqf9CZrn/f6y/wDkiugooA5mTxDqe/8A5E7XB/22sv8A5Ipn/CQan/0J2t/9/rL/AOSK6KX79MpDMD/hINT/AOhO1v8A7/WX/wAkUf8ACQan/wBCdrf/AH+sv/kit+ikBgf8JBqf/Qna3/3+sv8A5Io/4SDU/wDoTtb/AO/1l/8AJFb9FAGLF4h1MZ/4o3XD/wBtrL/5IqT/AISHVP8AoTNc/wC/1l/8kVtw/wAVS1SEc/8A8JDqn/Qma5/3+sv/AJIo/wCEh1T/AKEzXP8Av9Zf/JFdBRQBz/8AwkOqf9CZrn/f6y/+SKP+Eh1T/oTNc/7/AFl/8kV0FFAHP/8ACQ6p/wBCZrn/AH+sv/kij/hIdU/6EzXP+/1l/wDJFdBRQBz/APwkOqf9CZrn/f6y/wDkiq3/AAkGp/8AQna3/wB/rL/5Irqaq0mBgf8ACQan/wBCdrf/AH+sv/kij/hINT/6E7W/+/1l/wDJFb9FIZgf8JBqf/Qna3/3+sv/AJIo/wCEg1P/AKE7W/8Av9Zf/JFb9FAGB/wkGp/9Cdrf/f6y/wDkij/hINT/AOhO1v8A7/WX/wAkVv0UAYH/AAkGp/8AQna3/wB/rL/5Ip8fiHU9/wDyJ2uH/ttZf/JFblPi+/TAxv8AhIdU/wChM1z/AL/WX/yRR/wkOqf9CZrn/f6y/wDkiugopiOf/wCEh1T/AKEzXP8Av9Zf/JFH/CQ6p/0Jmuf9/rL/AOSK6CigDn/+Eh1T/oTNc/7/AFl/8kUf8JDqn/Qma5/3+sv/AJIroKKAOdk8Q6psP/FG65/3+sv/AJIqD/hINT/6E7W/+/1l/wDJFdPJ/qzVekxmB/wkGp/9Cdrf/f6y/wDkij/hINT/AOhO1v8A7/WX/wAkVv0UgMD/AISDU/8AoTtb/wC/1l/8kUf8JBqf/Qna3/3+sv8A5IrfooAwP+Eg1P8A6E7W/wDv9Zf/ACRR/wAJBqf/AEJ2t/8Af6y/+SK36KAMOPxBqe8f8Udrh/7bWX/yRU3/AAkOqf8AQma5/wB/rL/5IrZj/wBYKnpoRz//AAkOqf8AQma5/wB/rL/5Io/4SHVP+hM1z/v9Zf8AyRXQUUwOf/4SHVP+hM1z/v8AWX/yRR/wkOqf9CZrn/f6y/8AkiugooA5/wD4SHVP+hM1z/v9Zf8AyRR/wkOqf9CZrn/f6y/+SK6CigDn/wDhIdU/6EzXP+/1l/8AJFH/AAkOqf8AQma5/wB/rL/5IroKKAOf/wCEh1T/AKEzXP8Av9Zf/JFRS+IdTLD/AIo7XBx/z2sv/kiulqGb7w+lJgc5/wAJBqf/AEJ2t/8Af6y/+SKP+Eg1P/oTtb/7/WX/AMkVv0UhmB/wkGp/9Cdrf/f6y/8Akij/AISDU/8AoTtb/wC/1l/8kVv0UAYH/CQan/0J2t/9/rL/AOSKP+Eg1P8A6E7W/wDv9Zf/ACRW/RQBgf8ACQan/wBCdrf/AH+sv/kij/hINT/6E7W/+/1l/wDJFb9FAGB/wkGp/wDQna3/AN/rL/5IqWLxDqYz/wAUbrh/7bWX/wAkVtVLD/FTQGJ/wkOqf9CZrn/f6y/+SKP+Eh1T/oTNc/7/AFl/8kV0FFMRz/8AwkOqf9CZrn/f6y/+SKP+Eh1T/oTNc/7/AFl/8kV0FFAHNS+IdTJH/FHa4P8AttZf/JFR/wDCQan/ANCdrf8A3+sv/kiujm6io6TGYH/CQan/ANCdrf8A3+sv/kij/hINT/6E7W/+/wBZf/JFb9FIDA/4SDU/+hO1v/v9Zf8AyRR/wkGp/wDQna3/AN/rL/5IrfooAxIvEOphj/xR2uHj/ntZf/JFS/8ACQ6p/wBCZrn/AH+sv/kitqH75+lTU0I5/wD4SHVP+hM1z/v9Zf8AyRR/wkOqf9CZrn/f6y/+SK6CimBz/wDwkOqf9CZrn/f6y/8Akij/AISHVP8AoTNc/wC/1l/8kV0FFAHP/wDCQ6p/0Jmuf9/rL/5Io/4SHVP+hM1z/v8AWX/yRXQUUAc//wAJDqn/AEJmuf8Af6y/+SKP+Eh1T/oTNc/7/WX/AMkV0FFAHP8A/CQ6p/0Jmuf9/rL/AOSKhk8QanvP/FHa4P8AttZf/JFdNUEn+sNJgc7/AMJBqf8A0J2t/wDf6y/+SKP+Eg1P/oTtb/7/AFl/8kVv0UhmB/wkGp/9Cdrf/f6y/wDkij/hINT/AOhO1v8A7/WX/wAkVv0UAYH/AAkGp/8AQna3/wB/rL/5Io/4SDU/+hO1v/v9Zf8AyRW/RQBgf8JBqf8A0J2t/wDf6y/+SKP+Eg1P/oTtb/7/AFl/8kVv0UAVdG1C5v8AzvtOj32nbNu37U8LeZnPTypH6Y746jGecalRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFAHP+BP+SeeGv+wVa/8Aopa25v4axPAn/JPPDX/YKtf/AEUtXdXvruy8n7Lo19qW/du+yvAvl4xjPmyJ1z2z0OccZALNFYf9uat/0Jut/wDf6y/+SKP7c1b/AKE3W/8Av9Zf/JFIZuUVh/25q3/Qm63/AN/rL/5Io/tzVv8AoTdb/wC/1l/8kUAblFYf9uat/wBCbrf/AH+sv/kij+3NW/6E3W/+/wBZf/JFAG5RWH/bmrf9Cbrf/f6y/wDkij+3NW/6E3W/+/1l/wDJFAG5RWH/AG5q3/Qm63/3+sv/AJIo/tzVv+hN1v8A7/WX/wAkUAblFYf9uat/0Jut/wDf6y/+SKP7c1b/AKE3W/8Av9Zf/JFAG5RWH/bmrf8AQm63/wB/rL/5Io/tzVv+hN1v/v8AWX/yRQBvx/6wVPXNpruqqwJ8G65/3+sv/kipP+Eh1T/oTNc/7/WX/wAkUIR0FFc//wAJDqn/AEJmuf8Af6y/+SKP+Eh1T/oTNc/7/WX/AMkUwOgorn/+Eh1T/oTNc/7/AFl/8kUf8JDqn/Qma5/3+sv/AJIoA6Ciuf8A+Eh1T/oTNc/7/WX/AMkUf8JDqn/Qma5/3+sv/kigDoKK5/8A4SHVP+hM1z/v9Zf/ACRR/wAJDqn/AEJmuf8Af6y/+SKAN2X7lQVjv4g1RlwPBuuf9/rL/wCSKj/tzVv+hN1v/v8AWX/yRSYG5RWH/bmrf9Cbrf8A3+sv/kij+3NW/wChN1v/AL/WX/yRQM3KKw/7c1b/AKE3W/8Av9Zf/JFH9uat/wBCbrf/AH+sv/kigDcorD/tzVv+hN1v/v8AWX/yRR/bmrf9Cbrf/f6y/wDkigDcqeL7lc5/bmrf9Cbrf/f6y/8AkipE8Qaoq4Pg3XP+/wBZf/JFCA6Kiuf/AOEh1T/oTNc/7/WX/wAkUf8ACQ6p/wBCZrn/AH+sv/kimI6Ciuf/AOEh1T/oTNc/7/WX/wAkUf8ACQ6p/wBCZrn/AH+sv/kigDZl+/TKxX17VWbI8G65/wB/rL/5Ipv9uat/0Jut/wDf6y/+SKQzcorD/tzVv+hN1v8A7/WX/wAkUf25q3/Qm63/AN/rL/5IoA3KKw/7c1b/AKE3W/8Av9Zf/JFH9uat/wBCbrf/AH+sv/kigDoYf4qlrnI9f1VM58G65z/02sv/AJIp/wDwkOqf9CZrn/f6y/8AkimI6Ciuf/4SHVP+hM1z/v8AWX/yRR/wkOqf9CZrn/f6y/8AkigDoKK5/wD4SHVP+hM1z/v9Zf8AyRR/wkOqf9CZrn/f6y/+SKAOgorn/wDhIdU/6EzXP+/1l/8AJFH/AAkOqf8AQma5/wB/rL/5IoA6CqtZP/CQ6p/0Jmuf9/rL/wCSKh/tzVv+hN1v/v8AWX/yRSYG5RWH/bmrf9Cbrf8A3+sv/kij+3NW/wChN1v/AL/WX/yRQM3KKw/7c1b/AKE3W/8Av9Zf/JFH9uat/wBCbrf/AH+sv/kigDcorD/tzVv+hN1v/v8AWX/yRR/bmrf9Cbrf/f6y/wDkigDcp8X36wP7c1b/AKE3W/8Av9Zf/JFOTXtVVsnwbrn/AH+sv/kigDpKK5//AISHVP8AoTNc/wC/1l/8kUf8JDqn/Qma5/3+sv8A5IpiOgorn/8AhIdU/wChM1z/AL/WX/yRR/wkOqf9CZrn/f6y/wDkigDoKK5//hIdU/6EzXP+/wBZf/JFH/CQ6p/0Jmuf9/rL/wCSKAN6T/Vmq9ZD+INUZSB4N1z/AL/WX/yRUX9uat/0Jut/9/rL/wCSKTA3KKw/7c1b/oTdb/7/AFl/8kUf25q3/Qm63/3+sv8A5IoGblFYf9uat/0Jut/9/rL/AOSKP7c1b/oTdb/7/WX/AMkUAblFYf8Abmrf9Cbrf/f6y/8Akij+3NW/6E3W/wDv9Zf/ACRQBvx/6wVPXNpruqqwJ8G65/3+sv8A5IqT/hIdU/6EzXP+/wBZf/JFCEdBRXP/APCQ6p/0Jmuf9/rL/wCSKP8AhIdU/wChM1z/AL/WX/yRTA6Ciuf/AOEh1T/oTNc/7/WX/wAkUf8ACQ6p/wBCZrn/AH+sv/kigDoKK5//AISHVP8AoTNc/wC/1l/8kUf8JDqn/Qma5/3+sv8A5IoA6Ciuf/4SHVP+hM1z/v8AWX/yRR/wkOqf9CZrn/f6y/8AkigDoKhm+8PpWL/wkOqf9CZrn/f6y/8Akio5Ne1VjkeDdc/7/WX/AMkUMDaorD/tzVv+hN1v/v8AWX/yRR/bmrf9Cbrf/f6y/wDkikM3KKw/7c1b/oTdb/7/AFl/8kUf25q3/Qm63/3+sv8A5IoA3KKw/wC3NW/6E3W/+/1l/wDJFH9uat/0Jut/9/rL/wCSKANyisP+3NW/6E3W/wDv9Zf/ACRR/bmrf9Cbrf8A3+sv/kigDcqWH+Kue/tzVv8AoTdb/wC/1l/8kU+PX9VTOfBuuc/9NrL/AOSKAOjorn/+Eh1T/oTNc/7/AFl/8kUf8JDqn/Qma5/3+sv/AJIpiOgorn/+Eh1T/oTNc/7/AFl/8kUf8JDqn/Qma5/3+sv/AJIoA2puoqOsaTXtVYjHg3XP+/1l/wDJFM/tzVv+hN1v/v8AWX/yRSGblFYf9uat/wBCbrf/AH+sv/kij+3NW/6E3W/+/wBZf/JFAG5RWH/bmrf9Cbrf/f6y/wDkij+3NW/6E3W/+/1l/wDJFAHQQ/fP0qaubTXtVVsnwbrnT/ntZf8AyRUn/CQ6p/0Jmuf9/rL/AOSKaEdBRXP/APCQ6p/0Jmuf9/rL/wCSKP8AhIdU/wChM1z/AL/WX/yRQB0FFc//AMJDqn/Qma5/3+sv/kij/hIdU/6EzXP+/wBZf/JFAHQUVz//AAkOqf8AQma5/wB/rL/5Io/4SHVP+hM1z/v9Zf8AyRQB0FFc/wD8JDqn/Qma5/3+sv8A5Io/4SHVP+hM1z/v9Zf/ACRQB0FQSf6w1jf8JDqn/Qma5/3+sv8A5IqN9d1VmJHg3XP+/wBZf/JFJgbVFYf9uat/0Jut/wDf6y/+SKP7c1b/AKE3W/8Av9Zf/JFAzcorD/tzVv8AoTdb/wC/1l/8kUf25q3/AEJut/8Af6y/+SKANyisP+3NW/6E3W/+/wBZf/JFH9uat/0Jut/9/rL/AOSKANyisP8AtzVv+hN1v/v9Zf8AyRR/bmrf9Cbrf/f6y/8AkigDoYf4qlrM0i+u73zvtWjX2m7Nu37U8DeZnOceVI/THfHUYzzjTpiCiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWtyRiuMUASUVB5retHmt60rgT0VB5retHmt60XAnoqDzW9aPNb1ouBPRUHmt60ea3rRcCeioPNb1o81vWi4E9FQea3rR5retFwJ6Kg81vWjzW9aLgT0VB5retHmt60XAnoqDzW9aPNb1ouBPRUHmt60ea3rRcCeioPNb1o81vWi4E9FQea3rR5retFwJ6Kg81vWjzW9aLgT0VB5retHmt60XAnoqDzW9aPNb1ouBPRUHmt60ea3rRcCeioPNb1o81vWi4E9FQea3rR5retFwJ6Kg81vWjzW9aLgT0VB5retHmt60XAnoqDzW9aPNb1ouBPRUHmt60ea3rRcCeioPNb1o81vWi4E9FQea3rR5retFwJ6Kg81vWjzW9aLgT0VB5retHmt60XAnoqDzW9aPNb1ouBPRUHmt60ea3rRcCeioPNb1o81vWi4E9FQea3rR5retFwJ6Kg81vWjzW9aLgT0VB5retHmt60XAnoqDzW9aPNb1ouBPRUHmt60ea3rRcCeioPNb1o81vWi4E9FQea3rR5retFwJ6Kg81vWjzW9aLgT0VB5retHmt60XAnoqDzW9aPNb1ouBPRUHmt60ea3rRcCeioPNb1o81vWi4E9FQea3rR5retFwJ6Kg81vWjzW9aLgT0VB5retHmt60XAnoqDzW9aPNb1ouBPRUHmt60ea3rRcCeioPNb1o81vWi4E9FQea3rR5retFwJ6Kg81vWjzW9aLgT0VB5retHmt60XAnoqDzW9aPNb1ouBPRUHmt60ea3rRcCeioPNb1o81vWi4E9FQea3rR5retFwJ6Kg81vWjzW9aLgT0VB5retHmt60XAnoqDzW9aPNb1ouBPRUHmt60ea3rRcCeioPNb1o81vWi4E9FQea3rR5retFwJ6Kg81vWjzW9aLgT0VB5retHmt60XAnoqDzW9aPNb1ouBPRUHmt60ea3rRcCeio42LZzUlMAooooAKKKKACiiigAooooAKKKKAOf8Cf8AJPPDX/YKtf8A0Utbc38NYngT/knnhr/sFWv/AKKWtub+GhgRUUUVIwooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigCWH+Kpaih/iqWqQgooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf8AYKtf/RS1tzfw1ieBP+SeeGv+wVa/+ilq5rOoXNh5P2bR77Ud+7d9leFfLxjr5sidc9s9DnHGRgWqKwP+Eg1P/oTtb/7/AFl/8kUf8JBqf/Qna3/3+sv/AJIqRm/RWB/wkGp/9Cdrf/f6y/8Akij/AISDU/8AoTtb/wC/1l/8kUAb9FYH/CQan/0J2t/9/rL/AOSKP+Eg1P8A6E7W/wDv9Zf/ACRQBv0Vgf8ACQan/wBCdrf/AH+sv/kij/hINT/6E7W/+/1l/wDJFAG/RWB/wkGp/wDQna3/AN/rL/5Io/4SDU/+hO1v/v8AWX/yRQBv0Vgf8JBqf/Qna3/3+sv/AJIo/wCEg1P/AKE7W/8Av9Zf/JFAG/RWB/wkGp/9Cdrf/f6y/wDkij/hINT/AOhO1v8A7/WX/wAkUAb9FYH/AAkGp/8AQna3/wB/rL/5Io/4SDU/+hO1v/v9Zf8AyRQBv0Vgf8JBqf8A0J2t/wDf6y/+SKP+Eg1P/oTtb/7/AFl/8kUAb9FYH/CQan/0J2t/9/rL/wCSKP8AhINT/wChO1v/AL/WX/yRQBv0Vgf8JBqf/Qna3/3+sv8A5Io/4SDU/wDoTtb/AO/1l/8AJFAG/RWB/wAJBqf/AEJ2t/8Af6y/+SKP+Eg1P/oTtb/7/WX/AMkUAb9FYH/CQan/ANCdrf8A3+sv/kij/hINT/6E7W/+/wBZf/JFAG/RWB/wkGp/9Cdrf/f6y/8Akij/AISDU/8AoTtb/wC/1l/8kUAb9FYH/CQan/0J2t/9/rL/AOSKP+Eg1P8A6E7W/wDv9Zf/ACRQBv0Vgf8ACQan/wBCdrf/AH+sv/kij/hINT/6E7W/+/1l/wDJFAG/RWB/wkGp/wDQna3/AN/rL/5Io/4SDU/+hO1v/v8AWX/yRQBv0Vgf8JBqf/Qna3/3+sv/AJIo/wCEg1P/AKE7W/8Av9Zf/JFAG/RWB/wkGp/9Cdrf/f6y/wDkij/hINT/AOhO1v8A7/WX/wAkUAb9FYH/AAkGp/8AQna3/wB/rL/5Io/4SDU/+hO1v/v9Zf8AyRQBv0Vgf8JBqf8A0J2t/wDf6y/+SKP+Eg1P/oTtb/7/AFl/8kUAb9FYH/CQan/0J2t/9/rL/wCSKP8AhINT/wChO1v/AL/WX/yRQBv0Vgf8JBqf/Qna3/3+sv8A5Io/4SDU/wDoTtb/AO/1l/8AJFAG/RWB/wAJBqf/AEJ2t/8Af6y/+SKP+Eg1P/oTtb/7/WX/AMkUAb9FYH/CQan/ANCdrf8A3+sv/kij/hINT/6E7W/+/wBZf/JFAG/RWB/wkGp/9Cdrf/f6y/8Akij/AISDU/8AoTtb/wC/1l/8kUAb9FYH/CQan/0J2t/9/rL/AOSKP+Eg1P8A6E7W/wDv9Zf/ACRQBv0Vgf8ACQan/wBCdrf/AH+sv/kij/hINT/6E7W/+/1l/wDJFAG/RWB/wkGp/wDQna3/AN/rL/5Io/4SDU/+hO1v/v8AWX/yRQBv0Vgf8JBqf/Qna3/3+sv/AJIo/wCEg1P/AKE7W/8Av9Zf/JFAG/RWB/wkGp/9Cdrf/f6y/wDkij/hINT/AOhO1v8A7/WX/wAkUAb9FYH/AAkGp/8AQna3/wB/rL/5Io/4SDU/+hO1v/v9Zf8AyRQBv0Vgf8JBqf8A0J2t/wDf6y/+SKP+Eg1P/oTtb/7/AFl/8kUAb9FYH/CQan/0J2t/9/rL/wCSKP8AhINT/wChO1v/AL/WX/yRQBv0Vgf8JBqf/Qna3/3+sv8A5Io/4SDU/wDoTtb/AO/1l/8AJFAG/RWB/wAJBqf/AEJ2t/8Af6y/+SKP+Eg1P/oTtb/7/WX/AMkUAb9FYH/CQan/ANCdrf8A3+sv/kij/hINT/6E7W/+/wBZf/JFAG/RWB/wkGp/9Cdrf/f6y/8Akij/AISDU/8AoTtb/wC/1l/8kUAb9FYH/CQan/0J2t/9/rL/AOSKP+Eg1P8A6E7W/wDv9Zf/ACRQBv0Vgf8ACQan/wBCdrf/AH+sv/kij/hINT/6E7W/+/1l/wDJFAG/RWB/wkGp/wDQna3/AN/rL/5Io/4SDU/+hO1v/v8AWX/yRQBv0Vgf8JBqf/Qna3/3+sv/AJIo/wCEg1P/AKE7W/8Av9Zf/JFAG/RWB/wkGp/9Cdrf/f6y/wDkij/hINT/AOhO1v8A7/WX/wAkUAb9FYH/AAkGp/8AQna3/wB/rL/5Io/4SDU/+hO1v/v9Zf8AyRQBv0Vgf8JBqf8A0J2t/wDf6y/+SKP+Eg1P/oTtb/7/AFl/8kUAb9FYH/CQan/0J2t/9/rL/wCSKP8AhINT/wChO1v/AL/WX/yRQBv0Vgf8JBqf/Qna3/3+sv8A5Io/4SDU/wDoTtb/AO/1l/8AJFAG/RWB/wAJBqf/AEJ2t/8Af6y/+SKP+Eg1P/oTtb/7/WX/AMkUAb9FYH/CQan/ANCdrf8A3+sv/kij/hINT/6E7W/+/wBZf/JFAG/RWB/wkGp/9Cdrf/f6y/8Akij/AISDU/8AoTtb/wC/1l/8kUAb9FYH/CQan/0J2t/9/rL/AOSKP+Eg1P8A6E7W/wDv9Zf/ACRQBv0Vgf8ACQan/wBCdrf/AH+sv/kij/hINT/6E7W/+/1l/wDJFAG/RWB/wkGp/wDQna3/AN/rL/5Io/4SDU/+hO1v/v8AWX/yRQBv0Vgf8JBqf/Qna3/3+sv/AJIo/wCEg1P/AKE7W/8Av9Zf/JFAG/RWB/wkGp/9Cdrf/f6y/wDkij/hINT/AOhO1v8A7/WX/wAkUAb9FYH/AAkGp/8AQna3/wB/rL/5Io/4SDU/+hO1v/v9Zf8AyRQBv0Vgf8JBqf8A0J2t/wDf6y/+SKP+Eg1P/oTtb/7/AFl/8kUAb9FYH/CQan/0J2t/9/rL/wCSKP8AhINT/wChO1v/AL/WX/yRQBv0Vgf8JBqf/Qna3/3+sv8A5Io/4SDU/wDoTtb/AO/1l/8AJFAG/RWB/wAJBqf/AEJ2t/8Af6y/+SKP+Eg1P/oTtb/7/WX/AMkUAb9FYH/CQan/ANCdrf8A3+sv/kij/hINT/6E7W/+/wBZf/JFAG/RWB/wkGp/9Cdrf/f6y/8Akij/AISDU/8AoTtb/wC/1l/8kUAb9FYH/CQan/0J2t/9/rL/AOSKP+Eg1P8A6E7W/wDv9Zf/ACRQBv0Vgf8ACQan/wBCdrf/AH+sv/kij/hINT/6E7W/+/1l/wDJFAHSQ/xVLWXo2oXN/wCd9p0e+07Zt2/anhbzM56eVI/THfHUYzzjUqkIKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLW3N/DWJ4E/5J54a/7BVr/wCilrbm/hoYEVFFFSMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAlh/iqWoof4qlqkIKKKKACiiigAooooAKKKKACiiigDn/An/JPPDX/AGCrX/0UtbF0JDs8t0XrncpP9RWP4E/5J54a/wCwVa/+ilrbm/hoYFTbc/8APWL/AL9H/wCKo23P/PWL/v0f/iqmoqRkO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FAEO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFVNRQBDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVTUUAQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVU1FADrUSDf5jo3TG1SP6mrFRQ/wAVS1SEFFFFABRRRQAUUUUAFFFFABRRRQBz/gT/AJJ54a/7BVr/AOilrbm/hrE8Cf8AJPPDX/YKtf8A0UtN8Up4vf7J/wAIr/YfG/7T/avm/wCzt2eX/wACzn2oA2KK4byfi76+B/8Aybo8n4u+vgf/AMm6Vhnc0Vw3k/F318D/APk3R5Pxd9fA/wD5N0WA7miuG8n4u+vgf/ybo8n4u+vgf/ybosB3NFcN5Pxd9fA//k3R5Pxd9fA//k3RYDuaK4byfi76+B//ACbo8n4u+vgf/wAm6LAdzRXDeT8XfXwP/wCTdHk/F318D/8Ak3RYDuaK4byfi76+B/8Aybo8n4u+vgf/AMm6LAdzRXDeT8XfXwP/AOTdHk/F318D/wDk3RYDuaK4byfi76+B/wDybo8n4u+vgf8A8m6LAdzRXDeT8XfXwP8A+TdHk/F318D/APk3RYDuaK4byfi76+B//Jujyfi76+B//JuiwHc0Vw3k/F318D/+TdHk/F318D/+TdFgO5orhvJ+Lvr4H/8AJujyfi76+B//ACbosB3NFcN5Pxd9fA//AJN0eT8XfXwP/wCTdFgO5orhvJ+Lvr4H/wDJujyfi76+B/8AybosB3NFcN5Pxd9fA/8A5N0eT8XfXwP/AOTdFgO5orhvJ+Lvr4H/APJujyfi76+B/wDybosB3NFcN5Pxd9fA/wD5N0eT8XfXwP8A+TdFgO5orhvJ+Lvr4H/8m6PJ+Lvr4H/8m6LAdzRXDeT8XfXwP/5N0eT8XfXwP/5N0WA7miuG8n4u+vgf/wAm6PJ+Lvr4H/8AJuiwHc0Vw3k/F318D/8Ak3R5Pxd9fA//AJN0WA7miuG8n4u+vgf/AMm6PJ+Lvr4H/wDJuiwHc0Vw3k/F318D/wDk3R5Pxd9fA/8A5N0WA7miuG8n4u+vgf8A8m6PJ+Lvr4H/APJuiwHc0Vw3k/F318D/APk3R5Pxd9fA/wD5N0WA7miuG8n4u+vgf/ybo8n4u+vgf/ybosB3NFcN5Pxd9fA//k3R5Pxd9fA//k3RYDuaK4byfi76+B//ACbo8n4u+vgf/wAm6LAdzRXDeT8XfXwP/wCTdHk/F318D/8Ak3RYDuaK4byfi76+B/8Aybo8n4u+vgf/AMm6LAdzRXDeT8XfXwP/AOTdHk/F318D/wDk3RYDuaK4byfi76+B/wDybo8n4u+vgf8A8m6LAdzRXDeT8XfXwP8A+TdHk/F318D/APk3RYDuaK4byfi76+B//Jujyfi76+B//JuiwHc0Vw3k/F318D/+TdHk/F318D/+TdFgO5orhvJ+Lvr4H/8AJujyfi76+B//ACbosB3NFcN5Pxd9fA//AJN0eT8XfXwP/wCTdFgO5orhvJ+Lvr4H/wDJujyfi76+B/8AybosB3NFcN5Pxd9fA/8A5N0eT8XfXwP/AOTdFgO5orhvJ+Lvr4H/APJujyfi76+B/wDybosB3NFcN5Pxd9fA/wD5N0eT8XfXwP8A+TdFgO5orhvJ+Lvr4H/8m6PJ+Lvr4H/8m6LAdzRXDeT8XfXwP/5N0eT8XfXwP/5N0WA7miuG8n4u+vgf/wAm6PJ+Lvr4H/8AJuiwHc0Vw3k/F318D/8Ak3R5Pxd9fA//AJN0WA7miuG8n4u+vgf/AMm6PJ+Lvr4H/wDJuiwHc0Vw3k/F318D/wDk3R5Pxd9fA/8A5N0WA7miuG8n4u+vgf8A8m6PJ+Lvr4H/APJuiwHc0Vw3k/F318D/APk3R5Pxd9fA/wD5N0WA7miuG8n4u+vgf/ybo8n4u+vgf/ybosB3NFcN5Pxd9fA//k3R5Pxd9fA//k3RYDuaK4byfi76+B//ACbo8n4u+vgf/wAm6LAdzRXDeT8XfXwP/wCTdHk/F318D/8Ak3RYDuaK4byfi76+B/8Aybo8n4u+vgf/AMm6LAdzRXDeT8XfXwP/AOTdHk/F318D/wDk3RYDuaK4byfi76+B/wDybo8n4u+vgf8A8m6LAdzRXDeT8XfXwP8A+TdHk/F318D/APk3RYDuaK4byfi76+B//Jujyfi76+B//JuiwHc0Vw3k/F318D/+TdHk/F318D/+TdFgO5orhvJ+Lvr4H/8AJujyfi76+B//ACbosB3NFcN5Pxd9fA//AJN0eT8XfXwP/wCTdFgO5orhvJ+Lvr4H/wDJujyfi76+B/8AybosB3NFcN5Pxd9fA/8A5N0eT8XfXwP/AOTdFgO+h/iqWud8LJ4vT7X/AMJV/YfOz7N/ZXm/7W7f5n/AcY966KmIKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/An/ACTzw1/2CrX/ANFLXQVz/gT/AJJ54a/7BVr/AOilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigDn/AAJ/yTzw1/2CrX/0UtdBXP8AgT/knnhr/sFWv/opa6CgAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooA5/wJ/yTzw1/wBgq1/9FLXQVz/gT/knnhr/ALBVr/6KWugoAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAOf8Cf8k88Nf9gq1/8ARS10Fc/4E/5J54a/7BVr/wCilroKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigD/2Q==)

Report on Directors’ remuneration continued

The interests of the Directors in the ordinary shares of the Company as at 28 September 2024 and 27 September 2025 are as set out below (audited by KPMG):

Wholly-owned shares

without performance

conditions

a

Unvested

shares with

performance

conditions

Unvested shares without

performance conditions

b

Unvested options

without performance

conditions

c

Unvested options

with performance

conditions/underpins

d

Vested but

unexercised

options

Total

shares/options

2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024 2025 2024

Executive

Directors

Phil Urban

671,181 499,599 – – 181,948 155,572 6,746 7,031 1,374,705 1,106,607 – – 2,234,580 1,768,809

Tim Jones 531,283 387,597 – – 152,150 130,180 – – 1,149,793 925,694 – – 1,833,226 1,443,471

Non-Executive

Directors

Bob Ivell

17,222 17,222 – – – – – – – – – – 17,222 17,222

Eddie Irwin 43,833 43,833 – – – – – – – – – – 43,833 43,833

Dave Coplin 7,360 6,000 – – – – – – – – – – 7,360 6,000

Josh Levy – – – – – – – – – – – – – –

Keith Browne – – – – – – – – – – – – – –

Jane Moriarty  – – – – – – – – – – – – – –

Amanda Brown – – – – – – – – – – – – –

Total 1,270,879 954,251 – – 334,098 285,752 6,746 7,031 2,524,498 2,032,301 – –  4,136,221 3,279,335

a.  Includes Free Shares and Partnership Shares granted under the SIP.

b. Deferred bonus awards granted under the STDIP.

c.  Options granted under the Sharesave as detailed in the table on page 112.

d. Options granted under the RSP or PSP as detailed in the table on page 112.

Directors’ shareholdings (shares without performance conditions) include shares held by persons closely associated with them.

The above shareholdings are beneficial interests and are inclusive of Directors’ holdings under the Share Incentive Plan (both Free Share and Partnership

Share elements).

Phil Urban and Tim Jones acquired 112 and 111 shares respectively under the Partnership Share element of the Share Incentive Plan between the end of the

financial period and 27 November 2025. There have been no changes in the holdings of any other Directors since the end of the financial period.

None of the Directors has a beneficial interest in the shares of any subsidiary or in debenture stocks of the Company or any subsidiary.

The market price per share on 27 September 2025 was 249p and the range during the year to 27 September 2025 was 208.5p to 295.5p per share.

The Executive Directors as a group beneficially own 0.2% of the Company’s shares.

Service contracts and Letters of Appointment

Executive Directors

Details of the service contracts of Executive Directors are set out below.

Director Contract start date Unexpired term

Notice period

from Company

Minimum notice

period from Director

Compensation on

change of control

Phil Urban

a

27/09/15 Indefinite 12 months 6 months  No

Tim Jones 18/10/10 Indefinite 12 months 6 months No

a.  Phil Urban became Chief Executive and joined the Board on 27 September 2015. His continuous service date started on 5 January 2015, the date on which he joined the

Company as Chief Operating Officer.

Annual Report and Accounts 2025  Mitchells & Butlers plc116

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Non-Executive Directors

Non-Executive Directors, including the Company Chair, do not have service

contracts but serve under letters of appointment which provide that they are

initially appointed until the next AGM when they are required to stand for

election. In line with the Company’s Articles of Association, all Directors,

including Non-Executive Directors, will stand for re-election at the 2026

AGM. This is also in line with the provisions of the 2018 UK Corporate

Governance Code. Non-Executive Directors’ appointments are terminable

without notice and with no entitlement to compensation. Payment of fees

will cease immediately on termination.

Copies of the individual letters of appointment for Non-Executive Directors

and the service contracts for Executive Directors are available at the registered

office of the Company during normal business hours and on our website.

Copies will also be available to shareholders to view at the 2026 AGM.

Mitchells & Butlers Remuneration Committee

Committee terms of reference

The Committee’s terms of reference were reviewed and updated in 2019

to take account of the 2018 UK Corporate Governance Code.

The Committee’s main responsibilities include:

•  determining and making recommendations to the Board on the

Company’s Executive remuneration policy and its cost;

•  taking account of all factors necessary when determining the

remuneration policy, the objective of which is to ensure that the policy

promotes the long-term success of the Company;

•  determining the individual remuneration packages of the Executive Directors

and other senior Executives (including the Group General Counsel and

Company Secretary and all direct reports to the Chief Executive) and,

in discussion with the Executive Directors, the Company Chair;

•  having regard to the pay and employment conditions across the

Company when setting the remuneration of individuals under the remit

of the Committee; and

•  aligning Executive Directors’ interests with those of shareholders by

providing the potential to earn significant rewards where significant

shareholder value has been delivered.

Committee membership and operation

Committee members and their respective appointment dates are detailed

in the table below.

Name

Date of appointment to

the Committee

Amanda Brown

a

4 July 2022

Bob Ivell 11 July 2013

Dave Coplin

a

29 February 2016

Josh Levy 20 July 2017

Jane Moriarty

a

27 February 2019

a. Independent Non-Executive Directors.

Committee activity during the year

During the year the Committee met four times.

Key remuneration items considered over the year were as follows:

October 2024 Annual Bonus Targets

Salary Reviews

Provisional PSP Target

November 2024 Remuneration Policy

2024 Bonus – Confirmation of outcome

2022 RSP Vesting outcome

Final approval of PSP Targets

April 2025 Employee Update

All Employee Share Schemes approval

September 2025 2026 Annual Bonus Plan structure

Executive Pay Benchmarking

Employee engagement

Advice to the Committee

During the year the Committee undertook a competitive tender process for

the provision of remuneration advice, and appointed Deloitte LLP with effect

from June 2025. Prior to this the Committee received advice from PwC LLP

(‘PwC’). Both Deloitte and PwC are signatories to the Remuneration

Consultants Group Code of Conduct and any advice received is governed

by that Code. Total fees

b

payable in respect of remuneration advice to the

Committee in the reporting year were £10,500 and £41,500 to Deloitte and

PwC respectively and were charged on a time and materials basis.

Advice was also received from the Company’s legal advisers, Freshfields LLP,

on the operation of the Company’s employee share schemes and on corporate

governance matters. Clifford Chance LLP also provided advice in relation to

pension schemes.

The Committee is satisfied that the advice received from its advisers was

objective and independent and that the Deloitte engagement partner and

the team that provide remuneration advice to the Committee do not have

any connections that may impair their independence.

Members of management including Susan Martindale, the Group HR Director,

and Craig Provett, the Director of Compensation and Benefits, are invited to

attend meetings on remuneration matters where appropriate. They are not

present when matters affecting their own remuneration arrangements are

discussed. The Company Chair does not attend Board or Committee

meetings when his remuneration is under review.

Phil Urban and Tim Jones were present at meetings where the Company’s

long-term and short-term incentive arrangements and share schemes were

discussed. However, each declared an interest in the matters under review

and did not vote on their own arrangements.

b. Fees are shown net of VAT. 20% VAT was paid on the advisers’ fees shown above.

Mitchells & Butlers plc  Annual Report and Accounts 2025

117

Financial Statements Other Information

![](data:image/jpeg;base64,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)

Report on Directors’ remuneration continued

Previous AGM voting outcomes

At the last AGM (held on 23 January 2025), a resolution on the annual report on remuneration was subject to an advisory vote.

The table below sets out details of this advisory vote at the 2025 AGM, and also the outcome of the vote on our remuneration policy at the 2024 AGM:

Votes cast Votes for

a

% Votes against % Votes withheld

b

Approval of annual report on remuneration 535,915,910 535,033,047 99.84 882,863 0.16 47,494

Approval of remuneration policy at 2024 AGM 535,062,052 509,875,972 95.29 25,186,080 4.71 61,730

a.  The ‘For’ vote includes those giving the Company Chair discretion.

b. A vote withheld is not a vote in law and is not counted in the calculation of the votes ‘For’ or ‘Against’ the resolution.

Votes ‘For’ and ‘Against’ are expressed as a percentage of votes cast.

The Board was pleased with the very high levels of support for both the new policy and the annual report on remuneration.

The Directors’ Remuneration Report has been approved by the Board of Mitchells & Butlers plc.

Amanda Brown

Chair of the Remuneration Committee

27 November 2025

Annual Report and Accounts 2025  Mitchells & Butlers plc118

Strategic Report

Introduction

Governance

![](data:image/jpeg;base64,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)

Details the financial performance of the

Group in FY 2025 in comparison to its

performance in prior years.

Financial Statements

In this section

120  Independent auditor’s report to the

members of Mitchells & Butlers plc

128  Group income statement

129  Group statement of comprehensive

income

130  Group balance sheet

131  Group statement of changes in equity

132  Group cash flow statement

Notes to the consolidated financial

statements

133  Section 1 – Basis of preparation

136  Section 2 – Results for the period

136  2.1 Segmental analysis

136  2.2 Separately disclosed items

137  2.3 Revenue and operating costs

139  2.4 Taxation

142  2.5 Earnings per share

143  Section 3 – Operating assets and liabilities

143  3.1 Property, plant and equipment

148  3.2 Leases

152  3.3 Impairment

153  3.4 Working capital

155  3.5 Provisions

156  3.6 Goodwill and other intangible

assets

158  Section 4 – Capital structure and

financing costs

158  4.1 Borrowings

160  4.2 Finance costs and income

160  4.3 Financial instruments

169  4.4 Net debt

171  4.5 Pensions

175  4.6 Share-based payments

177  4.7 Equity

179  Section 5 – Other notes

179  5.1 Acquisitions

180  5.2 Related party transactions

181  5.3 Subsidiaries and associates

183  Mitchells & Butlers plc Company

financial statements

185  Notes to the Mitchells & Butlers plc

Company financial statements

52 weeks ended 27 September 2025

119

Other InformationFinancial Statements

119  Mitchells & Butlers plc  Annual Report and Accounts 2025

![](data:image/jpeg;base64,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)

Independent auditor’s report to the members

of Mitchells & Butlers plc

1. Our opinion is unmodified

We have audited the financial statements of Mitchells & Butlers plc

(“the Company”) for the 52 week period ended 27 September 2025 which

comprise the Group Income Statement, the Group Statement of Comprehensive

Income, the Group and Company Balance Sheets, the Group and Company

Statements of Changes in Equity, the Group Cash Flow Statement, and the

related notes, including the accounting policies within notes 1 to 5.3 of the Group

financial statements and notes 1 to 10 of the Company financial statements.

In our opinion:

•  the financial statements give a true and fair view of the state of the

Group’s and of the parent Company’s affairs as at 27 September 2025

and of the Group’s profit for the 52 week period then ended;

•  the Group financial statements have been properly prepared in

accordance with UK-adopted international accounting standards;

•  the parent Company financial statements have been properly

prepared in accordance with UK accounting standards, including FRS

101 Reduced Disclosure Framework and

•  the financial statements have been prepared in accordance with the

requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on

Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are

described below. We believe that the audit evidence we have obtained is a

sufficient and appropriate basis for our opinion. Our audit opinion is consistent

with our report to the audit committee.

We were first appointed as auditor by the shareholders on 25 January 2022.

The period of total uninterrupted engagement is for the 4 financial periods

ended 27 September 2025. We have fulfilled our ethical responsibilities

under, and we remain independent of the Group in accordance with, UK

ethical requirements including the FRC Ethical Standard as applied to listed

public interest entities. No non-audit services prohibited by that standard

were provided.

Overview

Materiality:

Group financial

statements as a whole

£26.5 million (2024:£24.0 million)

0.49% (2024: 0.46%) of total assets

Key audit matters vs 2024

Recurring risks  Valuation of the freehold and

long leasehold restaurant and

pub estate

Recoverability of parent

Company investments

in subsidiaries

Annual Report and Accounts 2025  Mitchells & Butlers plc120

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

2. Key audit matters: our assessment of risks of material misstatement

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most

significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: the overall

audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. We summarise below the key audit matters

(unchanged from 2024), in decreasing order of audit significance, in arriving at our audit opinion above, together with our key audit procedures to address

those matters and, as required for public interest entities, our results from those procedures. These matters were addressed, and our results are based on

procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon,

and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.

The risk Our response

Valuation of the

freehold and long

leasehold restaurant

and pub estate

(£4,407 million; 2024:

£4,260 million)

Refer to page 96 (Audit

Committee Report), pages

143-144 (accounting policy)

and pages 145-147 (financial

disclosures).

Subjective estimate

The Group holds its freehold

and long leasehold property

estate at fair value, with a

revaluation taking place as at

the balance sheet date. We

determined that the valuation

of the Group’s property estate

is a major source of estimation

uncertainty.

The valuation involves the

determination of key

assumptions, being fair

maintainable trade (FMT) and

applicable trading multiples by

category and location.

These estimations are inherently

subjective and small changes in

the assumptions used to value

the Group’s estate could have

a potential range of reasonable

outcomes greater than our

materiality for the financial

statements as a whole and

possibly many times that

amount. The financial

statements (note 3.1) disclose

the sensitivity estimated by

the Group.

Key elements of estimation

uncertainty are due to the

following business risks:

•  Economic environment (cost

inflation) and consumer

changes (demographic

changes) have led to

increased uncertainty of

maintainable performance

based on historical trends.

•  Capital market sentiment

of the sector remains in

recovery and the sector

has been trading below its

historical levels, leading to

a deficit between market

capitalisation and asset

carrying value of the Group

as a whole.

We performed the tests below rather than seeking to rely on any of the Group’s controls

because the nature of the balance is such that we would expect to obtain audit evidence

primarily through the detailed procedures described.

Our procedures included:

Evaluating the valuation approach:

Meeting with the Group’s external valuers and relevant Group management to critically

assess the valuation assumptions and methodology used in valuing the properties and

the market evidence used by the valuers to support their assumptions;

Assessing valuer’s credentials:

Evaluating the independence, professional qualification, competence and experience

of the internal and external valuers engaged by the Group;

Benchmarking assumptions:

Using our own valuation specialists to benchmark the key assumptions, being FMT and

trading multiples, for a sample of properties against comparable market data;

Comparing assumptions against market capitalisation:

Comparing the Group’s market capitalisation to the sum of discounted cashflows to

assess the reasonableness of those cash flows which were consistent with those used

to help inform our assessment of FMT.

Agreeing inputs:

Agreeing observable inputs for a sample of properties to source documentation;

Sensitivity analysis:

Assessing the sensitivity of the overall valuation to changes in key assumptions, being the

FMT and trading multiples; and

Assessing transparency:

Assessing whether the Group’s disclosures about the sensitivity of the estate valuation

to changes in key assumptions reflects the inherent risks.

Our results

We found the valuation of the freehold and long leasehold restaurant and pub estate

to be acceptable (2024: acceptable).

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

121

![](data:image/jpeg;base64,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)

2. Key audit matters: our assessment of risks of material misstatement continued

The risk Our response

Recoverability of

parent Company

investments in

subsidiaries

(£1,966 million; 2024:

£1,966 million)

Refer to page 186

(accounting policy and

financial disclosures).

Low risk high value

The carrying amount of the

parent Company’s investments

in subsidiaries represents 72%

(2024: 71%) of the parent

Company’s total assets.

Their recoverability is not at

a high risk of material

misstatement or subject to

significant judgement. However,

due to their materiality in the

context of the parent Company

financial statements, this is

considered to be the area that

had the greatest effect on our

overall parent Company audit.

We performed the tests below rather than seeking to rely on any of the Company’s

controls because the nature of the balance is such that we would expect to obtain audit

evidence primarily through the detailed procedures described.

Our procedures included:

Test of detail:

Comparing the carrying amount of 100% of investments with the relevant subsidiaries’

draft balance sheet to identify whether their net assets, being an approximation of their

minimum recoverable amount, are in excess of their carrying amount and assess whether

those subsidiaries have historically been profit-making;

Assessing subsidiary audits:

Considering the results of our work on those subsidiaries’ profits and net assets.

Our results:

We found the parent Company’s conclusion that there is no impairment of its

investments in subsidiaries to be acceptable (2024: acceptable).

Independent auditor’s report to the members of Mitchells & Butlers plc continued

Annual Report and Accounts 2025  Mitchells & Butlers plc122

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

3. Our application of materiality and an overview of the scope

of our audit

Our application of materiality

Materiality for the Group financial statements as a whole was set at

£26.5 million (2024: £24.0 million), determined with reference to a benchmark

of Group total assets, of which it represents 0.49% (2024: 0.46%).

Materiality for the parent Company financial statements as a whole was set at

£23.1 million (2024: £18.7 million), determined with reference to a benchmark

of Company total assets, of which it represents 0.85% (2024: 0.68%).

In line with our audit methodology, our procedures on individual account

balances and disclosures were performed to a lower threshold, performance

materiality, so as to reduce to an acceptable level the risk that individually

immaterial misstatements in individual account balances add up to a material

amount across the financial statements as a whole.

Performance materiality was set at 75% (2024: 75%) of materiality for the

financial statements as a whole, which equates to £19.8 million (2024:

£18.0 million) for the Group and £17.3 million (2024: £14 million) for the

parent Company. We applied this percentage in our determination of

performance materiality because we did not identify any factors indicating

an elevated level of risk.

We agreed to report to the Audit Committee any corrected or uncorrected

identified misstatements exceeding £1.3 million (2024: £1.2 million), in

addition to other identified misstatements that warranted reporting on

qualitative grounds.

Overview of the scope of our audit

This year, we applied the revised group auditing standard in our audit of the

consolidated financial statements. The revised standard changes how an

auditor approaches the identification of components, and how the audit

procedures are planned and executed across components.

In particular, the definition of a component has changed, shifting the focus

from how the entity prepares financial information to how we, as the group

auditor, plan to perform audit procedures to address group risks of material

misstatement (“RMMs”). Similarly, the group auditor has an increased role in

designing the audit procedures as well as making decisions on where these

procedures are performed (centrally and/or at component level) and how

these procedures are executed and supervised. As a result, we assess

scoping and coverage in a different way and comparisons to prior period

coverage figures are not meaningful. In this report we provide an indication

of scope coverage on the new basis.

We performed risk assessment procedures to determine which of the

Group’s components are likely to include risks of material misstatement to

the Group financial statements and which procedures to perform at these

components to address those risks.

In total, we identified 3 components, having considered our evaluation of

the Group’s operational structure, the existence of common information

systems, the existence of common risk profile across entities, geographical

locations, and our ability to perform audit procedures centrally.

Of those, we identified 1 quantitatively significant component which

contained the largest percentages of either total revenue or total assets

of the Group, for which we performed audit procedures.

Accordingly, we performed audit procedures on 1 component. We also

performed the audit of the parent Company.

We set the component materiality of £26.0 million, having regard to the mix

of size and risk profile of the Group across the components.

Our audit procedures covered 95% of Group revenue. We performed audit

procedures in relation to components that accounted for 99% of Group profit

before tax and 98% of Group total assets.

Impact of controls on our group audit

The Mitchells & Butlers plc Group operates with a diverse range of IT

systems across its operating business. We used IT auditors to assist us in

obtaining an understanding of the Group’s IT environment and applications

relevant to our audit. Given the diverse nature of the IT systems, we determined

a substantive audit approach was most efficient in predominantly all areas

of our audit.

As we did not rely upon automated or manual controls, we performed

additional substantive testing to respond to the risks identified. This included

performing a direct testing approach over the completeness and reliability of

data used in our data-oriented approach to revenue and journals, and considering

both manual and automated journals in our work to respond to the risk of

management override of controls.

Group materiality

£26.5 million

(2024: £24.0 million)

£26.5m

Whole financialstatements

materiality (2024: £24.0m)

£19.8m

Whole financialstatements

performance materiality

(2024: £18.0m)

£26.0m

Materiality at 1 component

(2024: range of

£12.0m–£21.6m)

£1.3m

Misstatements reported to the

audit committee (2024: £1.2m)

Group total assets

£5,393 million

(2024: £5,245 million)

Group materiality

Group total assets

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

123

![](data:image/jpeg;base64,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)

4. The impact of climate change in our audit

In planning our audit, we have considered the potential impacts of climate

change on the Group’s business and its financial statements.

The Group has set out its target to achieve Net Zero emissions by 2040,

including Scope 1, 2 and 3 emissions, zero operational waste to landfill by

2030 and to reduce food waste by 50% by 2030 (from FY 2019 baselines).

Climate-related risks and opportunities could have a significant impact on

the Group’s business and operations in the long term. There is the possibility

that climate change risks, both physical and transitional, could affect the

long-term profitability of the business. These risks are discussed within the

annual report, however, the costs of transition and how demand may be

impacted by any price increases needed to recover these costs cannot yet

be reasonably estimated by the Group.

As part of our audit we have performed a risk assessment, including making

enquiries of management, reading board meeting minutes and applying our

knowledge of the Group and sector in which it operates to understand the

extent of the potential impact of climate change risk on the Group’s financial

statements. Taking into account the nature of the business and the time

horizon of risks identified, we have not assessed climate related risk to be

significant to our audit this financial year. There was no impact on our key

audit matters.

We have read the Group’s disclosure of climate related information in the

front half of the annual report and considered consistency with the financial

statements and our knowledge gained from our financial statement audit work.

5. Going concern

The directors have prepared the financial statements on the going concern

basis as they do not intend to liquidate the Group or the Company or to cease

their operations, and as they have concluded that the Group’s and the

Company’s financial position means that this is realistic. They have also

concluded that there are no material uncertainties that could have cast

significant doubt over their ability to continue as a going concern for at least

12 months from the date of approval of the financial statements (“the going

concern period”).

We used our knowledge of the Group, its industry, and the general economic

environment to identify the inherent risks to its business model and analysed

how those risks might affect the Group’s financial resources or ability to

continue operations over the going concern period. The risks that we

considered most likely to adversely affect the Group’s available financial

resources and metrics relevant to debt covenants over this period were:

•  Maintenance of sales growth in the face of pressure on consumer

spending power

•  Future outlook for cost inflation specifically in food costs, drink costs,

energy prices and wages, salaries & related costs.

We also considered less predictable but realistic second order impacts, such

as global political developments, supply chain disruptions and government

policy that could affect demand in the Group’s markets.

We considered whether these risks could plausibly affect the liquidity and

covenant compliance in the going concern period by assessing the directors’

sensitivities over the level of available financial resources and covenant

thresholds indicated by the Group’s financial forecasts taking account of

severe, but plausible adverse effects that could arise from these risks

individually and collectively.

We considered whether the going concern disclosure in note 1 to the

financial statements gives a full and accurate description of the directors’

assessment of going concern, including the identified risks, dependencies,

and related sensitivities. We assessed the completeness of the going

concern disclosure.

Our conclusions based on this work:

•  we consider that the directors’ use of the going concern basis of

accounting in the preparation of the financial statements is appropriate;

•  we have not identified, and concur with the directors’ assessment that

there is not, a material uncertainty related to events or conditions that,

individually or collectively, may cast significant doubt on the Group’s

or Company’s ability to continue as a going concern for the going

concern period;

•  we have nothing material to add or draw attention to in relation to the

directors’ statement in note 1 to the financial statements on the use of the

going concern basis of accounting with no material uncertainties that may

cast significant doubt over the Group and Company’s use of that basis for

the going concern period, and we found the going concern disclosure in

note 1 to be acceptable; and

•  the related statement under the UK Listing Rules set out on page 60 is

materially consistent with the financial statements and our audit knowledge.

However, as we cannot predict all future events or conditions and as

subsequent events may result in outcomes that are inconsistent with

judgements that were reasonable at the time they were made, the above

conclusions are not a guarantee that the Group or the Company will continue

in operation.

Independent auditor’s report to the members of Mitchells & Butlers plc continued

Annual Report and Accounts 2025  Mitchells & Butlers plc124

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

6. Fraud and breaches of laws and regulations – ability

to detect

Identifying and responding to risks of material misstatement due

to fraud

To identify risks of material misstatement due to fraud (‘fraud risks’) we

assessed events or conditions that could indicate an incentive or pressure to

commit fraud or provide an opportunity to commit fraud. Our risk assessment

procedures included:

•  Enquiring of directors, the audit committee, internal audit and inspection

of policy documentation as to the Group’s and parent Company’s

high-level policies and procedures to prevent and detect fraud, including

the internal audit function, and the Group’s and parent Company’s

channels for ‘whistleblowing’, as well as whether they have knowledge

of any actual, suspected or alleged fraud.

•  Reading Board, audit committee, risk and remuneration committee

meeting minutes.

•  Considering remuneration incentive schemes and performance targets

for directors and other management.

•  Using analytical procedures to identify any unusual or unexpected

relationships.

We communicated identified fraud risks throughout the audit team and

remained alert to any indications of fraud throughout the audit.

As required by auditing standards, and taking into account possible pressures

to meet profit targets, our overall knowledge of the control environment,

we performed procedures to address the risk of management override of

controls, in particular the risk that Group and component management may

be in a position to make inappropriate accounting entries and the risk of bias

in accounting estimates and judgements such as the valuation of the freehold

and long leasehold estate. On this audit we do not believe there is a fraud

risk related to revenue recognition because Group revenue is generated

predominantly through the operation of pubs & restaurants. This revenue

contains no significant judgements and is comprised of a large number of

small, simple transactions that are received in cash or credit card receivables

at the point of sale. Therefore, there is limited opportunity for management

to manipulate or to fraudulently post the volume of transactions that would

be required to have a material impact on revenue.

We did not identify any additional fraud risks.

We performed procedures including:

•  Identifying journal entries and other adjustments to test based on risk

criteria and comparing the identified entries to supporting documentation.

These included those posted by senior finance management/those

posted to unusual accounts related to revenue, cash and borrowings.

•  Assessing whether the judgements made in making accounting estimates

are indicative of a potential bias.

Identifying and responding to risks of material misstatement due

to non-compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected

to have a material effect on the financial statements from our general commercial

and sector experience, and through discussion with the directors and other

management (as required by auditing standards), and from inspection of the

Group’s regulatory and legal correspondence and discussed with the directors

and other management the policies and procedures regarding compliance

with laws and regulations.

As the Group is regulated, our assessment of risks involved gaining an

understanding of the control environment including the entity’s procedures

for complying with regulatory requirements.

We communicated identified laws and regulations throughout our team and

remained alert to any indications of non- compliance throughout the audit.

The potential effect of these laws and regulations on the financial statements

varies considerably.

Firstly, the Group is subject to laws and regulations that directly affect the

financial statements including financial reporting legislation (including

related companies legislation), distributable profits legislation, pension

legislation and taxation legislation and we assessed the extent of compliance

with these laws and regulations as part of our procedures on the related

financial statement items.

Secondly, the Group is subject to many other laws and regulations where the

consequences of non-compliance could have a material effect on amounts or

disclosures in the financial statements, for instance through the imposition of

fines or litigation or the loss of the Group’s license to operate. We identified

the following areas as those most likely to have such an effect: licensing

regulations, responsible drinking regulations, planning and building legislation,

health and safety, data protection laws, anti-bribery, employment law,

recognising the nature of the Group’s activities. Auditing standards limit the

required audit procedures to identify non-compliance with these laws and

regulations to enquiry of the directors and other management and inspection

of regulatory and legal correspondence, if any. Therefore if a breach of

operational regulations is not disclosed to us or evident from relevant

correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches of law

or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that

we may not have detected some material misstatements in the financial

statements, even though we have properly planned and performed our audit

in accordance with auditing standards. For example, the further removed

non-compliance with laws and regulations is from the events and transactions

reflected in the financial statements, the less likely the inherently limited

procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection

of fraud, as these may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal controls. Our audit procedures

are designed to detect material misstatement. We are not responsible for

preventing non-compliance or fraud and cannot be expected to detect

non-compliance with all laws and regulations.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

125

![](data:image/jpeg;base64,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)

7. We have nothing to report on the other information in the

Annual Report

The directors are responsible for the other information presented in the

Annual Report together with the financial statements. Our opinion on the

financial statements does not cover the other information and, accordingly,

we do not express an audit opinion or, except as explicitly stated below,

any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider

whether, based on our financial statements audit work, the information

therein is materially misstated or inconsistent with the financial statements

or our audit knowledge. Based solely on that work we have not identified

material misstatements in the other information.

Strategic report and directors’ report

Based solely on our work on the other information:

•  we have not identified material misstatements in the strategic report and

the directors’ report;

•  in our opinion the information given in those reports for the financial year

is consistent with the financial statements; and

•  in our opinion those reports have been prepared in accordance with the

Companies Act 2006.

Directors’ remuneration report

In our opinion the part of the Directors’ Remuneration Report to be audited

has been properly prepared in accordance with the Companies Act 2006.

Disclosures of emerging and principal risks and longer-term viability

We are required to perform procedures to identify whether there is a

material inconsistency between the directors’ disclosures in respect of

emerging and principal risks and the viability statement, and the financial

statements and our audit knowledge.

Based on those procedures, we have nothing material to add or draw

attention to in relation to:

•  the directors’ confirmation on page 92 that they have carried out a robust

assessment of the emerging and principal risks facing the Group, including

those that would threaten its business model, future performance,

solvency and liquidity;

•  the Risks and Uncertainties disclosures describing these risks and how

emerging risks are identified, and explaining how they are being

managed and mitigated; and

•  the directors’ explanation in the Corporate viability disclosure of how

they have assessed the prospects of the Group, over what period they

have done so and why they considered that period to be appropriate, and

their statement as to whether they have a reasonable expectation that the

Group will be able to continue in operation and meet its liabilities as they fall

due over the period of their assessment, including any related disclosures

drawing attention to any necessary qualifications or assumptions.

We are also required to review the Corporate viability disclosure, set out on

page 60 under the UK Listing Rules. Based on the above procedures, we

have concluded that the above disclosures are materially consistent with the

financial statements and our audit knowledge.

Our work is limited to assessing these matters in the context of only the

knowledge acquired during our financial statements audit. As we cannot

predict all future events or conditions and as subsequent events may result in

outcomes that are inconsistent with judgements that were reasonable at the

time they were made, the absence of anything to report on these statements

is not a guarantee as to the Group’s and Company’s longer-term viability.

Corporate governance disclosures

We are required to perform procedures to identify whether there is a

material inconsistency between the directors’ corporate governance

disclosures and the financial statements and our audit knowledge.

Based on those procedures, we have concluded that each of the following is

materially consistent with the financial statements and our audit knowledge:

•  the directors’ statement that they consider that the annual report and

financial statements taken as a whole is fair, balanced and understandable,

and provides the information necessary for shareholders to assess the

Group’s position and performance, business model and strategy;

•  the section of the annual report describing the work of the Audit

Committee, including the significant issues that the audit committee

considered in relation to the financial statements, and how these issues

were addressed; and

•  the section of the annual report that describes the review of the effectiveness

of the Group’s risk management and internal control systems.

We are required to review the part of the Corporate Governance Statement

relating to the Group’s compliance with the provisions of the UK Corporate

Governance Code specified by the UK Listing Rules for our review. We have

nothing to report in this respect.

8. We have nothing to report on the other matters on which we

are required to report by exception

Under the Companies Act 2006, we are required to report to you if,

in our opinion:

•  adequate accounting records have not been kept by the parent Company,

or returns adequate for our audit have not been received from branches

not visited by us; or

•  the parent Company financial statements and the part of the Directors’

Remuneration Report to be audited are not in agreement with the

accounting records and returns; or

•  certain disclosures of directors’ remuneration specified by law are not

made; or

•  we have not received all the information and explanations we require for

our audit.

We have nothing to report in these respects.

Independent auditor’s report to the members of Mitchells & Butlers plc continued

Annual Report and Accounts 2025  Mitchells & Butlers plc126

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

9. Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on page 80, the directors

are responsible for: the preparation of the financial statements including

being satisfied that they give a true and fair view; such internal control as they

determine is necessary to enable the preparation of financial statements that

are free from material misstatement, whether due to fraud or error; assessing

the Group and parent Company’s ability to continue as a going concern,

disclosing, as applicable, matters related to going concern; and using the

going concern basis of accounting unless they either intend to liquidate the

Group or the parent Company or to cease operations, or have no realistic

alternative but to do so.

Auditor’s responsibilities

Our objectives are to obtain reasonable assurance about whether the

financial statements as a whole are free from material misstatement,

whether due to fraud or error, and to issue our opinion in an auditor’s report.

Reasonable assurance is a high level of assurance, but does not guarantee

that an audit conducted in accordance with ISAs (UK) will always detect a

material misstatement when it exists. Misstatements can arise from fraud or

error and are considered material if, individually or in aggregate, they could

reasonably be expected to influence the economic decisions of users taken

on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website

at www.frc.org.uk/auditorsresponsibilities.

The Company is required to include these financial statements in an annual

financial report prepared under Disclosure Guidance and Transparency Rule

4.1.17R and 4.1.18R. This auditor’s report provides no assurance over

whether the annual financial report has been prepared in accordance with

those requirements.

10. The purpose of our audit work and to whom we owe

our responsibilities

This report is made solely to the Company’s members, as a body, in

accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit

work has been undertaken so that we might state to the Company’s members

those matters we are required to state to them in an auditor’s report and for

no other purpose. To the fullest extent permitted by law, we do not accept or

assume responsibility to anyone other than the Company and the Company’s

members, as a body, for our audit work, for this report, or for the opinions

we have formed.

Simon Haydn-Jones

(Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

One Snowhill

Snowhill Queensway

Birmingham

B4 6GH

27 November 2025

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

127

![](data:image/jpeg;base64,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)

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | 2025 |  |  | 2024 |  |
|  |  |  | 52 weeks |  |  | 52 weeks |  |
|  |  | Before |  |  | Before |  |  |
|  |  | separately | Separately |  | separately | Separately |  |
|  |  | disclosed | disclosed |  | disclosed | disclosed |  |
|  |  | items | items  a | Total | items | items  a | Total |
|  | Notes | £m | £m | £m | £m | £m | £m |
| Revenue | 2.1, 2.3 | 2,711 | – | 2,711 | 2,610 | – | 2,610 |
| Operating costs before depreciation,  amortisation and movements in the valuation |  |  |  |  |  |  |  |
| of the property portfolio | 2.2, 2.3 | (2,246) | (6) | (2,252) | (2,168) | – | (2,168) |
| Net profit arising on property disposals | 2.2, 2.3 | – | 1 | 1 | – | 2 | 2 |
| EBITDA  b  before movements in the  valuation of the property portfolio |  | 465 | (5) | 460 | 442 | 2 | 444 |
| Depreciation, amortisation and movements in  the valuation of the property portfolio | 2.2, 2.3 | (135) | (3) | (138) | (130) | (14) | (144) |
| Operating profit/(loss) |  | 330 | (8) | 322 | 312 | (12) | 300 |
| Finance costs | 4.2 | (100) | – | (100) | (109) | – | (109) |
| Finance income | 4.2 | 9 | – | 9 | 10 | – | 10 |
| Net pensions finance income/(charge) | 4.2, 4.5 | 7 | – | 7 | (2) | – | (2) |
| Profit/(loss) before tax |  | 246 | (8) | 238 | 211 | (12) | 199 |
| Tax (charge)/credit | 2.2, 2.4 | (62) | 1 | (61) | (54) | 4 | (50) |
| Profit/(loss) for the period |  | 184 | (7) | 177 | 157 | (8) | 149 |
| Earnings per ordinary share |  |  |  |  |  |  |  |
| – Basic | 2.5 | 30.9p |  | 29.7p | 26.4p |  | 25.0p |
| – Diluted | 2.5 | 30.6p |  | 29.5p | 26.2p |  | 24.8p |

a.  Separately disclosed items are explained and analysed in note 2.2.

b. Earnings before interest, tax, depreciation, amortisation and movements in the valuation of the property portfolio. The Directors use a number of alternative performance

measures (APMs) that are considered critical to aid the understanding of the Group’s performance. Key measures are explained on pages 189 to 191 of this Report.

The notes on pages 133 to 182 form an integral part of these consolidated financial statements.

All results relate to continuing operations.

Group income statement

For the 52 weeks ended 27 September 2025

Annual Report and Accounts 2025  Mitchells & Butlers plc128

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Group statement of comprehensive income

For the 52 weeks ended 27 September 2025

|  |  |  |  |
| --- | --- | --- | --- |
|  |  | 2025 | 2024 |
|  |  | 52 weeks | 52 weeks |
|  | Notes | £m | £m |
| Profit for the period |  | 177 | 149 |
| Items that will not be reclassified subsequently to profit or loss: |  |  |  |
| Unrealised gain on revaluation of the property portfolio | 3.1 | 88 | 254 |
| Remeasurement of pension liability | 4.5 | (18) | 166 |
| Tax relating to items not reclassified | 2.4 | (13) | (116) |
|  |  | 57 | 304 |
| Items that may be reclassified subsequently to profit or loss: |  |  |  |
| Cash flow hedges: |  |  |  |
| – Gain/(losses) arising during the period | 4.3 | 10 | (34) |
| – Reclassification adjustments for items included in profit or loss | 4.3 | 5 | 11 |
| Tax relating to items that may be reclassified | 2.4 | (4) | 6 |
|  |  | 11 | (17) |
| Other comprehensive income after tax |  | 68 | 287 |
| Total comprehensive income for the period |  | 245 | 436 |

The notes on pages 133 to 182 form an integral part of these consolidated financial statements.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

129

![](data:image/jpeg;base64,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)

|  |  |  |  |
| --- | --- | --- | --- |
|  |  | 2025 | 2024 |
|  | Notes | £m | £m |
| Assets |  |  |  |
| Goodwill and other intangible assets | 3.6 | 28 | 20 |
| Property, plant and equipment | 3.1 | 4,591 | 4,419 |
| Right-of-use assets | 3.2 | 291 | 307 |
| Finance lease receivables | 3.2 | 10 | 11 |
| Pension surplus | 4.5 | 132 | 164 |
| Deferred tax asset | 2.4 | 2 | 3 |
| Derivative financial instruments | 4.3 | 15 | 19 |
| Total non-current assets |  | 5,069 | 4,943 |
| Inventories | 3.4 | 26 | 27 |
| Trade and other receivables | 3.4 | 79 | 98 |
| Current tax asset |  | 2 | – |
| Finance lease receivables | 3.2 | 1 | 1 |
| Cash and cash equivalents | 4.4 | 216 | 176 |
| Total current assets |  | 324 | 302 |
| Total assets |  | 5,393 | 5,245 |
| Liabilities |  |  |  |
| Pension liabilities | 4.5 | (1) | (1) |
| Trade and other payables | 3.4 | (473) | (482) |
| Current tax liabilities |  | – | (1) |
| Borrowings | 4.1 | (174) | (143) |
| Lease liabilities | 3.2 | (42) | (33) |
| Derivative financial instruments | 4.3 | (4) | (2) |
| Total current liabilities |  | (694) | (662) |
| Pension liabilities | 4.5 | (21) | (24) |
| Other payables | 3.4 | – | (8) |
| Borrowings | 4.1 | (900) | (1,041) |
| Lease liabilities | 3.2 | (392) | (414) |
| Derivative financial instruments | 4.3 | (11) | (27) |
| Deferred tax liabilities | 2.4 | (546) | (491) |
| Provisions | 3.5 | (13) | (12) |
| Total non-current liabilities |  | (1,883) | (2,017) |
| Total liabilities |  | (2,577) | (2,679) |
| Net assets |  | 2,816 | 2,566 |
| Equity |  |  |  |
| Called up share capital | 4.7 | 51 | 51 |
| Share premium account | 4.7 | 358 | 357 |
| Capital redemption reserve | 4.7 | 3 | 3 |
| Revaluation reserve | 4.7 | 1,209 | 1,143 |
| Own shares held | 4.7 | (10) | (9) |
| Hedging reserve | 4.7 | (10) | (21) |
| Translation reserve | 4.7 | 14 | 14 |
| Retained earnings |  | 1,201 | 1,028 |
| Total equity |  | 2,816 | 2,566 |

The notes on pages 133 to 182 form an integral part of these consolidated financial statements.

The consolidated financial statements were approved by the Board and authorised for issue on 27 November 2025.

They were signed on its behalf by:

Tim Jones

Chief Financial Officer

Group balance sheet

27 September 2025

Annual Report and Accounts 2025  Mitchells & Butlers plc130

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Group statement of changes in equity

For the 52 weeks ended 27 September 2025

|  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Called | Share | Capital |  | Own |  |  |  |  |
|  | up share | premium | redemption | Revaluation | shares | Hedging | Translation | Retained | Total |
|  | capital | account | reserve | reserve | held | reserve | reserve | earnings | equity |
|  | £m | £m | £m | £m | £m | £m | £m | £m | £m |
| At 30 September 2023 | 51 | 357 | 3 | 951 | (5) | (4) | 14 | 763 | 2,130 |
| Profit for the period | – | – | – | – | – | – | – | 149 | 149 |
| Other comprehensive income/(expense) | – | – | – | 192 | – | (17) | – | 112 | 287 |
| Total comprehensive income/(expense) | – | – | – | 192 | – | (17) | – | 261 | 436 |
| Purchase of shares | – | – | – | – | (7) | – | – | – | (7) |
| Release of shares | – | – | – | – | 3 | – | – | (3) | – |
| Credit in respect of share-based payments | – | – | – | – | – | – | – | 6 | 6 |
| Tax on share-based payment | – | – | – | – | – | – | – | 1 | 1 |
| At 28 September 2024 | 51 | 357 | 3 | 1,143 | (9) | (21) | 14 | 1,028 | 2,566 |
| Profit for the period | – | – | – | – | – | – | – | 177 | 177 |
| Other comprehensive income/(expense) | – | – | – | 66 | – | 11 | – | (9) | 68 |
| Total comprehensive income | – | – | – | 66 | – | 11 | – | 168 | 245 |
| Share capital issued | – | 1 | – | – | – | – | – | – | 1 |
| Purchase of shares | – | – | – | – | (5) | – | – | – | (5) |
| Release of shares | – | – | – | – | 4 | – | – | (4) | – |
| Credit in respect of share-based payments | – | – | – | – | – | – | – | 9 | 9 |
| At 27 September 2025 | 51 | 358 | 3 | 1,209 | (10) | (10) | 14 | 1,201 | 2,816 |

The notes on pages 133 to 182 form an integral part of these consolidated financial statements.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

131

![](data:image/jpeg;base64,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)

|  |  |  |  |
| --- | --- | --- | --- |
|  |  | 2025 | 2024 |
|  |  | 52 weeks | 52 weeks |
|  | Notes | £m | £m |
| Cash flow from operations |  |  |  |
| Operating profit |  | 322 | 300 |
| Add back/(deduct): |  |  |  |
| Movement in the valuation of the property portfolio | 2.2 | 3 | 14 |
| Net profit arising on property disposals | 2.2 | (1) | (2) |
| Depreciation of property, plant and equipment | 2.3 | 96 | 92 |
| Amortisation of intangibles | 2.3 | 3 | 4 |
| Depreciation of right-of-use assets | 2.3 | 36 | 34 |
| Cost charged in respect of share-based payments | 4.6 | 9 | 7 |
| Administrative pension costs | 4.5 | 4 | 5 |
| Amendment of past service cost in relation to the defined benefit obligation | 2.2 | 3 | – |
| Utilisation of pension surplus for DC contributions |  | 9 | – |
| Operating cash flow before movements in working capital and additional pension contributions |  | 484 | 454 |
| Decrease/(increase) in inventories |  | 1 | (1) |
| Decrease in trade and other receivables |  | 16 | 44 |
| (Decrease)/increase in trade and other payables |  | (17) | 8 |
| Decrease in provisions |  | (3) | (1) |
| Pension contributions | 4.5 | (1) | (1) |
| Cash flow from operations |  | 480 | 503 |
| Interest payments  a |  | (82) | (96) |
| Interest (payments)/receipts on interest rate swaps  a |  | (1) | 3 |
| Interest receipts on cross currency swap  a |  | 4 | 7 |
| Interest payments on cross currency swap  a |  | (3) | (5) |
| Other interest paid – lease liabilities | 4.4 | (14) | (17) |
| Borrowing facility fees paid |  | (1) | – |
| Interest received |  | 9 | 9 |
| Tax paid |  | (24) | (18) |
| Net cash from operating activities |  | 368 | 386 |
| Investing activities |  |  |  |
| Acquisition of Pesto Restaurants Limited | 5.1 | – | (2) |
| Purchases of property, plant and equipment |  | (169) | (152) |
| Purchases of intangible assets |  | (12) | (2) |
| Proceeds from sale of property, plant and equipment |  | 1 | 1 |
| Finance lease principal repayments received |  | 1 | 1 |
| Net cash used in investing activities |  | (179) | (154) |
| Financing activities |  |  |  |
| Issue of ordinary share capital |  | 1 | – |
| Purchase of own shares | 4.7 | (5) | (7) |
| Repayment of principal in respect of securitised debt  b | 4.4 | (134) | (128) |
| Principal receipts on currency swap  b | 4.4 | 21 | 21 |
| Principal payments on currency swap  b | 4.4 | (17) | (16) |
| Cash payments for the principal portion of lease liabilities | 4.4 | (39) | (41) |
| Repayment of other borrowings |  | – | (1) |
| Short term financing of employee advances |  | – | 2 |
| Net cash used in financing activities |  | (173) | (170) |
| Net increase in cash and cash equivalents |  | 16 | 62 |
| Cash and cash equivalents at the beginning of the period | 4.4 | 164 | 103 |
| Foreign exchange movements |  | 1 | (1) |
| Cash and cash equivalents at the end of the period | 4.4 | 181 | 164 |

a.  Interest paid is split to show gross payments on the interest rate and cross currency swaps.

b. Principal repayments on securitised debt are split to show repayments relating to the cross currency swap.

The notes on pages 133 to 182 form an integral part of these consolidated financial statements.

Group cash flow statement

For the 52 weeks ended 27 September 2025

Annual Report and Accounts 2025  Mitchells & Butlers plc132

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAaUBKcDASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD3WiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMDC/tTXv+hc/8nk/wo/tTXv+hc/8nk/wrcorn9jP/n4//Jf/AJE6PbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SKmn3F3cQM97ZfY5A2BH5okyMDnI/Hj2q3RRW0U0rN3MJNN3SsFYk914oW4lW30fR5IA5EbyarKjMueCVFuQDjtk49TW3RTEYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1b9FAGB9r8Xf9APRP/BxL/wDI1H2vxd/0A9E/8HEv/wAjVv0UAYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1b9FAGB9r8Xf9APRP/BxL/wDI1H2vxd/0A9E/8HEv/wAjVv0UAYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1b9FAGB9r8Xf9APRP/BxL/wDI1H2vxd/0A9E/8HEv/wAjVv0UAYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1b9FAGB9r8Xf9APRP/BxL/wDI1H2vxd/0A9E/8HEv/wAjVv0UAYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1b9FAFTTpNRlt2bU7W1tp95CpbXLTqVwOSzRoQc54x2HPPFuiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKjknhheFJZUR5n2RKzAF22lsD1O1WOPQE9qAJKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//SO5rfrA8Qf8hvwr/wBhR/8A0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/wBI7mt+sDxB/wAhvwr/ANhR/wD0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/AGFH/wDSO5rfrA8Qf8hvwr/2FH/9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8AIb8K/wDYUf8A9I7mt+sDxB/yG/Cv/YUf/wBI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/9I7mt+sDxB/yG/Cv/AGFH/wDSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//AEjua36wPEH/ACG/Cv8A2FH/APSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/8AYUf/ANI7mt+sDxB/yG/Cv/YUf/0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/wAhvwr/ANhR/wD0jua36wPEH/Ib8K/9hR//AEjuaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/0jua36wPEH/Ib8K/8AYUf/ANI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/8ASO5rfrA8Qf8AIb8K/wDYUf8A9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/wBhR/8A0jua36wPEH/Ib8K/9hR//SO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/ACG/Cv8A2FH/APSO5rfrA8Qf8hvwr/2FH/8ASO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//SO5rfrA8Qf8hvwr/wBhR/8A0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/wBI7mt+sDxB/wAhvwr/ANhR/wD0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/AGFH/wDSO5rfrA8Qf8hvwr/2FH/9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8AIb8K/wDYUf8A9I7mt+sDxB/yG/Cv/YUf/wBI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/9I7mt+sDxB/yG/Cv/AGFH/wDSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//AEjua36wPEH/ACG/Cv8A2FH/APSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/8AYUf/ANI7mt+sDxB/yG/Cv/YUf/0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/wAhvwr/ANhR/wD0jua36wPEH/Ib8K/9hR//AEjuaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/0jua36wPEH/Ib8K/8AYUf/ANI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/8ASO5rfrA8Qf8AIb8K/wDYUf8A9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/wBhR/8A0jua36wPEH/Ib8K/9hR//SO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/ACG/Cv8A2FH/APSO5rfrA8Qf8hvwr/2FH/8ASO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//SO5rfrA8Qf8hvwr/wBhR/8A0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/wBI7mt+sDxB/wAhvwr/ANhR/wD0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/AGFH/wDSO5rfrA8Qf8hvwr/2FH/9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8AIb8K/wDYUf8A9I7mt+sDxB/yG/Cv/YUf/wBI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/9I7mt+sDxB/yG/Cv/AGFH/wDSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//AEjua36wPEH/ACG/Cv8A2FH/APSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/8AYUf/ANI7mt+sDxB/yG/Cv/YUf/0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/wAhvwr/ANhR/wD0jua36wPEH/Ib8K/9hR//AEjuaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/0jua36wPEH/Ib8K/8AYUf/ANI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/8ASO5rfrA8Qf8AIb8K/wDYUf8A9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/wBhR/8A0jua36wPEH/Ib8K/9hR//SO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/ACG/Cv8A2FH/APSO5rfrA8Qf8hvwr/2FH/8ASO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//SO5rfrA8Qf8hvwr/wBhR/8A0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/wBI7mt+sDxB/wAhvwr/ANhR/wD0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/AGFH/wDSO5rfrA8Qf8hvwr/2FH/9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8AIb8K/wDYUf8A9I7mt+sDxB/yG/Cv/YUf/wBI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/9I7mt+sDxB/yG/Cv/AGFH/wDSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//AEjua36wPEH/ACG/Cv8A2FH/APSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/8AYUf/ANI7mt+sDxB/yG/Cv/YUf/0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/wAhvwr/ANhR/wD0jua36wPEH/Ib8K/9hR//AEjuaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/0jua36wPEH/Ib8K/8AYUf/ANI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/8ASO5rfrA8Qf8AIb8K/wDYUf8A9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/wBhR/8A0jua36wPEH/Ib8K/9hR//SO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/ACG/Cv8A2FH/APSO5rfrA8Qf8hvwr/2FH/8ASO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//SO5rfrA8Qf8hvwr/wBhR/8A0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/wBI7mt+sDxB/wAhvwr/ANhR/wD0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/AGFH/wDSO5rfrA8Qf8hvwr/2FH/9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8AIb8K/wDYUf8A9I7mt+sDxB/yG/Cv/YUf/wBI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/9I7mt+sDxB/yG/Cv/AGFH/wDSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//AEjua36wPEH/ACG/Cv8A2FH/APSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/8AYUf/ANI7mt+sDxB/yG/Cv/YUf/0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/wAhvwr/ANhR/wD0jua36wPEH/Ib8K/9hR//AEjuaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/0jua36wPEH/Ib8K/8AYUf/ANI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/8ASO5rfrA8Qf8AIb8K/wDYUf8A9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/wBhR/8A0jua36wPEH/Ib8K/9hR//SO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/ACG/Cv8A2FH/APSO5rfrA8Qf8hvwr/2FH/8ASO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//SO5rfrA8Qf8hvwr/wBhR/8A0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/wBI7mt+sDxB/wAhvwr/ANhR/wD0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/AGFH/wDSO5rfrA8Qf8hvwr/2FH/9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8AIb8K/wDYUf8A9I7mt+sDxB/yG/Cv/YUf/wBI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/9I7mt+sDxB/yG/Cv/AGFH/wDSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//AEjua36wPEH/ACG/Cv8A2FH/APSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/8AYUf/ANI7mt+sDxB/yG/Cv/YUf/0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/wAhvwr/ANhR/wD0jua36wPEH/Ib8K/9hR//AEjuaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/0jua36wPEH/Ib8K/8AYUf/ANI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/8ASO5rfrA8Qf8AIb8K/wDYUf8A9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/wBhR/8A0jua36wPEH/Ib8K/9hR//SO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/ACG/Cv8A2FH/APSO5rfrA8Qf8hvwr/2FH/8ASO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//SO5rfrA8Qf8hvwr/wBhR/8A0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/wBI7mt+sDxB/wAhvwr/ANhR/wD0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/AGFH/wDSO5rfrA8Qf8hvwr/2FH/9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8AIb8K/wDYUf8A9I7mt+sDxB/yG/Cv/YUf/wBI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/9I7mt+sDxB/yG/Cv/AGFH/wDSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//AEjua36wPEH/ACG/Cv8A2FH/APSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/8AYUf/ANI7mt+sDxB/yG/Cv/YUf/0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/wAhvwr/ANhR/wD0jua36wPEH/Ib8K/9hR//AEjuaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/0jua36wPEH/Ib8K/8AYUf/ANI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/8ASO5rfrA8Qf8AIb8K/wDYUf8A9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/wBhR/8A0jua36wPEH/Ib8K/9hR//SO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/ACG/Cv8A2FH/APSO5rfrA8Qf8hvwr/2FH/8ASO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//SO5rfrA8Qf8hvwr/wBhR/8A0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/wBI7mt+sDxB/wAhvwr/ANhR/wD0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/AGFH/wDSO5rfrA8Qf8hvwr/2FH/9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8AIb8K/wDYUf8A9I7mt+sDxB/yG/Cv/YUf/wBI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/9I7mt+sDxB/yG/Cv/AGFH/wDSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKqXmnQ3t1p9xKzh7G4NxEFIwWMTx4bjpiRumOQPpVuigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooopgf/2Q==)

Notes to the consolidated financial statements

Section 1 – Basis of preparation

General information

Mitchells & Butlers plc (the Company) is a public limited company limited by

shares and is registered in England and Wales. The Company’s shares are

listed on the London Stock Exchange. The address of the Company’s

registered office is shown on page 192.

The principal activities of the Company and its subsidiaries (the Group) and

the nature of the Group’s operations are set out in the Strategic Report on

pages 24 to 64.

The Group is required to prepare its consolidated financial statements in

accordance with UK-adopted International Financial Reporting Standards

(IFRSs) and in accordance with the Companies Act 2006.

The Group’s accounting reference date is 30 September. The Group draws

up its consolidated financial statements to the Saturday directly before or

following the accounting reference date, as permitted by section 390 (3) of

the Companies Act 2006. The period ended 27 September 2025 includes

52 trading weeks and the comparative period ended 28 September 2024

includes 52 trading weeks.

The consolidated financial statements have been prepared on the historical

cost basis as modified by the revaluation of freehold and long leasehold

properties, pension obligations and financial instruments.

The Group’s accounting policies have been applied consistently.

Going concern

The Group’s business activities, together with the factors likely to affect its

future development, performance and position, are set out in the Strategic

Report on pages 24 to 64. The financial position of the Group, its cash flows,

liquidity position and borrowing facilities are also described within the

Financial Review on pages 62 to 64.

Note 4.3 to the consolidated financial statements includes the Group’s

objectives, policies and processes for managing capital; its financial risk

management objectives; details of its financial instruments and hedging

activities; and, its exposures to credit and liquidity risks. As highlighted in

note 4.1 to the consolidated financial statements, the Group’s financing is

based on securitised debt and unsecured borrowing facilities.

The Directors have adopted the going concern basis in preparing these

financial statements after assessing the impact of identified principal risks

and their possible adverse impact on financial performance, specifically

revenue and cash flows throughout the going concern period, being

12 months from the date of signing of these financial statements.

The Group’s primary source of borrowings is through nine tranches of fully

amortising loan notes with a gross debt value of a little over £1bn as at the

end of the year. These are secured against the majority of the Group’s

property and future income streams. The principal repayment period varies

by class of note with maturity dates ranging from 2028 to 2036. Within this

financing structure there are two main covenants: the level of net worth

(being the net asset value of the securitisation group), and FCF to DSCR.

As at 27 September 2025 there was substantial headroom on the net worth

covenant. FCF to DSCR represents the multiple of Free Cash Flow (being

EBITDA less tax and required capital maintenance expenditure) generated

by sites within the structure to the cost of debt service (being the repayment

of principal, net interest charges and associated fees). This is tested quarterly

on both a trailing two quarter and four quarter basis.

The Group also has a committed unsecured credit facility of £150m,

with a negative pledge in favour of participating banks and an expiry date

in July 2028. At the balance sheet date there were no drawings under this

facility. This facility has two main financial covenants, based on the

performance of the unsecured estate: the ratio of EBITDAR to rent plus

interest (at a minimum of 1.25 times) and Net debt to EBITDA (to be no more

than 3.0 times), both tested on a half-yearly basis (for the prior four quarters).

In the year ahead the main uncertainties facing the Group are considered

to be the maintenance of sales growth in the face of pressure on consumer

spending power, and the rate of cost inflation. The outlook for these remains

uncertain, depending on a number of factors including consumer confidence,

global macroeconomic and political developments, supply chain disruptions

and Government policies.

The Directors have reviewed the financing arrangements against a base case

forward trading forecast. This forecast assumes continued mid single digit

growth in sales across the year. Cost inflation is assumed to increase to a

slightly higher level than the previous financial year driven primarily by

increased food input costs (notably red meat) and labour costs (which

include annualisation of increased levels of employers national insurance

contributions from April 2025). As a result an overall net increase of

approximately 6% across the cost base of the business of approximately

£2.2bn is expected. Under this base case the Group is able to stay within

securitisation and committed facility financial covenants and maintains

sufficient liquidity.

The Directors have also considered a severe but plausible downside scenario

covering adverse movements against the base forward forecast in both

sales and cost inflation, but no major disruption to supply chain or systems.

Some mitigation activity is taken including lower capital expenditure on site

remodel activity and a flex down of labour and site costs in line with reduced

sales. In this scenario sales are assumed to remain marginally in growth, but

at 2.5% below the base case forecast. Unmitigated cost inflation is also higher

in the areas of food, labour, duty and energy. In this downside scenario the

Group is again able to stay within securitisation and committed facility

financial covenants, whilst maintaining sufficient liquidity.

Furthermore, the Directors have considered a reverse stress test analysis,

to review the headroom below which trading could fall beyond the downside

scenario before the earlier of financial covenants becoming breached, or

available liquidity becoming insufficient. This analysis indicates that on

consistent cost assumptions, sales would be able to fall by approximately

4% beyond the downside case throughout the assessment period before

financial covenants were breached, when tested at Q4 FY 2026 being the

last full testing period within the 12 month going concern assessment period.

In this scenario the Group would still have sufficient available liquidity.

After due consideration of these factors, the Directors therefore believe

that it remains appropriate to prepare the financial statements on a going

concern basis.

A review of longer-term viability is provided on page 60 which assesses the

Group’s ability to continue and to meet its liabilities as they fall due over

a longer, three year, period.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

133

![](data:image/jpeg;base64,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)

Foreign currencies

Transactions in foreign currencies are recorded at the exchange rates ruling

on the dates of the transactions. Monetary assets and liabilities denominated

in foreign currencies are translated into the functional currency at the relevant

rates of exchange ruling at the balance sheet date. Foreign exchange

differences arising on translation are recognised in the Group income

statement. Non-monetary assets and liabilities are measured at cost using

the exchange rate on the date of the initial transaction.

The consolidated financial statements are presented in pounds sterling

(rounded to the nearest million), being the functional currency of the primary

economic environment in which the parent and most subsidiaries operate.

On consolidation, the assets and liabilities of the Group’s overseas operations

are translated into sterling at the relevant rates of exchange ruling at the

balance sheet date. The results of overseas operations are translated into

sterling at average rates of exchange for the period. Exchange differences

arising from the translation of the results and the retranslation of opening net

assets denominated in foreign currencies are taken directly to the Group’s

translation reserve. When an overseas operation is sold, such exchange

differences are recognised in the Group income statement as part of the

gain or loss on sale.

The results of overseas operations have been translated into sterling at the

weighted average euro rate of exchange for the period of £1 = €1.17 (2024

£1 = €1.15), where this is a reasonable approximation to the rate at the dates of

the transactions. Euro and US dollar denominated assets and liabilities have

been translated at the relevant rate of exchange at the balance sheet date of

£1 = €1.14 (2024 £1 = €1.20) and £1 = $1.34 (2024 £1 = $1.34) respectively.

New and amended IFRS Standards that are effective for the

current period

The International Accounting Standards Board (IASB) and International

Financial Reporting Interpretations Committee (IFRIC) have issued the

following standards and interpretations which have been adopted by the

Group in these consolidated financial statements for the first time with no

material impact.

|  |  |
| --- | --- |
| Accounting standard | Effective date |
| Amendments to IFRS 16 Leases | 1 January 2024 |
| (Lease Liability in a Sale and  Leaseback) |  |
| Amendments to IAS 1 Presentation | 1 January 2024 |
| of Financial Statements |  |
| (Classification of liabilities as Current |  |
| or Non-Current and Non-current |  |
| Liabilities with Covenants) |  |
| Amendments to IAS 7 Statement of  Cash Flows and IFRS 7 Financial | 1 January 2024 |
| Instruments (Disclosures – Supplier |  |
| Finance Arrangements) |  |

Section 1 – Basis of preparation continued

Notes to the consolidated financial

statements continued

Basis of consolidation

The consolidated financial statements incorporate the financial statements

of Mitchells & Butlers plc (‘the Company’) and entities controlled by the

Company (its subsidiaries).

Control is achieved when the Company:

•  has the power over the investee;

•  is exposed, or has rights, to variable return from its involvement with the

investee; and

•  has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and

circumstances indicate that there are changes to one or more of the three

elements of control listed above.

When the Company has less than a majority of voting rights of an investee,

it considers that it has power over the investee when the voting rights are

sufficient to give it the practical ability to direct the relevant activities of the

investee unilaterally. The Company considers all relevant facts and

circumstances in assessing whether or not the Company’s voting rights in

an investee are sufficient to give it power, including:

•  the size of the Company’s holding of voting rights relative to the size

and dispersion of holdings of the other vote holders;

•  potential voting rights held by the Company, other vote holders

or parties;

•  rights arising from other contractual arrangements; and

•  any additional facts and circumstances that indicate that the Company

has, or does not have, the current ability to direct the relevant activities

at the time that decisions need to be made, including voting patterns at

the previous shareholders’ meetings.

Consolidation of a subsidiary begins when the Company obtains control over

the subsidiary and ceases when the Company loses control of the subsidiary.

Specifically, the results of the subsidiaries acquired or disposed of during

the period are included in the Group income statement from the date the

Company gains control until the date when the Company ceases to control

the subsidiary.

The financial statements of the subsidiaries are prepared for the same

financial reporting period as the Company, with the exception of Pesto

Restaurants Limited which is prepared to 28 September 2025 (see note 5.3).

Intercompany transactions, balances and unrealised gains and losses on

transactions between Group companies are eliminated on consolidation.

Annual Report and Accounts 2025  Mitchells & Butlers plc134

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

New and revised IFRS Standards in issue but not yet effective

The IASB, IFRIC and the International Sustainability Standards Board (ISSB)

have issued the following standards and interpretations which could impact

the Group, with an effective date for financial periods beginning on or after

the dates disclosed below:

|  |  |  |
| --- | --- | --- |
| Accounting standard |  | Effective date |
| Amendments to IAS 21 The Effects |  | 1 January 2025 |
| of Changes in Foreign Exchange |  |  |
| Rates (Lack of Exchangeability) |  |  |
| Amendments to IFRS 9 Financial |  | 1 January 2026 |
| Instruments and IFRS 7 Financial |  |  |
| Instruments: Disclosures |  |  |
| (Amendments to the Classification |  |  |
| and Measurement of Financial |  |  |
| Instruments) |  |  |
| Annual Improvements to IFRS |  | 1 January 2026 |
| Accounting Standards – |  |  |
| Amendments to: |  |  |
| • | IFRS 1 First-time Adoption of |  |
|  | International Financial Reporting |  |
|  | Standards; |  |
| • | IFRS 7 Financial Instruments: |  |
|  | Disclosures and its |  |
|  | accompanying Guidance on |  |
|  | implementing IFRS 7; |  |
| • | IFRS 9 Financial Instruments; |  |
| • | IFRS 10 Consolidated Financial |  |
|  | Statements; and |  |
| • | IAS 7 Statement of Cash flows |  |
| IFRS 18 Presentation and Disclosure |  | 1 January 2027 |
| in Financial Statements |  |  |

The Directors do not expect that the adoption of the standards listed above

will have a material impact on the consolidated financial statements in future

periods. With respect to IFRS 18, the Group is still assessing the potential

impact of this standard on presentation and disclosures.

Critical accounting judgements and key sources of

estimation uncertainty

The preparation of the consolidated financial statements requires

management to make judgements, estimates and assumptions in the

application of accounting policies that affect reported amounts of assets,

liabilities, income and expense.

Estimates and judgements are periodically evaluated and are based on

historical experience and other factors including expectations of future

events that are believed to be reasonable under the circumstances. Actual

results may differ from these estimates.

Judgements and estimates for the period remain largely unchanged from the

prior period.

Significant accounting estimates:

The significant accounting estimate with a significant risk of a material change

to the carrying value of assets and liabilities within the next year in terms of

IAS 1 Presentation of Financial Statements, is:

•  Fair value of freehold and long leasehold properties – see note 3.1

Other areas of judgement are described in each section listed below:

•  Determination of items that are separately disclosed – see note 2.2

•  Impairment review of short leasehold properties and right-of-use assets

– see note 3.3

•  Recognition of pension surplus – see note 4.5

Other sources of estimation uncertainty are described in:

•  Impairment review of short leasehold properties and right-of-use assets

– see note 3.3

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

135

![](data:image/jpeg;base64,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)

Section 2 – Results for the period

2.1 Segmental analysis

Accounting policies

Operating segments

IFRS 8 Operating Segments requires operating segments to be based on the Group’s internal reporting to its Chief Operating Decision Maker (CODM).

The CODM is regarded as the Chief Executive together with other Board members. The Group trades in one business segment (that of operating pubs

and restaurants) and the Group’s brands meet the aggregation criteria set out in Paragraph 12 of IFRS 8. Economic indicators assessed in determining that

the aggregated operating segments share similar economic characteristics include: expected future financial performance; operating and competitive

risks; and return on invested capital. As such, the Group reports the business as one reportable business segment.

The CODM uses EBITDA and operating profit before interest and separately disclosed items as the key measures of the Group’s results on an

aggregated basis.

Geographical segments

Substantially all of the Group’s business is conducted in the United Kingdom. In presenting information by geographical segment, segment revenue

and non-current assets are based on the geographical location of customers and assets.

Geographical segments

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  | UK | Germany |  | Total |  |
|  | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 |
|  | 52 weeks | 52 weeks | 52 weeks | 52 weeks | 52 weeks | 52 weeks |
|  | £m | £m | £m | £m | £m | £m |
| Revenue – sales to third parties | 2,598 | 2,493 | 113 | 117 | 2,711 | 2,610 |
| Segment non-current assets  a | 4,868 | 4,706 | 56 | 51 | 4,924 | 4,757 |

a. Includes balances relating to intangibles, property, plant and equipment, right-of-use assets and finance lease receivables.

2.2 Separately disclosed items

Accounting policy

In addition to presenting information on an IFRS basis, the Group also presents adjusted profit and earnings per share information that excludes separately

disclosed items and the impact of any associated tax. Adjusted profit measures are presented excluding separately disclosed items as we believe this

provides management, investors and other stakeholders with useful additional information about the Group’s performance and supports a more effective

comparison of the Group’s trading performance from one period to the next. Adjusted profit and earnings per share information is used by management

to monitor business performance against both shorter-term budgets and forecasts but also against the Group’s longer-term strategic plans.

Judgement is used to determine those items which should be separately disclosed. This judgement includes assessment of whether an item is of sufficient

size or of a nature that is not consistent with normal trading activities.

Separately disclosed items are those which are separately identified by virtue of their size or incidence.

Accounting judgements

Judgement is used to determine those items which should be separately disclosed to allow an understanding of the adjusted trading performance of the

Group. This judgement includes assessment of whether an item is of sufficient size or of a nature that is not consistent with normal trading activities.

Separately disclosed items are identified as follows:

•  Profit/(loss) arising on property disposals – property disposals are disclosed separately as they are not considered to be part of adjusted trade

performance and there is volatility in the size of the profit/(loss) in each accounting period.

•  Movement in the valuation of the property portfolio – this is disclosed separately, due to the size and volatility of the movement in property valuation

each period, which can be partly driven by movements in the property market and discount rate where impairment reviews are completed. This

movement is also not considered to be part of the adjusted trade performance of the Group and would prevent comparability between periods of the

Group’s trading performance if not separately disclosed.

•  Movements in contingent consideration – adjustments relating to the estimate of contingent consideration on acquisition of Pesto Restaurants Limited

are disclosed separately due to the nature of the transaction as it is not considered to be part of the adjusted trade performance of the Group.

•  Amendment of the past service cost in relation to the defined benefit pension obligation relating to the 2018 High Court ruling on guaranteed minimum

pensions (GMPs) equalisations. Consistent with disclosure of the original estimation in the FY 2019 financial statements this has been disclosed

separately as it is not considered part of the adjusted trade performance of the Group and would prevent year on year comparability of the Group’s

trading if not separately disclosed.

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc136

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

The items identified in the current period are as follows:

|  |  |  |  |
| --- | --- | --- | --- |
|  |  | 2025 | 2024 |
|  |  | 52 weeks | 52 weeks |
|  | Notes | £m | £m |
| Separately disclosed items |  |  |  |
| Remeasurement of contingent consideration | a | (3) | – |
| Amendment of past service cost in relation to the defined benefit obligation | b | (3) | – |
| Total separately disclosed items recognised within operating costs |  | (6) | – |
| Net profit arising on property disposals |  | 1 | 2 |
| Movement in the valuation of the property portfolio: |  |  |  |
| – Impairment reversal arising from the revaluation of freehold and long leasehold properties | c | 11 | 4 |
| – Net impairment of short leasehold and unlicensed properties | d | (5) | – |
| – Net impairment of right-of-use assets | e | (8) | (17) |
| – Net impairment of computer software | f | – | (1) |
| – Net impairment of goodwill | g | (1) | – |
| Net movement in the valuation of the property portfolio |  | (3) | (14) |
| Total separately disclosed items before tax |  | (8) | (12) |
| Tax credit relating to above items |  | 1 | 4 |
| Total separately disclosed items after tax |  | (7) | (8) |

a.  Loss on remeasurement of the contingent consideration relating to the acquisition of Pesto Restaurants Limited. See note 5.1 for further details.

b. In FY 2018 the High Court ruled that pensions provided to members who had contracted-out of their scheme must be recalculated to ensure payments reflect the equalisation

of state pension ages in the 1990s. An initial estimate for this liability of £19m was charged in FY 2019, and disclosed separately. Following the buy-in of the Mitchells & Butlers

Main Pension Plan during the 53 weeks ending 30 September 2023 work is ongoing to fully quantify the liability, which is now anticipated to cost an additional £3m.

c.  The impairment arising from the Group’s revaluation of its freehold and long leasehold pub estate comprises an impairment credit as the result of a revaluation surplus that

reverses past impairments net of an impairment charge, where the carrying values of the properties exceed their recoverable amount. See note 3.1 for further details.

d. Impairment of short leasehold and unlicensed properties where their carrying values exceed their recoverable amounts, net of reversals of past impairments. See note 3.3 for

further details.

e. Impairment of right-of-use assets where their carrying values exceed their recoverable amounts, net of reversals of past impairments. See note 3.3 for further details.

f.  Impairment of computer software where the carrying value exceeds the recoverable amount. See note 3.3 for further details.

g. Impairment of goodwill where the carrying value exceeds the recoverable amount. See note 3.3 for further details.

2.3 Revenue and operating costs

Accounting policies

Revenue recognition

Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer and excludes amounts collected

on behalf of third parties. The Group recognises revenue when it transfers control of a product or service to a customer.

Revenue – food and drink

The majority of revenue comprises food and drinks sold in the Group’s outlets. Revenue is recognised when control of the goods has transferred, being

at the point the customer purchases the goods at the outlet or on ordering through a delivery partner. Payment of the transaction price is due immediately

at the point the customer makes a purchase at the outlet, or on agreed terms where purchases are made through third-party delivery partners. Revenue

excludes sales-based taxes, and is net of any coupons and discounts.

Revenue – services

Revenue for services mainly represents income from gaming machines, hotel accommodation and rent receivable from unlicensed and leased operations.

Revenue for gaming machines and hotel accommodation is recognised at the point the service is provided and excludes sales-based taxes and discounts.

Rental income is received from operating leases where the Group acts as lessor for a number of unlicensed and leased operations. Income from these

leases is recognised on a straight-line basis over the term of the lease.

Operating profit

Operating profit is stated after charging separately disclosed items but before investment income and finance costs.

Supplier incentives

Supplier incentives and rebates are recognised within operating costs as they are earned. The accrued value at the reporting date is included in

other receivables.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

137

![](data:image/jpeg;base64,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)

2.3 Revenue and operating costs continued

Revenue

Revenue is analysed as follows:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Food | 1,440 | 1,385 |
| Drink | 1,172 | 1,132 |
| Services | 99 | 93 |
|  | 2,711 | 2,610 |

Revenue from services includes rent receivable from unlicensed properties and leased operations of £8m (2024 £9m).

Food and drink revenue includes £21m (2024 £18m) in respect of gift card redemptions, which were sold in the prior period, and recorded within deferred

income at the prior period end.

Operating costs

Operating costs are analysed as follows:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Raw materials and food and drink consumables recognised as an expense  a | 681 | 670 |
| Changes in inventory of finished goods and work in progress | 1 | (2) |
| Employee costs | 1,023 | 946 |
| Hire of plant and machinery | 24 | 23 |
| Property operating lease costs  b | 9 | 11 |
| Utility costs | 103 | 107 |
| Business rates | 79 | 77 |
| Other pub costs | 266 | 271 |
| Other central costs | 60 | 65 |
| Operating costs before depreciation and amortisation and other separately disclosed items | 2,246 | 2,168 |
| Other separately disclosed items (note 2.2) | 6 | – |
|  | 2,252 | 2,168 |
| Net profit arising on property disposals | (1) | (2) |
| Depreciation of property, plant and equipment (note 3.1) | 96 | 92 |
| Depreciation of right-of-use assets (note 3.2) | 36 | 34 |
| Amortisation of intangible assets (note 3.6) | 3 | 4 |
| Net movement in the valuation of the property portfolio (note 2.2) | 3 | 14 |
| Depreciation, amortisation and movements in the valuation of the property portfolio | 138 | 144 |
| Total operating costs | 2,389 | 2,310 |

a.  Supplier incentives are included as a reduction to the raw materials and consumables expense. These are not disclosed separately as the value is immaterial.

b. Property operating lease costs include service charge, insurance and turnover rents.

Section 2 – Results for the period continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc138

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Employee costs

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Wages and salaries | 907 | 852 |
| Share-based payments (note 4.6) | 9 | 7 |
| Social security costs | 86 | 68 |
| Pensions (note 4.5) | 21 | 19 |
| Total employee costs | 1,023 | 946 |

The four-weekly average number of employees including part-time employees was 49,2 87 retail employees (2024 49,249) and 1,271 support employees

(2024 1,206).

Information regarding key management personnel is included in note 5.2. Detailed information regarding Directors’ emoluments, pensions, long-term

incentive scheme entitlements and their interests in share options is given in the Report on Directors’ remuneration in the information labelled as audited by

KPMG on pages 98 to 118.

Auditor remuneration

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Fees payable to the Group’s auditor for the: |  |  |
| – audit of the consolidated financial statements | 0.4 | 0.4 |
| – audit of the Company’s subsidiaries’ financial statements | 0.6 | 0.6 |
| Total audit fees  a | 1.0 | 1.0 |
| Total fees | 1.0 | 1.0 |

a.  Auditor’s remuneration of £0.9m (2024 £0.9m) was paid in the UK and £0.1m (2024 £0.1m) was paid in Germany.

Fees payable to the Group auditor for audit-related assurance services in respect of covenant reporting and turnover certificates totalled £12k (2024 £10k).

2.4 Taxation

Accounting policies

The income tax (charge)/credit represents both the income tax payable, based on profits/(losses) for the period, and deferred tax and is calculated using

tax rates enacted or substantively enacted at the balance sheet date. Taxable profit differs from net profit as reported in the income statement because it

excludes items of income or expense which are not taxable. Income tax is recognised in the income statement except when it relates to items that are

charged or credited in other comprehensive income or directly in equity, in which case the income tax is also charged or credited in other comprehensive

income or directly in equity.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements

and the corresponding tax bases used in the computation of taxable profits and is accounted for using the balance sheet liability method. Deferred tax

liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable

profits will be available against which deductible temporary differences can be utilised.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, except where the Group is

able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred

tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable

that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the

foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient

taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset realised based on tax laws and

rates that have been substantively enacted at the balance sheet date. The amount of deferred tax recognised is based on the expected manner of

realisation or settlement of the carrying amount of assets and liabilities.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

139

![](data:image/jpeg;base64,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)

2.4 Taxation continued

Taxation – Group income statement

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Current tax: |  |  |
| – Corporation tax | (22) | (16) |
| Total current tax charge | (22) | (16) |
| Deferred tax: |  |  |
| – Origination and reversal of temporary differences | (40) | (33) |
| – Amounts over/(under)-provided in prior periods | 1 | (1) |
| Total deferred tax charge | (39) | (34) |
| Total tax charge in the Group income statement | (61) | (50) |
| Further analysed as tax relating to: |  |  |
| Profit before separately disclosed items | (62) | (54) |
| Separately disclosed items | 1 | 4 |
| Total tax charge in the Group income statement | (61) | (50) |

The standard rate of corporation tax applied to the reported profit is 25.0% (2024 25.0%).

The tax charge (2024 charge) in the Group income statement for the period is higher than (2024 in line with) the standard rate of corporation tax in the UK.

The differences are reconciled below:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Profit before tax | 238 | 199 |
| Taxation charge at the UK standard rate of corporation tax of 25.0% (2024 25.0%) | (59) | (50) |
| Expenses not deductible | (4) | (3) |
| Permanent benefits | 1 | 4 |
| Adjustments in respect of prior periods | 1 | (1) |
| Total tax charge in the Group income statement | (61) | (50) |

Taxation for other jurisdictions is calculated at the rates prevailing in those jurisdictions.

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Deferred tax in the Group income statement: |  |  |
| Accelerated capital allowances | (12) | (14) |
| Tax losses – UK | (22) | (15) |
| Tax losses – Interest restriction | (5) | (7) |
| Retirement benefit obligations | 3 | 1 |
| Share-based payments | – | 1 |
| Unrealised gains on revaluations | (3) | – |
| Depreciated non-qualifying assets | 1 | – |
| Right of use assets | (1) | – |
| Total deferred tax charge in the Group income statement | (39) | (34) |

Section 2 – Results for the period continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc140

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Taxation – other comprehensive income

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Deferred tax: |  |  |
| Items that will not be reclassified subsequently to profit or loss: |  |  |
| – Unrealised gains due to revaluations – revaluation reserve | (22) | (62) |
| – Unrealised gains due to revaluations – retained earnings | 5 | (12) |
| – Remeasurement of pension liability | 4 | (42) |
|  | (13) | (116) |
| Items that may be reclassified subsequently to profit or loss: |  |  |
| – Cash flow hedges | (4) | 6 |
| Total tax charge recognised in other comprehensive income | (17) | (110) |

Tax relating to items recognised directly in equity

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Deferred tax: |  |  |
| – Tax credit related to share-based payments | – | 1 |

Taxation – Group balance sheet

The deferred tax assets and liabilities recognised in the Group balance sheet are shown below:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Deferred tax assets: |  |  |
| Derivative financial instruments | 4 | 8 |
| Tax losses – UK | 6 | 28 |
| Share-based payments | 4 | 4 |
| Right-of-use assets | 5 | 6 |
| Tax losses – Interest restriction | 1 | 6 |
| Total deferred tax assets | 20 | 52 |
| Deferred tax liabilities: |  |  |
| Accelerated capital allowances | (98) | (86) |
| Rolled over and held over gains | (164) | (164) |
| Unrealised gains on revaluations | (271) | (251) |
| Depreciated non-qualifying assets | (3) | (4) |
| Retirement benefit obligation (note 4.5) | (28) | (35) |
| Total deferred tax liabilities | (564) | (540) |
| Total | (544) | (488) |

At 27 September 2025, the Group has netted off deferred tax assets of £18m (2024 £49m) with deferred tax liabilities where there is a legally enforceable

right to settle on a net basis. Deferred tax assets and liabilities have been offset and disclosed in the Group balance sheet as follows:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Deferred tax assets (after offsetting) | 2 | 3 |
| Deferred tax liabilities (after offsetting) | (546) | (491) |
| Net deferred tax liability | (544) | (488) |

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

141

![](data:image/jpeg;base64,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)

2.4 Taxation continued

Unrecognised tax allowances

At the balance sheet date the Group had unrecognised tax allowances of £76m in respect of unclaimed capital allowances (2024 £81m) available for offset

against future profits.

A deferred tax asset has not been recognised on tax allowances with a value of £19m (2024 £20m) because it is not certain that future taxable profits will be

available in the company where these tax allowances arose against which the Group can utilise these benefits. These tax credits can be carried forward indefinitely.

Factors which may affect future tax charges

The Group is within the scope of the OECD Pillar Two (Global Minimum Tax) model rules. The legislation has been enacted in the UK and Germany, being the

jurisdictions in which the Group operates. The rules are effective for the Group from the accounting period commencing 29 September 2024. The Group has

assessed that no material top-up taxes will arise.

For the 52 week period ended 27 September 2025, the Group has applied the IAS 12 mandatory exception to recognising and disclosing information about

deferred tax assets and liabilities related to Pillar Two income taxes.

2.5 Earnings/(loss) per share

Basic earnings per share (EPS) has been calculated by dividing the profit for the period by the weighted average number of ordinary shares in issue during the

period, excluding own shares held by employee share trusts.

For diluted earnings per share, the weighted average number of ordinary shares is adjusted to assume conversion of all dilutive potential ordinary shares.

Adjusted earnings per ordinary share amounts are presented before separately disclosed items (see note 2.2) in order to allow an understanding of the

adjusted trading performance of the Group.

The profits used for the earnings per share calculations are as follows:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Profit for the period | 177 | 149 |
| Separately disclosed items, net of tax | 7 | 8 |
| Adjusted profit for the period  a | 184 | 157 |

The number of shares used for the earnings per share calculations are as follows:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | million | million |
| Basic weighted average number of ordinary shares | 595 | 595 |
| Effect of dilutive potential ordinary shares: |  |  |
| – Contingently issuable shares | 5 | 5 |
| – Other share options | 1 | – |
| Diluted weighted average number of shares | 601 | 600 |

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | pence | pence |
| Basic earnings per share |  |  |
| Basic earnings per share | 29.7p | 25.0p |
| Separately disclosed items net of tax per share | 1.2p | 1.4p |
| Adjusted basic earnings per share  a | 30.9p | 26.4p |
| Diluted earnings per share |  |  |
| Diluted earnings per share | 29.5p | 24.8 p |
| Adjusted diluted earnings per share  a | 30.6p | 26.2 p |

a.  Adjusted profit and adjusted EPS are alternative performance measures (APMs) and are considered critical to aid understanding of the Group’s performance. These measures

are explained on pages 189 to 191 of this report.

At 27 September 2025, 2,949,881 (2024 1,486,595) other share options were outstanding that could potentially dilute basic EPS in the future but were not

included in the calculation of diluted EPS as they are anti-dilutive for the periods presented.

Section 2 – Results for the period continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc142

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Section 3 – Operating assets and liabilities

3.1 Property, plant and equipment

Accounting policies

Property, plant and equipment

The majority of the Group’s freehold and long leasehold licensed land and buildings, and the associated landlord’s fixtures, fittings and equipment

(i.e. fixed fittings) are revalued annually and are therefore held at fair value less depreciation. Tenant’s fixtures and fittings (i.e. loose fixtures) within

freehold and long leasehold properties, are held at cost less depreciation and impairment.

Short leasehold buildings (leases with an unexpired lease term of less than 50 years), unlicensed land and buildings and associated fixtures, fittings and

equipment are held at cost less depreciation and impairment.

Land and buildings include leasehold improvements on long and short leases. All land and buildings are disclosed as a single class of asset within the

property, plant and equipment table, as we do not consider the short leasehold and unlicensed buildings to be material for separate disclosure.

Non-current assets held for sale are held at their carrying value or their fair value less costs to sell where this is lower.

Depreciation

Depreciation is charged to the income statement on a straight-line basis to write off the cost less residual value over the estimated useful life of an asset and

commences when an asset is ready for its intended use. Expected useful lives and residual values are reviewed each period and adjusted if appropriate.

No adjustments have been made in the period.

Freehold land is not depreciated.

Freehold and long leasehold buildings are depreciated so that the difference between their carrying value and estimated residual value is written off over

50 years from the date of acquisition. The residual value of freehold and long leasehold buildings is reassessed each period and is estimated to be equal to

the fair value determined in the annual valuation and therefore no depreciation charge is recognised.

Short leasehold buildings, and associated fixtures and fittings, are depreciated over the shorter of the estimated useful life and the unexpired term

of the lease.

Fixtures, fittings and equipment have the following estimated useful lives:

Information technology equipment  3 to 7 years

Fixtures and fittings      3 to 20 years

At the point of transfer to non-current assets held for sale, depreciation ceases. Should an asset be subsequently reclassified to property, plant and

equipment, the depreciation charge is calculated to reflect the cumulative charge had the asset not been reclassified.

Disposals

Profits and losses on disposal of property, plant and equipment are calculated as the difference between the net sales proceeds and the carrying amount

of the asset at the date of disposal.

Revaluation

The revaluation, performed at 27 September 2025, is determined via annual third-party inspection of 20% of the sites with the aim that all sites are

individually valued approximately every five years. The valuation utilises estimates of fair maintainable trade (FMT) and valuation multiples. The

revaluation determined by the annual inspection was carried out in accordance with the RICS Valuation – Global Standards 2025 which incorporate the

International Valuation Standards and the RICS Valuation – Professional Standards UK (the ‘Red Book’) assuming each asset is sold as a fully operational

trading entity.

Properties are valued as fully operational entities, to include fixtures and fittings but excluding stock, tenant’s fixtures and fittings and personal goodwill.

The 80% of the freehold and long leasehold estate which is not subject to a third-party valuation in the period is instead revalued internally by management.

The Group’s external valuer provides advice to management in relation to their internal valuation. This valuation is performed using estimates of FMT,

together with the same valuation multiples as those applied by the external valuer. Sites impacted by expansionary capital investment in the preceding

twelve months are reviewed for impairment only, based on estimated annualised post investment FMT against the carrying value of the asset. Where the

value of land and buildings derived purely from a multiple applied to the FMT misrepresents the underlying asset value, a spot valuation is applied.

Surpluses which arise from the revaluation exercise are included within other comprehensive income (in the revaluation reserve) unless they are reversing

a revaluation deficit which has been recognised in the income statement previously; in which case an amount equal to a maximum of that recognised in the

income statement previously is recognised in the income statement. Where the revaluation exercise gives rise to a deficit, this is reflected directly within

the income statement, unless it is reversing a previous revaluation surplus against the same asset; in which case an amount equal to the maximum of the

revaluation surplus is recognised within other comprehensive income (in the revaluation reserve).

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

143

![](data:image/jpeg;base64,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)

3.1 Property, plant and equipment continued

Impairment

Short leaseholds, unlicensed properties and fixtures and fittings are reviewed on an outlet basis for impairment if events or changes in circumstances

indicate that the carrying amount may not be recoverable. Further details of the impairment policy are provided in the impairment note 3.3.

Accounting judgements

Revaluation of freehold and long leasehold properties

The revaluation methodology is determined, with advice from CBRE, independent chartered surveyors, and incorporates management judgement where

appropriate. The application of a valuation multiple to the FMT of each site is considered the most appropriate method for the Group to determine the fair

value of freehold and long leasehold licensed land and buildings.

In the current and prior period, judgement has been applied to establish the basis of FMT that a willing third-party buyer would assume. The estimation of

FMT is derived from the individual profit and loss accounts of pubs and restaurants and is inclusive of the centrally recorded trading margins earned by the

Group but exclusive of certain head office costs. This represents the Group’s best view of the value that would be attributed by other reasonably efficient

operators. In both the current and prior periods FMT is estimated with reference to the reported site performance, with averages of the last two years

performance taken in the current period.

Where sites have been impacted by expansionary capital investment in the preceding twelve months, the FMT has been determined by estimating

annualised post-investment operating profit with reference to post-investment forecasts. See sensitivity analysis on page 146 regarding sites with

investment in the current period.

For the purposes of the valuation, and in order to group together properties of a similar nature, groupings by brand are applied for which standard

multiples have been established through third-party inspections of 20% of the freehold and long leasehold licensed property estate. Judgements are

applied in assessing multiples on the basis of market evidence of transaction prices and nature of the overall offer within the local market, with specific

consideration given to geographical location, ancillary revenue such as accommodation sales from bedrooms and lease terms for long leasehold sites.

Further judgement is required when a spot valuation is applied where the property value derived purely from a multiple applied to the FMT misrepresents

the underlying asset value with consideration given to the level of trade and location characteristics.

Significant accounting estimates

Revaluation of freehold and long leasehold properties

The application of the valuation methodology requires two significant estimates; the estimation of valuation multiples, which are determined via

third-party inspections; and an estimate of FMT.

In the prior period, inflation and costs stabilised, such that the Group’s external valuer considered that the level of reported site profitability was

representative of the FMT that a third-party, reasonably efficient operator would include in arriving at a transaction price. In the current period, trading

conditions have remained stable, and the Group’s external valuer has determined FMT as the average of the current and prior period reported site

profitability for all sites other than those impacted by investment in either period, or sites that have been spot valued.

The estimation of valuation multiples is derived from the valuer’s knowledge of market evidence of transaction prices for similar properties. In the current

period the multiples adopted are mostly in line with the prior period.

There is considered to be a significant risk that an adjustment to either of these assumptions could lead to a material change in the property valuation

within the next year.

A sensitivity analysis of changes in valuation multiples and FMT, in relation to the properties to which these estimates apply, is provided on page 146.

Notes to the consolidated financial

statements continued

Section 3 – Operating assets and liabilities continued

Annual Report and Accounts 2025  Mitchells & Butlers plc144

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Property, plant and equipment

Property, plant and equipment can be analysed as follows:

|  |  |  |  |
| --- | --- | --- | --- |
|  | Land and | Fixtures, fittings |  |
|  | buildings | and equipment | Total |
|  | £m | £m | £m |
| Cost or valuation |  |  |  |
| At 30 September 2023 | 3,699 | 942 | 4,641 |
| Acquired through business combinations (note 5.1) | 7 | – | 7 |
| Additions | 32 | 131 | 163 |
| Disposals  a | (2) | (108) | (110) |
| Net increase from property revaluation | 258 | – | 258 |
| Net impairment of short leasehold properties | 3 | (3) | – |
| Exchange differences | (1) | (1) | (2) |
| At 28 September 2024 | 3,996 | 961 | 4,957 |
| Additions | 34 | 143 | 177 |
| Disposals  a | (10) | (101) | (111) |
| Net increase from property revaluation | 99 | – | 99 |
| Net impairment of short leasehold properties | (2) | (3) | (5) |
| Exchange differences | – | 1 | 1 |
| At 27 September 2025 | 4,117 | 1,001 | 5,118 |
| Accumulated depreciation |  |  |  |
| At 30 September 2023 | 80 | 475 | 555 |
| Provided during the period | 4 | 88 | 92 |
| Disposals  a | (2) | (106) | (108) |
| Exchange differences | – | (1) | (1) |
| At 28 September 2024 | 82 | 456 | 538 |
| Provided during the period | 4 | 92 | 96 |
| Disposals  a | (8) | (99) | (107) |
| At 27 September 2025 | 78 | 449 | 527 |
| Net book value |  |  |  |
| At 27 September 2025 | 4,039 | 552 | 4,591 |
| At 28 September 2024 | 3,914 | 505 | 4,419 |
| At 30 September 2023 | 3,619 | 467 | 4,086 |

a.  Includes assets which are fully depreciated and have been removed from the fixed asset register.

Land and buildings include leasehold improvements on long and short leases with a net book value of £332m (2024 £314m).

Certain assets with a net book value of £46m (2024 £44m) owned by the Group are subject to a fixed charge in respect of liabilities held by the

Mitchells & Butlers Executive Top-Up Scheme (MABETUS).

Included within property, plant and equipment are assets with a net book value of £3,832m (2024 £3,697m), which are pledged as security for the

securitisation debt and over which there are certain restrictions on title. Further details of the securitisation are provided in note 4.1.

Cost at 27 September 2025 includes £19m (2024 £14m) of assets in the course of construction.

Revaluation of freehold and long leasehold properties

The fair value has been determined by estimations of FMT and brand valuation multiples. In the current period, FMT is largely reflective of the average of

current and prior period reported profits. Consideration has been given to location, quality of the pub restaurant and recent market transactions in the sector

in assessing property multiples. In the prior period FMT was largely reflective of reported profits.

Sensitivity analysis

Changes in the FMT, or the multiple could materially impact the valuation of the freehold and long leasehold properties, and as such they are both considered

to be significant estimates in the current period. The carrying value of properties to which these estimates apply is £4,407m (2024 £4,260m).

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

145

![](data:image/jpeg;base64,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)

3.1 Property, plant and equipment continued

FMT

In the current period, FMT has increased by 1% over the prior period’s FMT, excluding the sites with investment in the current period which are only assessed

for impairment. Given trading has now normalised following the disruption caused by the Covid pandemic in 2020, and there is a more stable inflationary

environment, a return to pre Covid FMT movements is considered to be within range of reasonably possible outcomes. Over the three years reported prior

to Covid the average movement in the FMT of the revalued estate was 1%. Assuming multiples remain stable, it is estimated that a 1% reduction in the FMT

would generate an approximate £36m reduction in the valuation. A 1% increase in the FMT is estimated to generate an approximate £38m increase in the

valuation. The sensitivity does not apply to sites with spot valuations as these valuations are independent of reported operating profits. Any change to the

spot valuations would not be material.

Multiples

Valuation multiples are determined at an individual brand level. Over the last three financial periods, the weighted average brand multiple has moved by an

average of 0.1, which is considered to be within the range of reasonably possible outcomes for future movements in multiples. It is estimated that a 0.1 reduction

in the multiple would generate an approximate £42m reduction in the valuation. A 0.1 increase to the multiple is estimated to generate an approximate £44m

increase in the valuation.

Sites with investment in the current period

205 properties were subject to investment over the last 12 months and, consistent with the Group’s policy have been valued at previous valuation plus the

associated investment capital expenditure as an approximation of current valuation. Trading results in the period immediately following an investment in a site

are less predictable and are therefore not taken into the assessment of fair maintainable trade until a year has passed. There is a reasonable possibility that the

valuation of the invested properties will move materially over the next 12 months as the post investment trading pattern becomes clearer. Over the last two

financial periods, the invested property portfolio has seen a valuation uplift in the year subsequent to the investment. If this pattern continues during FY 2026,

then the uplift recognised on FY 2025 invested properties could represent around 2.8% of the overall property estate valuation. This is completely dependent

on the individual performance of those sites and past experience also indicates that there is a risk of downward movements. The invested properties are

reviewed for impairment, based on estimated annualised post investment FMT against the carrying value of the asset as described in the revaluation policy.

Impairment review

Short leasehold and unlicensed properties (comprising land, buildings, fixtures, fittings and equipment) which are not revalued to fair market value, are

reviewed for impairment as described in the impairment note 3.3. A net impairment of £5m (2024 £nil) has been recognised against short leasehold and

unlicensed properties in the period.

Revaluation and impairment recognised

Current period valuations have been incorporated into the consolidated financial statements and the resulting revaluation adjustments have been taken to the

revaluation reserve or Group income statement as appropriate.

The impact of the revaluations/impairments described above is as follows:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Group income statement |  |  |
| Revaluation deficit charged as an impairment | (63) | (120) |
| Reversal of past revaluation deficits | 74 | 124 |
| Total impairment reversal arising from the revaluation | 11 | 4 |
| Impairment of short leasehold and unlicensed properties (note 3.3) | (7) | (7) |
| Reversal of past impairments of short leasehold and unlicensed properties (note 3.3) | 2 | 7 |
| Net impairment of short leaseholds and unlicensed properties | (5) | – |
| Total impairment reversal recognised in the income statement | 6 | 4 |
| Group statement of other comprehensive income |  |  |
| Unrealised revaluation surplus | 165 | 356 |
| Reversal of past revaluation surplus | (77) | (102) |
| Total movement recognised in other comprehensive income | 88 | 254 |
| Net increase in property, plant and equipment | 94 | 258 |

The valuation techniques are consistent with the principles in IFRS 13 and use significant unobservable inputs such that the fair value measurement of each

property within the portfolio has been classified as Level 3 in the fair value hierarchy.

Section 3 – Operating assets and liabilities continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc146

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

The number of pubs included in the revaluation and the resulting valuation of these properties is reconciled to the total value of property, plant and

equipment below.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  | Fixtures, |  |
|  |  | Land and | fittings and | Net book |
|  |  |  |  | a |
|  |  | buildings | equipment | value |
|  | Number of pubs | £m | £m | £m |
| 27 September 2025 |  |  |  |  |
| Freehold properties | 1,338 | 3,688 | 433 | 4,121 |
| Long leasehold properties | 90 | 253 | 33 | 286 |
| Total revalued properties | 1,428 | 3,941 | 466 | 4,407 |
| Short leasehold properties |  | 76 | 62 | 138 |
| Unlicensed properties |  | 16 | 2 | 18 |
| Other non-pub assets |  | 2 | 7 | 9 |
| Assets under construction |  | 4 | 15 | 19 |
| Total property, plant and equipment |  | 4,039 | 552 | 4,591 |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  | Fixtures, |  |
|  |  | Land and | fittings and | Net book |
|  | Number of | buildings | equipment | value  a |
|  | pubs | £m | £m | £m |
| 28 September 2024 |  |  |  |  |
| Freehold properties | 1,336 | 3,572 | 399 | 3,971 |
| Long leasehold properties | 92 | 257 | 32 | 289 |
| Total revalued properties | 1,428 | 3,829 | 431 | 4,260 |
| Short leasehold properties |  | 65 | 57 | 122 |
| Unlicensed properties |  | 15 | 2 | 17 |
| Other non-pub assets |  | 1 | 5 | 6 |
| Assets under construction |  | 4 | 10 | 14 |
| Total property, plant and equipment |  | 3,914 | 505 | 4,419 |

a.  The carrying value of freehold and long leasehold properties based on their historical cost is £2,654m and £186m respectively (2024 £2,581m and £180m).

The tables below show, for revalued properties, the number of pubs that have been valued within each fair maintainable trade and multiple banding:

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | Valuation multiple applied to fair maintainable trade |  |  |
|  | Over 10 times | 9 to 10 times | 8 to 9 times | 7 to 8 times | Under 7 times | Total |
| 27 September 2025 |  |  |  |  |  |  |
| Number of pubs in each fair maintainable trade banding: |  |  |  |  |  |  |
| < £200k p.a. | 115 | 56 | 129 | 141 | 26 | 467 |
| £200k to £360k p.a. | 7 | 59 | 147 | 74 | 41 | 328 |
| > £360k p.a. | 54 | 135 | 279 | 86 | 79 | 633 |
|  | 176 | 250 | 555 | 301 | 146 | 1,428 |

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  | Valuation multiple applied to fair maintainable trade |  |  |
|  | Over 10 times | 9 to 10 times | 8 to 9 times | 7 to 8 times | Under 7 times | Total |
| 28 September 2024 |  |  |  |  |  |  |
| Number of pubs in each fair maintainable trade banding: |  |  |  |  |  |  |
| < £200k p.a. | 129 | 52 | 141 | 139 | 22 | 483 |
| £200k to £360k p.a. | 12 | 87 | 163 | 76 | 29 | 367 |
| > £360k p.a. | 53 | 126 | 265 | 78 | 56 | 578 |
|  | 194 | 265 | 569 | 293 | 107 | 1,428 |

Movements in valuation multiples between financial periods are the result of changes in property market conditions. The average weighted multiple is 8.5

(2024 8.7).

Capital commitments

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Contracts placed for expenditure on property, plant and equipment not provided for in the consolidated financial statements | 25 | 18 |

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

147

![](data:image/jpeg;base64,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)

3.2 Leases

Leases – Group as lessee

Accounting policies

The Group assesses whether a contract is or contains a lease, at inception of the contract.

The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for

short-term leases (defined as new leases with a lease term of twelve months or less), leases containing variable lease payment terms that are linked to the

revenue generated from leased pubs and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones).

For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another

systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

The lease liability is initially measured at the present value of the future lease payments unpaid at the lease commencement date, discounted by using

the rate implicit in the lease. If this rate cannot be readily determined, the lessee uses its incremental borrowing rate. Lease payments included in the

measurement of the lease liability comprise:

•  Fixed lease payments (including in substance fixed payments), less any lease incentives receivable; and

•  Lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method)

and by reducing the carrying amount to reflect the lease payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

•  The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a break

option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate;

•  The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which case the

lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to

a change in a floating interest rate, in which case a revised discount rate is used);

•  A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on

the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, adjusted for any advance payments made at or before lease

commencement, less any lease incentives received and any initial direct costs (including lease premiums).

Whenever the Group incurs an obligation to restore the underlying asset to the condition required by the terms and conditions of the lease, a dilapidations

provision is recognised and measured under IAS 37 Provisions, Contingent Liabilities and Contingent Assets. To the extent that the costs relate to a

right-of-use asset, the costs are included in the related right-of-use asset.

Right-of-use assets are depreciated over the remaining committed lease term on a straight-line basis. Right-of-use assets are tested annually for

impairment in accordance with IAS 36 Impairment of Assets.

Right-of-use assets are subsequently remeasured for any changes in lease term and future committed rental payments.

For short-term leases (lease term of twelve months or less), and leases of low-value assets (such as personal computers and office furniture), the Group

recognises a lease expense on a straight-line basis, directly in the income statement, as permitted by IFRS 16.

Impairment of right-of-use assets

Right-of-use assets are tested for impairment in accordance with IAS 36 Impairment of Assets, as described in the policy in the impairment note 3.3.

Section 3 – Operating assets and liabilities continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc148

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Right-of-use assets

Right-of-use assets can be analysed as follows:

|  |  |  |  |
| --- | --- | --- | --- |
|  | Land and |  |  |
|  | buildings | Cars | Total |
|  | £m | £m | £m |
| Cost |  |  |  |
| At 30 September 2023 | 592 | 10 | 602 |
| Acquired through business combinations (note 5.1) | 7 | – | 7 |
| Additions  a | 26 | 4 | 30 |
| Disposals | (15) | (2) | (17) |
| Foreign currency movements | (2) | – | (2) |
| At 28 September 2024 | 608 | 12 | 620 |
| Additions  a | 25 | 4 | 29 |
| Disposals | (16) | (1) | (17) |
| Foreign currency movements | 3 | – | 3 |
| At 27 September 2025 | 620 | 15 | 635 |
| Accumulated depreciation and impairment |  |  |  |
| At 30 September 2023 | 271 | 4 | 275 |
| Provided during the period | 32 | 2 | 34 |
| Disposals | (10) | (2) | (12) |
| Impairment | 17 | – | 17 |
| Foreign currency movements | (1) | – | (1) |
| At 28 September 2024 | 309 | 4 | 313 |
| Provided during the period | 33 | 3 | 36 |
| Disposals | (13) | (1) | (14) |
| Impairment | 8 | – | 8 |
| Foreign currency movements | 1 | – | 1 |
| At 27 September 2025 | 338 | 6 | 344 |
| Net book value |  |  |  |
| At 27 September 2025 | 282 | 9 | 291 |
| At 28 September 2024 | 299 | 8 | 307 |
| At 30 September 2023 | 321 | 6 | 327 |

a.  Additions to right-of-use assets include new leases, increases in dilapidation provisions and lease extensions or rent reviews relating to existing leases.

Impairment review of right-of-use assets

Right-of-use assets are reviewed for impairment by comparing site recoverable amounts to their carrying values. Impairment is considered at a cash-generating

unit level. A net impairment of £8m (2024 £17m) has been recognised against right-of-use assets in the period. Details of the impairment review at a

cash-generating unit level are disclosed in note 3.3.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

149

![](data:image/jpeg;base64,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)

3.2 Leases continued

Lease liabilities

A maturity analysis of the undiscounted future lease payments used to calculate the lease liabilities is shown below.

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Amounts payable under lease liabilities |  |  |
| Due within one year | 58 | 50 |
| Due between one and two years | 50 | 50 |
| Due between two and three years | 54 | 46 |
| Due between three and four years | 42 | 49 |
| Due between four and five years | 33 | 40 |
| Due between five and ten years | 165 | 166 |
| Due between ten and fifteen years | 79 | 103 |
| Due between fifteen and twenty years | 59 | 56 |
| Due between twenty and twenty five years | 16 | 16 |
| Due between twenty five and thirty years | 11 | 11 |
| Due after thirty years | 78 | 78 |
| Total undiscounted lease liabilities | 645 | 665 |
| Less: impact of discounting | (211) | (218) |
| Present value of lease liabilities | 434 | 447 |
| Analysed as: |  |  |
| Current lease liabilities – principal amounts due within twelve months | 42 | 33 |
| Non-current lease liabilities – principal amounts due after twelve months | 392 | 414 |
|  | 434 | 447 |

Some of the property leases in which the Group is lessee contain variable lease payment terms that are linked to the revenue generated from the leased pubs.

Variable payment terms are used in contracts to link rental payments to pub cash flows and reduce fixed costs. The total value of variable lease payments

charged to the income statement in the current period is £2m (2024 £3m).

Leases – Group as lessor

Accounting policy

The Group enters into lease agreements as a lessor with respect to some of its properties. The properties are operated as either licensed or unlicensed

businesses by the tenants.

Leases for which the Group is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and

rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. When the Group is an

intermediate lessor, it accounts for the head lease and the sub-lease as two separate contracts. The sub-lease is classified as a finance or operating lease

by reference to the right-of-use asset arising from the head lease.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and

arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

Amounts due from lessees under finance leases are recognised as receivables at the amount of the Group’s net investment in the leases. Finance lease income

is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.

Section 3 – Operating assets and liabilities continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc150

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Group as lessor – Finance lease receivables

A maturity analysis of the undiscounted future lease payments receivable used to calculate the finance lease receivable is shown below.

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Amounts receivable under finance leases |  |  |
| Due within one year | 2 | 1 |
| Due between one and two years | 1 | 1 |
| Due between two and three years | 1 | 1 |
| Due between three and four years | 1 | 1 |
| Due between four and five years | 1 | 1 |
| Due after five years | 7 | 9 |
| Total undiscounted lease payments receivable | 13 | 14 |
| Less: unearned finance income | (2) | (2) |
| Present value of lease payments receivable | 11 | 12 |
| Net investment in the leases is analysed as: |  |  |
| Current finance lease receivables – amounts due within twelve months | 1 | 1 |
| Non-current finance lease receivables – amounts due after twelve months | 10 | 11 |
|  | 11 | 12 |

The Directors of the Group estimate the loss allowance on finance lease receivables at the end of the reporting period at an amount equal to lifetime expected

credit loss (ECL). Overdue amounts on finance lease receivables at the end of the reporting period are £1m (2024 £1m) and are fully provided. The Directors

of the Group have recognised a finance lease receivable impairment of £nil in the current period (2024 £nil).

There has been no change in the estimation techniques or significant assumptions made during the current reporting period in assessing the impairment for

finance lease receivables.

Group as lessor – Operating leases

The Group leases a small proportion of its licensed and unlicensed properties to tenants. The majority of lease agreements have terms of 50 years or less and

are classified as operating leases. Where sublet arrangements are in place, future minimum lease payments and receipts are presented gross.

Total future minimum lease rental receipts under non-cancellable operating leases are as follows:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Due within one year | 7 | 7 |
| Due between one and two years | 5 | 6 |
| Due between two and three years | 5 | 5 |
| Due between three and four years | 4 | 4 |
| Due between four and five years | 4 | 4 |
| Due after five years | 17 | 18 |
|  | 42 | 44 |

The total value of future minimum sub-lease rental receipts included above is £2m (2024 £2m).

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

151

![](data:image/jpeg;base64,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)

3.3 Impairment

Accounting policies

Impairment – Property, plant and equipment, right-of-use assets, computer software and goodwill

As described in the property, plant and equipment policy (note 3.1), the lease accounting policy (note 3.2) and the goodwill policy (note 3.6), impairment

reviews are considered at a cash-generating unit level, with this being an individual outlet.

The carrying value of assets for an individual outlet, comprise the property, plant and equipment value, the associated right-of-use asset, computer

software and any attributable goodwill, that includes an allocation of central asset values. At each balance sheet date, the Group assesses whether there

is any indication that the carrying value of assets for individual outlets may be impaired. If any such impairment indicator exists then an impairment loss is

recognised in the income statement, whenever the carrying value of the outlet exceeds its recoverable amount, which is determined as the higher of the

value in use, or fair value less costs to sell for each outlet. Any resulting impairment relates to sites with poor trading performance, where the output of the

value in use calculations are insufficient to justify their current net book value. Changes in outlet earnings or cash flows, the discount rate applied to those

cash flows, or the estimate of fair value less costs of disposal could give rise to an additional impairment loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only

so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised

for the asset in prior periods. A reversal of an impairment loss is recognised in the income statement. An impairment reversal is only recognised where

there is a change in circumstances or favourable events since the last impairment test impacting estimates used to determine recoverable amounts, not

where it results from the passage of time.

Accounting judgements

Impairment review of cash-generating units – property, plant and equipment, right-of-use assets, computer software and goodwill

For the individual outlet level impairment review, judgement has been applied to determine the most appropriate site level profit and cash flow forecasts

based on the Group forecast for FY 2026 to FY 2028 that was in place at the balance sheet date.

Management apply judgement:

•  when allocating overhead costs to site cash flows, with an overhead allocation being made only for those costs that can be directly attributable to a site

on a consistent basis; and

•  in the allocation of corporate level assets to individual cash generating units, based on relative profitability.

Other sources of estimation uncertainty

Impairment review of cash-generating units – property, plant and equipment, right-of-use assets, computer software and goodwill

The impairment review requires two key sources of estimation uncertainty in calculating the value in use: the estimation of forecast cash flows for each

site and the selection of an appropriate discount rate. The discount rate is applied consistently to each cash-generating unit.

A sensitivity of changes in forecast cash flows and the discount rate is provided on page 153. The carrying value of assets to which these estimates apply

is £438m (2024 £442m).

Impairment review of cash-generating units, comprising property, plant and equipment, right-of-use assets, computer software

and goodwill

Recoverable amount is determined as the higher of the value in use, or fair value less costs to sell for each outlet.

Value in use calculations use forecast trading performance pre-tax cash flows, for years 1 to 3. These include steady increases to revenue and costs. In the

short to medium term, over the three year forecast period, no allowances have been made for any potential impact activity related to climate change, other

than continued maintenance and infrastructure spend on existing sustainability projects, as the impacts of this on future cash flows or capital expenditure

cannot yet be reasonably estimated or allocated to cash-generating units.

The forecast cash flows are discounted by applying a pre-tax discount rate of 11.3% (2024 11.0%) and a long-term growth rate of 2.0% from year 4 (2024

2.0%). The long-term growth rate is applied to the net cash flows and is based on up-to-date economic data points.

In addition to the short leasehold property and right-of-use asset impairment review performed at a cash-generating unit level, the Group’s freehold, long and

short leasehold cash generating units have been grouped together to ensure that the unallocated corporate level assets are also considered for impairment.

The assumptions are consistent with those described above for the value in use calculations performed at an individual outlet level, whilst also including

unallocated central overheads. As a result of this review, no additional impairment has been recognised in the current period.

Section 3 – Operating assets and liabilities continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc152

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

In summary, the carrying value of the cash-generating units and impairment charges and reversals recognised against those cash-generating units is as follows:

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  | Impairment | Impairment | Net |
|  |  | Carrying value | charges | reversals | impairment |
|  |  | 2025 | 2025 | 2025 | 2025 |
|  | Note | £m | £m | £m | £m |
| Short leasehold properties | 3.1 | 138 | (7) | 2 | (5) |
| Right-of-use assets | 3.2 | 291 | (18) | 10 | (8) |
| Software | 3.6 | 16 | – | – | – |
| Goodwill | 3.6 | 6 | (1) | – | (1) |
|  |  | 451 | (26) | 12 | (14) |

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  | Impairment | Impairment | Net |
|  |  | Carrying value | charges | reversals | impairment |
|  |  | 2024 | 2024 | 2024 | 2024 |
|  | Note | £m | £m | £m | £m |
| Short leasehold properties | 3.1 | 122 | (7) | 7 | – |
| Right-of-use assets | 3.2 | 307 | (29) | 12 | (17) |
| Software | 3.6 | 6 | (1) | – | (1) |
| Goodwill | 3.6 | 7 | – | – | – |
|  |  | 442 | (37) | 19 | (18) |

Sensitivity analysis

Changes in forecast cash flows or the discount rate could impact the impairment charge recognised against the cash-generating units, and corporate level assets.

Forecast cash flows

The forecast pre-tax cash flows used in the value in use calculations are site level forecasts determined from the Group forecast for FY 2026 to FY 2028 that

was in place at the balance sheet date. For short leasehold sites and freehold/long leasehold sites with ROU or goodwill assets, should future cash flows

decline by 1%, this would result in an increase of £2m to the net impairment charge recognised.

Discount rate

The pre-tax discount rate applied to the forecast cash flows is derived from the Group’s post-tax weighted average cost of capital (WACC). The assumptions

used in the calculation of the Group’s WACC are benchmarked to externally available data. A single discount rate is applied to all cash-generating units. Over

recent periods, the discount rate used in impairment reviews has moved by c. 1.0%. For short leasehold sites and freehold/long leasehold sites with ROU or

goodwill assets, an increase of 1.0% in the discount rate would result in an increase of £4m to the net impairment charge recognised.

3.4 Working capital

Inventories

Accounting policy

Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the weighted average method.

Inventories can be analysed as follows:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Goods held for resale | 26 | 27 |

Trade and other receivables

Accounting policy

Trade receivables are initially recognised at transaction price and other receivables are initially recognised at fair value. Subsequently, these assets are

measured at amortised cost. This results in their recognition at nominal value less an allowance for any doubtful debts. The allowance for doubtful debts

is recognised based on management’s expectation of losses without regard to whether an impairment trigger happened or not (an ‘expected credit loss’

model). The Group always measures the loss allowance for trade receivables using the simplified model at an amount equal to lifetime ECL. Loss allowance

for other receivables is measured either at twelve months or lifetime ECL depending on whether the credit risk has increased significantly since initial

recognition (see financial assets impairment policy in note 4.3).

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

153

![](data:image/jpeg;base64,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)

3.4 Working capital continued

Trade and other receivables can be analysed as follows:

Current

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Trade receivables | 15 | 13 |
| Other receivables | 13 | 16 |
| Prepayments | 23 | 27 |
| Other financial assets  a | 28 | 30 |
| Defined benefit pension blocked accounts  b | – | 12 |
| Total trade and other receivables | 79 | 98 |

a.  Other financial assets relate to cash collateral provided by a swap counterparty (see note 4.3).

b. Contributions to the MABEPP scheme were paid into a blocked account since the scheme buy-in that took place during the year ended 24 September 2022. The full amount has

been repaid to the Company in the current period. See note 4.5 for further details.

All trade, lease and other receivables are non-interest bearing. The Directors consider that the carrying amount of trade receivables and other receivables

approximately equates to their fair value. A provision for expected credit loss of £2m (2024 £2m) has been recognised against trade and other receivables.

Credit risk is considered in note 4.3.

Trade and other payables

Accounting policy

Trade and other payables are initially recognised at fair value and recognised subsequently at amortised cost.

Trade and other payables can be analysed as follows:

Current

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Trade payables | 111 | 114 |
| Other taxation and social security | 81 | 99 |
| Accrued charges | 183 | 186 |
| Deferred income  a | 39 | 34 |
| Other payables | 20 | 19 |
| Other – contingent consideration  b | 11 | – |
| Other financial liabilities  c | 28 | 30 |
| Total trade and other payables | 473 | 482 |

Non-current

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Other contingent consideration  b | – | 8 |

a.  Mainly relates to deferred income on gift card sales not yet redeemed at the period end.

b. Relates to contingent consideration payable following the acquisition of Pesto Restaurants Limited. At 27 September 2025, the amount is due for payment within twelve months,

and has therefore been reclassified to current from non-current payables (see note 5.1).

c.  Other financial liabilities relate to cash collateral provided by a swap counterparty (see note 4.3).

Current trade and other payables are non-interest bearing. The Directors consider that the carrying amount of trade and other payables approximately

equates to their fair value.

Section 3 – Operating assets and liabilities continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc154

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

3.5 Provisions

Accounting policy

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow

of resources will be required to settle the obligation; and the amount can be reliably estimated. Provisions are measured using the Directors’ best estimate

of the expenditure required to settle the obligation at the balance sheet date and are discounted to present value where the effect is material.

Onerous property provisions represent the expected unavoidable losses on onerous and vacant property leases and comprise the net lease commitment

(fixed service charges) not expected to be covered by operating revenue after all other operating costs. The provision is calculated on a site by site basis

with a provision being made for the remaining committed lease term, where a lease is considered to be onerous. Other contractual dilapidations costs are

also recorded as provisions as appropriate.

Provisions

The provision for unavoidable losses on onerous property leases has been set up to cover fixed service charge payments of vacant or loss-making properties.

The provision for dilapidation costs has been set up to cover the estimated future dilapidation claims from landlords on leasehold properties.

Provisions can be analysed as follows:

|  |  |  |  |
| --- | --- | --- | --- |
|  | Onerous property | Dilapidation | Total property |
|  | provisions | provisions | provisions |
|  | £m | £m | £m |
| At 30 September 2023 | 2 | 7 | 9 |
| Provided in the period | 2 | 4 | 6 |
| Utilised in the period | (2) | – | (2) |
| Released in the period | – | (1) | (1) |
| At 28 September 2024 | 2 | 10 | 12 |
| Provided in the period | 1 | 4 | 5 |
| Utilised in the period | (1) | (2) | (3) |
| Released in the period | – | (1) | (1) |
| At 27 September 2025 | 2 | 11 | 13 |

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

155

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAaUBKcDASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD3WiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFAFDU5tXi8r+yrGxus58z7VePBt6YxtifPf0xgdc8Z/2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNVzTp9dluGXU9O062g2Eq9tfvOxbI4KtCgAxnnPYcc8adFABRRRQBQ1KbV4vK/sqxsbrOfM+1XjwbemMbYnz39MYHXPGf8Aa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNVzTp9dluGXU9O062g2Eq9tfvOxbI4KtCgAxnnPYcc8adFABRRRQBQ1KbV4vK/sqxsbrOfM+1XjwbemMbYnz39MYHXPGf9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1XNOn12W4ZdT07TraDYSr21+87Fsjgq0KADGec9hxzxp0UAFFFFAGbqF7qdvOqWWk/bIyuTJ9pWPByeMH8Ofeqv9qa9/0Ln/k8n+FblFYypSbuptfd/kbxqwSs4J/+Bf5mH/amvf8AQuf+Tyf4Uf2pr3/Quf8Ak8n+FblFL2M/+fj/APJf/kR+2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kY0Wp640oD+H9i92+2ocfpRW0OtFUqUl9t/h/kS6sH9hf+Tf5iUUUVqYhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRUcE8N1bxXFvKksEqB45I2DK6kZBBHUEd6AJKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA6JE355xineT/tfpRD/FUtMRF5P+1+lHk/7X6VLRTsBF5P+1+lHk/7X6VLRRYCLyf9r9KPJ/2v0qWiiwEXk/7X6UeT/tfpUtFFgIvJ/wBr9KPJ/wBr9KloosBF5P8AtfpR5P8AtfpUtFFgIvJ/2v0o8n/a/SpaKLAReT/tfpR5P+1+lS0UWAi8n/a/Sjyf9r9KloosBF5P+1+lHk/7X6VLRRYCLyf9r9KPJ/2v0qWiiwEXk/7X6UeT/tfpUtFFgIvJ/wBr9KPJ/wBr9KloosBF5P8AtfpR5P8AtfpUtFFgIvJ/2v0o8n/a/SpaKLAReT/tfpR5P+1+lS0UWAi8n/a/Sjyf9r9KloosBF5P+1+lHk/7X6VLRRYCLyf9r9KPJ/2v0qWiiwEXk/7X6UeT/tfpUtFFgIvJ/wBr9KPJ/wBr9KloosBF5P8AtfpR5P8AtfpUtFFgIvJ/2v0o8n/a/SpaKLAReT/tfpR5P+1+lS0UWAi8n/a/Sjyf9r9KloosBF5P+1+lHk/7X6VLRRYCLyf9r9KPJ/2v0qWiiwEXk/7X6UeT/tfpUtFFgIvJ/wBr9KPJ/wBr9KloosBF5P8AtfpR5P8AtfpUtFFgIvJ/2v0o8n/a/SpaKLAReT/tfpR5P+1+lS0UWAi8n/a/Sjyf9r9KloosBF5P+1+lHk/7X6VLRRYCLyf9r9KPJ/2v0qWiiwEXk/7X6UeT/tfpUtFFgIvJ/wBr9KPJ/wBr9KloosBF5P8AtfpR5P8AtfpUtFFgIvJ/2v0o8n/a/SpaKLAReT/tfpR5P+1+lS0UWAi8n/a/Sjyf9r9KloosBF5P+1+lHk/7X6VLRRYCLyf9r9KPJ/2v0qWiiwEXk/7X6UeT/tfpUtFFgIvJ/wBr9KPJ/wBr9KloosBF5P8AtfpR5P8AtfpUtFFgIvJ/2v0o8n/a/SpaKLAReT/tfpR5P+1+lS0UWAi8n/a/Sjyf9r9KloosBF5P+1+lHk/7X6VLRRYCLyf9r9KPJ/2v0qWiiwEXk/7X6UeT/tfpUtFFgIvJ/wBr9KPJ/wBr9KloosBF5P8AtfpR5P8AtfpUtFFgIvJ/2v0o8n/a/SpaKLAReT/tfpR5P+1+lS0UWAi8n/a/Sjyf9r9KloosBF5P+1+lHk/7X6VLRRYCLyf9r9KPJ/2v0qWiiwEXk/7X6UeT/tfpUtFFgIvJ/wBr9KPJ/wBr9KloosBF5P8AtfpR5P8AtfpUtFFgIvJ/2v0o8n/a/SpaKLAReT/tfpTXTZjnOanqKb+GkBFRRRSGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0kP8AFUtRQ/xVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAHSQ/xVLUUP8VS1SEFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFRTfw1LUU38NDAioooqRhRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQB0kP8VS1FD/FUtUhBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABUU38NS1FN/DQwIqKKKkYUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQB0kP8VS1FD/ABVLVIQUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVFN/DUtRTfw0MCKiiipGFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQB0AJHQkUbm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dG5v7x/OkooAXc394/nRub+8fzpKKAF3N/eP50bm/vH86SigBdzf3j+dBJPUk0lFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv8Akn/hv/sF2v8A6KWt+sDwN/yT/wAN/wDYLtf/AEUtAG/RRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQBv0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVU0rTodH0ex0y3Z2gs7eO3jaQgsVRQoJwAM4HpVuigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKKKYH/2Q==)

3.6 Goodwill and other intangible assets

Accounting policies

Business combinations and goodwill

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the

aggregate of the fair values of assets given and liabilities incurred or assumed by the Group in exchange for control of the acquiree. Acquisition-related

costs are recognised in the income statement as incurred.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that:

•  deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognised and measured in accordance with IAS

12 Income Taxes and IAS 19 Employee Benefits (revised) respectively; and

•  assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations

are measured in accordance with that standard.

Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value

of the acquirer’s previously held equity interest in the acquiree over the net of the identifiable assets acquired and the liabilities assumed at the acquisition

date. If, after reassessment, the net of the identifiable assets acquired and liabilities assumed at the acquisition date exceeds the sum of the consideration

transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree, the

excess is recognised immediately in the income statement as a bargain purchase.

When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration

arrangement, the contingent consideration is measured at its acquisition date fair value and included as part of the contingent consideration transferred

in a business combination. Changes in fair value of the contingent consideration that qualify as measurement period adjustments are adjusted

retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional

information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that

existed at the acquisition date.

The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement period adjustments depends on

how the contingent consideration is classified. Contingent consideration that is classified as equity is not re-measured at subsequent reporting dates and

its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is re-measured at subsequent

reporting dates, at fair value, with the corresponding gain or loss being recognised in the income statement.

When a business combination is achieved in stages, the Group’s previously-held interests in the acquired entity is re-measured to its acquisition date fair

value and the resulting gain or loss, if any, is recognised in the income statement. Amounts arising from interests in the acquiree prior to the acquisition

date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate

if that interest were disposed of.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports

provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or

additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that,

if known, would have affected the amounts recognised as of that date.

Goodwill is not amortised, but is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying

value may be impaired. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from

the synergies of the combination. The impairment review requires management to consider the recoverable value of the business to which the goodwill

relates, based on either the fair value less costs to sell or the value in use. Value in use calculations require management to consider the net present value

of future cash flows generated by the business to which the goodwill relates. Fair value less costs to sell is based on management’s estimate of the net

proceeds which could be generated through disposing of that business. If the recoverable amount of the cash-generating unit is less than the carrying

amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of

the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss is recognised immediately in the income statement and

is not subsequently reversed.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Computer software

Computer software and associated development costs, which are not an integral part of a related item of hardware, are capitalised as an intangible

asset and amortised on a straight-line basis over their useful life. The period of amortisation ranges between three and seven years with the majority

being three years.

Brands

Brand intangible assets recognised on acquisition are amortised on a straight-line basis over their estimated useful lives (20 years) within operating costs.

Brand intangibles are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable.

Section 3 – Operating assets and liabilities continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc156

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Intangible assets

Intangible assets can be analysed as follows:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  | Computer |  |
|  | Goodwill | Brands | software | Total |
|  | £m | £m | £m | £m |
| Cost |  |  |  |  |
| At 30 September 2023 | 8 | 5 | 18 | 31 |
| Acquired through business combinations (note 5.1) | 5 | 2 | – | 7 |
| Additions | – | – | 2 | 2 |
| Disposals | – | – | (3) | (3) |
| At 28 September 2024 | 13 | 7 | 17 | 37 |
| Additions | – | – | 12 | 12 |
| Disposals | – | – | (3) | (3) |
| At 27 September 2025 | 13 | 7 | 26 | 46 |
| Accumulated amortisation and impairment |  |  |  |  |
| At 30 September 2023 | 6 | – | 8 | 14 |
| Amortisation during the period | – | – | 4 | 4 |
| Impairment | – | – | 1 | 1 |
| Disposals | – | – | (2) | (2) |
| At 28 September 2024 | 6 | – | 11 | 17 |
| Amortisation during the period | – | 1 | 2 | 3 |
| Impairment | 1 | – | – | 1 |
| Disposals | – | – | (3) | (3) |
| At 27 September 2025 | 7 | 1 | 10 | 18 |
| Net book value |  |  |  |  |
| At 27 September 2025 | 6 | 6 | 16 | 28 |
| At 28 September 2024 | 7 | 7 | 6 | 20 |
| At 30 September 2023 | 2 | 5 | 10 | 17 |

Goodwill and brands

With the exception of goodwill, there are no intangible assets with indefinite useful lives. All amortisation charges have been expensed through operating costs.

Brand intangibles have been recognised as part of business combinations (see note 5.1). Brand intangibles are amortised over their estimated useful lives and

have an average remaining useful life of 20 years.

Impairment review

All goodwill was recognised as part of business combinations. Goodwill has been allocated to cash-generating units, being individual outlets, to test for

impairment. An impairment charge of £1m (2024 £nil) has been recognised in the current period.

Computer software has been allocated to cash-generating units, being individual outlets, to test for impairment. An impairment charge of £nil (2024 £1m)

has been recognised in the current period.

Further details of the impairment review are provided in note 3.3.

There have been no significant changes in events or circumstances in the period that would indicate the brand value may be impaired.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

157

![](data:image/jpeg;base64,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)

Notes to the consolidated financial

statements continued

Section 4 – Capital structure and financing costs

4.1 Borrowings

Accounting policy

Borrowings, which include the Group’s secured loan notes, are stated initially at fair value (normally the amount of the proceeds) net of issue costs.

Thereafter they are stated at amortised cost using an effective interest basis. Finance costs, which are the difference between the net proceeds and the

total amount of payments to be made in respect of the instruments, are allocated over the term of the debt using the effective interest method. Borrowing

costs are not attributed to the acquisition or construction of assets and therefore no costs are capitalised within property, plant and equipment.

Borrowings can be analysed as follows:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Current |  |  |
| Securitised debt  a,b | 137 | 130 |
| Unsecured revolving credit facilities  c | – | (1) |
| Overdrafts  d | 35 | 12 |
| Other borrowings  e | 2 | 2 |
| Total current | 174 | 143 |
| Non-current |  |  |
| Securitised debt  a,b | 900 | 1,041 |
| Total borrowings | 1,074 | 1,184 |

a.  Further details of the assets pledged as security against the securitised debt are given on page 145.

b. Stated net of deferred issue costs.

c.  At 27 September 2025 the amount of £nil (2024 £1m) represents unamortised issue costs.

d. The overdraft is within a cash pooling arrangement. In the cash flow statement, cash and cash equivalents are presented net of this overdraft (see note 4.4).

e. Short-term financing of employee advances.

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Analysis by year of repayment |  |  |
| Due within one year or on demand | 174 | 143 |
| Due between one and two years | 160 | 157 |
| Due between two and five years | 463 | 458 |
| Due after five years | 277 | 426 |
| Total borrowings | 1,074 | 1,184 |

Securitised debt

On 13 November 2003, the Group refinanced its debt by raising £1,900m through a securitisation of the majority of its UK pubs and restaurants owned by

Mitchells & Butlers Retail Limited. On 15 September 2006 the Group completed a further debt (‘tap’) issue to borrow an additional £655m and refinance

£450m of existing debt at lower cost.

The loan notes consist of ten tranches as follows:

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  | Initial |  | Principal | Effective |  | Principal outstanding |  |
|  | principal |  | repayment | interest | 27 September | 28 September |  |
|  | borrowed |  | period (all by | rate | 2025 | 2024 | Expected |
| Tranche | £m | Interest | instalments) | % |  | £m | WAL  a |
|  |  |  |  |  | £m |  |  |
| A1N | 200 | Floating | 2011 to 2028 | 6.61  b | 48 | 62 | 2 years |
| A2 | 550 | Fixed – 5.57% | 2003 to 2028 | 5.72 | 87 | 112 | 2 years |
| A3N | 250 | Floating | 2011 to 2028 | 6.69  b | 60  c | 77  c | 2 years |
| A4 | 170 | Floating | 2016 to 2028 | 6.37  b | 59 | 75 | 2 years |
| AB | 325 | Floating | 2020 to 2032 | 6.28  b | 244 | 260 | 5 years |
| B1  d | 350 | Fixed – 5.97% | 2003 to 2023 | 6.12 | – | – | 0 years |
| B2 | 350 | Fixed – 6.01% | 2015 to 2028 | 6.12 | 163 | 205 | 2 years |
| C1 | 200 | Fixed – 6.47% | 2029 to 2030 | 6.56 | 200 | 200 | 4 years |
| C2 | 50 | Floating | 2033 to 2034 | 6.47  b | 50 | 50 | 8 years |
| D1 | 110 | Floating | 2034 to 2036 | 6.68  b | 110 | 110 | 10 years |
|  | 2,555 |  |  |  | 1,021 | 1,151 |  |

a.  Expected weighted average life (WAL) assumes no early redemption in respect of any loan notes.

b. After the effect of interest rate swaps.

c.  A3N notes are US$ notes which are shown as translated to sterling at the hedged swap rate. Values at the period end spot rate are £75m (2024 £96m). Therefore the exchange

difference on the A3N notes is £15m (2024 £19m).

d. The B1 loan notes were fully repaid during the prior period in accordance with the documented repayment schedule.

Annual Report and Accounts 2025  Mitchells & Butlers plc158

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Principal outstanding above is reconciled to the principal outstanding and carrying value of securitised debt as disclosed on page 159 as follows.

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Principal outstanding | 1,021 | 1,151 |
| A3N US$ notes exchange difference | 15 | 19 |
| Principal outstanding at spot rate | 1,036 | 1,170 |
| Deferred issue costs | (1) | (1) |
| Accrued interest | 2 | 2 |
| Carrying value at end of period | 1,037 | 1,171 |

The notes are secured on the majority of the Group’s property and future income streams therefrom. All of the floating rate notes are hedged using interest

rate swaps which fix the interest rate payable.

Interest and margin is payable on the floating rate notes as follows:

|  |  |  |
| --- | --- | --- |
| Tranche | Interest | Margin |
| A1N | 3 month SONIA | 0.57% |
| A3N | 3 month SOFR | 0.71% |
| A4 | 3 month SONIA | 0.69% |
| AB | 3 month SONIA | 0.72% |
| C2 | 3 month SONIA | 1.99% |
| D1 | 3 month SONIA | 2.24% |

The overall cash interest rate payable on the loan notes is 6.3% (2024 6.3%) after taking account of interest rate hedging and the cost of the financial guarantee

provided by Ambac Assurance UK Limited (Ambac). Ambac acts as a guarantor of the Group’s obligations to repay interest and principal on the loan notes.

In the event that the Group is unable to pay such amounts the guarantee is limited to the Class A1N, A3N, A4 and Class AB note holders only.

The securitisation is governed by various covenants, warranties and events of default, many of which apply to Mitchells & Butlers Retail Limited, the Group’s

main operating subsidiary. There are two main financial covenants, being the level of net assets and free cash flow (FCF) to debt service. FCF to debt service

represents the multiple of cash generated by sites within the structure to the cost of debt service. This is tested quarterly on both a trailing two quarter and

a four quarter basis. There are additional covenants regarding the maintenance and disposal of securitised properties and restrictions on its ability to move

cash, by way of dividends for example, to other Group companies. Further details of the covenants are provided in the going concern review on page 133.

At 27 September 2025, Mitchells & Butlers Retail Limited had cash and cash equivalents of £77m (2024 £91m). Of this amount £1m (2024 £2m), representing

disposal proceeds, was held on deposit in an account over which there are a number of restrictions. The use of this cash requires the approval of the securitisation

trustee and may only be used for certain specified purposes such as capital enhancement expenditure and business acquisitions.

The carrying value of the securitised debt in the Group balance sheet is analysed as follows:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Principal outstanding at beginning of period | 1,170 | 1,308 |
| Principal repaid during the period | (134) | (128) |
| Net principal receipts on cross currency swap | 4 | 5 |
| Exchange on translation of dollar loan notes | (4) | (15) |
| Principal outstanding at end of period | 1,036 | 1,170 |
| Deferred issue costs | (1) | (1) |
| Accrued interest | 2 | 2 |
| Carrying value at end of period | 1,037 | 1,171 |

Liquidity facility

Under the terms of the securitisation, the Group holds a liquidity facility of £295m provided by two counterparties.

The amount drawn at 27 September 2025 is £nil (2024 £nil).

Unsecured revolving credit facilities

In the prior period, the Group held a single unsecured committed revolving credit facility of £200m. During the period, the unsecured committed revolving

credit facility of £200m was cancelled and replaced by a new unsecured committed revolving credit facility of £150m which expires on 22 July 2028.

The amount drawn at 27 September 2025 is £nil (2024 £nil).

There are covenants on the unsecured revolving credit facility relating to the ratio of EBITDAR to rent plus interest and net debt to EBITDA based on the

performance of the unsecured estate. Further details of the covenants are provided in the going concern review on pages 133.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

159

![](data:image/jpeg;base64,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)

4.2 Finance costs and income

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Finance costs |  |  |
| Interest on securitised debt | (72) | (79) |
| Interest on other borrowings | (11) | (13) |
| Interest on lease liabilities | (17) | (17) |
| Total finance costs | (100) | (109) |
| Finance income |  |  |
| Interest receivable – cash | 9 | 10 |
| Net pensions finance income/(charge) (note 4.5) | 7 | (2) |

4.3 Financial instruments

Accounting policies

Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the contractual provisions of

the instrument.

Financial assets

All financial assets are recognised or derecognised on a trade date where the purchase or sale of a financial asset is under a contract whose terms require

delivery of the financial asset within the timeframe established by the market concerned. Financial assets are initially measured at fair value, plus transaction

costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.

Debt instruments that meet the following conditions are measured subsequently at amortised cost:

•  the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

•  the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal

amount outstanding.

By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Impairment of financial assets

The Group recognises a loss allowance for expected credit losses (ECLs) on financial assets, where applicable. The amount of expected credit losses

is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial asset.

The Group adopts the simplified approach detailed in IFRS 9 for trade receivables and finance lease receivables and therefore recognises lifetime ECL on

these assets. The expected credit losses on these financial assets are estimated using a provision matrix based on the Group’s historical credit loss experience,

adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction

of conditions at the reporting date, including time value of money where appropriate.

For all other financial assets, the Group recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. However,

if the credit risk on the financial asset has not increased significantly since initial recognition, the Group measures the loss allowance for that financial

instrument at an amount equal to twelve-month ECL.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast,

twelve-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within

twelve months after the reporting date.

Definition of default

The Group considers financial assets to be in default when information developed internally or obtained from external sources indicates that a debtor

is unlikely to pay its creditors, including the Group, in full (without taking into account any collateral held by the Group).

Credit-impaired financial assets

At each reporting date, the Group assesses whether financial assets are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that

have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Notes to the consolidated financial

statements continued

Section 4 – Capital structure and financing costs continued

Annual Report and Accounts 2025  Mitchells & Butlers plc160

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Accounting policies continued

Write-off policy

The Group writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of

recovery. Financial assets written off may still be subject to enforcement activities under the Group’s recovery procedures, taking into account legal advice

where appropriate. Any recoveries made are recognised in profit or loss.

Measurement and recognition of expected credit losses

The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default)

and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking

information. As for the exposure at default, for financial assets, this is represented by the assets’ gross carrying amount at the reporting date.

For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Group in accordance with

the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate.

If the Group has measured the loss allowance for a financial asset at an amount equal to lifetime ECL in the previous reporting period, but determines at the

current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an amount equal to twelve-month

ECL at the current reporting date, except for assets for which the simplified approach was used.

The Group recognises an impairment gain or loss in profit or loss for all financial assets with a corresponding adjustment to their carrying amount through

a loss allowance account.

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset

and substantially all the risks and rewards of ownership of the asset to another entity. If the Group does not retain substantially all the risks and rewards of

ownership but continues to control a transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may

have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the

financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration

received and receivable is recognised in profit or loss.

Financial liabilities

The Group has financial liabilities relating to borrowings, for which the accounting policy is provided in note 4.1. Other financial liabilities are initially

measured at fair value, net of transaction costs.

All financial liabilities are measured subsequently at amortised cost using the effective interest method or at fair value through profit or loss (FVTPL).

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or expired. The difference between

the carrying amount of the financial liability discharged and the consideration paid and payable is recognised in profit or loss.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating finance charges over the relevant period.

The effective interest rate is the rate that exactly discounts estimated future cash flows (including all fees and points paid or received that form an integral

part of the effective interest rate, transaction costs and other premiums or discounts) over the expected life of the debt instrument, or where appropriate,

a shorter period, to the amortised cost of a financial liability. Finance charges are recognised on an effective interest basis for all debt instruments.

Derivative financial instruments

The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including

interest rate and currency swaps.

Derivative financial instruments are initially measured at fair value on the contract date and are remeasured to fair value at each reporting date. The resulting

gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing

of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is recognised as a financial liability.

Derivatives are not offset in the financial statements unless the Group has both the current legal right to offset and intention to settle on a net basis or

realise simultaneously. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than

twelve months and it is not expected to be realised or settled within twelve months. Other derivatives are presented as current assets or current liabilities.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

161

![](data:image/jpeg;base64,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)

4.3 Financial instruments continued

Hedge accounting

The Group designates its derivative financial instruments, i.e. interest rate and currency swaps, as cash flow hedges.

At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the hedged item, along with its risk

management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis,

the Group documents whether the hedging instrument is highly effective in offsetting changes in cash flows of the hedged item attributable to the hedged

risk, which is when the hedging relationships meet all of the following hedge effectiveness requirements:

•  there is an economic relationship between the hedged item and the hedging instrument;

•  the effect of credit risk does not dominate the value changes that result from that economic relationship; and

•  the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the

quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item.

If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that

designated hedging relationship remains the same, the Group adjusts the hedge ratio of the hedging relationship (i.e. rebalances the hedge) so that it

meets the qualifying criteria again.

Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive

income and accumulated under the heading of hedging reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge.

Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged

item affects profit or loss, in the same line as the recognised hedged item. This transfer does not affect other comprehensive income. Furthermore, if the

Group expects that some or all of the loss accumulated in the hedging reserve will not be recovered in the future, that amount is immediately reclassified to

profit or loss.

Hedge accounting is discontinued only when the hedging relationship ceases to meet the qualifying criteria (after rebalancing, if applicable). This includes

instances when the hedging instrument expires or is sold or terminated. The discontinuation is accounted for prospectively. Any gain or loss recognised in

other comprehensive income and accumulated in the hedging reserve at that time remains in equity and is reclassified to profit or loss when the forecast

transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in the hedging reserve is reclassified

immediately to profit or loss.

Financial risk management

Financial risk is managed by the Group’s Treasury function. The Group’s Treasury function is governed by a Board Approved Treasury Policy Statement which

details the key objectives and policies for the Group’s treasury management. The Treasury Committee ensures that the Treasury Policy is adhered to, monitors its

operation and agrees appropriate strategies for recommendation to the Board. The Treasury Policy Statement is reviewed annually, with recommendations

for change made to the Board, as appropriate. The Group Treasury function is operated as a cost centre and is the only area of the business permitted to

transact treasury deals. It must also be consulted on other related matters such as the provision of guarantees or the financial implications of contract terms.

An explanation of the Group’s financial instrument risk management objectives and strategies is set out below.

The main financial risks which impact the Group result from funding and liquidity risk, credit risk, capital risk and market risk, principally as a result of changes

in interest and currency rates. Derivative financial instruments, principally interest rate and foreign currency swaps, are used to manage market risk.

Derivative financial instruments are not used for trading or speculative purposes.

Funding and liquidity risk

In order to ensure that the Group’s long-term funding strategy is aligned with its strategic objectives, the Treasury Committee regularly assesses the maturity

profile of the Group’s debt, alongside the prevailing financial projections. This enables it to ensure that funding levels are appropriate to support the Group’s plans.

The current funding arrangements of the Group consist of the securitised notes issued by Mitchells & Butlers Finance plc (and associated liquidity facility)

along with an unsecured committed revolving credit facility of £150m. The terms of the securitisation and the revolving credit facility contain various financial

covenants. Compliance with these covenants is monitored by Group Treasury. The Group also has uncommitted credit facilities of £5m, together with

short-term financing in respect of employee advances of £2m.

The Group prepares a rolling daily cash forecast covering a six week period and an annual cash forecast by period. These forecasts are reviewed on a timely

basis and are used to manage the investment and borrowing requirements of the Group. A combination of cash pooling and zero balancing agreements are in

place to ensure the optimum liquidity position is maintained. The Group maintains sufficient cash balances or committed facilities outside the securitisation to

ensure that it can meet its medium-term anticipated cash flow requirements.

Section 4 – Capital structure and financing costs continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc162

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAaUBKcDASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD3WiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMDC/tTXv+hc/8nk/wo/tTXv+hc/8nk/wrcorn9jP/n4//Jf/AJE6PbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SKmn3F3cQM97ZfY5A2BH5okyMDnI/Hj2q3RRW0U0rN3MJNN3SsFYk914oW4lW30fR5IA5EbyarKjMueCVFuQDjtk49TW3RTEYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1b9FAGB9r8Xf9APRP/BxL/wDI1H2vxd/0A9E/8HEv/wAjVv0UAYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1b9FAGB9r8Xf9APRP/BxL/wDI1H2vxd/0A9E/8HEv/wAjVv0UAYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1b9FAGB9r8Xf9APRP/BxL/wDI1H2vxd/0A9E/8HEv/wAjVv0UAYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1b9FAGB9r8Xf9APRP/BxL/wDI1H2vxd/0A9E/8HEv/wAjVv0UAYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1b9FAFTTpNRlt2bU7W1tp95CpbXLTqVwOSzRoQc54x2HPPFuiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKjknhheFJZUR5n2RKzAF22lsD1O1WOPQE9qAJKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//SO5rfrA8Qf8hvwr/wBhR/8A0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/wBI7mt+sDxB/wAhvwr/ANhR/wD0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/AGFH/wDSO5rfrA8Qf8hvwr/2FH/9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8AIb8K/wDYUf8A9I7mt+sDxB/yG/Cv/YUf/wBI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/9I7mt+sDxB/yG/Cv/AGFH/wDSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//AEjua36wPEH/ACG/Cv8A2FH/APSO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/8AYUf/ANI7mt+sDxB/yG/Cv/YUf/0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/wAhvwr/ANhR/wD0jua36wPEH/Ib8K/9hR//AEjuaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/0jua36wPEH/Ib8K/8AYUf/ANI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/2FH/8ASO5rfrA8Qf8AIb8K/wDYUf8A9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8hvwr/wBhR/8A0jua36wPEH/Ib8K/9hR//SO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/ACG/Cv8A2FH/APSO5rfrA8Qf8hvwr/2FH/8ASO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiszUdBs9UuFnuJtRR1UIBbalcW64yT92N1BPPXGfyoA06KwP+EP0z/n61v8A8Hl7/wDHaP8AhD9M/wCfrW//AAeXv/x2gDforA/4Q/TP+frW/wDweXv/AMdo/wCEP0z/AJ+tb/8AB5e//HaAN+isD/hD9M/5+tb/APB5e/8Ax2j/AIQ/TP8An61v/wAHl7/8doA36KwP+EP0z/n61v8A8Hl7/wDHaP8AhD9M/wCfrW//AAeXv/x2gDforA/4Q/TP+frW/wDweXv/AMdo/wCEP0z/AJ+tb/8AB5e//HaAN+isD/hD9M/5+tb/APB5e/8Ax2j/AIQ/TP8An61v/wAHl7/8doA36KwP+EP0z/n61v8A8Hl7/wDHaP8AhD9M/wCfrW//AAeXv/x2gDforA/4Q/TP+frW/wDweXv/AMdo/wCEP0z/AJ+tb/8AB5e//HaAN+isD/hD9M/5+tb/APB5e/8Ax2j/AIQ/TP8An61v/wAHl7/8doA36KwP+EP0z/n61v8A8Hl7/wDHaP8AhD9M/wCfrW//AAeXv/x2gDforA/4Q/TP+frW/wDweXv/AMdo/wCEP0z/AJ+tb/8AB5e//HaAN+isD/hD9M/5+tb/APB5e/8Ax2j/AIQ/TP8An61v/wAHl7/8doA36KwP+EP0z/n61v8A8Hl7/wDHaP8AhD9M/wCfrW//AAeXv/x2gDforA/4Q/TP+frW/wDweXv/AMdo/wCEP0z/AJ+tb/8AB5e//HaAN+isD/hD9M/5+tb/APB5e/8Ax2j/AIQ/TP8An61v/wAHl7/8doA36KwP+EP0z/n61v8A8Hl7/wDHaP8AhD9M/wCfrW//AAeXv/x2gDforA/4Q/TP+frW/wDweXv/AMdo/wCEP0z/AJ+tb/8AB5e//HaAN+isD/hD9M/5+tb/APB5e/8Ax2j/AIQ/TP8An61v/wAHl7/8doA36KwP+EP0z/n61v8A8Hl7/wDHaP8AhD9M/wCfrW//AAeXv/x2gDforA/4Q/TP+frW/wDweXv/AMdqx/whelf8/Ot/+D29/wDjtMDXorI/4QvSv+fnW/8Awe3v/wAdo/4QvSv+fnW//B7e/wDx2iwGvRWR/wAIXpX/AD863/4Pb3/47R/whelf8/Ot/wDg9vf/AI7RYDXorI/4QvSv+fnW/wDwe3v/AMdo/wCEL0r/AJ+db/8AB7e//HaLAa9FZH/CF6V/z863/wCD29/+O0f8IXpX/Pzrf/g9vf8A47RYDXorI/4QvSv+fnW//B7e/wDx2j/hC9K/5+db/wDB7e//AB2iwGvRWR/whelf8/Ot/wDg9vf/AI7R/wAIXpX/AD863/4Pb3/47RYDXorI/wCEL0r/AJ+db/8AB7e//HaP+EL0r/n51v8A8Ht7/wDHaLAa9FZH/CF6V/z863/4Pb3/AOO0f8IXpX/Pzrf/AIPb3/47RYDXorI/4QvSv+fnW/8Awe3v/wAdo/4QvSv+fnW//B7e/wDx2iwGvRWR/wAIXpX/AD863/4Pb3/47R/whelf8/Ot/wDg9vf/AI7RYDXorI/4QvSv+fnW/wDwe3v/AMdo/wCEL0r/AJ+db/8AB7e//HaLAa9FZH/CF6V/z863/wCD29/+O0f8IXpX/Pzrf/g9vf8A47RYDXorI/4QvSv+fnW//B7e/wDx2j/hC9K/5+db/wDB7e//AB2iwGvRWR/whelf8/Ot/wDg9vf/AI7R/wAIXpX/AD863/4Pb3/47RYDXorI/wCEL0r/AJ+db/8AB7e//HaP+EL0r/n51v8A8Ht7/wDHaLAa9FZH/CF6V/z863/4Pb3/AOO0f8IXpX/Pzrf/AIPb3/47RYDXorI/4QvSv+fnW/8Awe3v/wAdo/4QvSv+fnW//B7e/wDx2iwGvRWR/wAIXpX/AD863/4Pb3/47R/whelf8/Ot/wDg9vf/AI7RYDXorI/4QvSv+fnW/wDwe3v/AMdo/wCEL0r/AJ+db/8AB7e//HaLAa9FZH/CF6V/z863/wCD29/+O0f8IXpX/Pzrf/g9vf8A47RYDXorI/4QvSv+fnW//B7e/wDx2j/hC9K/5+db/wDB7e//AB2iwGvRWR/whelf8/Ot/wDg9vf/AI7R/wAIXpX/AD863/4Pb3/47RYDXorI/wCEL0r/AJ+db/8AB7e//HaP+EL0r/n51v8A8Ht7/wDHaLAa9FZH/CF6V/z863/4Pb3/AOO0f8IXpX/Pzrf/AIPb3/47RYDXorI/4QvSv+fnW/8Awe3v/wAdo/4QvSv+fnW//B7e/wDx2iwGvRWR/wAIXpX/AD863/4Pb3/47R/whelf8/Ot/wDg9vf/AI7RYDXorI/4QvSv+fnW/wDwe3v/AMdo/wCEL0r/AJ+db/8AB7e//HaLAa9FZH/CF6V/z863/wCD29/+O0f8IXpX/Pzrf/g9vf8A47RYDXorI/4QvSv+fnW//B7e/wDx2j/hC9K/5+db/wDB7e//AB2iwGvRWR/whelf8/Ot/wDg9vf/AI7R/wAIXpX/AD863/4Pb3/47RYDXorI/wCEL0r/AJ+db/8AB7e//HaP+EL0r/n51v8A8Ht7/wDHaLAa9FZH/CF6V/z863/4Pb3/AOO0f8IXpX/Pzrf/AIPb3/47RYDXorI/4QvSv+fnW/8Awe3v/wAdo/4QvSv+fnW//B7e/wDx2iwGvRWR/wAIXpX/AD863/4Pb3/47R/whelf8/Ot/wDg9vf/AI7RYDXorI/4QvSv+fnW/wDwe3v/AMdo/wCEL0r/AJ+db/8AB7e//HaLAa9FZH/CF6V/z863/wCD29/+O0f8IXpX/Pzrf/g9vf8A47RYDXorI/4QvSv+fnW//B7e/wDx2j/hC9K/5+db/wDB7e//AB2iwGvRWR/whelf8/Ot/wDg9vf/AI7R/wAIXpX/AD863/4Pb3/47RYDXorI/wCEL0r/AJ+db/8AB7e//HaP+EL0r/n51v8A8Ht7/wDHaLAa9FZH/CF6V/z863/4Pb3/AOO0f8IXpX/Pzrf/AIPb3/47RYDXorI/4QvSv+fnW/8Awe3v/wAdo/4QvSv+fnW//B7e/wDx2iwGvRWR/wAIXpX/AD863/4Pb3/47R/whelf8/Ot/wDg9vf/AI7RYDXorI/4QvSv+fnW/wDwe3v/AMdo/wCEL0r/AJ+db/8AB7e//HaLAa9FZH/CF6V/z863/wCD29/+O0f8IXpX/Pzrf/g9vf8A47RYDXrA8Qf8hvwr/wBhR/8A0jua1rLTLfSYWgtnunRm3k3N3LcNnAHDSMxA46Zx19TWT4g/5DfhX/sKP/6R3NIDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKjeeGNtskqIeuGYCgCSioftdt/wA/EX/fYo+123/PxF/32KAJqKh+123/AD8Rf99ij7Xbf8/EX/fYoAmoqH7Xbf8APxF/32KPtdt/z8Rf99igCaioftdt/wA/EX/fYo+123/PxF/32KAJqKh+123/AD8Rf99ij7Xbf8/EX/fYoAmoqH7Xbf8APxF/32KPtdt/z8Rf99igCaioftdt/wA/EX/fYo+123/PxF/32KAJqKh+123/AD8Rf99ij7Xbf8/EX/fYoAmoqH7Xbf8APxF/32KPtdt/z8Rf99igCaioftdt/wA/EX/fYo+123/PxF/32KAJqKh+123/AD8Rf99ij7Xbf8/EX/fYoAmoqH7Xbf8APxF/32KPtdt/z8Rf99igCaioftdt/wA/EX/fYo+123/PxF/32KAJqKh+123/AD8Rf99ij7Xbf8/EX/fYoAmoqH7Xbf8APxF/32KPtdt/z8Rf99igCaioftdt/wA/EX/fYo+123/PxF/32KAJqKh+123/AD8Rf99ij7Xbf8/EX/fYoAmoqH7Xbf8APxF/32KPtdt/z8Rf99igCaioftdt/wA/EX/fYo+123/PxF/32KAJqtVn/a7b/n4i/wC+xVn7baf8/UP/AH8FNCJ6Kg+22n/P1D/38FH220/5+of+/gpgT0VB9ttP+fqH/v4KPttp/wA/UP8A38FAE9FQfbbT/n6h/wC/go+22n/P1D/38FAE9FQfbbT/AJ+of+/go+22n/P1D/38FAE9FQfbbT/n6h/7+Cj7baf8/UP/AH8FAE9FQfbbT/n6h/7+Cj7baf8AP1D/AN/BQBPRUH220/5+of8Av4KPttp/z9Q/9/BQBPRUH220/wCfqH/v4KPttp/z9Q/9/BQBPRUH220/5+of+/go+22n/P1D/wB/BQBPRUH220/5+of+/go+22n/AD9Q/wDfwUAT0VB9ttP+fqH/AL+Cj7baf8/UP/fwUAT0VB9ttP8An6h/7+Cj7baf8/UP/fwUAT0VB9ttP+fqH/v4KPttp/z9Q/8AfwUAT0VB9ttP+fqH/v4KPttp/wA/UP8A38FAE9FQfbbT/n6h/wC/go+22n/P1D/38FAE9FQfbbT/AJ+of+/go+22n/P1D/38FAE9FQfbbT/n6h/7+Cj7baf8/UP/AH8FAE9FQfbbT/n6h/7+Cj7baf8AP1D/AN/BQBPRUH220/5+of8Av4KPttp/z9Q/9/BQBPRUH220/wCfqH/v4KPttp/z9Q/9/BQBPRUH220/5+of+/go+22n/P1D/wB/BQBPRUH220/5+of+/go+22n/AD9Q/wDfwUAT0VB9ttP+fqH/AL+Cj7baf8/UP/fwUAT0VB9ttP8An6h/7+Cj7baf8/UP/fwUAT0VB9ttP+fqH/v4KPttp/z9Q/8AfwUAT0VB9ttP+fqH/v4KPttp/wA/UP8A38FAE9FQfbbT/n6h/wC/go+22n/P1D/38FAE9FQfbbT/AJ+of+/go+22n/P1D/38FAE9FQfbbT/n6h/7+Cj7baf8/UP/AH8FAE9FQfbbT/n6h/7+Cj7baf8AP1D/AN/BQBPRUH220/5+of8Av4KPttp/z9Q/9/BQBPRUH220/wCfqH/v4KPttp/z9Q/9/BQBPRUH220/5+of+/go+22n/P1D/wB/BQBPRUH220/5+of+/go+22n/AD9Q/wDfwUAT0VB9ttP+fqH/AL+Cj7baf8/UP/fwUAT0VB9ttP8An6h/7+Cj7baf8/UP/fwUAT0VB9ttP+fqH/v4KPttp/z9Q/8AfwUAT0VB9ttP+fqH/v4KPttp/wA/UP8A38FAE9FQfbbT/n6h/wC/go+22n/P1D/38FAE9FQfbbT/AJ+of+/go+22n/P1D/38FAE9FQfbbT/n6h/7+Cj7baf8/UP/AH8FAE9FQfbbT/n6h/7+Cj7baf8AP1D/AN/BQBPRUH220/5+of8Av4KPttp/z9Q/9/BQBPRUH220/wCfqH/v4KPttp/z9Q/9/BQAS/f/AArnfEH/ACG/Cv8A2FH/APSO5roDLHKd0ciuvTKnIrn/ABB/yG/Cv/YUf/0juaQzfooopAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVaqrVqmhBRRRTAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAIJfv/AIVzviD/AJDfhX/sKP8A+kdzXRS/f/Cud8Qf8hvwr/2FH/8ASO5pDN+iiikAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAVG8yxthg5PX5UY/yFSUUAQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4VNRQBD9pj/uy/8Afpv8KPtMf92X/v03+FTUUAQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FTUUAQ/aY/7sv/fpv8KPtMf92X/v03+FTUUAQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4VNRQBD9pj/uy/8Afpv8KPtMf92X/v03+FTUUAQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FTUUAQ/aY/7sv/fpv8KPtMf92X/v03+FTUUAQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4VNRQBD9pj/uy/8Afpv8KPtMf92X/v03+FTUUAQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FTUUAQ/aY/7sv/fpv8KPtMf92X/v03+FTUUAQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4VNRQBD9pj/uy/8Afpv8KPtMf92X/v03+FTUUAQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FTUUAQ/aY/7sv/fpv8KPtMf92X/v03+FTUUAQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4VNRQBD9pj/uy/8Afpv8KPtMf92X/v03+FTUUAQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FTUUAQ/aY/7sv/fpv8Ks/a4/7s3/AH4f/CmVapoRB9rj/uzf9+H/AMKPtcf92b/vw/8AhU9FMCD7XH/dm/78P/hR9rj/ALs3/fh/8KnooAg+1x/3Zv8Avw/+FH2uP+7N/wB+H/wqeigCD7XH/dm/78P/AIUfa4/7s3/fh/8ACp6KAIPtcf8Adm/78P8A4Ufa4/7s3/fh/wDCp6KAIPtcf92b/vw/+FH2uP8Auzf9+H/wqeigCD7XH/dm/wC/D/4Ufa4/7s3/AH4f/Cp6KAIPtcf92b/vw/8AhR9rj/uzf9+H/wAKnooAg+1x/wB2b/vw/wDhR9rj/uzf9+H/AMKnooAg+1x/3Zv+/D/4Ufa4/wC7N/34f/Cp6KAIPtcf92b/AL8P/hR9rj/uzf8Afh/8KnooAg+1x/3Zv+/D/wCFH2uP+7N/34f/AAqeigCD7XH/AHZv+/D/AOFH2uP+7N/34f8AwqeigCD7XH/dm/78P/hR9rj/ALs3/fh/8KnooAg+1x/3Zv8Avw/+FH2uP+7N/wB+H/wqeigCD7XH/dm/78P/AIUfa4/7s3/fh/8ACp6KAIPtcf8Adm/78P8A4Ufa4/7s3/fh/wDCp6KAIPtcf92b/vw/+FH2uP8Auzf9+H/wqeigCD7XH/dm/wC/D/4Ufa4/7s3/AH4f/Cp6KAIPtcf92b/vw/8AhR9rj/uzf9+H/wAKnooAg+1x/wB2b/vw/wDhR9rj/uzf9+H/AMKnooAg+1x/3Zv+/D/4Ufa4/wC7N/34f/Cp6KAIPtcf92b/AL8P/hR9rj/uzf8Afh/8KnooAg+1x/3Zv+/D/wCFH2uP+7N/34f/AAqeigCD7XH/AHZv+/D/AOFH2uP+7N/34f8AwqeigCD7XH/dm/78P/hR9rj/ALs3/fh/8KnooAg+1x/3Zv8Avw/+FH2uP+7N/wB+H/wqeigCD7XH/dm/78P/AIUfa4/7s3/fh/8ACp6KAIPtcf8Adm/78P8A4Ufa4/7s3/fh/wDCp6KAIPtcf92b/vw/+FH2uP8Auzf9+H/wqeigCD7XH/dm/wC/D/4Ufa4/7s3/AH4f/Cp6KAIPtcf92b/vw/8AhR9rj/uzf9+H/wAKnooAg+1x/wB2b/vw/wDhR9rj/uzf9+H/AMKnooAg+1x/3Zv+/D/4Ufa4/wC7N/34f/Cp6KAIPtcf92b/AL8P/hR9rj/uzf8Afh/8KnooAg+1x/3Zv+/D/wCFH2uP+7N/34f/AAqeigCD7XH/AHZv+/D/AOFH2uP+7N/34f8AwqeigCD7XH/dm/78P/hR9rj/ALs3/fh/8KnooAg+1x/3Zv8Avw/+FH2uP+7N/wB+H/wqeigCD7XH/dm/78P/AIUfa4/7s3/fh/8ACp6KAIPtcf8Adm/78P8A4Ufa4/7s3/fh/wDCp6KAIPtcf92b/vw/+FH2uP8Auzf9+H/wqeigCD7XH/dm/wC/D/4Ufa4/7s3/AH4f/Cp6KAIPtcf92b/vw/8AhR9rj/uzf9+H/wAKnooArGRZTuUMB0+ZSp/Wuf8AEH/Ib8K/9hR//SO5ropfv/hXO+IP+Q34V/7Cj/8ApHc0hm/RRRSAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKjeZY2wwcnr8qMf5CgCSioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmoqH7TH/dl/wC/Tf4UfaY/7sv/AH6b/CgCaioftMf92X/v03+FH2mP+7L/AN+m/wAKAJqKh+0x/wB2X/v03+FH2mP+7L/36b/CgCaioftMf92X/v03+FH2mP8Auy/9+m/woAmq1Wf9pj/uy/8Afpv8Ks/a4/7s3/fh/wDCmhE9FQfa4/7s3/fh/wDCj7XH/dm/78P/AIUwJ6Kg+1x/3Zv+/D/4Ufa4/wC7N/34f/CgCeioPtcf92b/AL8P/hR9rj/uzf8Afh/8KAJ6Kg+1x/3Zv+/D/wCFH2uP+7N/34f/AAoAnoqD7XH/AHZv+/D/AOFH2uP+7N/34f8AwoAnoqD7XH/dm/78P/hR9rj/ALs3/fh/8KAJ6Kg+1x/3Zv8Avw/+FH2uP+7N/wB+H/woAnoqD7XH/dm/78P/AIUfa4/7s3/fh/8ACgCeioPtcf8Adm/78P8A4Ufa4/7s3/fh/wDCgCeioPtcf92b/vw/+FH2uP8Auzf9+H/woAnoqD7XH/dm/wC/D/4Ufa4/7s3/AH4f/CgCeioPtcf92b/vw/8AhR9rj/uzf9+H/wAKAJ6Kg+1x/wB2b/vw/wDhR9rj/uzf9+H/AMKAJ6Kg+1x/3Zv+/D/4Ufa4/wC7N/34f/CgCeioPtcf92b/AL8P/hR9rj/uzf8Afh/8KAJ6Kg+1x/3Zv+/D/wCFH2uP+7N/34f/AAoAnoqD7XH/AHZv+/D/AOFH2uP+7N/34f8AwoAnoqD7XH/dm/78P/hR9rj/ALs3/fh/8KAJ6Kg+1x/3Zv8Avw/+FH2uP+7N/wB+H/woAnoqD7XH/dm/78P/AIUfa4/7s3/fh/8ACgCeioPtcf8Adm/78P8A4Ufa4/7s3/fh/wDCgCeioPtcf92b/vw/+FH2uP8Auzf9+H/woAnoqD7XH/dm/wC/D/4Ufa4/7s3/AH4f/CgCeioPtcf92b/vw/8AhR9rj/uzf9+H/wAKAJ6Kg+1x/wB2b/vw/wDhR9rj/uzf9+H/AMKAJ6Kg+1x/3Zv+/D/4Ufa4/wC7N/34f/CgCeioPtcf92b/AL8P/hR9rj/uzf8Afh/8KAJ6Kg+1x/3Zv+/D/wCFH2uP+7N/34f/AAoAnoqD7XH/AHZv+/D/AOFH2uP+7N/34f8AwoAnoqD7XH/dm/78P/hR9rj/ALs3/fh/8KAJ6Kg+1x/3Zv8Avw/+FH2uP+7N/wB+H/woAnoqD7XH/dm/78P/AIUfa4/7s3/fh/8ACgCeioPtcf8Adm/78P8A4Ufa4/7s3/fh/wDCgCeioPtcf92b/vw/+FH2uP8Auzf9+H/woAnoqD7XH/dm/wC/D/4Ufa4/7s3/AH4f/CgCeioPtcf92b/vw/8AhR9rj/uzf9+H/wAKAJ6Kg+1x/wB2b/vw/wDhR9rj/uzf9+H/AMKAJ6Kg+1x/3Zv+/D/4Ufa4/wC7N/34f/CgCeioPtcf92b/AL8P/hR9rj/uzf8Afh/8KAJ6Kg+1x/3Zv+/D/wCFH2uP+7N/34f/AAoAnoqD7XH/AHZv+/D/AOFH2uP+7N/34f8AwoAnoqD7XH/dm/78P/hR9rj/ALs3/fh/8KAJ6Kg+1x/3Zv8Avw/+FH2uP+7N/wB+H/woAnoqD7XH/dm/78P/AIUfa4/7s3/fh/8ACgAl+/8AhXO+IP8AkN+Ff+wo/wD6R3NdAZFlO5QwHT5lKn9a5/xB/wAhvwr/ANhR/wD0juaQzfooopAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVaqrVqmhBRRRTAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAIJfv/hXO+IP+Q34V/wCwo/8A6R3NdFL9/wDCud8Qf8hvwr/2FH/9I7mkM36KKKQBRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABUbyMjYWF3HqpX+pqSigCHzpP+faX81/8AiqPOk/59pfzX/wCKqaigCHzpP+faX81/+Ko86T/n2l/Nf/iqmooAh86T/n2l/Nf/AIqjzpP+faX81/8AiqmooAh86T/n2l/Nf/iqPOk/59pfzX/4qpqKAIfOk/59pfzX/wCKo86T/n2l/Nf/AIqpqKAIfOk/59pfzX/4qjzpP+faX81/+KqaigCHzpP+faX81/8AiqPOk/59pfzX/wCKqaigCHzpP+faX81/+Ko86T/n2l/Nf/iqmooAh86T/n2l/Nf/AIqjzpP+faX81/8AiqmooAh86T/n2l/Nf/iqPOk/59pfzX/4qpqKAIfOk/59pfzX/wCKo86T/n2l/Nf/AIqpqKAIfOk/59pfzX/4qjzpP+faX81/+KqaigCHzpP+faX81/8AiqPOk/59pfzX/wCKqaigCHzpP+faX81/+Ko86T/n2l/Nf/iqmooAh86T/n2l/Nf/AIqjzpP+faX81/8AiqmooAh86T/n2l/Nf/iqPOk/59pfzX/4qpqKAIfOk/59pfzX/wCKo86T/n2l/Nf/AIqpqKAIfOk/59pfzX/4qjzpP+faX81/+KqaigCHzpP+faX81/8AiqPOk/59pfzX/wCKqaigCHzpP+faX81/+Kqz58n/AD6Tfmn/AMVTKtU0Ig8+T/n0m/NP/iqPPk/59JvzT/4qp6KYEHnyf8+k35p/8VR58n/PpN+af/FVPRQBB58n/PpN+af/ABVHnyf8+k35p/8AFVPRQBB58n/PpN+af/FUefJ/z6Tfmn/xVT0UAQefJ/z6Tfmn/wAVR58n/PpN+af/ABVT0UAQefJ/z6Tfmn/xVHnyf8+k35p/8VU9FAEHnyf8+k35p/8AFUefJ/z6Tfmn/wAVU9FAEHnyf8+k35p/8VR58n/PpN+af/FVPRQBB58n/PpN+af/ABVHnyf8+k35p/8AFVPRQBB58n/PpN+af/FUefJ/z6Tfmn/xVT0UAQefJ/z6Tfmn/wAVR58n/PpN+af/ABVT0UAQefJ/z6Tfmn/xVHnyf8+k35p/8VU9FAEHnyf8+k35p/8AFUefJ/z6Tfmn/wAVU9FAEHnyf8+k35p/8VR58n/PpN+af/FVPRQBB58n/PpN+af/ABVHnyf8+k35p/8AFVPRQBB58n/PpN+af/FUefJ/z6Tfmn/xVT0UAQefJ/z6Tfmn/wAVR58n/PpN+af/ABVT0UAQefJ/z6Tfmn/xVHnyf8+k35p/8VU9FAEHnyf8+k35p/8AFUefJ/z6Tfmn/wAVU9FAEHnyf8+k35p/8VR58n/PpN+af/FVPRQBB58n/PpN+af/ABVHnyf8+k35p/8AFVPRQBB58n/PpN+af/FUefJ/z6Tfmn/xVT0UAQefJ/z6Tfmn/wAVR58n/PpN+af/ABVT0UAQefJ/z6Tfmn/xVHnyf8+k35p/8VU9FAEHnyf8+k35p/8AFUefJ/z6Tfmn/wAVU9FAEHnyf8+k35p/8VR58n/PpN+af/FVPRQBB58n/PpN+af/ABVHnyf8+k35p/8AFVPRQBB58n/PpN+af/FUefJ/z6Tfmn/xVT0UAQefJ/z6Tfmn/wAVR58n/PpN+af/ABVT0UAQefJ/z6Tfmn/xVHnyf8+k35p/8VU9FAEHnyf8+k35p/8AFUefJ/z6Tfmn/wAVU9FAEHnyf8+k35p/8VR58n/PpN+af/FVPRQBB58n/PpN+af/ABVHnyf8+k35p/8AFVPRQBB58n/PpN+af/FUefJ/z6Tfmn/xVT0UAQefJ/z6Tfmn/wAVR58n/PpN+af/ABVT0UAQefJ/z6Tfmn/xVHnyf8+k35p/8VU9FAEHnyf8+k35p/8AFUefJ/z6Tfmn/wAVU9FAEHnyf8+k35p/8VR58n/PpN+af/FVPRQBB58n/PpN+af/ABVHnyf8+k35p/8AFVPRQBB58n/PpN+af/FUefJ/z6Tfmn/xVT0UAQefJ/z6Tfmn/wAVR58n/PpN+af/ABVT0UAQefJ/z6Tfmn/xVHnyf8+k35p/8VU9FAEHnyf8+k35p/8AFUefJ/z6Tfmn/wAVU9FAEHnyf8+k35p/8VR58n/PpN+af/FVPRQBWLs5y0bRn0bGf0Jrn/EH/Ib8K/8AYUf/ANI7muil+/8AhXO+IP8AkN+Ff+wo/wD6R3NIZv0UUUgCiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiszUZ9diuFXTNO065g2gl7m/eBg2TxtWFxjGOc/h6gGnRWB9r8Xf9APRP/BxL/8AI1H2vxd/0A9E/wDBxL/8jUAb9FYH2vxd/wBAPRP/AAcS/wDyNR9r8Xf9APRP/BxL/wDI1AG/RWB9r8Xf9APRP/BxL/8AI1H2vxd/0A9E/wDBxL/8jUAb9FYH2vxd/wBAPRP/AAcS/wDyNR9r8Xf9APRP/BxL/wDI1AG/RWB9r8Xf9APRP/BxL/8AI1H2vxd/0A9E/wDBxL/8jUAb9FYH2vxd/wBAPRP/AAcS/wDyNR9r8Xf9APRP/BxL/wDI1AG/RWB9r8Xf9APRP/BxL/8AI1H2vxd/0A9E/wDBxL/8jUAb9FYH2vxd/wBAPRP/AAcS/wDyNR9r8Xf9APRP/BxL/wDI1AG/RWB9r8Xf9APRP/BxL/8AI1H2vxd/0A9E/wDBxL/8jUAb9FYH2vxd/wBAPRP/AAcS/wDyNR9r8Xf9APRP/BxL/wDI1AG/RWB9r8Xf9APRP/BxL/8AI1H2vxd/0A9E/wDBxL/8jUAb9FYH2vxd/wBAPRP/AAcS/wDyNR9r8Xf9APRP/BxL/wDI1AG/RWB9r8Xf9APRP/BxL/8AI1H2vxd/0A9E/wDBxL/8jUAb9FYH2vxd/wBAPRP/AAcS/wDyNR9r8Xf9APRP/BxL/wDI1AG/RWB9r8Xf9APRP/BxL/8AI1H2vxd/0A9E/wDBxL/8jUAb9FYH2vxd/wBAPRP/AAcS/wDyNR9r8Xf9APRP/BxL/wDI1AG/RWB9r8Xf9APRP/BxL/8AI1H2vxd/0A9E/wDBxL/8jUAb9FYH2vxd/wBAPRP/AAcS/wDyNR9r8Xf9APRP/BxL/wDI1AG/RWB9r8Xf9APRP/BxL/8AI1H2vxd/0A9E/wDBxL/8jUAb9Wq5b7X4u/6Aeif+DiX/AORqs/bPGH/QC0P/AMHM3/yLTQjoKK5/7Z4w/wCgFof/AIOZv/kWj7Z4w/6AWh/+Dmb/AORaYHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AdBRXP/bPGH/QC0P/AMHM3/yLR9s8Yf8AQC0P/wAHM3/yLQB0FFc/9s8Yf9ALQ/8Awczf/ItH2zxh/wBALQ//AAczf/ItAHQUVz/2zxh/0AtD/wDBzN/8i0fbPGH/AEAtD/8ABzN/8i0AbMv3/wAK53xB/wAhvwr/ANhR/wD0jua1rKTUpYmbVLS0tp92FS1uWnUrgclmjQg5zxjsOeeMnxB/yG/Cv/YUf/0juaQzfooopAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVaqrVqmhBRRRTAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAIJfv/AIVzviD/AJDfhX/sKP8A+kdzXRS/f/Cud8Qf8hvwr/2FH/8ASO5pDN+iiikAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAVG5mDfu0Rh6s5H9DUlFAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNTUUAQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTU1FAEO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE1NRQBDuuf+eUX/f0/wDxNWd93/zxh/7/AB/+JplWqaEQb7v/AJ4w/wDf4/8AxNG+7/54w/8Af4//ABNT0UwIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAIN93/AM8Yf+/x/wDiaN93/wA8Yf8Av8f/AImp6KAKxMhP7xVVvRW3D+Qrn/EH/Ib8K/8AYUf/ANI7muil+/8AhXO+IP8AkN+Ff+wo/wD6R3NIZv0UUUgCiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiio3Exb926KPRkJ/qKAJKKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqKh23P/PWL/v0f/iqNtz/AM9Yv+/R/wDiqAJqtVn7bn/nrF/36P8A8VVnZd/89of+/J/+KpoRPRUGy7/57Q/9+T/8VRsu/wDntD/35P8A8VTAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqAJ6Kg2Xf/PaH/vyf/iqNl3/z2h/78n/4qgCeioNl3/z2h/78n/4qjZd/89of+/J/+KoAnoqDZd/89of+/J/+Ko2Xf/PaH/vyf/iqACX7/wCFc74g/wCQ34V/7Cj/APpHc10BEgP7xlZvVV2j+Zrn/EH/ACG/Cv8A2FH/APSO5pDN+iiikAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABVqqtWqaEFFFFMAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAgl+/+Fc74g/5DfhX/ALCj/wDpHc10Uv3/AMK53xB/yG/Cv/YUf/0juaQzfooopAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFRvGztlZnQeihf6ipKKAIfJk/5+ZfyX/wCJo8mT/n5l/Jf/AImpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/n5l/Jf/AImjyZP+fmX8l/8AiamooAh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/5+ZfyX/wCJo8mT/n5l/Jf/AImpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/n5l/Jf/AImjyZP+fmX8l/8AiamooAh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/5+ZfyX/wCJo8mT/n5l/Jf/AImpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/n5l/Jf/AImjyZP+fmX8l/8AiamooAh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/5+ZfyX/wCJo8mT/n5l/Jf/AImpqKAIfJk/5+ZfyX/4mrPkSf8AP3N+Sf8AxNMq1TQiDyJP+fub8k/+Jo8iT/n7m/JP/ianopgQeRJ/z9zfkn/xNHkSf8/c35J/8TU9FAEHkSf8/c35J/8AE0eRJ/z9zfkn/wATU9FAEHkSf8/c35J/8TR5En/P3N+Sf/E1PRQBB5En/P3N+Sf/ABNHkSf8/c35J/8AE1PRQBB5En/P3N+Sf/E0eRJ/z9zfkn/xNT0UAQeRJ/z9zfkn/wATR5En/P3N+Sf/ABNT0UAQeRJ/z9zfkn/xNHkSf8/c35J/8TU9FAEHkSf8/c35J/8AE0eRJ/z9zfkn/wATU9FAEHkSf8/c35J/8TR5En/P3N+Sf/E1PRQBB5En/P3N+Sf/ABNHkSf8/c35J/8AE1PRQBB5En/P3N+Sf/E0eRJ/z9zfkn/xNT0UAQeRJ/z9zfkn/wATR5En/P3N+Sf/ABNT0UAQeRJ/z9zfkn/xNHkSf8/c35J/8TU9FAEHkSf8/c35J/8AE0eRJ/z9zfkn/wATU9FAEHkSf8/c35J/8TR5En/P3N+Sf/E1PRQBB5En/P3N+Sf/ABNHkSf8/c35J/8AE1PRQBB5En/P3N+Sf/E0eRJ/z9zfkn/xNT0UAQeRJ/z9zfkn/wATR5En/P3N+Sf/ABNT0UAQeRJ/z9zfkn/xNHkSf8/c35J/8TU9FAEHkSf8/c35J/8AE0eRJ/z9zfkn/wATU9FAEHkSf8/c35J/8TR5En/P3N+Sf/E1PRQBB5En/P3N+Sf/ABNHkSf8/c35J/8AE1PRQBB5En/P3N+Sf/E0eRJ/z9zfkn/xNT0UAQeRJ/z9zfkn/wATR5En/P3N+Sf/ABNT0UAQeRJ/z9zfkn/xNHkSf8/c35J/8TU9FAEHkSf8/c35J/8AE0eRJ/z9zfkn/wATU9FAEHkSf8/c35J/8TR5En/P3N+Sf/E1PRQBB5En/P3N+Sf/ABNHkSf8/c35J/8AE1PRQBB5En/P3N+Sf/E0eRJ/z9zfkn/xNT0UAQeRJ/z9zfkn/wATR5En/P3N+Sf/ABNT0UAQeRJ/z9zfkn/xNHkSf8/c35J/8TU9FAEHkSf8/c35J/8AE0eRJ/z9zfkn/wATU9FAEHkSf8/c35J/8TR5En/P3N+Sf/E1PRQBB5En/P3N+Sf/ABNHkSf8/c35J/8AE1PRQBB5En/P3N+Sf/E0eRJ/z9zfkn/xNT0UAQeRJ/z9zfkn/wATR5En/P3N+Sf/ABNT0UAQeRJ/z9zfkn/xNHkSf8/c35J/8TU9FAEHkSf8/c35J/8AE0eRJ/z9zfkn/wATU9FAEHkSf8/c35J/8TR5En/P3N+Sf/E1PRQBB5En/P3N+Sf/ABNHkSf8/c35J/8AE1PRQBB5En/P3N+Sf/E0eRJ/z9zfkn/xNT0UAQeRJ/z9zfkn/wATR5En/P3N+Sf/ABNT0UAQeRJ/z9zfkn/xNHkSf8/c35J/8TU9FAFYoyHDSNIfVsZ/QCuf8Qf8hvwr/wBhR/8A0jua6KX7/wCFc74g/wCQ34V/7Cj/APpHc0hm/RRRSAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKjeNnbKzOg9FC/wBRQBJRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNRUPkyf8/Mv5L/8AE0eTJ/z8y/kv/wATQBNRUPkyf8/Mv5L/APE0eTJ/z8y/kv8A8TQBNVqs/wAmT/n5l/Jf/ias+RJ/z9zfkn/xNNCJ6Kg8iT/n7m/JP/iaPIk/5+5vyT/4mmBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNAE9FQeRJ/z9zfkn/xNHkSf8/c35J/8TQBPRUHkSf8AP3N+Sf8AxNHkSf8AP3N+Sf8AxNABL9/8K53xB/yG/Cv/AGFH/wDSO5roCjIcNI0h9Wxn9AK5/wAQf8hvwr/2FH/9I7mkM36KKKQBRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFWqq1apoQUUUUwCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigCCX7/wCFc74g/wCQ34V/7Cj/APpHc10Uv3/wrnfEH/Ib8K/9hR//AEjuaQzfooopAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFRvCsjZYuD0+V2H8jUlFAEP2aP8AvS/9/W/xo+zR/wB6X/v63+NTUUAQ/Zo/70v/AH9b/Gj7NH/el/7+t/jU1FAEP2aP+9L/AN/W/wAaPs0f96X/AL+t/jU1FAEP2aP+9L/39b/Gj7NH/el/7+t/jU1FAEP2aP8AvS/9/W/xo+zR/wB6X/v63+NTUUAQ/Zo/70v/AH9b/Gj7NH/el/7+t/jU1FAEP2aP+9L/AN/W/wAaPs0f96X/AL+t/jU1FAEP2aP+9L/39b/Gj7NH/el/7+t/jU1FAEP2aP8AvS/9/W/xo+zR/wB6X/v63+NTUUAQ/Zo/70v/AH9b/Gj7NH/el/7+t/jU1FAEP2aP+9L/AN/W/wAaPs0f96X/AL+t/jU1FAEP2aP+9L/39b/Gj7NH/el/7+t/jU1FAEP2aP8AvS/9/W/xo+zR/wB6X/v63+NTUUAQ/Zo/70v/AH9b/Gj7NH/el/7+t/jU1FAEP2aP+9L/AN/W/wAaPs0f96X/AL+t/jU1FAEP2aP+9L/39b/Gj7NH/el/7+t/jU1FAEP2aP8AvS/9/W/xo+zR/wB6X/v63+NTUUAQ/Zo/70v/AH9b/Gj7NH/el/7+t/jU1FAEP2aP+9L/AN/W/wAaPs0f96X/AL+t/jU1FAEP2aP+9L/39b/GrP2SP+9N/wB/3/xplWqaEQfZI/703/f9/wDGj7JH/em/7/v/AI1PRTAg+yR/3pv+/wC/+NH2SP8AvTf9/wB/8anooAg+yR/3pv8Av+/+NH2SP+9N/wB/3/xqeigCD7JH/em/7/v/AI0fZI/703/f9/8AGp6KAIPskf8Aem/7/v8A40fZI/703/f9/wDGp6KAIPskf96b/v8Av/jR9kj/AL03/f8Af/Gp6KAIPskf96b/AL/v/jR9kj/vTf8Af9/8anooAg+yR/3pv+/7/wCNH2SP+9N/3/f/ABqeigCD7JH/AHpv+/7/AONH2SP+9N/3/f8AxqeigCD7JH/em/7/AL/40fZI/wC9N/3/AH/xqeigCD7JH/em/wC/7/40fZI/703/AH/f/Gp6KAIPskf96b/v+/8AjR9kj/vTf9/3/wAanooAg+yR/wB6b/v+/wDjR9kj/vTf9/3/AManooAg+yR/3pv+/wC/+NH2SP8AvTf9/wB/8anooAg+yR/3pv8Av+/+NH2SP+9N/wB/3/xqeigCD7JH/em/7/v/AI0fZI/703/f9/8AGp6KAIPskf8Aem/7/v8A40fZI/703/f9/wDGp6KAIPskf96b/v8Av/jR9kj/AL03/f8Af/Gp6KAIPskf96b/AL/v/jR9kj/vTf8Af9/8anooAg+yR/3pv+/7/wCNH2SP+9N/3/f/ABqeigCD7JH/AHpv+/7/AONH2SP+9N/3/f8AxqeigCD7JH/em/7/AL/40fZI/wC9N/3/AH/xqeigCD7JH/em/wC/7/40fZI/703/AH/f/Gp6KAIPskf96b/v+/8AjR9kj/vTf9/3/wAanooAg+yR/wB6b/v+/wDjR9kj/vTf9/3/AManooAg+yR/3pv+/wC/+NH2SP8AvTf9/wB/8anooAg+yR/3pv8Av+/+NH2SP+9N/wB/3/xqeigCD7JH/em/7/v/AI0fZI/703/f9/8AGp6KAIPskf8Aem/7/v8A40fZI/703/f9/wDGp6KAIPskf96b/v8Av/jR9kj/AL03/f8Af/Gp6KAIPskf96b/AL/v/jR9kj/vTf8Af9/8anooAg+yR/3pv+/7/wCNH2SP+9N/3/f/ABqeigCD7JH/AHpv+/7/AONH2SP+9N/3/f8AxqeigCD7JH/em/7/AL/40fZI/wC9N/3/AH/xqeigCD7JH/em/wC/7/40fZI/703/AH/f/Gp6KAIPskf96b/v+/8AjR9kj/vTf9/3/wAanooAg+yR/wB6b/v+/wDjR9kj/vTf9/3/AManooAg+yR/3pv+/wC/+NH2SP8AvTf9/wB/8anooAg+yR/3pv8Av+/+NH2SP+9N/wB/3/xqeigCD7JH/em/7/v/AI0fZI/703/f9/8AGp6KAIPskf8Aem/7/v8A40fZI/703/f9/wDGp6KAIPskf96b/v8Av/jR9kj/AL03/f8Af/Gp6KAIPskf96b/AL/v/jR9kj/vTf8Af9/8anooAg+yR/3pv+/7/wCNH2SP+9N/3/f/ABqeigCsY1iO1SxHX5mLH9a5/wAQf8hvwr/2FH/9I7muil+/+Fc74g/5DfhX/sKP/wCkdzSGb9FFFIAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooqN4IZG3SRI56ZZQaAJKKh+yW3/PvF/3wKPslt/z7xf8AfAoAmoqH7Jbf8+8X/fAo+yW3/PvF/wB8CgCaiofslt/z7xf98Cj7Jbf8+8X/AHwKAJqKh+yW3/PvF/3wKPslt/z7xf8AfAoAmoqH7Jbf8+8X/fAo+yW3/PvF/wB8CgCaiofslt/z7xf98Cj7Jbf8+8X/AHwKAJqKh+yW3/PvF/3wKPslt/z7xf8AfAoAmoqH7Jbf8+8X/fAo+yW3/PvF/wB8CgCaiofslt/z7xf98Cj7Jbf8+8X/AHwKAJqKh+yW3/PvF/3wKPslt/z7xf8AfAoAmoqH7Jbf8+8X/fAo+yW3/PvF/wB8CgCaiofslt/z7xf98Cj7Jbf8+8X/AHwKAJqKh+yW3/PvF/3wKPslt/z7xf8AfAoAmoqH7Jbf8+8X/fAo+yW3/PvF/wB8CgCaiofslt/z7xf98Cj7Jbf8+8X/AHwKAJqKh+yW3/PvF/3wKPslt/z7xf8AfAoAmoqH7Jbf8+8X/fAo+yW3/PvF/wB8CgCaiofslt/z7xf98Cj7Jbf8+8X/AHwKAJqKh+yW3/PvF/3wKPslt/z7xf8AfAoAmq1Wf9ktv+feL/vgVZ+xWn/PrD/37FNCJ6Kg+xWn/PrD/wB+xR9itP8An1h/79imBPRUH2K0/wCfWH/v2KPsVp/z6w/9+xQBPRUH2K0/59Yf+/Yo+xWn/PrD/wB+xQBPRUH2K0/59Yf+/Yo+xWn/AD6w/wDfsUAT0VB9itP+fWH/AL9ij7Faf8+sP/fsUAT0VB9itP8An1h/79ij7Faf8+sP/fsUAT0VB9itP+fWH/v2KPsVp/z6w/8AfsUAT0VB9itP+fWH/v2KPsVp/wA+sP8A37FAE9FQfYrT/n1h/wC/Yo+xWn/PrD/37FAE9FQfYrT/AJ9Yf+/Yo+xWn/PrD/37FAE9FQfYrT/n1h/79ij7Faf8+sP/AH7FAE9FQfYrT/n1h/79ij7Faf8APrD/AN+xQBPRUH2K0/59Yf8Av2KPsVp/z6w/9+xQBPRUH2K0/wCfWH/v2KPsVp/z6w/9+xQBPRUH2K0/59Yf+/Yo+xWn/PrD/wB+xQBPRUH2K0/59Yf+/Yo+xWn/AD6w/wDfsUAT0VB9itP+fWH/AL9ij7Faf8+sP/fsUAT0VB9itP8An1h/79ij7Faf8+sP/fsUAT0VB9itP+fWH/v2KPsVp/z6w/8AfsUAT0VB9itP+fWH/v2KPsVp/wA+sP8A37FAE9FQfYrT/n1h/wC/Yo+xWn/PrD/37FAE9FQfYrT/AJ9Yf+/Yo+xWn/PrD/37FAE9FQfYrT/n1h/79ij7Faf8+sP/AH7FAE9FQfYrT/n1h/79ij7Faf8APrD/AN+xQBPRUH2K0/59Yf8Av2KPsVp/z6w/9+xQBPRUH2K0/wCfWH/v2KPsVp/z6w/9+xQBPRUH2K0/59Yf+/Yo+xWn/PrD/wB+xQBPRUH2K0/59Yf+/Yo+xWn/AD6w/wDfsUAT0VB9itP+fWH/AL9ij7Faf8+sP/fsUAT0VB9itP8An1h/79ij7Faf8+sP/fsUAT0VB9itP+fWH/v2KPsVp/z6w/8AfsUAT0VB9itP+fWH/v2KPsVp/wA+sP8A37FAE9FQfYrT/n1h/wC/Yo+xWn/PrD/37FAE9FQfYrT/AJ9Yf+/Yo+xWn/PrD/37FAE9FQfYrT/n1h/79ij7Faf8+sP/AH7FAE9FQfYrT/n1h/79ij7Faf8APrD/AN+xQBPRUH2K0/59Yf8Av2KPsVp/z6w/9+xQBPRUH2K0/wCfWH/v2KPsVp/z6w/9+xQBPRUH2K0/59Yf+/Yo+xWn/PrD/wB+xQBPRUH2K0/59Yf+/Yo+xWn/AD6w/wDfsUAT0VB9itP+fWH/AL9ij7Faf8+sP/fsUAT0VB9itP8An1h/79ij7Faf8+sP/fsUAT0VB9itP+fWH/v2KPsVp/z6w/8AfsUAT0VB9itP+fWH/v2KPsVp/wA+sP8A37FABL9/8K53xB/yG/Cv/YUf/wBI7mugMUcR2xxqi9cKMCuf8Qf8hvwr/wBhR/8A0juaQzfooopAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVaqrVqmhBRRRTAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAIJfv/hXO+IP+Q34V/7Cj/8ApHc10Uv3/wAK53xB/wAhvwr/ANhR/wD0juaQzfooopAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFZmo+G9C1e4W41PRdOvZ1UIJLm1SRguScZYE4yTx71p0UAYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATW/RQBgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNb9FAGB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE1v0UAYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TW/RQBgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNb9FAGB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E1v0UAYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATW/RQBgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNb9FAGB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE1v0UAYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TW/RQBgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNb9FAGB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E1v0UAYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATW/RQBgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNb9FAGB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE1v0UAYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TW/RQBgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNb9FAGB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E1v0UAYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATW/RQBgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNb9FAGB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE1v0UAYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TW/RQBgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNb9FAGB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E1v0UAYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATW/RQBgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNb9FAGB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE1v0UAYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TW/RQBgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNb9FAGB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E1v0UAYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATW/RQBgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNb9FAGB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE1v0UAYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TW/RQBgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNb9FAGB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E1v0UAYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATW/RQBgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNb9FAGB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE1v0UAYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TW/RQBgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNb9FAGB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E1v0UAYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATW/RQBgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNb9FAGB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE1v0UAYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TW/RQBgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNb9FAGB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E1v0UAYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATW/RQBgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNb9FAGB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE1v0UAYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TW/RQBgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNb9FAGB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E1v0UAYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATW/RQBgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNb9FAGB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE1v0UAYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TW/RQBgf8IN4R/6FbRP/BfF/wDE0f8ACDeEf+hW0T/wXxf/ABNb9FAGB/wg3hH/AKFbRP8AwXxf/E0f8IN4R/6FbRP/AAXxf/E1v0UAYH/CDeEf+hW0T/wXxf8AxNH/AAg3hH/oVtE/8F8X/wATW/RQBgf8IN4R/wChW0T/AMF8X/xNH/CDeEf+hW0T/wAF8X/xNb9FAGB/wg3hH/oVtE/8F8X/AMTR/wAIN4R/6FbRP/BfF/8AE1v0UAYH/CDeEf8AoVtE/wDBfF/8TR/wg3hH/oVtE/8ABfF/8TW/RQBU07StO0e3a30ywtbKBnLtHbQrGpbAGSFAGcAc+wrL8Qf8hvwr/wBhR/8A0jua36wPEH/Ib8K/9hR//SO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACo3nhjbbJKiHrhmAqSigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAh+123/PxF/32KPtdt/z8Rf99ipqKAIftdt/z8Rf99ij7Xbf8/EX/fYqaigCH7Xbf8/EX/fYo+123/PxF/32KmooAakiSrujdXHTKnNYXiD/AJDfhX/sKP8A+kdzW/WB4g/5DfhX/sKP/wCkdzQBv0UUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFRvMsbYYOT1+VGP8AIUASUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATUVD9pj/uy/8Afpv8KPtMf92X/v03+FAE1FQ/aY/7sv8A36b/AAo+0x/3Zf8Av03+FAE1FQ/aY/7sv/fpv8KPtMf92X/v03+FAE1FQ/aY/wC7L/36b/Cj7TH/AHZf+/Tf4UATVgeIP+Q34V/7Cj/+kdzW6jiRcqGA6fMpX+dYXiD/AJDfhX/sKP8A+kdzQBv0UUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVgeIP+Q34V/wCwo/8A6R3Nb9YHiD/kN+Ff+wo//pHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABUbzLG2GDk9flRj/IVJRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQBD9pj/uy/wDfpv8ACj7TH/dl/wC/Tf4VNRQBD9pj/uy/9+m/wo+0x/3Zf+/Tf4VNRQBD9pj/ALsv/fpv8KPtMf8Adl/79N/hU1FAEP2mP+7L/wB+m/wo+0x/3Zf+/Tf4VNRQA1HEi5UMB0+ZSv8AOsLxB/yG/Cv/AGFH/wDSO5rfrA8Qf8hvwr/2FH/9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKjeRkbCwu49VK/1NAElFQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1YHiD/AJDfhX/sKP8A+kdzW6jF1y0bIfRsf0JrC8Qf8hvwr/2FH/8ASO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKwPEH/Ib8K/9hR//SO5rfrA8Qf8hvwr/wBhR/8A0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAqNzMG/dojD1ZyP6GpKKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAId1z/AM8ov+/p/wDiaN1z/wA8ov8Av6f/AImpqKAGoXK/vFVT6K2f6CsLxB/yG/Cv/YUf/wBI7mt+sDxB/wAhvwr/ANhR/wD0juaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAoorM1GfXYrhV0zTtOuYNoJe5v3gYNk8bVhcYxjnP4eoBp0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv1geIP+Q34V/7Cj/8ApHc1qadJqMtuzana2ttPvIVLa5adSuByWaNCDnPGOw554y/EH/Ib8K/9hR//AEjuaAN+iiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACsDxB/yG/Cv/YUf/0jua36wPEH/Ib8K/8AYUf/ANI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKjcTFv3boo9GQn+oqSigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigCHbc/wDPWL/v0f8A4qjbc/8APWL/AL9H/wCKqaigBqBwv7xlY+qrj+prC8Qf8hvwr/2FH/8ASO5rfrA8Qf8AIb8K/wDYUf8A9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKjeNnbKzOg9FC/1FAElFQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1FQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNAE1FQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNAE1YHiD/kN+Ff8AsKP/AOkdzW6ilFw0jOfVsf0ArC8Qf8hvwr/2FH/9I7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigArA8Qf8AIb8K/wDYUf8A9I7mt+sDxB/yG/Cv/YUf/wBI7mgDfooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKjeNnbKzOg9FC/1FSUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUAQ+TJ/z8y/kv/wATR5Mn/PzL+S//ABNTUUAQ+TJ/z8y/kv8A8TR5Mn/PzL+S/wDxNTUUANRSi4aRnPq2P6AVheIP+Q34V/7Cj/8ApHc1v1geIP8AkN+Ff+wo/wD6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUVG8KyNli4PT5XYfyNAElFQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1FQ/Zo/70v/f1v8aPs0f96X/v63+NAE1FQ/Zo/wC9L/39b/Gj7NH/AHpf+/rf40ATUVD9mj/vS/8Af1v8aPs0f96X/v63+NAE1FQ/Zo/70v8A39b/ABo+zR/3pf8Av63+NAE1YHiD/kN+Ff8AsKP/AOkdzW6iCNcKWI6/Mxb+dYXiD/kN+Ff+wo//AKR3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/5DfhX/sKP/6R3Nb9YHiD/kN+Ff8AsKP/AOkdzQBv0UUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFRvBDI26SJHPTLKDUlFAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FAEP2S2/594v8AvgUfZLb/AJ94v++BU1FADUjSJdsaKg64UYrC8Qf8hvwr/wBhR/8A0jua36wPEH/Ib8K/9hR//SO5oA36KKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiuZ8RfD3wt4s1BL/W9L+1XMcQhV/tEqYQEkDCsB1Y/nQB01FcF/wpb4ff8AQv8A/k5cf/F0f8KW+H3/AEL/AP5OXH/xdAHe0VwX/Clvh9/0L/8A5OXH/wAXR/wpb4ff9C//AOTlx/8AF0Ad7RXBf8KW+H3/AEL/AP5OXH/xdH/Clvh9/wBC/wD+Tlx/8XQB3tFcF/wpb4ff9C//AOTlx/8AF0f8KW+H3/Qv/wDk5cf/ABdAHe0VwX/Clvh9/wBC/wD+Tlx/8XR/wpb4ff8AQv8A/k5cf/F0Ad7RXBf8KW+H3/Qv/wDk5cf/ABdH/Clvh9/0L/8A5OXH/wAXQB3tFcF/wpb4ff8AQv8A/k5cf/F0f8KW+H3/AEL/AP5OXH/xdAHe0VwX/Clvh9/0L/8A5OXH/wAXR/wpb4ff9C//AOTlx/8AF0Ad7RXBf8KW+H3/AEL/AP5OXH/xdH/Clvh9/wBC/wD+Tlx/8XQB3tFcF/wpb4ff9C//AOTlx/8AF0f8KW+H3/Qv/wDk5cf/ABdAHe0VwX/Clvh9/wBC/wD+Tlx/8XR/wpb4ff8AQv8A/k5cf/F0Ad7RXBf8KW+H3/Qv/wDk5cf/ABdH/Clvh9/0L/8A5OXH/wAXQB3tFcF/wpb4ff8AQv8A/k5cf/F0f8KW+H3/AEL/AP5OXH/xdAHe0VwX/Clvh9/0L/8A5OXH/wAXR/wpb4ff9C//AOTlx/8AF0Ad7RXBf8KW+H3/AEL/AP5OXH/xdH/Clvh9/wBC/wD+Tlx/8XQB3tFcF/wpb4ff9C//AOTlx/8AF0f8KW+H3/Qv/wDk5cf/ABdAHe0VwX/Clvh9/wBC/wD+Tlx/8XR/wpb4ff8AQv8A/k5cf/F0Ad7RXBf8KW+H3/Qv/wDk5cf/ABdH/Clvh9/0L/8A5OXH/wAXQB3tFcF/wpb4ff8AQv8A/k5cf/F0f8KW+H3/AEL/AP5OXH/xdAHe0VwX/Clvh9/0L/8A5OXH/wAXR/wpb4ff9C//AOTlx/8AF0Ad7RXBf8KW+H3/AEL/AP5OXH/xdH/Clvh9/wBC/wD+Tlx/8XQB3tFcF/wpb4ff9C//AOTlx/8AF0f8KW+H3/Qv/wDk5cf/ABdAHe0VwX/Clvh9/wBC/wD+Tlx/8XR/wpb4ff8AQv8A/k5cf/F0Ad7RXBf8KW+H3/Qv/wDk5cf/ABdH/Clvh9/0L/8A5OXH/wAXQB3tFcF/wpb4ff8AQv8A/k5cf/F0f8KW+H3/AEL/AP5OXH/xdAHe0VwX/Clvh9/0L/8A5OXH/wAXR/wpb4ff9C//AOTlx/8AF0Ad7RXBf8KW+H3/AEL/AP5OXH/xdH/Clvh9/wBC/wD+Tlx/8XQB3tFcF/wpb4ff9C//AOTlx/8AF0f8KW+H3/Qv/wDk5cf/ABdAHe0VwX/Clvh9/wBC/wD+Tlx/8XR/wpb4ff8AQv8A/k5cf/F0Ad7RXBf8KW+H3/Qv/wDk5cf/ABdH/Clvh9/0L/8A5OXH/wAXQB3tFcF/wpb4ff8AQv8A/k5cf/F0f8KW+H3/AEL/AP5OXH/xdAHe0VwX/Clvh9/0L/8A5OXH/wAXR/wpb4ff9C//AOTlx/8AF0Ad7RXBf8KW+H3/AEL/AP5OXH/xdH/Clvh9/wBC/wD+Tlx/8XQB3tFcF/wpb4ff9C//AOTlx/8AF0f8KW+H3/Qv/wDk5cf/ABdAHe0VwX/Clvh9/wBC/wD+Tlx/8XR/wpb4ff8AQv8A/k5cf/F0Ad7RXBf8KW+H3/Qv/wDk5cf/ABdH/Clvh9/0L/8A5OXH/wAXQB3tFcF/wpb4ff8AQv8A/k5cf/F0f8KW+H3/AEL/AP5OXH/xdAHe0VwX/Clvh9/0L/8A5OXH/wAXR/wpb4ff9C//AOTlx/8AF0Ad7RXBf8KW+H3/AEL/AP5OXH/xdH/Clvh9/wBC/wD+Tlx/8XQB3tFcF/wpb4ff9C//AOTlx/8AF0f8KW+H3/Qv/wDk5cf/ABdAHe0VwX/Clvh9/wBC/wD+Tlx/8XR/wpb4ff8AQv8A/k5cf/F0Ad7RXBf8KW+H3/Qv/wDk5cf/ABdH/Clvh9/0L/8A5OXH/wAXQB3tFcF/wpb4ff8AQv8A/k5cf/F0f8KW+H3/AEL/AP5OXH/xdAHe0VwX/Clvh9/0L/8A5OXH/wAXR/wpb4ff9C//AOTlx/8AF0Ad7RXBf8KW+H3/AEL/AP5OXH/xdH/Clvh9/wBC/wD+Tlx/8XQB3tFcF/wpb4ff9C//AOTlx/8AF0f8KW+H3/Qv/wDk5cf/ABdAHe0VwX/Clvh9/wBC/wD+Tlx/8XR/wpb4ff8AQv8A/k5cf/F0Ad7RXBf8KW+H3/Qv/wDk5cf/ABdH/Clvh9/0L/8A5OXH/wAXQB3tFcF/wpb4ff8AQv8A/k5cf/F0f8KW+H3/AEL/AP5OXH/xdAHe0VwX/Clvh9/0L/8A5OXH/wAXR/wpb4ff9C//AOTlx/8AF0Ad7RXBf8KW+H3/AEL/AP5OXH/xdH/Clvh9/wBC/wD+Tlx/8XQB3tFcF/wpb4ff9C//AOTlx/8AF0f8KW+H3/Qv/wDk5cf/ABdAHe0VwX/Clvh9/wBC/wD+Tlx/8XR/wpb4ff8AQv8A/k5cf/F0Ad7RXBf8KW+H3/Qv/wDk5cf/ABdH/Clvh9/0L/8A5OXH/wAXQB3tFcF/wpb4ff8AQv8A/k5cf/F0f8KW+H3/AEL/AP5OXH/xdAHe0VwX/Clvh9/0L/8A5OXH/wAXR/wpb4ff9C//AOTlx/8AF0Ad7RXBf8KW+H3/AEL/AP5OXH/xdH/Clvh9/wBC/wD+Tlx/8XQB3tFcF/wpb4ff9C//AOTlx/8AF0f8KW+H3/Qv/wDk5cf/ABdAHe0VwX/Clvh9/wBC/wD+Tlx/8XR/wpb4ff8AQv8A/k5cf/F0Ad7RXBf8KW+H3/Qv/wDk5cf/ABdH/Clvh9/0L/8A5OXH/wAXQB3tFcF/wpb4ff8AQv8A/k5cf/F0f8KW+H3/AEL/AP5OXH/xdAHe0VwX/Clvh9/0L/8A5OXH/wAXR/wpb4ff9C//AOTlx/8AF0Ad7RXBf8KW+H3/AEL/AP5OXH/xdH/Clvh9/wBC/wD+Tlx/8XQB3tFcF/wpb4ff9C//AOTlx/8AF0f8KW+H3/Qv/wDk5cf/ABdAHe1geIP+Q34V/wCwo/8A6R3NWPDvhjR/CenyWGiWf2W2klMzJ5rvlyACcsSeij8qr+IP+Q34V/7Cj/8ApHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff+wo//pHc1v1geIP+Q34V/wCwo/8A6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/5DfhX/sKP/wCkdzW/WB4g/wCQ34V/7Cj/APpHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff8AsKP/AOkdzW/WB4g/5DfhX/sKP/6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/wCQ34V/7Cj/APpHc1v1geIP+Q34V/7Cj/8ApHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff+wo//pHc1v1geIP+Q34V/wCwo/8A6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/5DfhX/sKP/wCkdzW/WB4g/wCQ34V/7Cj/APpHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff8AsKP/AOkdzW/WB4g/5DfhX/sKP/6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/wCQ34V/7Cj/APpHc1v1geIP+Q34V/7Cj/8ApHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff+wo//pHc1v1geIP+Q34V/wCwo/8A6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/5DfhX/sKP/wCkdzW/WB4g/wCQ34V/7Cj/APpHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff8AsKP/AOkdzW/WB4g/5DfhX/sKP/6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/wCQ34V/7Cj/APpHc1v1geIP+Q34V/7Cj/8ApHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff+wo//pHc1v1geIP+Q34V/wCwo/8A6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/5DfhX/sKP/wCkdzW/WB4g/wCQ34V/7Cj/APpHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff8AsKP/AOkdzW/WB4g/5DfhX/sKP/6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/wCQ34V/7Cj/APpHc1v1geIP+Q34V/7Cj/8ApHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff+wo//pHc1v1geIP+Q34V/wCwo/8A6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/5DfhX/sKP/wCkdzW/WB4g/wCQ34V/7Cj/APpHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff8AsKP/AOkdzW/WB4g/5DfhX/sKP/6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/wCQ34V/7Cj/APpHc1v1geIP+Q34V/7Cj/8ApHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff+wo//pHc1v1geIP+Q34V/wCwo/8A6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/5DfhX/sKP/wCkdzW/WB4g/wCQ34V/7Cj/APpHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff8AsKP/AOkdzW/WB4g/5DfhX/sKP/6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/wCQ34V/7Cj/APpHc1v1geIP+Q34V/7Cj/8ApHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff+wo//pHc1v1geIP+Q34V/wCwo/8A6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/5DfhX/sKP/wCkdzW/WB4g/wCQ34V/7Cj/APpHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff8AsKP/AOkdzW/WB4g/5DfhX/sKP/6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/wCQ34V/7Cj/APpHc1v1geIP+Q34V/7Cj/8ApHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff+wo//pHc1v1geIP+Q34V/wCwo/8A6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/5DfhX/sKP/wCkdzW/WB4g/wCQ34V/7Cj/APpHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff8AsKP/AOkdzW/WB4g/5DfhX/sKP/6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/wCQ34V/7Cj/APpHc1v1geIP+Q34V/7Cj/8ApHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff+wo//pHc1v1geIP+Q34V/wCwo/8A6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/5DfhX/sKP/wCkdzW/WB4g/wCQ34V/7Cj/APpHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff8AsKP/AOkdzW/WB4g/5DfhX/sKP/6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/wCQ34V/7Cj/APpHc1v1geIP+Q34V/7Cj/8ApHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff+wo//pHc1v1geIP+Q34V/wCwo/8A6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/5DfhX/sKP/wCkdzW/WB4g/wCQ34V/7Cj/APpHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff8AsKP/AOkdzW/WB4g/5DfhX/sKP/6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABWB4g/wCQ34V/7Cj/APpHc1v1geIP+Q34V/7Cj/8ApHc0Ab9FFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFYHiD/kN+Ff+wo//pHc1v1geIP+Q34V/wCwo/8A6R3NAG/RRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABVS806G9utPuJWcPY3BuIgpGCxiePDcdMSN0xyB9Kt0UAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFFFMD/9k=)

The maturity table below details the contractual undiscounted cash flows (both principal and interest), based on the prevailing period end interest and

exchange rates, for the Group’s financial liabilities, after taking into account the effect of interest rate and currency swaps (which are settled gross) and

assumes no early redemption in respect of any loan notes. As such these amounts will not reconcile to amounts disclosed in the Group Balance Sheet for

securitised debt and lease liabilities due to the impact of interest accruing in future periods.

|  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  | Within | One to | Two to | Three to | Four to | More than |  |
|  | one year | two years | three years | four years | five years | five years | Total |
|  | £m | £m | £m | £m | £m | £m | £m |
| 27 September 2025 |  |  |  |  |  |  |  |
| Securitised debt – loan notes | (199) | (198) | (198) | (192) | (169) | (326) | (1,282) |
| Derivative financial liabilities (settled net) | (4) | (4) | (3) | (2) | (2) | (6) | (21) |
| Derivative financial asset receipts | 24 | 24 | 25 | 6 | – | – | 79 |
| Derivative financial asset payments | (20) | (20) | (20) | (5) | – | – | (65) |
| Fixed rate: Securitised debt | (199) | (198) | (196) | (193) | (171) | (332) | (1,289) |
| Lease liabilities (note 3.2) | (58) | (50) | (54) | (42) | (33) | (408) | (645) |
| Trade payables (note 3.4) | (111) | – | – | – | – | – | (111) |
| Other payables (note 3.4) | (20) | – | – | – | – | – | (20) |
| Accrued charges (note 3.4) | (183) | – | – | – | – | – | (183) |
| Other financial liabilities (note 3.4) | (28) | – | – | – | – | – | (28) |
| Other contingent consideration (note 3.4) | (11) | – | – | – | – | – | (11) |
| 28 September 2024 |  |  |  |  |  |  |  |
| Securitised debt – loan notes | (201) | (198) | (198) | (198) | (192) | (496) | (1,483) |
| Derivative financial liabilities (settled net) | (2) | (4) | (4) | (3) | (2) | (7) | (22) |
| Derivative financial asset receipts | 24 | 24 | 24 | 24 | 6 | – | 102 |
| Derivative financial asset payments | (20) | (20) | (20) | (20) | (5) | – | (85) |
| Fixed rate: Securitised debt | (199) | (198) | (198) | (197) | (193) | (503) | (1,488) |
| Lease liabilities (note 3.2) | (50) | (50) | (46) | (49) | (40) | (430) | (665) |
| Trade payables (note 3.4) | (114) | – | – | – | – | – | (114) |
| Other payables (note 3.4) | (19) | (9) | – | – | – | – | (28) |
| Accrued charges (note 3.4) | (186) | – | – | – | – | – | (186) |
| Other financial liabilities (note 3.4) | (30) | – | – | – | – | – | (30) |

Credit risk

The Group Treasury function enters into contracts with third parties in respect of the investment of surplus funds and derivative financial instruments for

risk management purposes. These activities expose the Group to credit risk against the counterparties. To mitigate this exposure, Group Treasury operates

policies that restrict the general investment of surplus funds and the entering into of derivative transactions to counterparties that have a minimum credit

rating of ‘A’ (long-term) and ‘A1’/‘P1’/‘F1’ (short-term). Where ratings subsequently drop below the policy minimum additional approval is sought from the

Board to retain the position, or action is taken to move to a higher rated counterparty. The minimum long-term rating of any Group counterparty during the

year was ‘A’. The amount that can be invested or transacted at various ratings levels is restricted under the policy. Counterparties to derivative financial

instruments may also be required to post collateral with the Group where their credit rating falls below a predetermined level. At the period end a collateral

amount of £28m (2024 £30m) is held by the Group and is recognised as an other financial asset and other financial liability in the balance sheet.

To minimise credit risk exposure against individual counterparties, investments and derivative transactions are entered into with a range of counterparties.

The maximum investment exposure with any counterparty during the year was £50m (2024 £49m). The Group held investments with ten counterparties

during the year (2024 ten). The Group Treasury function reviews credit ratings, as published by Moody’s, Standard & Poor’s and Fitch Ratings, current

exposure levels and the maximum permitted exposure at given credit ratings, for each counterparty on a daily basis. Any exceptions are required to be

formally reported to the Treasury Committee on a four-weekly basis.

Trade receivables and other receivables mainly represent amounts due from tenants of unlicensed properties, amounts due from Group suppliers and cash

collateral deposits held by third parties. Credit exposure relating to tenants is ordinarily considered to be low risk, with an expected lifetime credit loss calculated

at the period end to reflect the risk of irrecoverable amounts. To minimise credit risk new tenants are assessed using an external credit rating system before

they are approved for tenancy. Credit exposure is reduced for the amounts due from Group suppliers as the Group holds offsetting amounts in trade and

other payables that are due to some of these suppliers. Credit risk on cash collateral deposits held by third parties are considered to be low credit risk as they

are held with reputable banking institutions by third parties.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

163

![](data:image/jpeg;base64,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)

4.3 Financial instruments continued

The Group’s maximum credit exposure at the balance sheet date was:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  | 12-month | Lifetime |  |
|  | FVTPL | ECL | ECL | Total |
|  | £m | £m | £m | £m |
| 27 September 2025: |  |  |  |  |
| Cash and cash equivalents  a | – | 181 | – | 181 |
| Trade receivables  b | – | – | 15 | 15 |
| Other receivables  b | – | 13 | – | 13 |
| Other financial assets | – | 28 | – | 28 |
| Finance lease receivables  c | – | 1 | 10 | 11 |
| Derivatives | 15 | – | – | 15 |
| 28 September 2024: |  |  |  |  |
| Cash and cash equivalents  a | – | 164 | – | 164 |
| Trade receivables  b | – | – | 13 | 13 |
| Other receivables  b | – | 16 | – | 16 |
| Other financial assets | – | 30 | – | 30 |
| Defined benefit pension blocked account | – | 12 | – | 12 |
| Finance lease receivables  c | – | 1 | 11 | 12 |
| Derivatives | 19 | – | – | 19 |

a.  Cash and cash equivalents as presented in the cash flow statement. This is presented net of an overdraft within a cash pooling arrangement, to which the Group has a legal right

of offset.

b. Trade receivables and other receivables are shown net of an expected credit loss allowance, as shown in note 3.4.

c.  Finance lease receivables expected credit loss allowance is immaterial, as described in note 3.2.

Capital management

The Group’s capital base is comprised of its net debt (analysed in note 4.4) plus total equity (disclosed on the face of the Group balance sheet). The objective

is to maintain a capital base which is sufficiently strong to support the ongoing development of the business as a going concern, including the amenity, and cash

flow generation of the pub estate. By keeping debt and headroom against its debt facilities at an appropriate level, the Group ensures that it maintains a strong

credit position, whilst maximising value for shareholders and adhering to its covenants and other restrictions associated with its debt (see note 4.1). In managing

its capital structure, from time to time the Group may realise value from non-core assets, buy back or issue new shares, initiate and vary its dividend payments

and seek to vary or accelerate debt repayments. The Group’s policy is to ensure that the maturity of its debt profile supports its strategic objectives. The Board

considers the latest covenant compliance, headroom projections and projected balance sheet positions periodically throughout the period, based on the

advice of the Treasury Committee which meets on a four-weekly basis. The Treasury Committee is chaired by the Group Treasurer and monitors Treasury

performance and compliance with Board-approved policies. The Group Chief Financial Officer is also a member of the Committee.

Total capital at the balance sheet date is as follows:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Net debt excluding leases (note 4.4) | 843 | 989 |
| Total equity | 2,816 | 2,566 |
| Total capital | 3,659 | 3,555 |

Market risk

The Group is exposed to the risk that the fair value of future cash flows of its financial instruments will fluctuate because of changes in market prices.

Market risk comprises foreign currency and interest rate risk.

Foreign currency risk

The most significant currency risk the Group faces is in relation to the class A3N floating rate notes. At issuance of these notes, the Group entered into a cross

currency interest rate swap to manage the foreign currency exposure resulting from both the US$ principal and initial interest elements of the notes. The A3N

notes have a carrying value of £75m (2024 £96m) and form part of the securitised debt (see note 4.1).

Sensitivity analysis

Further to the step-up on the A3N notes on 15 December 2010, the Group has additional foreign currency exposure as a result of the increase in US$ finance

costs. A movement of 10% in the US$ exchange rate would have £nil (2024 £nil) impact on the reported Group profit and £7m (2024 £16m) impact on the

reported Group equity.

The Group has no significant profit and loss exposure as a result of retranslating monetary assets and liabilities at different exchange rates. As the Group

is predominantly UK-based and acquires the majority of its supplies in sterling, it has no significant direct currency exposure from its operations.

Section 4 – Capital structure and financing costs continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc164

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Interest rate risk

The Group has a mixture of fixed and floating interest rate debt instruments and manages the variability in cash flows resulting from changes in interest rates

by using derivative financial instruments. Where the necessary criteria are met, the Group minimises the volatility in its consolidated financial statements

through the adoption of the hedge accounting provisions permitted under IFRS 9. The interest rate exposure resulting from the Group’s £1.0bn securitisation

is largely fixed, either as a result of the notes themselves being issued at fixed interest rates, or through a combination of floating rate notes against which

effective interest rate swaps are held, which are eligible for hedge accounting.

A number of the Group’s financial instruments were initially issued with LIBOR as their interest reference rate. The Group completed the necessary amendments

to transition its financing arrangements in advance of the discontinuation of LIBOR as a floating reference rate, and in prior periods replaced LIBOR with a

Sterling Overnight Index Average (SONIA) based rate in respect of sterling and a Secured Overnight Financing Rate (SOFR) based rate in respect of US

dollars. The sterling facilities transitioned to SONIA plus a credit adjustment spread of 11.93 basis points to maintain an economically equivalent position,

for periods commencing on or after 1 January 2022. The facilities previously referencing US dollar LIBOR transitioned to SOFR plus 26.161 basis points for

periods commencing on or after 1 July 2023.

As part of the transition, all of the Group’s hedge relationships were reviewed and these continue to be highly effective. Hedge documentation was updated

in accordance with the reliefs permitted in the amendments to IFRS 9, designating the new interest reference rate in both the hedged item and the hedging

instrument. As a result of the transition, there was no impact on the amounts recognised in the income statement or statement of other comprehensive income.

There has been no change to interest rate exposure in the current period. This is consistent with the Group Treasury policy on interest rate management.

Sensitivity analysis

The sensitivity analysis below has been calculated based on the Group’s exposure to interest rates for both derivative and non-derivative instruments as at

the balance sheet date. A 1% movement is used when reporting interest rate risk internally to key management personnel and represents management’s

assessment of this reasonably possible change in interest rates.

For floating rate liabilities, which are not hedged by derivative instruments, the analysis has been prepared assuming that the liability outstanding at the

balance sheet date was outstanding for the whole period. For interest income the analysis assumes that cash and cash equivalents and other cash deposits

that were held in interest bearing accounts at the balance sheet date were held for the whole period.

The Group’s sensitivity to a 1% increase in interest rates is detailed below:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Interest income  a | 1 | 1 |
| Interest expense  b | – | – |
| Profit impact | 1 | 1 |
| Derivative financial instruments (fair values)  c | 24 | 40 |
| Total equity | 25 | 41 |

a.  Represents interest income earned on cash and cash equivalents and other cash deposits (these are defined in note 4.1).

b. The element of interest expense which is not matched by payments and receipts under cash flow hedges which would otherwise offset the interest rate exposure of the Group.

c.  The impact on total equity from movements in the fair value of cash flow hedges.

Derivative financial instruments

Cash flow hedges

Changes in cash flow hedge fair values are recognised in the hedging reserve in equity to the extent that the hedges are effective. The cash flow hedges

detailed below have been assessed as being highly effective during the period and are expected to remain highly effective over the remaining contract lives.

The following amounts have been recognised during the period:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Gains/(losses) arising during the period | 10 | (34) |
| Reclassification adjustments for items included in profit or loss within finance costs | 5 | 11 |
|  | 15 | (23) |

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

165

![](data:image/jpeg;base64,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)

4.3 Financial instruments continued

Cash flow hedges – securitised borrowings

The nominal and carrying values of cash flow hedges at the balance sheet date, together with the changes in fair value of cash flow hedges during the period,

are shown below.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  | Carrying amount of |  | Changes in fair |
|  | Nominal amount | hedging instrument |  | value used for |
|  | of hedging |  |  | calculating hedge |
|  | instrument | Assets | Liabilities | ineffectiveness |
|  | £m | £m | £m | £m |
| 2025 |  |  |  |  |
| Interest rate risk |  |  |  |  |
| – 10 interest rate swaps | 571 | – | (15) | 14 |
| Foreign exchange risk |  |  |  |  |
| – Cross currency swap | 60 | 15 | – | (4) |
| 2024 |  |  |  |  |
| Interest rate risk |  |  |  |  |
| – 10 interest rate swaps | 633 | – | (29) | (22) |
| Foreign exchange risk |  |  |  |  |
| – Cross currency swap | 77 | 19 | – | (16) |

The cash flows on the interest rate swaps occur quarterly, receiving a floating rate of interest based on SONIA plus a credit adjustment spread of 11.93 basis

points, and paying a fixed rate of 4.77% (2024 4.78%). The contract maturity dates match those of the hedged item. No hedge ineffectiveness on the interest

rate swaps was recognised in profit or loss in the current or prior period.

The cash flows on the cross currency swap occur quarterly, receiving a floating rate of interest based on SOFR and paying a floating rate of interest at SONIA

plus a credit adjustment spread of 11.93 basis points in sterling. The ineffectiveness on the cross currency swaps due to foreign currency basis spread was

immaterial in both the current and prior period.

The cash flows arising from interest rate swap positions on the same counterparty may be settled as a net position. The cross currency interest rate swap is

held under a separate agreement and cash movements for this instrument are settled individually. In the event of default, the interest rate swaps and cross

currency swaps with counterparty B may be settled net, as shown below.

The position at 27 September 2025 is as follows:

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  | Positions that |  |
|  |  |  |  | could be net in |  |
|  |  | Positions netted | Balance sheet | balance sheet | Overall net |
|  | Gross position | in balance sheet | position | but are not | exposure |
|  | £m | £m | £m | £m | £m |
| Counterparty A – interest rate swaps | (6) | – | (6) | – | (6) |
| Counterparty B – interest rate swaps | (9) | – | (9) | 15 | 6 |
| Net interest rate swaps | (15) | – | (15) | 15 | – |
| Counterparty B – cross currency swap liability | (61) | 61 | – | – | – |
| Counterparty B – cross currency swap asset | 76 | (61) | 15 | (15) | – |
| Net cross currency swap | 15 | – | 15 | (15) | – |
| Total | – | – | – | – | – |

Section 4 – Capital structure and financing costs continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc166

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

The position at 28 September 2024 was as follows:

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  | Positions that |  |
|  |  |  |  | could be net in |  |
|  |  | Positions netted | Balance sheet | balance sheet | Overall net |
|  | Gross position | in balance sheet | position | but are not | exposure |
|  | £m | £m | £m | £m | £m |
| Counterparty A – interest rate swaps | (13) | – | (13) | – | (13) |
| Counterparty B – interest rate swaps | (16) | – | (16) | 19 | 3 |
| Net interest rate swaps | (29) | – | (29) | 19 | (10) |
| Counterparty B – cross currency swap liability | (78) | 78 | – | – | – |
| Counterparty B – cross currency swap asset | 97 | (78) | 19 | (19) | – |
| Net cross currency swap | 19 | – | 19 | (19) | – |
| Total | (10) |  | (10) | – | (10) |

Fair values of derivative financial instruments

The fair values of the derivative financial instruments were measured at 27 September 2025 and may be subject to material movements in the period

subsequent to the balance sheet date. The fair values of the derivative financial instruments are reflected on the balance sheet as follows:

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  | Derivative financial instruments – fair value |  |  |
|  | Non-current | Current | Current | Non-current |  |
|  | assets | assets | liabilities | liabilities | Total |
|  | £m | £m | £m | £m | £m |
| Derivatives at fair value designated in cash flow hedges: |  |  |  |  |  |
| – Interest rate swaps | – | – | (4) | (11) | (15) |
| – Cross currency swap | 15 | – | – | – | 15 |
| 27 September 2025 | 15 | – | (4) | (11) | – |
| 28 September 2024 | 19 | – | (2) | (27) | (10) |

Reconciliation of movements in derivative values

The tables below detail changes in the Group’s derivatives, including both cash and non-cash changes where appropriate. Changes in the Group’s

borrowings are disclosed in the net debt reconciliation in note 4.4.

Movements in derivative values for the 52 weeks ended 27 September 2025 are represented by:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  | At |  |  | At |
|  | 28 September | Cash | Fair value | 27 September |
|  | 2024 | movements | movements | 2025 |
|  | £m | £m | £m | £m |
| Cash flow hedges | (10) | – | 10 | – |
| Total derivatives | (10) | – | 10 | – |

Movements in derivative values for the 52 weeks ended 28 September 2024 are represented by:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  | At |  |  | At |
|  | 30 September | Cash | Fair value | 28 September |
|  | 2023 | movements | movements | 2024 |
|  | £m | £m | £m | £m |
| Cash flow hedges | 28 | (4) | (34) | (10) |
| Total derivatives | 28 | (4) | (34) | (10) |

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

167

![](data:image/jpeg;base64,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)

4.3 Financial instruments continued

Fair value of financial assets and liabilities

The fair value and carrying value of financial assets and liabilities by category is as follows:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  | 2025 |  | 2024 |  |
|  | Carrying value | Fair value | Carrying value | Fair value |
|  | £m | £m | £m | £m |
| Financial assets at amortised cost: |  |  |  |  |
| – Cash and cash equivalents (note 4.4) | 216 | 216 | 176 | 176 |
| – Trade receivables (note 3.4) | 15 | 15 | 13 | 13 |
| – Other receivables (note 3.4) | 13 | 13 | 16 | 16 |
| – Other financial assets (note 3.4) | 28 | 28 | 30 | 30 |
| – Defined benefit pension blocked account (note 3.4) | – | – | 12 | 12 |
| – Finance lease receivables (note 3.2) | 11 | 11 | 12 | 12 |
|  | 283 | 283 | 259 | 259 |
| Financial assets – derivatives at FVTPL: |  |  |  |  |
| – Derivative instruments in designated hedge accounting relationships (note 4.3) | 15 | 15 | 19 | 19 |
|  | 15 | 15 | 19 | 19 |
| Financial liabilities at amortised cost: |  |  |  |  |
| – Borrowings (note 4.1) | (1,074) | (1,038) | (1,184) | (1,084) |
| – Lease liabilities (note 3.2) | (434) | (434) | (447) | (447) |
| – Trade payables (note 3.4) | (111) | (111) | (114) | (114) |
| – Accrued charges (note 3.4) | (183) | (183) | (186) | (186) |
| – Other payables (note 3.4) | (20) | (20) | (27) | (27) |
| – Other – contingent consideration (note 3.4) | (11) | (11) | (8) | (8) |
| – Other financial liabilities (note 3.4) | (28) | (28) | (30) | (30) |
|  | (1,861) | (1,825) | (1,996) | (1,896) |
| Financial liabilities – derivatives at FVTPL: |  |  |  |  |
| – Derivative instruments in designated hedge accounting relationships (note 4.3) | (15) | (15) | (29) | (29) |

Borrowings have been valued as Level 1 financial instruments, as the various tranches of the securitised debt have been valued using period end quoted offer

prices. As the securitised debt is traded on an active market, the market value represents the fair value of this debt. The fair value of interest rate and currency

swaps is the estimated amount which the Group could expect to pay or receive on termination of the agreements. Other financial assets and liabilities are

either short-term in nature or their book values approximate to fair values.

Fair value of derivative financial instruments

The fair value of the Group’s derivative financial instruments is calculated by discounting the expected future cash flows of each instrument at an appropriate

discount rate to a ‘mark to market’ position and then adjusting this to reflect any non-performance risk associated with the counterparties to the instrument.

IFRS 13 Financial Instruments requires the Group’s derivative financial instruments to be disclosed at fair value and categorised in three levels according to the

inputs used in the calculation of their fair value:

•  Level 1 instruments use quoted prices as the input to fair value calculations;

•  Level 2 instruments use inputs, other than quoted prices, that are observable either directly or indirectly;

•  Level 3 instruments use inputs that are unobservable.

The table below sets out the valuation basis of derivative financial instruments held at fair value by the Group:

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  | Level 1 | Level 2 | Level 3 | Total |
| Fair value at 27 September 2025 | £m | £m | £m | £m |
| Financial assets: |  |  |  |  |
| Currency swaps | – | 15 | – | 15 |
| Financial liabilities: |  |  |  |  |
| Interest rate swaps | – | (15) | – | (15) |
|  | – | – | – | – |

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  | Level 1 | Level 2 | Level 3 | Total |
| Fair value at 28 September 2024 | £m | £m | £m | £m |
| Financial assets: |  |  |  |  |
| Currency swaps | – | 19 | – | 19 |
| Financial liabilities: |  |  |  |  |
| Interest rate swaps | – | (29) | – | (29) |
|  | – | (10) | – | (10) |

Section 4 – Capital structure and financing costs continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc168

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

4.4 Net debt

Accounting policies

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and other short-term highly liquid deposits with an original maturity at acquisition of three months

or less. Cash held on deposit with an original maturity at acquisition of more than three months is disclosed as other cash deposits. In the cash flow statement,

cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management.

Net debt

Net debt comprises cash and cash equivalents, cash deposits net of borrowings and discounted lease liabilities. Net debt is presented on a constant

currency basis, due to the inclusion of the fixed exchange rate component of the cross currency swap (as described in note 4.3). Cash flows on the interest

rate and cross currency swaps are shown within interest paid in the Group cash flow statement.

Net debt

|  |  |  |  |
| --- | --- | --- | --- |
|  |  | 2025 | 2024 |
|  | Note | £m | £m |
| Cash and cash equivalents |  | 216 | 176 |
| Overdraft | 4.1 | (35) | (12) |
| Cash and cash equivalents as presented in the cash flow statement  a |  | 181 | 164 |
| Securitised debt | 4.1 | (1,037) | (1,171) |
| Unsecured revolving credit facility | 4.1 | – | 1 |
| Derivatives hedging securitised debt  b | 4.1 | 15 | 19 |
| Short-term financing of employee advances  c | 4.1 | (2) | (2) |
| Net debt excluding leases |  | (843) | (989) |
| Lease liabilities | 3.2 | (434) | (447) |
| Net debt including leases |  | (1,277) | (1,436) |

a.  Cash and cash equivalents, in the cash flow statement, are presented net of an overdraft within a cash pooling arrangement relating to various entities across the Group.

b. Represents the element of the fair value of currency swaps hedging the balance sheet value of the Group’s US$ denominated A3N loan notes. This amount is disclosed

separately to remove the impact of exchange movements which are included in the securitised debt amount. Derivatives hedging debt restates the US$ debt at $1.675:£1.

c.  Advances to employees is a borrowing from Wagestream.

Movement in net debt excluding leases

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Net increase in cash and cash equivalents | 16 | 62 |
| Add back cash flows in respect of other components of net debt: |  |  |
| Principal repayments on securitised debt | 134 | 128 |
| Principal receipts on cross currency swap | (21) | (21) |
| Principal payments on cross currency swap | 17 | 16 |
| Short term financing of employee advances | – | (2) |
| Decrease in net debt arising from cash flows | 146 | 183 |
| Movement in capitalised debt issue costs net of accrued interest | (1) | (1) |
| Decrease in net debt excluding leases | 145 | 182 |
| Opening net debt excluding leases | (989) | (1,170) |
| Foreign exchange movements on cash | 1 | (1) |
| Closing net debt excluding leases | (843) | (989) |

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

169

![](data:image/jpeg;base64,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)

4.4 Net debt continued

Movement in lease liabilities:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Opening lease liabilities | (447) | (463) |
| Acquired through business combinations (note 5.1) | – | (5) |
| Additions  a | (26) | (28) |
| Interest charged during the period (note 4.2) | (17) | (17) |
| Repayment of principal | 39 | 41 |
| Payment of interest | 14 | 17 |
| Disposals | 5 | 7 |
| Foreign currency movements | (2) | 1 |
| Closing lease liabilities | (434) | (447) |

a.  Additions to lease liabilities include new leases and lease extensions or rent reviews relating to existing leases.

The movement in net debt including leases for the 52 weeks ended 27 September 2025 is represented by:

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  | At | Cash flow | Non-cash | Foreign | At |
|  | 28 September | movements | movements | currency | 27 September |
|  | 2024 | in the period | in the period | movements | 2025 |
|  | £m | £m | £m | £m | £m |
| Securitised debt  a | (1,171) | 134 | – | – | (1,037) |
| Derivatives hedging securitised debt | 19 | (4) | – | – | 15 |
|  | (1,152) | 130 | – | – | (1,022) |
| Revolving credit facilities | 1 | 1 | (2) | – | – |
| Short-term financing | (2) | – | – | – | (2) |
| Lease liabilities  b | (447) | 53 | (38) | (2) | (434) |
| Total liabilities arising from financing activities | (1,600) | 184 | (40) | (2) | (1,458) |
| Cash and cash equivalents | 164 | 16 | – | 1 | 181 |
| Net debt including leases | (1,436) | 200 | (40) | (1) | (1,277) |

a.  Cash movements on securitised debt of £134m relate to principal repayments. In addition, £72m of securitised debt interest has been accrued and settled during the period.

b. Cash movements of £53m relate to £39m repayment of principal on lease liabilities and £14m of interest paid on lease liabilities.

The movement in net debt including leases for the 52 weeks ended 28 September 2024 is represented by:

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  | At | Cash flow | Non-cash | Foreign | At |
|  | 30 September | movements | movements | currency | 28 September |
|  | 2023 | in the period | in the period | movements | 2024 |
|  | £m | £m | £m | £m | £m |
| Securitised debt  a | (1,309) | 128 | – | 10 | (1,171) |
| Derivatives hedging securitised debt | 34 | (5) | – | (10) | 19 |
|  | (1,275) | 123 | – | – | (1,152) |
| Revolving credit facilities | 2 | – | (1) | – | 1 |
| Short-term financing | – | (2) | – | – | (2) |
| Lease liabilities  b | (463) | 58 | (43) | 1 | (447) |
| Total liabilities arising from financing activities | (1,736) | 179 | (44) | 1 | (1,600) |
| Cash and cash equivalents | 103 | 62 | – | (1) | 164 |
| Net debt including leases | (1,633) | 241 | (44) | – | (1,436) |

a.  Cash movements on securitised debt of £128m relate to principal repayments. In addition, £79m of securitised debt interest has been accrued and settled during the period.

b. Cash movements of £58m relate to £41m repayment of principal on lease liabilities and £17m of interest paid on lease liabilities.

Section 4 – Capital structure and financing costs continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc170

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

4.5 Pensions

Accounting policy

In the prior period the Trustees of the Mitchells & Butlers Executive Pension Plan (MABEPP) bought out the liabilities of the plan with Legal & General

Assurance Society Limited through converting the overall bulk annuity policy into individual policies in members own names. Subsequent to that, and in

the current period the scheme has been wound up.

As a result, retirement and death benefits for eligible employees in the United Kingdom are now provided principally by the Mitchells & Butlers Pension

Plan (MABPP). This plan is a funded, HMRC approved, occupational pension scheme with defined contribution and defined benefit sections. The defined

benefit section of the plan is now closed to future service accrual. The defined benefit liabilities relate to this funded plan, together with an unfunded

unapproved pension arrangement (the Executive Top-Up Scheme, or MABETUS). The assets of the MABPP plan are held in a self-administered trust fund

separate from the Company’s assets.

The MABPP plan operates under the UK regulatory framework and is governed by a Trustee Board composed of member-nominated and independent

Trustee Directors. The Trustee Directors make investment decisions and set the required contribution rates based on independent actuarial advice and

consultation with the Company.

In addition, Mitchells & Butlers plc also provides a workplace pension plan in line with the Workplace Pensions Reform Regulations. This automatically

enrols all eligible workers into a Qualifying Workplace Pension Plan.

Actuarial surplus/(liabilities) are the present value of the fair value of the schemes’ assets less the defined benefit obligation. The defined benefit obligation

has been calculated using the projected unit credit method. This is based on a number of financial assumptions and estimates, the determination of which

may be significant to the balance sheet valuation.

A pension surplus is recognised where there is an expectation of future economic benefit to the Company. In the prior period, the Trustees of MABPP

resolved that any surplus arising in MABPP can be used to pay for the employer contributions to the defined contribution section of MABPP. Since this was

a change in the Trustee’s agreed use of the MABPP surplus compared to previous years, the accounting surplus was and continues to be recognised, with

the full value of the surplus expected to be an economic benefit to the Company. This economic benefit has been determined over the future lifetime of

the DC section of the plan, in particular on the basis that this section remains open to new members in its current form, and therefore will continue to

remain active for the foreseeable future.

There is no current service cost as all defined benefit schemes are closed to future accrual. Past service costs for amendment of the GMP equalisation

liability, due to changes in methodology, are recognised within separately disclosed items in the income statement. The net pension finance charge,

calculated by applying the discount rate to the pension deficit or surplus at the beginning of the period, is shown within finance income or expense.

The administration costs of the schemes are recognised within operating costs in the income statement

Remeasurement comprising actuarial gains and losses, the effect of minimum funding requirements, and the return on schemes’ assets are recognised

immediately in the balance sheet with a charge or credit to the statement of comprehensive income in the period in which they occur.

Curtailments and settlements relating to the Group’s defined benefit plans are recognised in the income statement in the period in which the curtailment

or settlement occurs.

For the defined contribution arrangements, the charge against profit is equal to the amount of contributions payable for that period.

Measurement of scheme assets and liabilities

MABPP – buy-in policy transaction

During the 53 weeks ended 30 September 2023, the Trustees of the MABPP entered a Bulk Purchase Agreement (BPA) with Standard Life. The resulting policy

was set up to provide the plan with sufficient funding to cover all known member benefits of the scheme. As at the balance sheet date the buy-in continues.

During the period, the Trustee and insurer have progressed a significant amount of work on the data cleanse project that ensures the data and benefits

covered by the BPA accurately reflect the entitlements of the MABPP members. Net reserves have been included within the MABPP balance sheet, that

cover the estimated additional costs for refinement of the benefit entitlements of the MABPP members. These net reserves are as follows:

•  £15m to cover the impact of contingent spouse pension calculations (which is the majority of this cost), some data corrections and GMP rectification.

This amount is a best-estimate of a final premium that will be due to the insurer when the buy-in data cleanse process is completed, and therefore results

in a value of the bulk annuity policy that is lower than the defined benefit obligation in respect of the membership it covers by this amount.

•  £24m (2024 £16m) as an additional liability arising from GMP equalisation; the majority of which will need to be secured with the insurer in future, via the

payment of an additional premium.

The GMP equalisation liability, includes a £3m charge in the current period, relating to amendment of the liability that has been recognised as a past service

cost within separately disclosed items (note 2.2).

These reserves may be updated in future as the data cleanse project progresses to allow for any further changes.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

171

![](data:image/jpeg;base64,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)

4.5 Pensions continued

MABPP – recognition of actuarial surplus

Over the course of the previous period, the Trustees of MABPP resolved that any surplus arising in MABPP can be used to pay for the employer contributions

to the defined contribution section of MABPP. In connection with this, before the buy-out of MABEPP occurred in September 2024, the defined contribution

members within MABEPP were moved across to MABPP, along with the remaining surplus funds from the MABEPP to enable future employer contributions

for them to be met out of the surplus in the MABPP. Since this was a change in the Trustee’s agreed use of the MABPP surplus compared to previous years, the

accounting surplus was recognised in full during the 52 weeks ended 28 September 2024. This economic benefit was determined over the future lifetime of

the DC section of the plan, in particular on the basis that this section remains open to new members in its current form, and therefore will continue to remain

active for the foreseeable future.

Prior to the 52 week period ending 28 September 2024 no actuarial surplus had been recognised as the Company did not have an unconditional right to

recover any surplus from the pension plans. During the 52 week period ending 27 September 2025, the MABPP surplus has funded £12m of the Company’s

employer contributions, AVCs in respect of prior year bonus payments and death in service benefits. This is shown in the surplus movements below.

Actuarial valuation

The actuarial valuations used for IAS 19 (revised) purposes are based on the results of the latest full actuarial valuation carried out as at 31 March 2022, which

completed in December 2022, and updated by the schemes’ independent qualified actuaries to 27 September 2025. The Plan’s assets are stated at market

value at 27 September 2025 and the liabilities of the Plan and the Scheme have been assessed as at the same date using the projected unit method. IAS 19

(revised) requires that the schemes’ liabilities are discounted using market yields at the end of the period on high-quality corporate bonds.

The principal financial assumptions have been updated to reflect changes in market conditions in the period and are as follows.

|  |  |  |  |
| --- | --- | --- | --- |
|  | Main plan and | Main plan and |  |
|  | MABETUS | MABETUS | Executive plan |
|  | 2025 | 2024 | 2024 |
| Discount rate | 5.9% | 5.1% | 5.1% |
| Pensions increases – RPI max 5% | 3.0% | 3.0% | 3.0% |
| Inflation rate – RPI | 3.1% | 3.2% | 3.2% |

The discount rate is based on a yield curve for AA corporate rated bonds which are consistent with the currency and estimated term of retirement benefit liabilities.

To determine the RPI assumption the gilt implied inflation yield curve has been used, reflecting the duration of the Plan’s cash flows, and adjusting for an

assumed inflation risk premium.

The mortality assumptions were reviewed following the 2022 actuarial valuation, although for MABETUS a member-specific analysis was carried out in 2024

to set a more appropriate mortality assumption due to the unique membership make-up (previously the MABETUS life expectancies were set equal to those

used in the Executive Plan and this has been finalised and updated to the most recent published mortality base tables at the period end). A summary of the

average life expectancies assumed is as follows:

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  | 2025 |  |  | 2024 |  |
|  | Main plan | MABETUS | Main plan | Executive plan | MABETUS |
|  | years | years | years | years | years |
| Male member aged 65 (current life expectancy) | 21.0 | 22.7 | 20.9 | 22.9 | 24.3 |
| Male member aged 45 (life expectancy at 65) | 22.4 | 24.1 | 22.3 | 24.3 | 25.9 |
| Female member aged 65 (current life expectancy) | 23.9 | 26.3 | 23.8 | 24.7 | 27.7 |
| Female member aged 45 (life expectancy at 65) | 25.3 | 27.6 | 25.2 | 26.1 | 28.9 |

Section 4 – Capital structure and financing costs continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc172

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Principal risks and assumptions

Following the MABEPP wind up the principal risks and assumptions apply to the MABPP and MABETUS schemes which are not exposed to any unusual,

entity specific or scheme specific risks. Whilst there are general risks as set out below they have been mitigated in the MABPP due to the impact of the buy-in.

Inflation – The majority of the plans’ obligations are linked to inflation. Higher inflation will lead to increased liabilities which is offset by the MABPP holding

the BPA with Standard Life.

Interest rate – The plans’ liabilities are determined using discount rates derived from yields on AA-rated corporate bonds. A decrease in corporate bond yields

will increase plan liabilities though this will be offset by the MABPP holding the BPA with Standard Life.

Mortality – The majority of the plans’ obligations are to provide benefits for the life of the members and their partners, so any increase in life expectancy will

result in an increase in the plans’ liabilities, although this will be offset by the MABPP holding the BPA with Standard Life.

Asset returns – The main asset held by the MABPP is the BPA with Standard Life, with other assets invested in a diversified portfolio of equities, bonds and

other assets. Volatility in the non-BPA asset values will lead to movements in the net deficit/surplus reported in the Group balance sheet for the plans which

in addition will also impact the pension finance charge in the Group income statement.

Amounts recognised in respect of defined benefit schemes

The following amounts relating to the Group’s defined benefit and defined contribution arrangements have been recognised in the Group income statement

and Group statement of comprehensive income.

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
| Group income statement | £m | £m |
| Operating profit: |  |  |
| Employer contributions (defined contribution plans) (note 2.3) | (21) | (19) |
| Administrative costs (defined benefit plans) | (4) | (5) |
| Charge to operating profit before separately disclosed items | (25) | (24) |
| Past service cost (see note 2.2) | (3) | – |
| Charge to operating profit | (28) | (24) |
| Finance costs: |  |  |
| Net pensions finance income on actuarial surplus | 7 | 6 |
| Additional pensions finance charge due to asset ceiling | – | (8) |
| Net finance income/(charge) in respect of pensions | 7 | (2) |
| Total charge | (21) | (26) |

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
| Group statement of comprehensive income | £m | £m |
| (Loss)/return on scheme assets and effects of changes in assumptions | (18) | 16 |
| Movement in pension liabilities recognised due to asset ceiling | – | 150 |
| Remeasurement of pension liabilities | (18) | 166 |

The net pension surplus is presented in the Group balance sheet as follows.

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
| Group balance sheet | £m | £m |
| Pension surplus (MABPP) | 132 | 164 |
| Current pension liability (MABETUS) | (1) | (1) |
| Non-current pension liability (MABETUS) | (21) | (24) |
| Net actuarial surplus | 110 | 139 |
| Associated deferred tax liability | (28) | (35) |

The schemes comprise the following assets and liabilities.

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
| Actuarial surplus | £m | £m |
| Fair value of scheme’s assets | 1,123 | 1,238 |
| Present value of scheme’s liabilities | (1,013) | (1,099) |
| Net actuarial surplus | 110 | 139 |

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

173

![](data:image/jpeg;base64,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)

4.5 Pensions continued

The movement in the fair value of the schemes’ assets in the period is as follows:

|  |  |  |
| --- | --- | --- |
|  | Schemes’ assets |  |
|  | 2025 | 2024 |
|  | £m | £m |
| Fair value of schemes’ assets at beginning of period | 1,238 | 1,434 |
| Interest income | 62 | 79 |
| Remeasurement (loss)/gain: |  |  |
| – (Loss)/gain on schemes’ assets (excluding amounts included in net finance charge) | (98) | 100 |
| Utilisation of pension surplus | (12) | – |
| Employer contributions to MABETUS | 1 | 1 |
| Benefits paid | (64) | (84) |
| Administration costs | (4) | (5) |
| Settlements | – | (287) |
| At end of period | 1,123 | 1,238 |

Changes in the present value of defined benefit obligation are as follows:

|  |  |  |
| --- | --- | --- |
|  | Defined benefit obligation |  |
|  | 2025 | 2024 |
|  | £m | £m |
| Present value of defined benefit obligation at beginning of period | (1,099) | (1,313) |
| Interest cost | (55) | (72) |
| Past service cost | (3) | – |
| Benefits paid | 64 | 84 |
| Remeasurement gains/(losses): |  |  |
| – Effect of changes in demographic assumptions | 1 | (1) |
| – Effect of changes in financial assumptions | 102 | (81) |
| – Effect of experience adjustments | (23) | (3) |
| Settlements | – | 287 |
| At end of period  a | (1,013) | (1,099) |

a.  The defined benefit obligation comprises £22m (2024 £25m) relating to the MABETUS unfunded plan and £991m (2024 £1,074m) relating to the funded plans.

The weighted average duration of the defined benefit obligation is 11 years (2024 13 years).

The major categories and fair values of assets of the MABPP scheme at the end of the reporting period are as follows.

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | £m | £m |
| Cash and equivalents | 94 | 82 |
| Pooled investment funds: |  |  |
| – Real estate debt | 11 | 16 |
| Debt instruments: |  |  |
| – Secured income debt | 67 | 82 |
| MABPP insurance policies | 951 | 1,058 |
| Fair value of assets | 1,123 | 1,238 |

The actual investment return achieved on schemes’ assets over the period was a loss of 3.1% (2024 profit of 12.9%), which represented a loss of £37m

(2024 gain of £180m).

Cash and cash equivalents are classified as Level 1 instruments. Forward foreign exchange contracts are classified as Level 2 instruments. Real estate debt

and secured income debt are classified as Level 3 instruments.

Section 4 – Capital structure and financing costs continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc174

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Sensitivity to changes in actuarial assumptions

The sensitivities regarding principal actuarial assumptions, assessed in isolation, that have been used to measure the scheme liabilities are set out below.

These are considered to be reasonable sensitivities based on the average movement over the last three financial periods. There was no change in the

methods and assumptions used in preparing the sensitivity analysis from the prior period.

|  |  |
| --- | --- |
|  | Increase/ |
|  | (decrease) in |
|  | actuarial surplus |
|  | 2025 |
|  | £m |
| 2025 |  |
| 0.5% increase in discount rate | 1 |
| 0.2% increase in inflation rate | (1) |
| Additional one year decrease to life expectancy | 1 |

|  |  |
| --- | --- |
|  | Increase/ |
|  | (decrease) in |
|  | actuarial surplus |
|  | 2024 |
|  | £m |
| 2024 |  |
| 0.5% increase in discount rate | 2 |
| 0.2% increase in inflation rate | (1) |
| Additional one year decrease to life expectancy | 1 |

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the changes in

assumptions would occur in isolation of one another as some of the assumptions may be correlated. In presenting the above sensitivity analysis, the present

value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that

applied in calculating the defined benefit obligation liabilities recognised in the statement of financial position.

4.6 Share-based payments

Accounting policy

The Group operates a number of equity-settled share-based compensation plans, whereby, subject to meeting any relevant conditions, employees are

awarded shares or rights over shares. The cost of such awards is measured at fair value, excluding the effect of non market-based vesting conditions, on the

date of grant. The expense is recognised on a straight-line basis over the vesting period and is adjusted for the estimated effect of non market-based vesting

conditions and forfeitures, on the number of shares that will eventually vest due to employees leaving the employment of the Group. Fair values are

calculated using either the Black-Scholes, Binomial or Monte Carlo simulation models depending on the conditions attached to the particular share scheme.

Sharesave plan options granted to employees are treated as cancelled when employees cease to contribute to the scheme. This results in an accelerated

recognition of the expense that would have arisen over the remainder of the original vesting period.

Schemes in operation

The net charge recognised for share-based payments in the period was £9m (2024 £7m).

The Group had five equity-settled share schemes (2024 six) in operation during the period: the Performance Share Plan (PSP); the Restricted Share Plan

(RSP); Sharesave Plan (SAYE); Share Incentive Plan (SIP) and Short Term Deferred Incentive Plan (STDIP).

The vesting of all awards or options is generally dependent upon participants remaining in the employment of a participating company during the vesting

period. Further details on each scheme are provided in the Report on Directors’ remuneration on pages 98 to 118.

The fair value of awards under the Performance Share Plan, the Restricted Share Plan, the Share Incentive Plan and the Short Term Deferred Incentive Plan

are equal to the share price on the date they are granted as there is no price to be paid and employees are entitled to Dividend Accrued Shares to the value of

ordinary dividends paid or payable during the vesting period. There was no award under the RSP in the current period, as this scheme has been replaced by

the PSP. The fair value of options granted under these schemes is shown below.

Fair value of options granted

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
| Share Incentive Plan | 283.0p | 282.5p |
| Short Term Deferred Incentive Plan | 253.5p | 229.0p |
| Performance Share Plan | 253.5p | 260.2p |

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

175

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAaUBKcDASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD3WiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFAFDU5tXi8r+yrGxus58z7VePBt6YxtifPf0xgdc8Z/2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNVzTp9dluGXU9O062g2Eq9tfvOxbI4KtCgAxnnPYcc8adFABRRRQBQ1KbV4vK/sqxsbrOfM+1XjwbemMbYnz39MYHXPGf8Aa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNR9r8Xf9APRP8AwcS//I1b9FAGB9r8Xf8AQD0T/wAHEv8A8jUfa/F3/QD0T/wcS/8AyNW/RQBgfa/F3/QD0T/wcS//ACNVzTp9dluGXU9O062g2Eq9tfvOxbI4KtCgAxnnPYcc8adFABRRRQBQ1KbV4vK/sqxsbrOfM+1XjwbemMbYnz39MYHXPGf9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1H2vxd/wBAPRP/AAcS/wDyNW/RQBgfa/F3/QD0T/wcS/8AyNR9r8Xf9APRP/BxL/8AI1b9FAGB9r8Xf9APRP8AwcS//I1XNOn12W4ZdT07TraDYSr21+87Fsjgq0KADGec9hxzxp0UAFFFFAGbqF7qdvOqWWk/bIyuTJ9pWPByeMH8Ofeqv9qa9/0Ln/k8n+FblFYypSbuptfd/kbxqwSs4J/+Bf5mH/amvf8AQuf+Tyf4Uf2pr3/Quf8Ak8n+FblFL2M/+fj/APJf/kR+2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kYf9qa9/0Ln/AJPJ/hR/amvf9C5/5PJ/hW5RR7Gf/Px/+S//ACIe2h/z7X/k3/yRh/2pr3/Quf8Ak8n+FH9qa9/0Ln/k8n+FblFHsZ/8/H/5L/8AIh7aH/Ptf+Tf/JGH/amvf9C5/wCTyf4Uf2pr3/Quf+Tyf4VuUUexn/z8f/kv/wAiHtof8+1/5N/8kY0Wp640oD+H9i92+2ocfpRW0OtFUqUl9t/h/kS6sH9hf+Tf5iUUUVqYhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRUcE8N1bxXFvKksEqB45I2DK6kZBBHUEd6AJKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKxJ/CunXFxJM9zrAeRi7CPWbtFBJzwqygAewAArbooAwP+EP0z/n61v/AMHl7/8AHaP+EP0z/n61v/weXv8A8drfooAwP+EP0z/n61v/AMHl7/8AHaP+EP0z/n61v/weXv8A8drfooAwP+EP0z/n61v/AMHl7/8AHaP+EP0z/n61v/weXv8A8drfooAwP+EP0z/n61v/AMHl7/8AHaP+EP0z/n61v/weXv8A8drfooAwP+EP0z/n61v/AMHl7/8AHaP+EP0z/n61v/weXv8A8drfooAwP+EP0z/n61v/AMHl7/8AHakg8K6db3EU6XGsF43DqJNZu3UkHPKtKQw9iCD3rbooAr3tnFf2j20zTrG+MmCd4X4OeHQhh07H2rI/4Q/TP+frW/8AweXv/wAdrfooAwP+EP0z/n61v/weXv8A8do/4Q/TP+frW/8AweXv/wAdrfooAwP+EP0z/n61v/weXv8A8do/4Q/TP+frW/8AweXv/wAdrfooAwP+EP0z/n61v/weXv8A8do/4Q/TP+frW/8AweXv/wAdrfooAwP+EP0z/n61v/weXv8A8do/4Q/TP+frW/8AweXv/wAdrfooAwP+EP0z/n61v/weXv8A8do/4Q/TP+frW/8AweXv/wAdrfooAwP+EP0z/n61v/weXv8A8drQ0zR7bSfN+zS3z+bjd9qvprnGM9PNdtvXtjPGegq/RQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAGhqesW2k+V9pivn83O37LYzXOMY6+UjbevfGecdDWf/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RQBgf8Jhpn/Prrf8A4I73/wCNUf8ACYaZ/wA+ut/+CO9/+NVv0UAYH/CYaZ/z663/AOCO9/8AjVH/AAmGmf8APrrf/gjvf/jVb9FAGB/wmGmf8+ut/wDgjvf/AI1Tv+Eu07/n01z/AMEV7/8AGq3asr90fSmBzP8Awl2nf8+muf8Agivf/jVH/CXad/z6a5/4Ir3/AONV09FFhHMf8Jdp3/Pprn/givf/AI1R/wAJdp3/AD6a5/4Ir3/41XT0UWA5j/hLtO/59Nc/8EV7/wDGqP8AhLtO/wCfTXP/AARXv/xqunoosBzH/CXad/z6a5/4Ir3/AONUf8Jdp3/Pprn/AIIr3/41XT0UWA5j/hLtO/59Nc/8EV7/APGqP+Eu07/n01z/AMEV7/8AGq6eiiwHMf8ACXad/wA+muf+CK9/+NUn/CXacP8Al01z/wAEV7/8arqKa/3D9KLAcx/wmGmf8+ut/wDgjvf/AI1R/wAJhpn/AD663/4I73/41W/RSGYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41W/RQBgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVb9FAGB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NVv0UAYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41W/RQBgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVb9FAGB/wmGmf8+ut/+CO9/wDjVaGmaxbat5v2aK+TysbvtVjNbZznp5qLu6ds44z1FX6KACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigArA8Df8k/8ADf8A2C7X/wBFLW/WB4G/5J/4b/7Bdr/6KWgDfopkjsmNsTvn+6Rx+ZFM86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmoqHzpP+faX81/+Ko86T/n2l/Nf/iqAJqKh86T/AJ9pfzX/AOKo86T/AJ9pfzX/AOKoAmqyv3R9KoedJ/z7S/mv/wAVVgTybR/ok3T1T/4qmhFiioPPk/59JvzT/wCKo8+T/n0m/NP/AIqmBPRUHnyf8+k35p/8VR58n/PpN+af/FUAT0VB58n/AD6Tfmn/AMVR58n/AD6Tfmn/AMVQBPRUHnyf8+k35p/8VR58n/PpN+af/FUAT0VB58n/AD6Tfmn/AMVR58n/AD6Tfmn/AMVQBPTX+4fpUXnyf8+k35p/8VTXnk2H/RJvzT/4qgBKKh86T/n2l/Nf/iqPOk/59pfzX/4qpGTUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFUedJ/wA+0v5r/wDFUATUVD50n/PtL+a//FUedJ/z7S/mv/xVAE1FQ+dJ/wA+0v5r/wDFU+N2fO6J0x/eI5/ImgB9FFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/wCSf+G/+wXa/wDopa36wPA3/JP/AA3/ANgu1/8ARS0Ab9FFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFWV+6PpVarK/dH0poQtFFFMAooooAKKKKACiiigAooooAKa/wBw/SnU1/uH6UAV6KKKkYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQBuSGQY8tEb13MR/Q0zdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImrAe62j9zD0/57H/4mm1ZX7o+lNCId93/zxh/7/H/4mjfd/wDPGH/v8f8A4mp6KYEG+7/54w/9/j/8TRvu/wDnjD/3+P8A8TU9FAEG+7/54w/9/j/8TRvu/wDnjD/3+P8A8TU9FAEG+7/54w/9/j/8TRvu/wDnjD/3+P8A8TU9FAEG+7/54w/9/j/8TRvu/wDnjD/3+P8A8TU9FAEG+7/54w/9/j/8TTXe62H9zD/39P8A8TVmmv8AcP0oAo7rn/nlF/39P/xNG65/55Rf9/T/APE1NRUjId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiaN1z/zyi/7+n/4mpqKAId1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqaigCHdc/8APKL/AL+n/wCJo3XP/PKL/v6f/iamooAh3XP/ADyi/wC/p/8AiafGZDnzERfTaxP9BT6KACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigArA8Df8k/8ADf8A2C7X/wBFLW/WB4G/5J/4b/7Bdr/6KWgDfopkhkGPLRG9dzEf0NM3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmoqHdc/88ov+/p/+Jo3XP8Azyi/7+n/AOJoAmqyv3R9Kobrn/nlF/39P/xNWA91tH7mHp/z2P8A8TTQixRUG+7/AOeMP/f4/wDxNG+7/wCeMP8A3+P/AMTTAnoqDfd/88Yf+/x/+Jo33f8Azxh/7/H/AOJoAnoqDfd/88Yf+/x/+Jo33f8Azxh/7/H/AOJoAnoqDfd/88Yf+/x/+Jo33f8Azxh/7/H/AOJoAnoqDfd/88Yf+/x/+Jo33f8Azxh/7/H/AOJoAnpr/cP0qLfd/wDPGH/v8f8A4mmu91sP7mH/AL+n/wCJoASiod1z/wA8ov8Av6f/AImjdc/88ov+/p/+JqRk1FQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTQBNRUO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE0ATUVDuuf+eUX/f0/wDxNG65/wCeUX/f0/8AxNAE1FQ7rn/nlF/39P8A8TRuuf8AnlF/39P/AMTQBNRUO65/55Rf9/T/APE0brn/AJ5Rf9/T/wDE0ATUVDuuf+eUX/f0/wDxNPjMhz5iIvptYn+goAfRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/8AsF2v/opa36wPA3/JP/Df/YLtf/RS0Ab9FFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFWV+6PpVarK/dH0poQtFFFMAooooAKKKKACiiigAooooAKa/3D9KdTX+4fpQBXoooqRhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/8AsF2v/opa36wPA3/JP/Df/YLtf/RS0AbkgkOPLdF9dyk/1FM23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+Ko23P8Az1i/79H/AOKqaigCHbc/89Yv+/R/+KqwEuto/fQ9P+eJ/wDiqbVlfuj6U0Ih2Xf/AD2h/wC/J/8AiqNl3/z2h/78n/4qp6KYEGy7/wCe0P8A35P/AMVRsu/+e0P/AH5P/wAVU9FAEGy7/wCe0P8A35P/AMVRsu/+e0P/AH5P/wAVU9FAEGy7/wCe0P8A35P/AMVRsu/+e0P/AH5P/wAVU9FAEGy7/wCe0P8A35P/AMVRsu/+e0P/AH5P/wAVU9FAEGy7/wCe0P8A35P/AMVTXS62H99D/wB+j/8AFVZpr/cP0oAo7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFVNRUjIdtz/z1i/79H/4qjbc/wDPWL/v0f8A4qpqKAIdtz/z1i/79H/4qjbc/wDPWL/v0f8A4qpqKAIdtz/z1i/79H/4qjbc/wDPWL/v0f8A4qpqKAIdtz/z1i/79H/4qjbc/wDPWL/v0f8A4qpqKAIdtz/z1i/79H/4qjbc/wDPWL/v0f8A4qpqKAIdtz/z1i/79H/4qnxiQZ8x0b02qR/U0+igAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KZIjPjbK6Y/ugc/mDTPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCaiofJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiaAJqKh8mT/n5l/Jf/iaPJk/5+ZfyX/4mgCarK/dH0qh5Mn/PzL+S/wDxNWBBJtH+lzdPRP8A4mmhFiioPIk/5+5vyT/4mjyJP+fub8k/+JpgT0VB5En/AD9zfkn/AMTR5En/AD9zfkn/AMTQBPRUHkSf8/c35J/8TR5En/P3N+Sf/E0AT0VB5En/AD9zfkn/AMTR5En/AD9zfkn/AMTQBPRUHkSf8/c35J/8TR5En/P3N+Sf/E0AT01/uH6VF5En/P3N+Sf/ABNNeCTYf9Lm/JP/AImgBKKh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqRk1FQ+TJ/wA/Mv5L/wDE0eTJ/wA/Mv5L/wDE0ATUVD5Mn/PzL+S//E0eTJ/z8y/kv/xNAE1FQ+TJ/wA/Mv5L/wDE0eTJ/wA/Mv5L/wDE0ATUVD5Mn/PzL+S//E0eTJ/z8y/kv/xNAE1FQ+TJ/wA/Mv5L/wDE0eTJ/wA/Mv5L/wDE0ATUVD5Mn/PzL+S//E0+NGTO6V3z/eA4/ICgB9FFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQBv0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAVZX7o+lVqsr90fSmhC0UUUwCiiigAooooAKKKKACiiigApr/cP0p1Nf7h+lAFeiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQBuSIz42yumP7oHP5g0zyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mrAgk2j/S5unon/xNNqyv3R9KaEQ+RJ/z9zfkn/xNHkSf8/c35J/8TU9FMCDyJP8An7m/JP8A4mjyJP8An7m/JP8A4mp6KAIPIk/5+5vyT/4mjyJP+fub8k/+JqeigCDyJP8An7m/JP8A4mjyJP8An7m/JP8A4mp6KAIPIk/5+5vyT/4mjyJP+fub8k/+JqeigCDyJP8An7m/JP8A4mmvBJsP+lzfkn/xNWaa/wBw/SgCj5Mn/PzL+S//ABNHkyf8/Mv5L/8AE1NRUjIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mjyZP8An5l/Jf8A4mpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP8An5l/Jf8A4mnxoyZ3Su+f7wHH5AU+igAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36Koanp9zf+V9m1i+07Znd9lSFvMzjr5sb9MdsdTnPGM/8A4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/wCR6P8AhH9T/wChx1v/AL82X/yPQBv0Vgf8I/qf/Q463/35sv8A5Ho/4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/wCR6P8AhH9T/wChx1v/AL82X/yPQBv0Vgf8I/qf/Q463/35sv8A5Ho/4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/wCR6P8AhH9T/wChx1v/AL82X/yPQBv0Vgf8I/qf/Q463/35sv8A5Ho/4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/wCR6P8AhH9T/wChx1v/AL82X/yPQBv0Vgf8I/qf/Q463/35sv8A5Ho/4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/wCR6P8AhH9T/wChx1v/AL82X/yPQBv0Vgf8I/qf/Q463/35sv8A5Ho/4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/wCR6P8AhH9T/wChx1v/AL82X/yPQBv0Vgf8I/qf/Q463/35sv8A5Ho/4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/wCR6P8AhH9T/wChx1v/AL82X/yPQBv0Vgf8I/qf/Q463/35sv8A5Ho/4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/wCR6P8AhH9T/wChx1v/AL82X/yPQBv0Vgf8I/qf/Q463/35sv8A5Ho/4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/wCR6P8AhH9T/wChx1v/AL82X/yPQBv0Vgf8I/qf/Q463/35sv8A5Ho/4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/wCR6P8AhH9T/wChx1v/AL82X/yPQBv0Vgf8I/qf/Q463/35sv8A5Ho/4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/wCR6P8AhH9T/wChx1v/AL82X/yPQBv0Vgf8I/qf/Q463/35sv8A5Ho/4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/wCR6P8AhH9T/wChx1v/AL82X/yPQBv0Vgf8I/qf/Q463/35sv8A5Ho/4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9WV+6PpXL/8I/qf/Q463/35sv8A5Hp/9h6qP+Zy1v8A782X/wAj0wOmormf7D1b/octb/782X/yPR/Yerf9Dlrf/fmy/wDkei4jpqK5n+w9W/6HLW/+/Nl/8j0f2Hq3/Q5a3/35sv8A5HouB01Fcz/Yerf9Dlrf/fmy/wDkej+w9W/6HLW/+/Nl/wDI9FwOmormf7D1b/octb/782X/AMj0f2Hq3/Q5a3/35sv/AJHouB01Fcz/AGHq3/Q5a3/35sv/AJHo/sPVv+hy1v8A782X/wAj0XA6amv9w/Sub/sPVv8Aoctb/wC/Nl/8j0h0LVSMHxlrf/fmy/8Akei4G7RWB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj0hm/RWB/wj+p/wDQ463/AN+bL/5Ho/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8Akej/AIR/U/8Aocdb/wC/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/AOR6P+Ef1P8A6HHW/wDvzZf/ACPQBv0Vgf8ACP6n/wBDjrf/AH5sv/kej/hH9T/6HHW/+/Nl/wDI9AG/RWB/wj+p/wDQ463/AN+bL/5Ho/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8AketDTNPubDzftOsX2o78bftSQr5eM9PKjTrnvnoMY5yAX6KKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/yT/w3/wBgu1/9FLW/WB4G/wCSf+G/+wXa/wDopaAN+iiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/wAk/wDDf/YLtf8A0Utb9YHgb/kn/hv/ALBdr/6KWgDfooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigArA8Df8k/8N/8AYLtf/RS1v1geBv8Akn/hv/sF2v8A6KWgDfooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigArA8Df8AJP8Aw3/2C7X/ANFLW/WB4G/5J/4b/wCwXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/AGC7X/0Utb9YHgb/AJJ/4b/7Bdr/AOiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/ACT/AMN/9gu1/wDRS1v1geBv+Sf+G/8AsF2v/opaAN+iiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/yT/w3/wBgu1/9FLW/WB4G/wCSf+G/+wXa/wDopaAN+iiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/wAk/wDDf/YLtf8A0Utb9YHgb/kn/hv/ALBdr/6KWgDfooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigArA8Df8k/8N/8AYLtf/RS1v1geBv8Akn/hv/sF2v8A6KWgDfooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigArA8Df8AJP8Aw3/2C7X/ANFLW/WB4G/5J/4b/wCwXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooqnqOk6drFutvqen2t7Crb1juYVkUNgjIDAjOCefegC5RWB/wAIN4R/6FbRP/BfF/8AE0f8IN4R/wChW0T/AMF8X/xNAG/RWB/wg3hH/oVtE/8ABfF/8TR/wg3hH/oVtE/8F8X/AMTQBv0Vgf8ACDeEf+hW0T/wXxf/ABNH/CDeEf8AoVtE/wDBfF/8TQBv0Vgf8IN4R/6FbRP/AAXxf/E0f8IN4R/6FbRP/BfF/wDE0Ab9FYH/AAg3hH/oVtE/8F8X/wATR/wg3hH/AKFbRP8AwXxf/E0Ab9FYH/CDeEf+hW0T/wAF8X/xNH/CDeEf+hW0T/wXxf8AxNAG/RWB/wAIN4R/6FbRP/BfF/8AE0f8IN4R/wChW0T/AMF8X/xNAG/RWB/wg3hH/oVtE/8ABfF/8TR/wg3hH/oVtE/8F8X/AMTQBv0Vgf8ACDeEf+hW0T/wXxf/ABNH/CDeEf8AoVtE/wDBfF/8TQBv0Vgf8IN4R/6FbRP/AAXxf/E0f8IN4R/6FbRP/BfF/wDE0Ab9FYH/AAg3hH/oVtE/8F8X/wATR/wg3hH/AKFbRP8AwXxf/E0Ab9FYH/CDeEf+hW0T/wAF8X/xNH/CDeEf+hW0T/wXxf8AxNAG/RWB/wAIN4R/6FbRP/BfF/8AE1twQQ21vHb28UcUESBI441CqigYAAHAAHGKAJKKwP8AhBvCP/QraJ/4L4v/AImj/hBvCP8A0K2if+C+L/4mgDforA/4Qbwj/wBCton/AIL4v/iaP+EG8I/9Cton/gvi/wDiaAN+isD/AIQbwj/0K2if+C+L/wCJo/4Qbwj/ANCton/gvi/+JoA36KwP+EG8I/8AQraJ/wCC+L/4mj/hBvCP/QraJ/4L4v8A4mgDforA/wCEG8I/9Cton/gvi/8AiaP+EG8I/wDQraJ/4L4v/iaAN+isD/hBvCP/AEK2if8Agvi/+Jo/4Qbwj/0K2if+C+L/AOJoA36KwP8AhBvCP/QraJ/4L4v/AImj/hBvCP8A0K2if+C+L/4mgDforA/4Qbwj/wBCton/AIL4v/iaP+EG8I/9Cton/gvi/wDiaAN+isD/AIQbwj/0K2if+C+L/wCJo/4Qbwj/ANCton/gvi/+JoA36KwP+EG8I/8AQraJ/wCC+L/4mj/hBvCP/QraJ/4L4v8A4mgDforA/wCEG8I/9Cton/gvi/8AiaP+EG8I/wDQraJ/4L4v/iaAN+isD/hBvCP/AEK2if8Agvi/+Jo/4Qbwj/0K2if+C+L/AOJoA36KwP8AhBvCP/QraJ/4L4v/AImtDTND0jRfN/srSrGw83HmfZbdIt+M4ztAzjJ/M0AX6KKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/yT/wAN/wDYLtf/AEUtb9YHgb/kn/hv/sF2v/opaAN+iiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/yT/w3/2C7X/0Utb9YHgb/kn/AIb/AOwXa/8AopaAN+iqGp6fc3/lfZtYvtO2Z3fZUhbzM46+bG/THbHU5zxjP/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8Akej/AIR/U/8Aocdb/wC/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/AOR6P+Ef1P8A6HHW/wDvzZf/ACPQBv0Vgf8ACP6n/wBDjrf/AH5sv/kej/hH9T/6HHW/+/Nl/wDI9AG/RWB/wj+p/wDQ463/AN+bL/5Ho/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8Akej/AIR/U/8Aocdb/wC/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/AOR6P+Ef1P8A6HHW/wDvzZf/ACPQBv0Vgf8ACP6n/wBDjrf/AH5sv/kej/hH9T/6HHW/+/Nl/wDI9AG/RWB/wj+p/wDQ463/AN+bL/5Ho/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8Akej/AIR/U/8Aocdb/wC/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/AOR6P+Ef1P8A6HHW/wDvzZf/ACPQBv0Vgf8ACP6n/wBDjrf/AH5sv/kej/hH9T/6HHW/+/Nl/wDI9AG/RWB/wj+p/wDQ463/AN+bL/5Ho/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8Akej/AIR/U/8Aocdb/wC/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/AOR6P+Ef1P8A6HHW/wDvzZf/ACPQBv0Vgf8ACP6n/wBDjrf/AH5sv/kej/hH9T/6HHW/+/Nl/wDI9AG/RWB/wj+p/wDQ463/AN+bL/5Ho/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8Akej/AIR/U/8Aocdb/wC/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/AOR6P+Ef1P8A6HHW/wDvzZf/ACPQBv0Vgf8ACP6n/wBDjrf/AH5sv/kej/hH9T/6HHW/+/Nl/wDI9AG/RWB/wj+p/wDQ463/AN+bL/5Ho/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8Akej/AIR/U/8Aocdb/wC/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/AOR6P+Ef1P8A6HHW/wDvzZf/ACPQBv0Vgf8ACP6n/wBDjrf/AH5sv/kej/hH9T/6HHW/+/Nl/wDI9AG/RWB/wj+p/wDQ463/AN+bL/5Ho/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8Akej/AIR/U/8Aocdb/wC/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/AOR6P+Ef1P8A6HHW/wDvzZf/ACPQBv0Vgf8ACP6n/wBDjrf/AH5sv/kej/hH9T/6HHW/+/Nl/wDI9AG/RWB/wj+p/wDQ463/AN+bL/5Ho/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8Akej/AIR/U/8Aocdb/wC/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/AOR6P+Ef1P8A6HHW/wDvzZf/ACPQBv0Vgf8ACP6n/wBDjrf/AH5sv/kej/hH9T/6HHW/+/Nl/wDI9AG/RWB/wj+p/wDQ463/AN+bL/5Ho/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8Akej/AIR/U/8Aocdb/wC/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/AOR6P+Ef1P8A6HHW/wDvzZf/ACPQBv0Vgf8ACP6n/wBDjrf/AH5sv/kej/hH9T/6HHW/+/Nl/wDI9AG/RWB/wj+p/wDQ463/AN+bL/5Ho/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8Akej/AIR/U/8Aocdb/wC/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/AOR6fH4d1JiQfGOuf9+bL/5HoA3KKx/+EZ1H/ocdc/79WX/yPR/wjOo/9Djrn/fqy/8AkenYDYorH/4RnUf+hx1z/v1Zf/I9H/CM6j/0OOuf9+rL/wCR6LAbFFY//CM6j/0OOuf9+rL/AOR6P+EZ1H/ocdc/79WX/wAj0WA2KKx/+EZ1H/ocdc/79WX/AMj0f8IzqP8A0OOuf9+rL/5HosBsUVj/APCM6j/0OOuf9+rL/wCR6P8AhGdR/wChx1z/AL9WX/yPRYDYorH/AOEZ1H/ocdc/79WX/wAj0f8ACM6j/wBDjrn/AH6sv/keiwGxRWE/h3UlbA8Y65/35sv/AJHpv/CP6n/0OOt/9+bL/wCR6QG/RWB/wj+p/wDQ463/AN+bL/5Ho/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8Akej/AIR/U/8Aocdb/wC/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/AOR6P+Ef1P8A6HHW/wDvzZf/ACPQBv0Vgf8ACP6n/wBDjrf/AH5sv/kej/hH9T/6HHW/+/Nl/wDI9AG/RWB/wj+p/wDQ463/AN+bL/5Ho/4R/U/+hx1v/vzZf/I9AG/RWB/wj+p/9Djrf/fmy/8Akel/4R/U8/8AI463/wB+bL/5HoA3qKx/+EZ1H/ocdc/79WX/AMj0f8IzqP8A0OOuf9+rL/5Hp2A2KKx/+EZ1H/ocdc/79WX/AMj0f8IzqP8A0OOuf9+rL/5HosBsUVj/APCM6j/0OOuf9+rL/wCR6P8AhGdR/wChx1z/AL9WX/yPRYDYorH/AOEZ1H/ocdc/79WX/wAj0f8ACM6j/wBDjrn/AH6sv/keiwGxRWP/AMIzqP8A0OOuf9+rL/5Ho/4RnUf+hx1z/v1Zf/I9FgNiisf/AIRnUf8Aocdc/wC/Vl/8j0f8IzqP/Q465/36sv8A5HosBsUViv4b1JVJHjHXP+/Vl/8AI9Rf8I/qf/Q463/35sv/AJHoA36KwP8AhH9T/wChx1v/AL82X/yPR/wj+p/9Djrf/fmy/wDkekBv0Vgf8I/qf/Q463/35sv/AJHo/wCEf1P/AKHHW/8AvzZf/I9AG/RWB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj0Ab9FYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPQBv0Vgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPQBv0Vgf8I/qf/Q463/35sv/AJHrQ0zT7mw837TrF9qO/G37UkK+XjPTyo065756DGOcgF+iiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigArA8Df8k/8N/8AYLtf/RS1v1geBv8Akn/hv/sF2v8A6KWgDfooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACpIfvH6VHUkP3j9KYE1FFFMQUUUUAFFFFABRRRQAUUUUAFFFFAEEv3/wplPl+/8AhTKQwooopAFFFFABRRRQAUUUUAFFFFABQOtFA60AWqKKKoQUUUUAFFFFABRRRQAUUUUAFFFFADZP9War1Yk/1ZqvSYwooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/kn/AIb/AOwXa/8Aopa36wPA3/JP/Df/AGC7X/0UtAG5IjPjbK6Y/ugc/mDTPJk/5+ZfyX/4mpqKAIfJk/5+ZfyX/wCJo8mT/n5l/Jf/AImpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/n5l/Jf/AImjyZP+fmX8l/8AiamooAh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/5+ZfyX/wCJo8mT/n5l/Jf/AImpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/n5l/Jf/AImjyZP+fmX8l/8AiamooAh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/5+ZfyX/wCJo8mT/n5l/Jf/AImpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/n5l/Jf/AImjyZP+fmX8l/8AiamooAh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/5+ZfyX/wCJo8mT/n5l/Jf/AImpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/n5l/Jf/AImjyZP+fmX8l/8AiamooAh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/5+ZfyX/wCJo8mT/n5l/Jf/AImpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/n5l/Jf/AImjyZP+fmX8l/8AiamooAh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/5+ZfyX/wCJo8mT/n5l/Jf/AImpqKAIfJk/5+ZfyX/4mjyZP+fmX8l/+JqaigCHyZP+fmX8l/8AiaPJk/5+ZfyX/wCJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/n5l/Jf/AImjyZP+fmX8l/8AiamooAh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/5+ZfyX/wCJo8mT/n5l/Jf/AImpqKAIfJk/5+ZfyX/4mpIoJCx/0qYceif/ABNOqSH7x+lMBPIk/wCfub8k/wDiaPIk/wCfub8k/wDianopiIPIk/5+5vyT/wCJo8iT/n7m/JP/AImp6KAIPIk/5+5vyT/4mjyJP+fub8k/+JqeigCDyJP+fub8k/8AiaPIk/5+5vyT/wCJqeigCDyJP+fub8k/+Jo8iT/n7m/JP/ianooAg8iT/n7m/JP/AImjyJP+fub8k/8AianooApSQSB/+PqY/gn/AMTTPJk/5+ZfyX/4mrMv3/wplIZD5Mn/AD8y/kv/AMTR5Mn/AD8y/kv/AMTU1FICHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+Jo8mT/n5l/Jf/iamooAh8mT/AJ+ZfyX/AOJo8mT/AJ+ZfyX/AOJqaigCHyZP+fmX8l/+JoEMmf8Aj5l/Jf8A4mpqB1oAf5En/P3N+Sf/ABNHkSf8/c35J/8AE1PRVCIPIk/5+5vyT/4mjyJP+fub8k/+JqeigCDyJP8An7m/JP8A4mjyJP8An7m/JP8A4mp6KAIPIk/5+5vyT/4mjyJP+fub8k/+JqeigCDyJP8An7m/JP8A4mjyJP8An7m/JP8A4mp6KAIPIk/5+5vyT/4mjyJP+fub8k/+JqeigCtJBJsP+lzH8E/+JqDyZP8An5l/Jf8A4mr0n+rNV6TGQ+TJ/wA/Mv5L/wDE0eTJ/wA/Mv5L/wDE1NRSAh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiamooAh8mT/n5l/Jf/iaPJk/5+ZfyX/4mpqKAIfJk/wCfmX8l/wDiaPJk/wCfmX8l/wDiamooAh8mT/n5l/Jf/iafGjJndK75/vAcfkBT6KACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigArA8Df8k/8N/9gu1/9FLW/WB4G/5J/wCG/wDsF2v/AKKWgDfopkkSyY3Fxj+65X+Rpn2aP+9L/wB/W/xoAmoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGgCaiofs0f8Ael/7+t/jR9mj/vS/9/W/xoAmoqH7NH/el/7+t/jR9mj/AL0v/f1v8aAJqKh+zR/3pf8Av63+NH2aP+9L/wB/W/xoAmoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGgCaiofs0f8Ael/7+t/jR9mj/vS/9/W/xoAmoqH7NH/el/7+t/jR9mj/AL0v/f1v8aAJqKh+zR/3pf8Av63+NH2aP+9L/wB/W/xoAmoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGgCaiofs0f8Ael/7+t/jR9mj/vS/9/W/xoAmoqH7NH/el/7+t/jR9mj/AL0v/f1v8aAJqKh+zR/3pf8Av63+NH2aP+9L/wB/W/xoAmoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGgCaiofs0f8Ael/7+t/jR9mj/vS/9/W/xoAmoqH7NH/el/7+t/jR9mj/AL0v/f1v8aAJqKh+zR/3pf8Av63+NH2aP+9L/wB/W/xoAmoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGgCaiofs0f8Ael/7+t/jR9mj/vS/9/W/xoAmoqH7NH/el/7+t/jR9mj/AL0v/f1v8aAJqKh+zR/3pf8Av63+NH2aP+9L/wB/W/xoAmoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGgCaiofs0f8Ael/7+t/jR9mj/vS/9/W/xoAmoqH7NH/el/7+t/jR9mj/AL0v/f1v8aAJqKh+zR/3pf8Av63+NH2aP+9L/wB/W/xoAmoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGgCaiofs0f8Ael/7+t/jR9mj/vS/9/W/xoAmoqH7NH/el/7+t/jR9mj/AL0v/f1v8aAJqKh+zR/3pf8Av63+NH2aP+9L/wB/W/xoAmoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGgCaiofs0f8Ael/7+t/jR9mj/vS/9/W/xoAmoqH7NH/el/7+t/jR9mj/AL0v/f1v8aAJqKh+zR/3pf8Av63+NH2aP+9L/wB/W/xoAmoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGgCaiofs0f8Ael/7+t/jR9mj/vS/9/W/xoAmoqH7NH/el/7+t/jR9mj/AL0v/f1v8aAJqKh+zR/3pf8Av63+NH2aP+9L/wB/W/xoAmoqH7NH/el/7+t/jR9mj/vS/wDf1v8AGgCapIfvH6VV+zR/3pf+/rf41JFaxlj803T/AJ7P/jTAuUVB9kj/AL03/f8Af/Gj7JH/AHpv+/7/AONMRPRUH2SP+9N/3/f/ABo+yR/3pv8Av+/+NAE9FQfZI/703/f9/wDGj7JH/em/7/v/AI0AT0VB9kj/AL03/f8Af/Gj7JH/AHpv+/7/AONAE9FQfZI/703/AH/f/Gj7JH/em/7/AL/40AT0VB9kj/vTf9/3/wAaPskf96b/AL/v/jQAS/f/AAplMktYw/3pv+/z/wCNM+zR/wB6X/v63+NIZNRUP2aP+9L/AN/W/wAaPs0f96X/AL+t/jSAmoqH7NH/AHpf+/rf40fZo/70v/f1v8aAJqKh+zR/3pf+/rf40fZo/wC9L/39b/GgCaiofs0f96X/AL+t/jR9mj/vS/8Af1v8aAJqKh+zR/3pf+/rf40fZo/70v8A39b/ABoAmoHWofs0f96X/v63+NAto8/el/7+t/jQBoUVB9kj/vTf9/3/AMaPskf96b/v+/8AjVCJ6Kg+yR/3pv8Av+/+NH2SP+9N/wB/3/xoAnoqD7JH/em/7/v/AI0fZI/703/f9/8AGgCeioPskf8Aem/7/v8A40fZI/703/f9/wDGgCeioPskf96b/v8Av/jR9kj/AL03/f8Af/GgCeioPskf96b/AL/v/jR9kj/vTf8Af9/8aAJZP9War0slpGEPzTf9/n/xqD7NH/el/wC/rf40mMmoqH7NH/el/wC/rf40fZo/70v/AH9b/GkBNRUP2aP+9L/39b/Gj7NH/el/7+t/jQBNRUP2aP8AvS/9/W/xo+zR/wB6X/v63+NAE1FQ/Zo/70v/AH9b/Gj7NH/el/7+t/jQBNRUP2aP+9L/AN/W/wAaPs0f96X/AL+t/jQBNRUP2aP+9L/39b/GnxxLHnaXOf7zlv5mgB9FFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/7Bdr/6KWt+sDwN/wAk/wDDf/YLtf8A0UtAG/RRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFSQ/eP0qOpIfvH6UwJqKKKYgooooAKKKKACiiigAooooAKKKKAIJfv8A4Uyny/f/AAplIYUUUUgCiiigAooooAKKKKACiiigAoHWigdaALVFFFUIKKKKACiiigAooooAKKKKACiiigBsn+rNV6sSf6s1XpMYUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/yT/wAN/wDYLtf/AEUtb9YHgb/kn/hv/sF2v/opaANySKOXHmRo+Om5QcUz7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKPslt/z7xf98CpqKAIfslt/z7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8+8X/fAo+yW3/PvF/3wKmooAh+yW3/PvF/3wKkis7Usc20J4/uCnVJD94/SmAn2K0/59Yf+/Yo+xWn/AD6w/wDfsVPRTEQfYrT/AJ9Yf+/Yo+xWn/PrD/37FT0UAQfYrT/n1h/79ij7Faf8+sP/AH7FT0UAQfYrT/n1h/79ij7Faf8APrD/AN+xU9FAEH2K0/59Yf8Av2KPsVp/z6w/9+xU9FAEH2K0/wCfWH/v2KPsVp/z6w/9+xU9FAFKSztg/FvCP+ACmfZLb/n3i/74FWZfv/hTKQyH7Jbf8+8X/fAo+yW3/PvF/wB8CpqKQEP2S2/594v++BR9ktv+feL/AL4FTUUAQ/ZLb/n3i/74FH2S2/594v8AvgVNRQBD9ktv+feL/vgUfZLb/n3i/wC+BU1FAEP2S2/594v++BR9ktv+feL/AL4FTUUAQ/ZLb/n3i/74FAtLbP8Ax7xf98CpqB1oAf8AYrT/AJ9Yf+/Yo+xWn/PrD/37FT0VQiD7Faf8+sP/AH7FH2K0/wCfWH/v2KnooAg+xWn/AD6w/wDfsUfYrT/n1h/79ip6KAIPsVp/z6w/9+xR9itP+fWH/v2KnooAg+xWn/PrD/37FH2K0/59Yf8Av2KnooAg+xWn/PrD/wB+xR9itP8An1h/79ip6KAK0llahDi2h/79ioPslt/z7xf98Cr0n+rNV6TGQ/ZLb/n3i/74FH2S2/594v8AvgVNRSAh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmooAh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmooAh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmooAh+yW3/PvF/wB8Cj7Jbf8APvF/3wKmooAh+yW3/PvF/wB8CnxxRxZ8uNEz12qBmn0UAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQBv0UySKOXHmRo+Om5QcUz7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgCaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgCaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgCaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgCaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgCaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgCaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgCaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgCaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgCaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgCaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgCaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgCaiofslt/wA+8X/fAo+yW3/PvF/3wKAJqKh+yW3/AD7xf98Cj7Jbf8+8X/fAoAmoqH7Jbf8APvF/3wKPslt/z7xf98CgCapIfvH6VV+yW3/PvF/3wKkis7Usc20J4/uCmBcoqD7Faf8APrD/AN+xR9itP+fWH/v2KYieioPsVp/z6w/9+xR9itP+fWH/AL9igCeioPsVp/z6w/8AfsUfYrT/AJ9Yf+/YoAnoqD7Faf8APrD/AN+xR9itP+fWH/v2KAJ6Kg+xWn/PrD/37FH2K0/59Yf+/YoAnoqD7Faf8+sP/fsUfYrT/n1h/wC/YoAJfv8A4UymSWdsH4t4R/wAUz7Jbf8APvF/3wKQyaiofslt/wA+8X/fAo+yW3/PvF/3wKQE1FQ/ZLb/AJ94v++BR9ktv+feL/vgUATUVD9ktv8An3i/74FH2S2/594v++BQBNRUP2S2/wCfeL/vgUfZLb/n3i/74FAE1FQ/ZLb/AJ94v++BR9ktv+feL/vgUATUDrUP2S2/594v++BQLS2z/wAe8X/fAoA0KKg+xWn/AD6w/wDfsUfYrT/n1h/79iqET0VB9itP+fWH/v2KPsVp/wA+sP8A37FAE9FQfYrT/n1h/wC/Yo+xWn/PrD/37FAE9FQfYrT/AJ9Yf+/Yo+xWn/PrD/37FAE9FQfYrT/n1h/79ij7Faf8+sP/AH7FAE9FQfYrT/n1h/79ij7Faf8APrD/AN+xQBLJ/qzVelksrUIcW0P/AH7FQfZLb/n3i/74FJjJqKh+yW3/AD7xf98Cj7Jbf8+8X/fApATUVD9ktv8An3i/74FH2S2/594v++BQBNRUP2S2/wCfeL/vgUfZLb/n3i/74FAE1FQ/ZLb/AJ94v++BR9ktv+feL/vgUATUVD9ktv8An3i/74FH2S2/594v++BQBNRUP2S2/wCfeL/vgU+OKOLPlxomeu1QM0APooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/AGC7X/0Utb9YHgb/AJJ/4b/7Bdr/AOiloA36KoanrmkaL5X9q6rY2Hm58v7VcJFvxjONxGcZH5is/wD4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36kh+8fpXOf8Jz4R/6GnRP/BhF/wDFVJF468IBjnxVoY4/6CEX/wAVTA6Wiuf/AOE78H/9DXof/gxh/wDiqP8AhO/B/wD0Neh/+DGH/wCKpiOgorn/APhO/B//AENeh/8Agxh/+Ko/4Tvwf/0Neh/+DGH/AOKoA6Ciuf8A+E78H/8AQ16H/wCDGH/4qj/hO/B//Q16H/4MYf8A4qgDoKK5/wD4Tvwf/wBDXof/AIMYf/iqP+E78H/9DXof/gxh/wDiqAOgorn/APhO/B//AENeh/8Agxh/+Ko/4Tvwf/0Neh/+DGH/AOKoA6Ciuf8A+E78H/8AQ16H/wCDGH/4qj/hO/B//Q16H/4MYf8A4qgDZl+/+FMrDk8c+ES/HirQz/3EIv8A4qmf8Jz4R/6GnRP/AAYRf/FUhm/RWB/wnPhH/oadE/8ABhF/8VR/wnPhH/oadE/8GEX/AMVSA36KwP8AhOfCP/Q06J/4MIv/AIqj/hOfCP8A0NOif+DCL/4qgDforA/4Tnwj/wBDTon/AIMIv/iqP+E58I/9DTon/gwi/wDiqAN+isD/AITnwj/0NOif+DCL/wCKo/4Tnwj/ANDTon/gwi/+KoA36KwP+E58I/8AQ06J/wCDCL/4qj/hOfCP/Q06J/4MIv8A4qgDfoHWsD/hOfCP/Q06J/4MIv8A4qlHjnwjn/kadE/8GEX/AMVQB1FFc/8A8J34P/6GvQ//AAYw/wDxVH/Cd+D/APoa9D/8GMP/AMVVCOgorn/+E78H/wDQ16H/AODGH/4qj/hO/B//AENeh/8Agxh/+KoA6Ciuf/4Tvwf/ANDXof8A4MYf/iqP+E78H/8AQ16H/wCDGH/4qgDoKK5//hO/B/8A0Neh/wDgxh/+Ko/4Tvwf/wBDXof/AIMYf/iqAOgorn/+E78H/wDQ16H/AODGH/4qj/hO/B//AENeh/8Agxh/+KoA6Ciuf/4Tvwf/ANDXof8A4MYf/iqP+E78H/8AQ16H/wCDGH/4qgDek/1ZqvWPJ468IFDjxVof/gxi/wDiqg/4Tnwj/wBDTon/AIMIv/iqTGb9FYH/AAnPhH/oadE/8GEX/wAVR/wnPhH/AKGnRP8AwYRf/FUgN+isD/hOfCP/AENOif8Agwi/+Ko/4Tnwj/0NOif+DCL/AOKoA36KwP8AhOfCP/Q06J/4MIv/AIqj/hOfCP8A0NOif+DCL/4qgDforA/4Tnwj/wBDTon/AIMIv/iqP+E58I/9DTon/gwi/wDiqAN+isD/AITnwj/0NOif+DCL/wCKo/4Tnwj/ANDTon/gwi/+KoA36KwP+E58I/8AQ06J/wCDCL/4qtDTNc0jWvN/srVbG/8AKx5n2W4SXZnOM7ScZwfyNAF+iiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigArA8Df8k/8N/9gu1/9FLW/WB4G/5J/wCG/wDsF2v/AKKWgDfooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACpIfvH6VHUkP3j9KYE1FFFMQUUUUAFFFFABRRRQAUUUUAFFFFAEEv3/AMKZT5fv/hTKQwooopAFFFFABRRRQAUUUUAFFFFABQOtFA60AWqKKKoQUUUUAFFFFABRRRQAUUUUAFFFFADZP9War1Yk/wBWar0mMKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQBoanrFtpPlfaYr5/Nzt+y2M1zjGOvlI23r3xnnHQ1n/8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONVv0UAYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RQBgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVb9FAGB/wmGmf8+ut/8Agjvf/jVSReMdMDH/AEXXOn/QCvf/AI1W3UkP3j9KYGL/AMJlpf8Az665/wCCK9/+M0f8Jlpf/Prrn/givf8A4zXQUUxHP/8ACZaX/wA+uuf+CK9/+M0f8Jlpf/Prrn/givf/AIzXQUUAc/8A8Jlpf/Prrn/givf/AIzR/wAJlpf/AD665/4Ir3/4zXQUUAc//wAJlpf/AD665/4Ir3/4zR/wmWl/8+uuf+CK9/8AjNdBRQBz/wDwmWl/8+uuf+CK9/8AjNH/AAmWl/8APrrn/givf/jNdBRQBz//AAmWl/8APrrn/givf/jNH/CZaX/z665/4Ir3/wCM10FFAHMyeMdML/8AHrrn/givf/jVM/4TDTP+fXW//BHe/wDxquil+/8AhTKQzA/4TDTP+fXW/wDwR3v/AMao/wCEw0z/AJ9db/8ABHe//Gq36KQGB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NVv0UAYH/CYaZ/z663/4I73/AONUf8Jhpn/Prrf/AII73/41W/RQBgf8Jhpn/Prrf/gjvf8A41R/wmGmf8+ut/8Agjvf/jVb9FAGB/wmGmf8+ut/+CO9/wDjVH/CYaZ/z663/wCCO9/+NVv0UAYH/CYaZ/z663/4I73/AONUo8YaZn/j11v/AMEd7/8AGq3qB1oAyf8AhMtL/wCfXXP/AARXv/xmj/hMtL/59dc/8EV7/wDGa6CiqEc//wAJlpf/AD665/4Ir3/4zR/wmWl/8+uuf+CK9/8AjNdBRQBz/wDwmWl/8+uuf+CK9/8AjNH/AAmWl/8APrrn/givf/jNdBRQBz//AAmWl/8APrrn/givf/jNH/CZaX/z665/4Ir3/wCM10FFAHP/APCZaX/z665/4Ir3/wCM0f8ACZaX/wA+uuf+CK9/+M10FFAHP/8ACZaX/wA+uuf+CK9/+M0f8Jlpf/Prrn/givf/AIzXQUUAc7J4x0sof9F1z/wRXv8A8ZqD/hMNM/59db/8Ed7/APGq6eT/AFZqvSYzA/4TDTP+fXW//BHe/wDxqj/hMNM/59db/wDBHe//ABqt+ikBgf8ACYaZ/wA+ut/+CO9/+NUf8Jhpn/Prrf8A4I73/wCNVv0UAYH/AAmGmf8APrrf/gjvf/jVH/CYaZ/z663/AOCO9/8AjVb9FAGB/wAJhpn/AD663/4I73/41R/wmGmf8+ut/wDgjvf/AI1W/RQBgf8ACYaZ/wA+ut/+CO9/+NUf8Jhpn/Prrf8A4I73/wCNVv0UAYH/AAmGmf8APrrf/gjvf/jVaGmaxbat5v2aK+TysbvtVjNbZznp5qLu6ds44z1FX6KACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigArA8Df8AJP8Aw3/2C7X/ANFLW/WB4G/5J/4b/wCwXa/+iloA36KwPEvjTw/4Q+y/27qH2T7Vv8n9zJJu243fcU4xuHX1rB/4XT8Pv+hg/wDJO4/+IoA72iuC/wCF0/D7/oYP/JO4/wDiKP8AhdPw+/6GD/yTuP8A4igDvaK4L/hdPw+/6GD/AMk7j/4ij/hdPw+/6GD/AMk7j/4igDvaK4L/AIXT8Pv+hg/8k7j/AOIo/wCF0/D7/oYP/JO4/wDiKAO9orgv+F0/D7/oYP8AyTuP/iKP+F0/D7/oYP8AyTuP/iKAO9orgv8AhdPw+/6GD/yTuP8A4ij/AIXT8Pv+hg/8k7j/AOIoA72iuC/4XT8Pv+hg/wDJO4/+Io/4XT8Pv+hg/wDJO4/+IoA72iuC/wCF0/D7/oYP/JO4/wDiKP8AhdPw+/6GD/yTuP8A4igDvaK4L/hdPw+/6GD/AMk7j/4ij/hdPw+/6GD/AMk7j/4igDvaK4L/AIXT8Pv+hg/8k7j/AOIo/wCF0/D7/oYP/JO4/wDiKAO9orgv+F0/D7/oYP8AyTuP/iKP+F0/D7/oYP8AyTuP/iKAO9orgv8AhdPw+/6GD/yTuP8A4ij/AIXT8Pv+hg/8k7j/AOIoA72iuC/4XT8Pv+hg/wDJO4/+Io/4XT8Pv+hg/wDJO4/+IoA72iuC/wCF0/D7/oYP/JO4/wDiKP8AhdPw+/6GD/yTuP8A4igDvaK4L/hdPw+/6GD/AMk7j/4ij/hdPw+/6GD/AMk7j/4igDvaK4L/AIXT8Pv+hg/8k7j/AOIo/wCF0/D7/oYP/JO4/wDiKAO9orgv+F0/D7/oYP8AyTuP/iKP+F0/D7/oYP8AyTuP/iKAO9orgv8AhdPw+/6GD/yTuP8A4ij/AIXT8Pv+hg/8k7j/AOIoA72iuC/4XT8Pv+hg/wDJO4/+Io/4XT8Pv+hg/wDJO4/+IoA72iuC/wCF0/D7/oYP/JO4/wDiKP8AhdPw+/6GD/yTuP8A4igDvaK4L/hdPw+/6GD/AMk7j/4ij/hdPw+/6GD/AMk7j/4igDvaK4L/AIXT8Pv+hg/8k7j/AOIo/wCF0/D7/oYP/JO4/wDiKAO9orgv+F0/D7/oYP8AyTuP/iKP+F0/D7/oYP8AyTuP/iKAO9orgv8AhdPw+/6GD/yTuP8A4ij/AIXT8Pv+hg/8k7j/AOIoA72iuC/4XT8Pv+hg/wDJO4/+Io/4XT8Pv+hg/wDJO4/+IoA72iuC/wCF0/D7/oYP/JO4/wDiKP8AhdPw+/6GD/yTuP8A4igDvaK4L/hdPw+/6GD/AMk7j/4ij/hdPw+/6GD/AMk7j/4igDvaK4L/AIXT8Pv+hg/8k7j/AOIo/wCF0/D7/oYP/JO4/wDiKAO9orgv+F0/D7/oYP8AyTuP/iKP+F0/D7/oYP8AyTuP/iKAO9orgv8AhdPw+/6GD/yTuP8A4ij/AIXT8Pv+hg/8k7j/AOIoA72iuC/4XT8Pv+hg/wDJO4/+Io/4XT8Pv+hg/wDJO4/+IoA72iuC/wCF0/D7/oYP/JO4/wDiKP8AhdPw+/6GD/yTuP8A4igDvaK4L/hdPw+/6GD/AMk7j/4ij/hdPw+/6GD/AMk7j/4igDvaK4L/AIXT8Pv+hg/8k7j/AOIo/wCF0/D7/oYP/JO4/wDiKAO9orgv+F0/D7/oYP8AyTuP/iKP+F0/D7/oYP8AyTuP/iKAO9orgv8AhdPw+/6GD/yTuP8A4ij/AIXT8Pv+hg/8k7j/AOIoA72iuC/4XT8Pv+hg/wDJO4/+Io/4XT8Pv+hg/wDJO4/+IoA72iuC/wCF0/D7/oYP/JO4/wDiKP8AhdPw+/6GD/yTuP8A4igDvakh+8fpXn3/AAun4ff9DB/5J3H/AMRT4/jV8PVJz4g/8k7j/wCN0wPRKK8//wCF2/Dz/oYf/JK4/wDjdH/C7fh5/wBDD/5JXH/xumI9Aorz/wD4Xb8PP+hh/wDJK4/+N0f8Lt+Hn/Qw/wDklcf/ABugD0CivP8A/hdvw8/6GH/ySuP/AI3R/wALt+Hn/Qw/+SVx/wDG6APQKK8//wCF2/Dz/oYf/JK4/wDjdH/C7fh5/wBDD/5JXH/xugD0CivP/wDhdvw8/wChh/8AJK4/+N0f8Lt+Hn/Qw/8Aklcf/G6APQKK8/8A+F2/Dz/oYf8AySuP/jdH/C7fh5/0MP8A5JXH/wAboA7mX7/4UyuEk+NXw9ZsjxB/5J3H/wAbpv8Awun4ff8AQwf+Sdx/8RSGd7RXBf8AC6fh9/0MH/kncf8AxFH/AAun4ff9DB/5J3H/AMRSA72iuC/4XT8Pv+hg/wDJO4/+Io/4XT8Pv+hg/wDJO4/+IoA72iuC/wCF0/D7/oYP/JO4/wDiKP8AhdPw+/6GD/yTuP8A4igDvaK4L/hdPw+/6GD/AMk7j/4ij/hdPw+/6GD/AMk7j/4igDvaK4L/AIXT8Pv+hg/8k7j/AOIo/wCF0/D7/oYP/JO4/wDiKAO9oHWuC/4XT8Pv+hg/8k7j/wCIoHxp+H2f+Rg/8k7j/wCIoA9Horz/AP4Xb8PP+hh/8krj/wCN0f8AC7fh5/0MP/klcf8AxuqEegUV5/8A8Lt+Hn/Qw/8Aklcf/G6P+F2/Dz/oYf8AySuP/jdAHoFFef8A/C7fh5/0MP8A5JXH/wAbo/4Xb8PP+hh/8krj/wCN0AegUV5//wALt+Hn/Qw/+SVx/wDG6P8Ahdvw8/6GH/ySuP8A43QB6BRXn/8Awu34ef8AQw/+SVx/8bo/4Xb8PP8AoYf/ACSuP/jdAHoFFef/APC7fh5/0MP/AJJXH/xuj/hdvw8/6GH/AMkrj/43QB30n+rNV64d/jZ8PChA8Qc/9eVx/wDG6i/4XT8Pv+hg/wDJO4/+IpMDvaK4L/hdPw+/6GD/AMk7j/4ij/hdPw+/6GD/AMk7j/4ikM72iuC/4XT8Pv8AoYP/ACTuP/iKP+F0/D7/AKGD/wAk7j/4igDvaK4L/hdPw+/6GD/yTuP/AIij/hdPw+/6GD/yTuP/AIigDvaK4L/hdPw+/wChg/8AJO4/+Io/4XT8Pv8AoYP/ACTuP/iKAO9orgv+F0/D7/oYP/JO4/8AiKP+F0/D7/oYP/JO4/8AiKAO9orgv+F0/D7/AKGD/wAk7j/4it7w1408P+L/ALV/YWofa/suzzv3Mke3dnb99RnO09PSgDfooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/YLtf/RS1v1geBv+Sf8Ahv8A7Bdr/wCiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/AA3/ANgu1/8ARS1v1geBv+Sf+G/+wXa/+iloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAMD/hMNM/59db/APBHe/8Axqj/AITDTP8An11v/wAEd7/8arfooAwP+Ew0z/n11v8A8Ed7/wDGqP8AhMNM/wCfXW//AAR3v/xqt+igDA/4TDTP+fXW/wDwR3v/AMao/wCEw0z/AJ9db/8ABHe//Gq36KAMD/hMNM/59db/APBHe/8Axqj/AITDTP8An11v/wAEd7/8arfooAwP+Ew0z/n11v8A8Ed7/wDGqP8AhMNM/wCfXW//AAR3v/xqt+igDA/4TDTP+fXW/wDwR3v/AMao/wCEw0z/AJ9db/8ABHe//Gq36KAMD/hMNM/59db/APBHe/8Axqj/AITDTP8An11v/wAEd7/8arfooAwP+Ew0z/n11v8A8Ed7/wDGqP8AhMNM/wCfXW//AAR3v/xqt+igDA/4TDTP+fXW/wDwR3v/AMao/wCEw0z/AJ9db/8ABHe//Gq36KAMD/hMNM/59db/APBHe/8Axqj/AITDTP8An11v/wAEd7/8arfooAwP+Ew0z/n11v8A8Ed7/wDGqP8AhMNM/wCfXW//AAR3v/xqt+igDA/4TDTP+fXW/wDwR3v/AMao/wCEw0z/AJ9db/8ABHe//Gq36KAMD/hMNM/59db/APBHe/8AxqtDTNYttW837NFfJ5WN32qxmts5z081F3dO2ccZ6ir9FABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/8AsF2v/opa36wPA3/JP/Df/YLtf/RS0Ab9FFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQBv0VQ1PR7bVvK+0y3yeVnb9lvprbOcdfKdd3TvnHOOprP/AOEP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaP+EP0z/n61v/AMHl7/8AHaAN+isD/hD9M/5+tb/8Hl7/APHaUeD9Mz/x9a3/AODy9/8AjtAG9RWR/wAIXpX/AD863/4Pb3/47R/whelf8/Ot/wDg9vf/AI7TsBr0Vkf8IXpX/Pzrf/g9vf8A47R/whelf8/Ot/8Ag9vf/jtFgNeisj/hC9K/5+db/wDB7e//AB2j/hC9K/5+db/8Ht7/APHaLAa9FZH/AAhelf8APzrf/g9vf/jtH/CF6V/z863/AOD29/8AjtFgNeisj/hC9K/5+db/APB7e/8Ax2j/AIQvSv8An51v/wAHt7/8dosBr0Vkf8IXpX/Pzrf/AIPb3/47R/whelf8/Ot/+D29/wDjtFgNeisZ/BmlBCRc63n/ALDt7/8AHah/4Q/TP+frW/8AweXv/wAdoA36KwP+EP0z/n61v/weXv8A8do/4Q/TP+frW/8AweXv/wAdpAb9FYH/AAh+mf8AP1rf/g8vf/jtH/CH6Z/z9a3/AODy9/8AjtAG/RWB/wAIfpn/AD9a3/4PL3/47R/wh+mf8/Wt/wDg8vf/AI7QBv0Vgf8ACH6Z/wA/Wt/+Dy9/+O0f8Ifpn/P1rf8A4PL3/wCO0Ab9FYH/AAh+mf8AP1rf/g8vf/jtH/CH6Z/z9a3/AODy9/8AjtAG/RWB/wAIfpn/AD9a3/4PL3/47Whpmj22k+b9mlvn83G77VfTXOMZ6ea7bevbGeM9BQBfooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/AGC7X/0Utb9YHgb/AJJ/4b/7Bdr/AOiloA36KKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKB1ooHWgC1RRRVCCiiigAooooAKKKKACiiigAooooAbJ/qzVerEn+rNV6TGFFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigArA8Df8k/8N/8AYLtf/RS1v1geBv8Akn/hv/sF2v8A6KWgDckijlx5kaPjpuUHFM+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAo+yW3/PvF/3wKmooAh+yW3/AD7xf98Cj7Jbf8+8X/fAqaigCH7Jbf8APvF/3wKPslt/z7xf98CpqKAIfslt/wA+8X/fAoFpbZ/494v++BU1A60AP+xWn/PrD/37FH2K0/59Yf8Av2KnoqhEH2K0/wCfWH/v2KPsVp/z6w/9+xU9FAEH2K0/59Yf+/Yo+xWn/PrD/wB+xU9FAEH2K0/59Yf+/Yo+xWn/AD6w/wDfsVPRQBB9itP+fWH/AL9ij7Faf8+sP/fsVPRQBB9itP8An1h/79ij7Faf8+sP/fsVPRQBWksrUIcW0P8A37FQfZLb/n3i/wC+BV6T/Vmq9JjIfslt/wA+8X/fAo+yW3/PvF/3wKmopAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FH2S2/594v++BU1FAEP2S2/wCfeL/vgUfZLb/n3i/74FTUUAQ/ZLb/AJ94v++BR9ktv+feL/vgVNRQBD9ktv8An3i/74FPjijiz5caJnrtUDNPooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/wAk/wDDf/YLtf8A0Utb9YHgb/kn/hv/ALBdr/6KWgDckljix5kiJnpuYDNM+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYo+123/PxF/wB9ipqKAIftdt/z8Rf99ij7Xbf8/EX/AH2KmooAh+123/PxF/32KPtdt/z8Rf8AfYqaigCH7Xbf8/EX/fYoF3bZ/wCPiL/vsVNQOtAD/ttp/wA/UP8A38FH220/5+of+/gqeiqEQfbbT/n6h/7+Cj7baf8AP1D/AN/BU9FAEH220/5+of8Av4KPttp/z9Q/9/BU9FAEH220/wCfqH/v4KPttp/z9Q/9/BU9FAEH220/5+of+/go+22n/P1D/wB/BU9FAEH220/5+of+/go+22n/AD9Q/wDfwVPRQBWkvbUocXMP/fwVB9rtv+fiL/vsVek/1ZqvSYyH7Xbf8/EX/fYo+123/PxF/wB9ipqKQEP2u2/5+Iv++xR9rtv+fiL/AL7FTUUAQ/a7b/n4i/77FH2u2/5+Iv8AvsVNRQBD9rtv+fiL/vsUfa7b/n4i/wC+xU1FAEP2u2/5+Iv++xR9rtv+fiL/AL7FTUUAQ/a7b/n4i/77FPjljlz5ciPjrtYHFPooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/yT/w3/wBgu1/9FLW/WB4G/wCSf+G/+wXa/wDopaAN+iqGp65pGi+V/auq2Nh5ufL+1XCRb8YzjcRnGR+YrP8A+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iqP+E58I/8AQ06J/wCDCL/4qgDforA/4Tnwj/0NOif+DCL/AOKo/wCE58I/9DTon/gwi/8AiqAN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36B1rA/4Tnwj/wBDTon/AIMIv/iqUeOfCOf+Rp0T/wAGEX/xVAHUUVz/APwnfg//AKGvQ/8AwYw//FUf8J34P/6GvQ//AAYw/wDxVUI6Ciuf/wCE78H/APQ16H/4MYf/AIqj/hO/B/8A0Neh/wDgxh/+KoA6Ciuf/wCE78H/APQ16H/4MYf/AIqj/hO/B/8A0Neh/wDgxh/+KoA6Ciuf/wCE78H/APQ16H/4MYf/AIqj/hO/B/8A0Neh/wDgxh/+KoA6Ciuf/wCE78H/APQ16H/4MYf/AIqj/hO/B/8A0Neh/wDgxh/+KoA6Ciuf/wCE78H/APQ16H/4MYf/AIqj/hO/B/8A0Neh/wDgxh/+KoA3pP8AVmq9Y8njrwgUOPFWh/8Agxi/+KqD/hOfCP8A0NOif+DCL/4qkxm/RWB/wnPhH/oadE/8GEX/AMVR/wAJz4R/6GnRP/BhF/8AFUgN+isD/hOfCP8A0NOif+DCL/4qj/hOfCP/AENOif8Agwi/+KoA36KwP+E58I/9DTon/gwi/wDiqP8AhOfCP/Q06J/4MIv/AIqgDforA/4Tnwj/ANDTon/gwi/+Ko/4Tnwj/wBDTon/AIMIv/iqAN+isD/hOfCP/Q06J/4MIv8A4qj/AITnwj/0NOif+DCL/wCKoA36KwP+E58I/wDQ06J/4MIv/iq0NM1zSNa83+ytVsb/AMrHmfZbhJdmc4ztJxnB/I0AX6KKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/yT/w3/wBgu1/9FLW/WB4G/wCSf+G/+wXa/wDopaAN+iiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACgdaKB1oAtUUUVQgooooAKKKKACiiigAooooAKKKKAGyf6s1XqxJ/qzVekxhRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/JP/Df/AGC7X/0Utb9YHgb/AJJ/4b/7Bdr/AOiloA0NT1i20nyvtMV8/m52/ZbGa5xjHXykbb174zzjoaz/APhMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8Axqt+igDA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGq36KAMD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMarfooAwP8AhMNM/wCfXW//AAR3v/xqlHjDTM/8eut/+CO9/wDjVb1A60AZP/CZaX/z665/4Ir3/wCM0f8ACZaX/wA+uuf+CK9/+M10FFUI5/8A4TLS/wDn11z/AMEV7/8AGaP+Ey0v/n11z/wRXv8A8ZroKKAOf/4TLS/+fXXP/BFe/wDxmj/hMtL/AOfXXP8AwRXv/wAZroKKAOf/AOEy0v8A59dc/wDBFe//ABmj/hMtL/59dc/8EV7/APGa6CigDn/+Ey0v/n11z/wRXv8A8Zo/4TLS/wDn11z/AMEV7/8AGa6CigDn/wDhMtL/AOfXXP8AwRXv/wAZo/4TLS/+fXXP/BFe/wDxmugooA52TxjpZQ/6Lrn/AIIr3/4zUH/CYaZ/z663/wCCO9/+NV08n+rNV6TGYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41W/RSAwP+Ew0z/n11v/AMEd7/8AGqP+Ew0z/n11v/wR3v8A8arfooAwP+Ew0z/n11v/AMEd7/8AGqP+Ew0z/n11v/wR3v8A8arfooAwP+Ew0z/n11v/AMEd7/8AGqP+Ew0z/n11v/wR3v8A8arfooAwP+Ew0z/n11v/AMEd7/8AGqP+Ew0z/n11v/wR3v8A8arfooAwP+Ew0z/n11v/AMEd7/8AGq0NM1i21bzfs0V8nlY3farGa2znPTzUXd07ZxxnqKv0UAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/7Bdr/6KWt+sDwN/wAk/wDDf/YLtf8A0UtAG/RVDU9YttJ8r7TFfP5udv2WxmucYx18pG29e+M846Gs/wD4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+isD/AITDTP8An11v/wAEd7/8ao/4TDTP+fXW/wDwR3v/AMaoA36KwP8AhMNM/wCfXW//AAR3v/xqj/hMNM/59db/APBHe/8AxqgDforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqAN+gdawP+Ew0z/n11v/AMEd7/8AGqUeMNMz/wAeut/+CO9/+NUAdRRXPf8ACaaT/wA++t/+CK9/+NUf8JppP/Pvrf8A4Ir3/wCNVQjoaK57/hNNJ/599b/8EV7/APGqP+E00n/n31v/AMEV7/8AGqAOhornv+E00n/n31v/AMEV7/8AGqP+E00n/n31v/wRXv8A8aoA6Giue/4TTSf+ffW//BFe/wDxqj/hNNJ/599b/wDBFe//ABqgDoaK57/hNNJ/599b/wDBFe//ABqj/hNNJ/599b/8EV7/APGqAOhornv+E00n/n31v/wRXv8A8ao/4TTSf+ffW/8AwRXv/wAaoA35P9War1jP4z0ooQLbW8/9gK9/+NVD/wAJhpn/AD663/4I73/41SYzforA/wCEw0z/AJ9db/8ABHe//GqP+Ew0z/n11v8A8Ed7/wDGqQG/RWB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONUAb9FYH/CYaZ/z663/wCCO9/+NUf8Jhpn/Prrf/gjvf8A41QBv0Vgf8Jhpn/Prrf/AII73/41R/wmGmf8+ut/+CO9/wDjVAG/RWB/wmGmf8+ut/8Agjvf/jVH/CYaZ/z663/4I73/AONUAb9FYH/CYaZ/z663/wCCO9/+NVoaZrFtq3m/Zor5PKxu+1WM1tnOenmou7p2zjjPUUAX6KKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/yT/wAN/wDYLtf/AEUtb9YHgb/kn/hv/sF2v/opaAN+iiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/yT/w3/2C7X/0Utb9YHgb/kn/AIb/AOwXa/8AopaAN+iiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/yT/wAN/wDYLtf/AEUtb9YHgb/kn/hv/sF2v/opaAN+iiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/yT/w3/2C7X/0Utb9YHgb/kn/AIb/AOwXa/8AopaAN+iiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACsDwN/yT/wAN/wDYLtf/AEUtb9YHgb/kn/hv/sF2v/opaAN+iiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAorA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9aGmafc2Hm/adYvtR342/akhXy8Z6eVGnXPfPQYxzkAv0UUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFYHgb/AJJ/4b/7Bdr/AOilrfrA8Df8k/8ADf8A2C7X/wBFLQBv0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/8AsF2v/opa36wPA3/JP/Df/YLtf/RS0Ab9FUNTm1eLyv7KsbG6znzPtV48G3pjG2J89/TGB1zxn/a/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1H2vxd/0A9E/8HEv/AMjUAb9FYH2vxd/0A9E/8HEv/wAjUfa/F3/QD0T/AMHEv/yNQBv0Vgfa/F3/AEA9E/8ABxL/API1L9r8Xf8AQE0T/wAHEv8A8jUAb1FYnneMP+gJof8A4OJv/kWjzvGH/QE0P/wcTf8AyLTsBt0Vied4w/6Amh/+Dib/AORaPO8Yf9ATQ/8AwcTf/ItFgNuisTzvGH/QE0P/AMHE3/yLR53jD/oCaH/4OJv/AJFosBt0Vied4w/6Amh/+Dib/wCRaPO8Yf8AQE0P/wAHE3/yLRYDborE87xh/wBATQ//AAcTf/ItHneMP+gJof8A4OJv/kWiwG3RWJ53jD/oCaH/AODib/5Fo87xh/0BND/8HE3/AMi0WA26Kw2n8XqMnRND/wDBxL/8i0z7X4u/6Aeif+DiX/5GpAb9FYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1AG/RWB9r8Xf9APRP/BxL/wDI1H2vxd/0A9E/8HEv/wAjUAb9FYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1AG/RWB9r8Xf9APRP/BxL/wDI1H2vxd/0A9E/8HEv/wAjUAb9FYH2vxd/0A9E/wDBxL/8jUfa/F3/AEA9E/8ABxL/API1AG/RWB9r8Xf9APRP/BxL/wDI1aGmTavL5v8AatjY2uMeX9lvHn3dc53RJjt65yemOQC/RRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQBv0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUDrRQOtAFqiiiqEFFFFABRRRQAUUUUAFFFFABRRRQA2T/AFZqvViT/Vmq9JjCiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/+wXa/+ilrfrA8Df8AJP8Aw3/2C7X/ANFLQBuSGQY8tEb13MR/Q0zdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mjdc/8APKL/AL+n/wCJqaigCHdc/wDPKL/v6f8A4mgNc5/1UX/f0/8AxNTUDrQA/fd/88Yf+/x/+Jo33f8Azxh/7/H/AOJqeiqEQb7v/njD/wB/j/8AE0b7v/njD/3+P/xNT0UAQb7v/njD/wB/j/8AE0b7v/njD/3+P/xNT0UAQb7v/njD/wB/j/8AE0b7v/njD/3+P/xNT0UAQb7v/njD/wB/j/8AE0b7v/njD/3+P/xNT0UAQb7v/njD/wB/j/8AE0b7v/njD/3+P/xNT0UAVpHuthzDD/39P/xNQbrn/nlF/wB/T/8AE1ek/wBWar0mMh3XP/PKL/v6f/iaN1z/AM8ov+/p/wDiamopAQ7rn/nlF/39P/xNG65/55Rf9/T/APE1NRQBDuuf+eUX/f0//E0brn/nlF/39P8A8TU1FAEO65/55Rf9/T/8TRuuf+eUX/f0/wDxNTUUAQ7rn/nlF/39P/xNG65/55Rf9/T/APE1NRQBDuuf+eUX/f0//E0+MyHPmIi+m1if6Cn0UAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/7Bdr/6KWt+sDwN/wAk/wDDf/YLtf8A0UtAG/RTJBIceW6L67lJ/qKZtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUVDtuf8AnrF/36P/AMVRtuf+esX/AH6P/wAVQBNRUO25/wCesX/fo/8AxVG25/56xf8Afo//ABVAE1FQ7bn/AJ6xf9+j/wDFUbbn/nrF/wB+j/8AFUATUDrUO25/56xf9+j/APFUBbnP+ti/79H/AOKoA0KKg2Xf/PaH/vyf/iqNl3/z2h/78n/4qqET0VBsu/8AntD/AN+T/wDFUbLv/ntD/wB+T/8AFUAT0VBsu/8AntD/AN+T/wDFUbLv/ntD/wB+T/8AFUAT0VBsu/8AntD/AN+T/wDFUbLv/ntD/wB+T/8AFUAT0VBsu/8AntD/AN+T/wDFUbLv/ntD/wB+T/8AFUAT0VBsu/8AntD/AN+T/wDFUbLv/ntD/wB+T/8AFUASyf6s1XpZEuthzND/AN+j/wDFVBtuf+esX/fo/wDxVJjJqKh23P8Az1i/79H/AOKo23P/AD1i/wC/R/8AiqQE1FQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVQBNRUO25/56xf9+j/APFUbbn/AJ6xf9+j/wDFUATUVDtuf+esX/fo/wDxVG25/wCesX/fo/8AxVAE1FQ7bn/nrF/36P8A8VRtuf8AnrF/36P/AMVQBNRUO25/56xf9+j/APFU+MSDPmOjem1SP6mgB9FFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQBv0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUDrRQOtAFqiiiqEFFFFABRRRQAUUUUAFFFFABRRRQA2T/Vmq9WJP8AVmq9JjCiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv+Sf+G/8AsF2v/opa36wPA3/JP/Df/YLtf/RS0AaGp6fc3/lfZtYvtO2Z3fZUhbzM46+bG/THbHU5zxjP/wCEf1P/AKHHW/8AvzZf/I9b9FAGB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj1v0UAYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPW/RQBgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPW/RQBgf8I/qf/Q463/35sv/AJHo/wCEf1P/AKHHW/8AvzZf/I9b9FAGB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj1v0UAYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPW/RQBgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPW/RQBgf8I/qf/Q463/35sv/AJHo/wCEf1P/AKHHW/8AvzZf/I9b9FAGB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj1v0UAYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPW/RQBgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPW/RQBgf8I/qf/Q463/35sv/AJHo/wCEf1P/AKHHW/8AvzZf/I9b9FAGB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj1v0UAYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPW/RQBgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPW/RQBgf8I/qf/Q463/35sv/AJHo/wCEf1P/AKHHW/8AvzZf/I9b9FAGB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj1v0UAYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPW/RQBgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPW/RQBgf8I/qf/Q463/35sv/AJHo/wCEf1P/AKHHW/8AvzZf/I9b9FAGB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj1v0UAYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPW/RQBgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPW/RQBgf8I/qf/Q463/35sv/AJHo/wCEf1P/AKHHW/8AvzZf/I9b9FAGB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj1v0UAYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPW/RQBgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPW/RQBgf8I/qf/Q463/35sv/AJHo/wCEf1P/AKHHW/8AvzZf/I9b9FAGB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj1v0UAYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPW/RQBgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPW/RQBgf8I/qf/Q463/35sv/AJHo/wCEf1P/AKHHW/8AvzZf/I9b9FAGB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj1v0UAYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPW/RQBgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPW/RQBgf8I/qf/Q463/35sv/AJHo/wCEf1P/AKHHW/8AvzZf/I9b9FAGB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj1v0UAYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPW/RQBgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPW/RQBgf8I/qf/Q463/35sv/AJHo/wCEf1P/AKHHW/8AvzZf/I9b9FAGB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj1v0UAYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPW/RQBgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPW/RQBgf8I/qf/Q463/35sv/AJHo/wCEf1P/AKHHW/8AvzZf/I9b9FAGB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj1v0UAYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPW/RQBgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPW/RQBgf8I/qf/Q463/35sv/AJHo/wCEf1P/AKHHW/8AvzZf/I9b9FAGB/wj+p/9Djrf/fmy/wDkej/hH9T/AOhx1v8A782X/wAj1v0UAYH/AAj+p/8AQ463/wB+bL/5Ho/4R/U/+hx1v/vzZf8AyPW/RQBgf8I/qf8A0OOt/wDfmy/+R6UeH9Tz/wAjjrf/AH5sv/ket6gdaAMn/hHtU/6HPXP+/Nl/8j0f8I9qn/Q565/35sv/AJHroKKoRz//AAj2qf8AQ565/wB+bL/5Ho/4R7VP+hz1z/vzZf8AyPXQUUAc/wD8I9qn/Q565/35sv8A5Ho/4R7VP+hz1z/vzZf/ACPXQUUAc/8A8I9qn/Q565/35sv/AJHo/wCEe1T/AKHPXP8AvzZf/I9dBRQBz/8Awj2qf9Dnrn/fmy/+R6P+Ee1T/oc9c/782X/yPXQUUAc//wAI9qn/AEOeuf8Afmy/+R6P+Ee1T/oc9c/782X/AMj10FFAHOyeHtU2H/istcP/AGxsv/keoP8AhH9T/wChx1v/AL82X/yPXTyf6s1XpMZgf8I/qf8A0OOt/wDfmy/+R6P+Ef1P/ocdb/782X/yPW/RSAwP+Ef1P/ocdb/782X/AMj0f8I/qf8A0OOt/wDfmy/+R636KAMD/hH9T/6HHW/+/Nl/8j0f8I/qf/Q463/35sv/AJHrfooAwP8AhH9T/wChx1v/AL82X/yPR/wj+p/9Djrf/fmy/wDket+igDA/4R/U/wDocdb/AO/Nl/8AI9H/AAj+p/8AQ463/wB+bL/5HrfooAwP+Ef1P/ocdb/782X/AMj1oaZp9zYeb9p1i+1Hfjb9qSFfLxnp5Uadc989BjHOb9FABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv8Akn/hv/sF2v8A6KWt+sDwN/yT/wAN/wDYLtf/AEUtAG/RVDU9Pub/AMr7NrF9p2zO77KkLeZnHXzY36Y7Y6nOeMZ//CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36KwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8AkegDforA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR6AN+isD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/kegDforA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HoA36B1rA/wCEf1P/AKHHW/8AvzZf/I9KPD+p5/5HHW/+/Nl/8j0AdRRXP/8ACPap/wBDnrn/AH5sv/kej/hHtU/6HPXP+/Nl/wDI9UI6Ciuf/wCEe1T/AKHPXP8AvzZf/I9H/CPap/0Oeuf9+bL/AOR6AOgorn/+Ee1T/oc9c/782X/yPR/wj2qf9Dnrn/fmy/8AkegDoKK5/wD4R7VP+hz1z/vzZf8AyPR/wj2qf9Dnrn/fmy/+R6AOgorn/wDhHtU/6HPXP+/Nl/8AI9H/AAj2qf8AQ565/wB+bL/5HoA6Ciuf/wCEe1T/AKHPXP8AvzZf/I9H/CPap/0Oeuf9+bL/AOR6AN6T/Vmq9Y8nh7VNh/4rLXD/ANsbL/5HqD/hH9T/AOhx1v8A782X/wAj0mM36KwP+Ef1P/ocdb/782X/AMj0f8I/qf8A0OOt/wDfmy/+R6QG/RWB/wAI/qf/AEOOt/8Afmy/+R6P+Ef1P/ocdb/782X/AMj0Ab9FYH/CP6n/ANDjrf8A35sv/kej/hH9T/6HHW/+/Nl/8j0Ab9FYH/CP6n/0OOt/9+bL/wCR6P8AhH9T/wChx1v/AL82X/yPQBv0Vgf8I/qf/Q463/35sv8A5Ho/4R/U/wDocdb/AO/Nl/8AI9AG/RWB/wAI/qf/AEOOt/8Afmy/+R60NM0+5sPN+06xfajvxt+1JCvl4z08qNOue+egxjnIBfooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/ACT/AMN/9gu1/wDRS1v1geBv+Sf+G/8AsF2v/opaAN+iiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACgdaKB1oAtUUUVQgooooAKKKKACiiigAooooAKKKKAGyf6s1XqxJ/qzVekxhRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKwPA3/ACT/AMN/9gu1/wDRS1v1geBv+Sf+G/8AsF2v/opaANDU9Pub/wAr7NrF9p2zO77KkLeZnHXzY36Y7Y6nOeMZ/wDwj+p/9Djrf/fmy/8Aket+igDA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR636KAMD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/ket+igDA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HrfooAwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8Aket+igDA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR636KAMD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/ket+igDA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HrfooAwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8Aket+igDA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR636KAMD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/ket+igDA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HrfooAwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8Aket+igDA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR636KAMD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/ket+igDA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HrfooAwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8Aket+igDA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR636KAMD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/ket+igDA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HrfooAwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8Aket+igDA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR636KAMD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/ket+igDA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HrfooAwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8Aket+igDA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR636KAMD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/ket+igDA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HrfooAwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8Aket+igDA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR636KAMD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/ket+igDA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HrfooAwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8Aket+igDA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR636KAMD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/ket+igDA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HrfooAwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8Aket+igDA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR636KAMD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/ket+igDA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HrfooAwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8Aket+igDA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR636KAMD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/ket+igDA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HrfooAwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8Aket+igDA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR636KAMD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/ket+igDA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HrfooAwP+Ef1P/ocdb/782X/yPR/wj+p/9Djrf/fmy/8Aket+igDA/wCEf1P/AKHHW/8AvzZf/I9H/CP6n/0OOt/9+bL/AOR636KAMD/hH9T/AOhx1v8A782X/wAj0f8ACP6n/wBDjrf/AH5sv/ket+igDA/4R/U/+hx1v/vzZf8AyPR/wj+p/wDQ463/AN+bL/5HrfooAw/7D1b/AKHLW/8AvzZf/I9H9h6t/wBDlrf/AH5sv/ketyimBh/2Hq3/AEOWt/8Afmy/+R6P7D1b/octb/782X/yPW5RQBh/2Hq3/Q5a3/35sv8A5Ho/sPVv+hy1v/vzZf8AyPW5RQBh/wBh6t/0OWt/9+bL/wCR6P7D1b/octb/AO/Nl/8AI9blFAGH/Yerf9Dlrf8A35sv/kej+w9W/wChy1v/AL82X/yPW5RQBh/2Hq3/AEOWt/8Afmy/+R6P7D1b/octb/782X/yPW5RQBhHQtVIwfGWt4/642X/AMj03/hH9T/6HHW/+/Nl/wDI9b9FIDA/4R/U/wDocdb/AO/Nl/8AI9H/AAj+p/8AQ463/wB+bL/5HrfooAwP+Ef1P/ocdb/782X/AMj0f8I/qf8A0OOt/wDfmy/+R636KAMD/hH9T/6HHW/+/Nl/8j0f8I/qf/Q463/35sv/AJHrfooAwP8AhH9T/wChx1v/AL82X/yPR/wj+p/9Djrf/fmy/wDket+igDA/4R/U/wDocdb/AO/Nl/8AI9H/AAj+p/8AQ463/wB+bL/5HrfooAwP+Ef1P/ocdb/782X/AMj1oaZp9zYeb9p1i+1Hfjb9qSFfLxnp5Uadc989BjHOb9FABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv8Akn/hv/sF2v8A6KWt+sDwN/yT/wAN/wDYLtf/AEUtAG/RRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQBv0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv8Akn/hv/sF2v8A6KWt+sDwN/yT/wAN/wDYLtf/AEUtAG/RRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQBv0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv8Akn/hv/sF2v8A6KWt+sDwN/yT/wAN/wDYLtf/AEUtAG/RRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQBv0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv8Akn/hv/sF2v8A6KWt+sDwN/yT/wAN/wDYLtf/AEUtAG/RRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQBv0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv8Akn/hv/sF2v8A6KWt+sDwN/yT/wAN/wDYLtf/AEUtAG/RRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQBv0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVgeBv8Akn/hv/sF2v8A6KWt+sDwN/yT/wAN/wDYLtf/AEUtAG/RRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABWB4G/5J/4b/wCwXa/+ilrfrA8Df8k/8N/9gu1/9FLQBv0UUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAVU0rTodH0ex0y3Z2gs7eO3jaQgsVRQoJwAM4HpVuigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKKKYH/2Q==)

4.6 Share-based payments continued

The following table sets out weighted average information about how the fair value of the Sharesave Plan option grants were calculated.

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | Sharesave | Sharesave |
|  | Plan | Plan |
| Valuation model | Black-Scholes | Black-Scholes |
| Weighted average share price | 283.0p | 282.5p |
| Exercise price | 272.0p | 278.0p |
| Expected dividend yield | – | – |
| Risk-free interest rate | 3.3% | 4.13% |
| Volatility  a | 36.1% | 43.1% |
| Expected life (years)  b | 3.3 | 3.5 |
| Weighted average fair value of grants during the period | 92.0p | 110.2p |

a.  The expected volatility is determined by calculating the historical volatility of the Company’s share price commensurate with the expected term of the options and share awards.

b. The expected life of the options represents the average length of time between grant date and exercise date.

Scheme movements in the period

The tables below summarise the movements in outstanding options during the period for each scheme.

|  |  |  |  |  |
| --- | --- | --- | --- | --- |
|  |  |  | Weighted average |  |
|  | Number of shares |  | exercise price |  |
|  | 2025 | 2024 | 2025 | 2024 |
| Sharesave Plan | m | m | p | p |
| Outstanding at the beginning of the period | 6.6 | 5.6 | 235.4 | 219.5 |
| Granted | 1.5 | 1.8 | 272.0 | 278.0 |
| Exercised | (0.5) | – | 243.6 | – |
| Forfeited | (0.8) | (0.7) | 240.2 | 220.8 |
| Expired | (0.6) | (0.1) | 251.7 | 223.2 |
| Outstanding at the end of the period | 6.2 | 6.6 | 241.1 | 235.4 |
| Exercisable at the end of the period | – | – | – | – |

The outstanding options for the sharesave plan scheme had an exercise price of between 199.0p and 278.0p (2024 between 199.0p and 278.0p) and the weighted

average remaining contract life was 2.6 years (2024 2.7 years). The number of forfeited shares in the period includes 514,351 (2024 369,713) cancellations.

Sharesave plan options were exercised on a range of dates. The average share price through the period was 253.1p (2024 260.0p).

|  |  |  |
| --- | --- | --- |
|  | Number of shares |  |
|  | 2025 | 2024 |
| Share Incentive Plan | m | m |
| Outstanding at the beginning of the period | 2.3 | 2.2 |
| Granted | 0.3 | 0.3 |
| Exercised | (0.2) | (0.2) |
| Outstanding at the end of the period | 2.4 | 2.3 |
| Exercisable at the end of the period | 1.3 | 1.5 |

Options under the Share Incentive Plan are capable of remaining within the SIP trust indefinitely while participants continue to be employed.

|  |  |  |
| --- | --- | --- |
|  | Number of shares |  |
|  | 2025 | 2024 |
| Restricted Share Plan | m | m |
| Outstanding at the beginning of the period | 3.7 | 4.8 |
| Exercised | (1.2) | (1.0) |
| Forfeited | (0.2) | (0.1) |
| Outstanding at the end of the period | 2.3 | 3.7 |
| Exercisable at the end of the period | – | – |

Section 4 – Capital structure and financing costs continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc176

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

The weighted average remaining contract life of the RSP options was 0.2 years (2024 0.8 years).

|  |  |  |
| --- | --- | --- |
|  | Number of shares |  |
|  | 2025 | 2024 |
| Performance Share Plan | m | m |
| Outstanding at the beginning of the period | 2.7 | – |
| Granted | 3.0 | 2.7 |
| Outstanding at the end of the period | 5.7 | 2.7 |
| Exercisable at the end of the period | – | – |

The weighted average remaining contract life of the PSP options was 1.8 years (2024 2.2 years).

|  |  |  |
| --- | --- | --- |
|  | Number of shares |  |
|  | 2025 | 2024 |
| STDIP | m | m |
| Outstanding at the beginning of the period | 0.4 | 0.1 |
| Granted | 0.4 | 0.3 |
| Exercised | (0.2) | – |
| Outstanding at the end of the period | 0.6 | 0.4 |
| Exercisable at the end of the period | – | – |

The weighted average remaining contract life of the STDIP options was 0.6 years (2024 0.6 years).

4.7 Equity

Accounting policies

Own shares

The cost of own shares held in employee share trusts and in treasury are deducted from shareholders’ equity until the shares are cancelled, reissued or

disposed of. Where such shares are subsequently sold or reissued, the fair value of any consideration received is also included in shareholders’ equity.

Dividends

Dividends proposed by the Board but unpaid at the period end are not recognised in the financial statements until they have been approved by

shareholders at the Annual General Meeting. Interim Dividends are recognised when paid.

Scrip Dividends are fully paid up from the share premium account. They are accounted for as an increase in share capital for the nominal value of the

shares issued, and a resulting reduction in share premium.

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  | 2025 |  | 2024 |  |
|  |  | Number of |  | Number of |  |
| Called up share capital |  | shares | £m | shares | £m |
| Allotted, called up and fully paid |  |  |  |  |  |
| Ordinary shares of 8  13  ⁄ | p each |  |  |  |  |
| At start of period |  | 598,057,671 | 51 | 597,726,859 | 51 |
| Share capital issued  a |  | 806,728 | – | 330,812 | – |
| At end of period |  | 598,864,399 | 51 | 598,057,671 | 51 |

24

a.  During the period, the Company issued 806,728 (2024 330,812) shares for total consideration of £1m (2024 £nil). The nominal value of shares issued under share option schemes

was £68,908 (2024 £28,257), with £1m (2024 £nil) recognised within share premium.

All of the ordinary shares rank equally with respect to voting rights and rights to receive Ordinary and Special Dividends. There are no restrictions on the

rights to transfer shares.

Details of options granted under the Group’s share schemes are contained in note 4.6.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

177

![](data:image/jpeg;base64,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)

4.7 Equity continued

Dividends

There were no dividends declared or paid during the current period.

Share premium account

The share premium account represents amounts received in excess of the nominal value of shares on issue of new shares. Share premium of £1m (2024 £nil)

has been recognised on shares issued in the period.

Capital redemption reserve

The capital redemption reserve movement arose on the repurchase and cancellation by the Company of ordinary shares during prior periods.

Revaluation reserve

The revaluation reserve represents the unrealised gain generated on revaluation of the property estate with effect from 29 September 2007. It comprises the

excess of the fair value of the estate over deemed cost, net of related deferred taxation.

Own shares held

Own shares held by the Group represent the shares in the Company held by the employee share trusts.

During the period, the employee share trusts acquired 2,000,000 shares at a cost of £5m (2024 2,500,000 shares at a cost of £7m) and subscribed for 260,378

shares (2024 302,420) at a cost of £nil (2024 £nil). The employee share trusts released 1,687,954 (2024 1,280,727) shares to employees on the exercise of

options and other share awards for a total consideration of £4m (2024 £3m). The 6,084,571 shares held by the trusts at 27 September 2025 had a market value

of £15m (2024 5,512,147 shares held had a market value of £17m).

The Company has established two employee share trusts:

Share Incentive Plan (‘SIP’) Trust

The SIP Trust was established in 2003 to purchase shares on behalf of employees participating in the Company’s Share Incentive Plan. Under this scheme,

eligible employees are awarded free shares which are normally held in trust for a holding period of at least three years. After three years, the shares may be

transferred or sold by the employee but would be subject to income tax and National Insurance contributions. After five years the shares may be transferred

to or sold by the employee free of income tax and National Insurance contributions. The SIP Trust buys the shares in the market or subscribes for newly issued

shares with funds provided by the Company. During the holding period, dividends are paid directly to the participating employees. At 27 September 2025,

the trustees, Equiniti Share Plan Trustees Limited, held 2,350,690 (2024 2,285,174) shares in the Company. Of these shares, 1,300,165 (2024 1,127,251) shares

are available to employees, 1,028,403 (2024 1,131,504) shares have been awarded to employees but are still required to be held within the SIP Trust until the

three year holding period has expired, and the remaining 22,122 (2024 26,419) shares are unallocated.

Employee Benefit Trust (‘EBT’)

The EBT was established in 2003 in order to satisfy the exercise or vesting of existing and future share options and awards under the Restricted Share Plan,

Performance Restricted Share Plan, Short Term Deferred Incentive Plan and the Sharesave Plan. The EBT purchases shares in the market or subscribes for

newly issued shares, using funds provided by the Company, based on expectations of future requirements. Dividends are waived by the EBT. At 27 September

2025, the trustees, Apex Group Fiduciary Services Limited, were holding 3,733,881 (2024 3,226,973) shares in the Company.

Hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged future

cash flows.

Translation reserve

The translation reserve is used to record exchange differences arising from the translation of the consolidated financial statements of foreign subsidiaries.

Retained earnings

The Group’s main operating subsidiary, Mitchells & Butlers Retail Limited, had retained earnings under FRS 101 of £2,561m at 27 September 2025 (2024 £2,384m).

Its ability to distribute these reserves by way of dividends is restricted by the securitisation covenants (see note 4.1).

Section 4 – Capital structure and financing costs continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc178

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

5.1 Acquisitions

In the prior period, on 14 May 2024, the Group acquired the entire share capital of Pesto Restaurants Ltd, a group of 10 restaurants based in the UK, for

consideration which will be determined over two payments and partly contingent on future performance of the business. At acquisition, the consideration

was assessed at £12m for the purposes of calculation of goodwill under IFRS 3.

The amounts recognised in respect of identifiable assets and liabilities relating to the acquisition were as follows.

|  |  |
| --- | --- |
|  | Fair value on |
|  | acquisition |
|  | £m |
| Land and buildings | 7 |
| Right-of-use assets | 7 |
| Brand intangible | 2 |
| Cash and cash equivalents | 2 |
| Trade and other payables | (3) |
| Lease liabilities | (5) |
| Borrowings | (1) |
| Deferred tax liability | (2) |
| Net identifiable assets of Pesto Restaurants Ltd | 7 |
| Goodwill | 5 |
| Fair value of assets and liabilities | 12 |
| Consideration: |  |
| Initial cash consideration | 4 |
| Contingent consideration | 8 |
| Total consideration | 12 |
| Initial cash consideration | 4 |
| Less: cash and cash equivalents acquired | (2) |
| Net cash outflow on acquisition | 2 |

Goodwill of £5m arose on the acquisition of Pesto Restaurants Ltd primarily through the benefits that will be gained from cost synergies that will be obtained

on joining the Group and future conversions of other Group outlets.

The brand intangible was fair valued by reference to an estimated royalty income based on forecast cash flows for Pesto Restaurants Ltd over the expected

useful life of 20 years.

In the prior period, contingent consideration of £8m was shown as a non-current liability within other payables (see note 3.4). Contingent consideration

is payable to the previous owners of Pesto Restaurants Ltd, at a level dependent on the financial performance of that business over the 12 months ending

28 September 2025, and not to exceed £15m. It was measured at £12m, its fair value, at the acquisition date based on trading forecast and discounted at

a risk-free rate.

Contingent consideration is measured in line with the Group’s accounting policy for business combinations (see note 3.6). It has been re-measured at

27 September 2025 at £15m, an increase of £3m. The increase has been recognised as a non-measurement period adjustment, with the loss being recognised

in the income statement (see note 2.2).

Section 5 – Other notes

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

179

![](data:image/jpeg;base64,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)

5.2 Related party transactions

Key management personnel

Employees of the Mitchells & Butlers plc Group who are members of the Board of Directors or the Executive Committee of Mitchells & Butlers plc are deemed

to be key management personnel. It is the Board who have responsibility for planning, directing and controlling the activities of the Group.

Compensation of key management personnel of the Group:

|  |  |  |
| --- | --- | --- |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £m | £m |
| Short-term employee benefits | 6 | 7 |
| Share-based payments | 4 | – |
|  | 10 | 7 |

Movements in share options held by the Directors of Mitchells & Butlers plc are summarised in the Report on Directors’ remuneration in the information

labelled as audited by KPMG on pages 98 to 118.

Associate companies

The Group held a of property lease agreement with its associate company Fatboy Pub Company Limited.

The Group has entered into the following transactions with the associates:

|  |  |  |
| --- | --- | --- |
|  |  | Fatboy Pub Company Limited |
|  | 2025 | 2024 |
|  | 52 weeks | 52 weeks |
|  | £000 | £000 |
| Rent charged | 122 | 128 |
| Sales of goods and services | 13 | 12 |
|  | 135 | 140 |

The balance due from Fatboy Pub Company at 27 September 2025 was £nil (2024 £14,000), net of a provision of £173,000 (2024 £298,000).

Related parties

During the prior period, Mitchells & Butlers Retail Limited entered an option arrangement with Tottenham Hotspur Football Co Limited (THFC), a related

party, to sell the company’s leasehold interest in a trading site. THFC paid an agreed amount to the company under the option agreement. Should the option

under the option agreement be exercised, THFC would pay a further amount to acquire the site at the fair market value at the time the option agreement was

entered into.

Notes to the consolidated financial

statements continued

Section 5 – Other notes continued

Annual Report and Accounts 2025  Mitchells & Butlers plc180

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

5.3 Subsidiaries and associates

Subsidiaries

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation.

Mitchells & Butlers plc is the ultimate controlling party and the beneficial owner of all of the equity share capital, either itself or through subsidiary

undertakings, of the following companies:

|  |  |  |  |
| --- | --- | --- | --- |
|  | Country of | Registration |  |
| Name of subsidiary | incorporation | Number | Nature of business |
| Principal operating subsidiaries |  |  |  |
| Mitchells & Butlers Retail Limited | England and Wales | 00024542 | Leisure retailing |
| Mitchells & Butlers Retail (No. 2) Limited | England and Wales | 03959664 | Leisure retailing |
| Ha Ha Bar & Grill Limited | England and Wales | 06295359 | Leisure retailing |
| Orchid Pubs & Dining Limited | England and Wales | 06754332 | Leisure retailing |
| ALEX Gaststätten Gesellschaft mbH & Co KG | Germany |  | Leisure retailing |
| Pesto Restaurants Ltd | England and Wales | 05162378 | Leisure retailing |
| Midco 1 Limited | England and Wales | 05835640 | Property leasing company |
| Mitchells & Butlers Leisure Retail Limited | England and Wales | 01001181 | Service company |
| Mitchells & Butlers Germany GmbH  a,c | Germany |  | Service company |
| Mitchells & Butlers Finance plc | England and Wales | 04778667 | Finance company |
| Other subsidiaries |  |  |  |
| Mitchells & Butlers (Property) Limited  b | England and Wales | 01299745 | Property management |
| Standard Commercial Property Developments Limited  b | England and Wales | 00056525 | Property development |
| Mitchells & Butlers Holdings (No.2) Limited  a,b | England and Wales | 06475790 | Holding company |
| Mitchells & Butlers Holdings Limited  b | England and Wales | 03420338 | Holding company |
| Mitchells & Butlers Leisure Holdings Limited  b | England and Wales | 02608173 | Holding company |
| Mitchells & Butlers Retail Holdings Limited | England and Wales | 04887979 | Holding company |
| Ego Restaurants Holdings Limited | England and Wales | 06425958 | Non-trading |
| Old Kentucky Restaurants Limited | England and Wales | 00465905 | Trademark ownership |
| Mitchells & Butlers (IP) Limited  b | England and Wales | 04885717 | Dormant |
| Mitchells & Butlers Retail Property Limited  a,b | England and Wales | 06301758 | Non-trading |
| Mitchells and Butlers Healthcare Trustee Limited  b | England and Wales | 04659443 | Healthcare trustee |
| ALEX Gaststätten Immobiliengesellschaft mbH  c | Germany |  | Property management |
| ALL BAR ONE Gaststätten Betriebsgesellschaft mbH  c | Germany |  | Leisure retailing |
| ALEX Alsterpavillon Immobilien GmbH & Co KG  c | Germany |  | Property management |
| ALEX Alsterpavillon Management GmbH  c | Germany |  | Management company |
| ALEX Gaststätten Management GmbH  c | Germany |  | Management company |
| Miller & Carter Gaststätten Betriebsgesellschaft mbH  c | Germany |  | Leisure retailing |
| Browns Restaurant (Brighton) Limited  d | England and Wales | 01564302 | Dormant |
| Browns Restaurant (Bristol) Limited  d | England and Wales | 02351724 | Dormant |
| Browns Restaurant (Cambridge) Limited  d | England and Wales | 01237917 | Dormant |
| Browns Restaurant (London) Limited  d | England and Wales | 00291996 | Dormant |
| Browns Restaurant (Oxford) Limited  d | England and Wales | 01730727 | Dormant |
| Browns Restaurants Limited  d | England and Wales | 01001320 | Dormant |
| Lander & Cook Limited  d | England and Wales | 11160005 | Dormant |
| 3Sixty Restaurants Limited  b | England and Wales | 07540663 | Holding company |
| Mitchells & Butlers (Guestwise Parent) Limited  b | England and Wales | 16171261 | Holding company |
| Mitchells & Butlers (Guestwise Holdco) Limited  b | England and Wales | 16172904 | Non-trading |

a.  Shares held directly by Mitchells & Butlers plc.

b. These companies are exempt from the requirement to prepare individual audited financial statements in respect of the 52 week period ended 27 September 2025 by virtue

of sections 479A and 479C of the Companies Act 2006.

c.  The German subsidiary companies are consolidated on the basis of their reporting period, being the year ending 30 September 2025 (2024 30 September 2024).

d. These companies are exempt from the requirement to prepare and file individual financial statements in respect of the 52 week period ended 27 September 2025 by virtue

of sections 394A and 448A of the Companies Act 2006.

All companies registered in England and Wales operate within the United Kingdom. The registered office for these companies is 27 Fleet Street,

Birmingham, B3 1JP.

All companies registered in Germany operate solely within Germany. The registered office for these companies is Adolfstrasse 16, 65185 Wiesbaden.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

181

![](data:image/jpeg;base64,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)

5.3 Subsidiaries and associates continued

Associates

Details of the Company’s associates, held indirectly, are as follows:

|  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  | Country of |  |  | Proportion of |  |
|  |  | incorporation and |  |  | ownership | Proportion of voting |
| Name of associate | Registered office | operation | Country of operation | Nature of business | interest % | power interest % |
| Fatboy Pub Company | 5 Stratford Place, | England and |  |  |  |  |
| Limited | London W1C 1AX | Wales | United Kingdom | Leisure retailing | 25 | 25 |

Section 5 – Other notes continued

Notes to the consolidated financial

statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc182

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Notes

2025

£m

2024

£m

Non-current assets

Investments in subsidiaries 5 1,966  1,966

Amounts owed by subsidiary undertakings 6 384 384

Pension surplus 4 132 164

2,482  2,514

Current assets

Trade and other receivables 6 151  206

Cash and cash equivalents 79  47

230  253

Current liabilities

Pension liabilities 4 (1) (1)

Borrowings 8 (35) (4)

Trade and other payables 7 (371) (427)

(407) (432)

Non-current liabilities

Pension liabilities 4 (21) (24)

Deferred tax liabilities 9 (24) (31)

(45) (55)

Net assets 2,260 2,280

Equity

Called up share capital 10 51  51

Share premium account 10 358  357

Capital redemption reserve 3  3

Own shares held 10 (10) (9)

Retained earnings 1,858 1,878

Total equity 2,260  2,280

The Company reported a loss for the 52 weeks ended 27 September 2025 of £9m (52 weeks ended 28 September 2024 loss of £16m).

The Company financial statements were approved by the Board and authorised for issue on 27 November 2025.

They were signed on its behalf by:

Tim Jones

Chief Financial Officer

The accounting policies and the notes on pages 185 to 188 form an integral part of these Company financial statements.

Registered Number: 04551498

Mitchells & Butlers plc Company financial statements

Company balance sheet

27 September 2025

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

183

![](data:image/jpeg;base64,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)

Share

capital

£m

Share

premium

£m

Capital

redemption

reserve

£m

Own

shares

held

£m

Retained

earnings

£m

Total

equity

£m

At 30 September 2023 51  357 3 (5) 1,766 2,172

Loss after taxation –  –  –  –  (16)  (16)

Remeasurement of pension liability –  –  –  –  166  166

Deferred tax on remeasurement of pension liability –  –  –  –  (42)  (42)

Total comprehensive income –  –  –  –   108  108

Purchase of own shares –  –  –  (7)  – (7)

Release of own shares –  –  –  3  (3) –

Credit in respect of employee share schemes  –  –  –  –  7  7

At 28 September 2024 51  357 3 (9) 1,878 2,280

Loss after taxation –  –  –  –  (9)  (9)

Remeasurement of pension liability –  –  –  –  (21)  (21)

Deferred tax on remeasurement of pension liability –  –  –  –  5  5

Total comprehensive expense –  –  –  –   (25)  (25)

Share premium issued 1 –  –  –  1

Purchase of own shares –  –  –  (5)  –  (5)

Release of own shares –  –  –  4  (4) –

Credit in respect of employee share schemes  –  –  –  –  9  9

At 27 September 2025 51  358 3 (10) 1,858 2,260

Details of each reserve are provided in note 4.7 to the consolidated financial statements.

Company statement of changes in equity

For the 52 weeks ended 27 September 2025

Mitchells & Butlers plc Company financial statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc184

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

1. Basis of preparation

Basis of accounting

These Company financial statements were prepared in accordance with Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ as issued by the FRC.

As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation to IFRS 2 Share-based

Payments, requirements of IFRS 7 Financial Instruments: Disclosures, presentation of a cash flow statement, IAS 36 Impairment of Assets, standards not yet

effective and IAS 24 Related Party Disclosures. Where required, equivalent disclosures are given in the consolidated financial statements.

The Company financial statements have been prepared under the historical cost convention. The Company’s accounting policies have been applied on

a consistent basis to those set out in the relevant notes to the consolidated financial statements.

Share options and share awards are granted to employees of the Mitchells & Butlers Group, by the Company. The Company accounts for share-based

payments, in line with the policy disclosed in note 4.6 of the consolidated financial statements. The Company’s income statement charge in respect of

share-based payments represents the charge for options of employees of the Company. Other companies within the Group are recharged an amount relating

to their employees.

Going concern

The Directors have adopted the going concern basis in preparing these financial statements, as described in section 1 of the consolidated financial statements.

Accounting judgements and sources of estimation uncertainty

The accounting judgements and estimates of the Company are considered alongside those of the Group. The key judgements and sources of estimation

uncertainty of the Company are: the recognition of the pension surplus described in note 4.5 of the consolidated financial statements; the determination

of appropriate cash flow forecasts for the investment impairment review described in note 5; and the assessment of expected credit loss on amounts owed

by subsidiary undertakings as described in note 6.

Foreign currencies

Transactions in foreign currencies are recorded at the exchange rates ruling on the dates of the transactions. Monetary assets and liabilities denominated

in foreign currencies are translated into sterling at the relevant rates of exchange ruling at the balance sheet date.

2. Profit and loss account

Profit and loss account

The Company has not presented its own profit and loss account, as permitted by Section 408 of the Companies Act 2006.

The Company recorded a loss after tax of £9m (2024 loss of £16m), less dividends of £nil (2024 £nil).

Audit remuneration

Auditor’s remuneration for audit services to the Company was £30,000 (2024 £30,000). This is borne by another Group company, as are any other costs

relating to non-audit services (see note 2.3 to the consolidated financial statements).

3. Employees and Directors

2025

52 weeks

2024

52 weeks

Average number of employees, including part-time employees 2 2

Employees of Mitchells & Butlers plc consist of Executive Directors who are considered to be the key management personnel of the Company.

Details of employee benefits and post-employment benefits including share-based payments are included within the Report on Directors’ remuneration

in the information labelled as audited by KPMG on pages 98 to 118.

The charge recognised for share-based payments in the period is £3m (2024 £2m).

Notes to the Mitchells & Butlers plc

Company financial statements

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

185

![](data:image/jpeg;base64,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)

4. Pensions

Accounting policy

The accounting policy for pensions is disclosed in the consolidated financial statements in note 4.5.

Pension assets and liabilities

At 27 September 2025 the Company’s pension surplus in relation to the MABPP was £132m (2024 £164m).

At 27 September 2025 the Company’s pension liability in relation to MABETUS was £22m (2024 £25m). Of this amount, £1m (2024 £1m) is a current liability

and £21m (2024 £24m) is a non-current liability.

The Company is the sponsoring employer of the Group’s pension plans. Information concerning the pension scheme arrangements operated by the

Company and associated current and future contributions is contained within note 4.5 to the consolidated financial statements on pages 171 to 175.

The pension amounts and disclosures included in note 4.5 to the consolidated financial statements are equivalent to those applicable for the Company.

5. Investments in subsidiaries

Accounting policy

The Company’s investments in Group undertakings are held at cost less provision for impairment. The value of these investments are reviewed for

impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable, or that there is evidence that past impairments

may be reversed. Impairment reviews are performed by comparing the recoverable amount with carrying value. Recoverable amount is deemed as being

either future discounted cash flows where the subsidiary is a trading entity or net asset value where the subsidiary has no trading assets.

Investments in

subsidiary

undertakings

£m

Cost

At 30 September 2023 3,745

Additions 100

At 28 September 2024 3,845

At 27 September 2025 3,845

Provision

At 30 September 2023 1,879

Impairment –

At 28 September 2024 1,879

Impairment –

At 27 September 2025 1,879

Net book value

At 27 September 2025 1,966

At 28 September 2024 1,966

At 30 September 2023 1,866

a.  During the prior period the Company subscribed for 1 ordinary share, of £1 nominal value, at a subscription price of £100m each in Mitchells & Butlers Holdings (No.2) Limited

Mitchells & Butlers plc is the beneficial owner of all of the equity share capital of companies within the Group, either itself or through subsidiary undertakings.

In addition, the Company has an indirect investment in an associate company through subsidiary undertakings.

Certain subsidiary companies are exempt from the requirement to prepare individual audited financial statements in respect of the 52 week period ended

27 September 2025 by virtue of sections 479A and 479C of the Companies Act 2006. In addition, certain other companies are exempt from the requirement

to prepare and file individual financial statements in respect of the 52 week period ended 27 September 2025 by virtue of sections 394A and 448A of the

Companies Act 2006.

For further details, see note 5.3 of the consolidated financial statements for a full list of subsidiaries and associates.

Notes to the Mitchells & Butlers plc

Company financial statements continued

Annual Report and Accounts 2025  Mitchells & Butlers plc186

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

5. Investments in subsidiaries continued

Impairment review

Investments in parent companies which hold trading subsidiaries have been tested for impairment using pre-tax forecast cash flows, discounted by applying

a pre-tax discount rate of 11.3% (2024 11.0%) and a long-term growth rate of 2.0% (2024 2.0%).

The long-term growth rate is based on up-to-date economic data points and for consistency with the overall Group profit forecast. No further impairment

has been recognised as a result of this review in the current or prior period, and there are no triggers to indicate any impairment should be reversed.

For the investment impairment review, judgement has been applied to determine the most appropriate forecast to use as a result of the impact of cost inflation

on site profits. Forecasts for cash flows of trading subsidiaries have been based on the overall Group forecast for FY 2026 to FY 2028 that was in place at the

balance sheet date. The assumptions are consistent with those used in the impairment review performed at a cash-generating unit level as disclosed in the

consolidated financial statements in note 3.3. The assessment is not sensitive to these key assumptions.

6. Trade and other receivables

2025

£m

2024

£m

Non-current

Amounts owed by subsidiary undertakings 384 384

384 384

2025

£m

2024

£m

Current

Amounts owed by subsidiary undertakings  149  192

Defined benefit pension blocked accounts

a

–  12

Prepayments 2  2

151  206

a.  Contributions to the MABEPP scheme were paid into a blocked account since the scheme buy-in that took place during the year ended 24 September 2022. The full amount has

been repaid to the Company in the current period. See note 4.5 to the consolidated financial statements for further details).

Amounts owed by subsidiary undertakings are repayable on demand. However, £384m (2024 £384m) of these amounts are disclosed as non-current as they

are not expected to be settled within the next twelve months. Interest is not charged on all balances. Where interest is charged, it is charged at market rate,

based on what can be achieved on corporate deposits.

Critical accounting judgements

Management has applied judgement when assessing the expected credit loss (ECL) on amounts owed by subsidiary undertakings. An assessment of the

future trading cash flows and asset values of the subsidiaries has been made which also considers intercompany transactions between Group companies.

As a result of this assessment, no ECL has been recognised in the current period as it is immaterial.

The Directors consider that the carrying value of amounts owed by subsidiary undertakings approximately equates to their fair value.

7. Trade and other payables

Current

2025

£m

2024

£m

Amounts owed to subsidiary undertakings

a

369 425

Accrued charges 1 1

Other payables 1 1

371 427

a.  Amounts owed to subsidiary undertakings are repayable on demand. Interest is not charged on all balances. Where interest is charged, it is charged at market rate, based on

what can be achieved on corporate deposits.

Other Information

Mitchells & Butlers plc  Annual Report and Accounts 2025

187

![](data:image/jpeg;base64,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)

Notes to the Mitchells & Butlers plc

Company financial statements continued

8. Borrowings

Accounting policy

The accounting policy for borrowings is disclosed in the consolidated financial statements in note 4.1.

Borrowings can be analysed as follows:

2025

£m

2024

£m

Current

Bank overdraft 35 4

Total borrowings 35 4

Unsecured revolving credit facility

The Company holds an uncommitted gross overdraft facility of £50m (2024 £50m) as part of the Group’s notional pooling arrangements with a net facility

limit of £5m (2024 £5m) across the participating Group companies. The amount drawn at 27 September 2025 is £35m (2024 £4m).

9. Taxation

Accounting policy

The accounting policy for taxation is disclosed in the consolidated financial statements in note 2.4.

Deferred tax assets/(liabilities)

Movements in the deferred tax assets and liabilities can be analysed as follows:

£m

At 30 September 2023 10

Credited to income statement – pensions 1

Charged to other comprehensive income – pensions (42)

At 28 September 2024 (31)

Credited to income statement – pensions 2

Credited to other comprehensive income – pensions 5

At 27 September 2025 (24)

Analysed as tax timing differences related to:

2025

£m

2024

£m

Pensions (28) (35)

Tax losses

a

3  3

Share-based payments 1  1

Deferred tax liability (24) (31)

a.  Tax losses arising in 2008 which are now recoverable by offset against other income.

Further information on the changes to tax legislation are provided in note 2.4 to the consolidated financial statements.

10. Equity

Called up share capital and share premium

Details of the amount and nominal value of called up and fully paid share capital and share premium are contained in note 4.7 to the consolidated

financial statements.

Dividends

Details of the dividends declared and paid by the Company are contained in note 4.7 to the consolidated financial statements.

Own shares held

Details of the amount of own shares held are contained in note 4.7 to the consolidated financial statements.

Annual Report and Accounts 2025  Mitchells & Butlers plc188

Governance

Strategic Report

Introduction

Financial Statements

![](data:image/jpeg;base64,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)

Alternative performance measures

The performance of the Group is assessed using a number of Alternative Performance Measures (APMs).

The Group’s results are presented both before and after separately disclosed items. Adjusted profit measures are presented excluding separately disclosed

items as we believe this provides both management and investors with useful additional information about the Group’s performance and supports an effective

comparison of the Group’s trading performance from one period to the next. Adjusted profit measures are reconciled to unadjusted IFRS results on the face

of the income statement with details of separately disclosed items provided in note 2.2.

The Group’s results are also described using other measures that are not defined under IFRS and are therefore considered to be APMs. These APMs are used

by management to monitor business performance against both shorter term budgets and forecasts but also against the Group’s longer-term strategic plans.

APMs used to explain and monitor Group performance include:

APM Definition Source

EBITDA Earnings before interest, tax, depreciation and amortisation, before movements in the

valuation of the property portfolio.

Group income statement

Adjusted EBITDA EBITDA before separately disclosed items is used to calculate net debt to EBITDA. Group income statement

Operating profit Earnings before interest and tax. Group income statement

Adjusted operating profit Operating profit before separately disclosed items. Group income statement

Like-for-like sales growth Like-for-like sales growth reflects the sales performance against the comparable period

in the prior year of UK managed pubs, bars and restaurants that were trading in the two

periods being compared, unless marketed for disposal.

APM A

Adjusted earnings per share (EPS) Earnings per share using profit before separately disclosed items. Note 2.5

Net debt Net debt comprises cash and cash equivalents, cash deposits net of borrowings and

discounted lease liabilities. Presented on a constant currency basis due to the inclusion

of the fixed exchange rate component of the cross currency swap.

Note 4.4

Net debt : Adjusted EBITDA The multiple of net debt including lease liabilities, as per the balance sheet compared

against EBITDA before separately disclosed items, which is a widely used leverage

measure in the industry.

APM D

Return on capital Return generating capital includes investments made in new sites and investment in

existing assets that materially change the guest offer. Return on investment is measured

by incremental site EBITDA following investment expressed as a percentage of return

generating capital. Incremental EBITDA reflects the increase in profit following investment,

with the pre-investment profit being measured as the average annual profit prior to

investment. Return on investment is measured for four years following investment.

Measurement commences three periods following the opening of the site.

APM E

Mitchells & Butlers plc  Annual Report and Accounts 2025

189

Other Information

![](data:image/jpeg;base64,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)

A. Like-for-like sales

The sales this year compared to the sales in the previous year of all UK managed sites that were trading in the two periods being compared, expressed as a

percentage. This widely used industry measure provides additional insight into the trading performance than total revenue which is impacted by acquisitions

and disposals. Like-for-like sales is provided on a 52-week basis.

Source

2025

£m

2024

£m

Year-on-year

%

Reported revenue Income statement 2,711.0 2,610.0 3.9%

Less non like-for-like sales (237.3) (237.3) 0.0%

Like-for-like sales  2,473.7 2,372.7 4.3%

Drink sales

Source

2025

£m

2024

£m

Year-on-year

%

Reported drink revenue Note 2.3 1,172.0 1,132.0 3.5%

Less non like-for-like drink sales (91.0) (93.0) 2.2%

Like-for-like sales  1,081.0 1,039.0 4.0%

Food sales

Source

2025

£m

2024

£m

Year-on-year

%

Reported food revenue Note 2.3 1,440.0 1,385.0 4.0%

Less non like-for-like food sales (131.0) (126.9) (3.2%)

Food like-for-like sales  1,309.0 1,258.1 4.0%

Other sales

Source

2025

£m

2024

£m

Year-on-year

%

Reported other revenue Note 2.3 99.0 93.0 6.5%

Less non like-for-like other sales (15.3) (17.4) 12.1%

Other like-for-like sales  83.7 75.6 10.7%

B. Adjusted operating profit

Operating profit before separately disclosed items as set out in the Group Income Statement. Separately disclosed items are those which are separately

identified by virtue of their size or nature. Excluding these items provides useful additional information in the comparison of the Group’s trading performance

from one period to the next.

Source

2025

£m

2024

£m

Year-on-year

%

Operating profit Income statement 322 300 7.3%

Separately disclosed items Income statement 8 12 (33.3%)

Adjusted operating profit Income statement 330 312 5.8%

Reported revenue Income statement 2,711 2,610 3.9%

Adjusted operating margin 12.2% 12.0% 0.2ppts

Alternative performance measures continued

Annual Report and Accounts 2025  Mitchells & Butlers plc190

Financial StatementsGovernance

Strategic Report

Introduction

Other Information

![](data:image/jpeg;base64,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)

C. Adjusted earnings per share

Earnings per share using profit before separately disclosed items. Separately disclosed items are those which are separately identified by virtue of their size

or nature. Excluding these items allows a more effective comparison of the Group’s trading performance from one period to the next.

Source

2025

£m

2024

£m

Year-on-year

%

Profit/(loss) for the period Income statement 177 149 18.8%

Add back separately disclosed items Income statement 7 8 (12.5%)

Adjusted profit  184 157 17.2%

Basic weighted average number of shares Note 2.5 595 595 –%

Adjusted earnings per share 30.9p 26.4p 17.0%

D. Net Debt: Adjusted EBITDA

The multiple of net debt as per the balance sheet compared against EBITDA before separately disclosed items which is a widely used leverage measure

in the industry. From FY 2020, leases are included in net debt following adoption of IFRS16. Adjusted EBITDA is used for this measure to prevent distortions

in performance resulting from separately disclosed items.

Source

2025

£m

2024

£m

Year-on-year

%

Net Debt including leases Note 4.4 1,277 1,436 (11.1%)

EBITDA Income statement 460 444 3.6%

Add back separately disclosed items Income statement 5 (2) 350.0%

Adjusted EBITDA 465 442 5.2%

Net debt : Adjusted EBITDA 2.7 3.2

E. Return on capital

Return generating capital includes investments made in new sites and investment in existing assets that materially changes the guest offer. Return on

investment is measured by incremental site EBITDA following investment expressed as a percentage of return generating capital. Return on investment is

measured for four years following investment. Measurement of return commences three periods following the opening of the site.

Return on expansionary capital

Source

2024

FY 2021–24

£m

2025

FY 2022–24

£m

2025

FY 2025

£m

2025

Total

£m

Maintenance and infrastructure 178 164 65 229

Remodel – refurbishment 203 194 91 285

Non-expansionary capital 381 358 156 514

Remodel expansionary 8 9 2 11

Conversions and acquisitions

a

43 50 14 64

Expansionary capital for return calculation 51 59 16 75

Expansionary capital open < 3 periods pre year end  7 (5) 8 3

Freehold purchases 26 20 1 21

Total capital Cash flow 465 432 181 613

Adjusted EBITDA Income statement 1,337 1,169 465 1,634

Non-incremental EBITDA 1,327.3 1,159 463 1,622

Incremental EBITDA 9.7 10 2.5 12.5

Return on expansionary capital 19% 17% 16% 16.7%

a.  Conversion and acquisition capital is net of capex incurred for projects which have been open for less than 3 periods pre year end.

Mitchells & Butlers plc  Annual Report and Accounts 2025

191

![](data:image/jpeg;base64,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)

Shareholder information

Contacts

Registered office

27 Fleet Street

Birmingham B3 1JP

Telephone 0121 498 4000

Registered in England No. 4551498

Registrar

Equiniti

Aspect House

Spencer Road

Lancing

West Sussex BN99 6DA

Telephone +44 (0) 371 384 2065\*

For deaf and speech impaired customers, we welcome calls via Relay UK.

Please see www.relayuk.bt.com for more information.

www.mbplc.com/investors/contacts/

\*  Lines are open 8.30am to 5.30pm (UK time), Monday to Friday, excluding public

holidays in England & Wales.

Key dates

These dates are indicative only and may be subject to change.

Annual General Meeting January 2026

Announcement of interim results May 2026

Pre-close trading update September 2026

2026 final results announcement November 2026

In line with our sustainability strategy to lessen the negative impact of

our business, we have reduced the number of Annual Reports we have

printed this year. Once that supply is exhausted, we will not print any

further copies, though the Annual Report will be available on our website

and can be printed from there if required, using the following link:

www.mbplc.com/investors/annualreport

Annual Report and Accounts 2025  Mitchells & Butlers plc192

Financial StatementsGovernance

Strategic Report

Introduction

Other Information

![](data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAkACQAAD/2wBDAAgGBgcGBQgHBwcJCQgKDBQNDAsLDBkSEw8UHRofHh0aHBwgJC4nICIsIxwcKDcpLDAxNDQ0Hyc5PTgyPC4zNDL/2wBDAQkJCQwLDBgNDRgyIRwhMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjIyMjL/wAARCAaUBKcDASIAAhEBAxEB/8QAHwAAAQUBAQEBAQEAAAAAAAAAAAECAwQFBgcICQoL/8QAtRAAAgEDAwIEAwUFBAQAAAF9AQIDAAQRBRIhMUEGE1FhByJxFDKBkaEII0KxwRVS0fAkM2JyggkKFhcYGRolJicoKSo0NTY3ODk6Q0RFRkdISUpTVFVWV1hZWmNkZWZnaGlqc3R1dnd4eXqDhIWGh4iJipKTlJWWl5iZmqKjpKWmp6ipqrKztLW2t7i5usLDxMXGx8jJytLT1NXW19jZ2uHi4+Tl5ufo6erx8vP09fb3+Pn6/8QAHwEAAwEBAQEBAQEBAQAAAAAAAAECAwQFBgcICQoL/8QAtREAAgECBAQDBAcFBAQAAQJ3AAECAxEEBSExBhJBUQdhcRMiMoEIFEKRobHBCSMzUvAVYnLRChYkNOEl8RcYGRomJygpKjU2Nzg5OkNERUZHSElKU1RVVldYWVpjZGVmZ2hpanN0dXZ3eHl6goOEhYaHiImKkpOUlZaXmJmaoqOkpaanqKmqsrO0tba3uLm6wsPExcbHyMnK0tPU1dbX2Nna4uPk5ebn6Onq8vP09fb3+Pn6/9oADAMBAAIRAxEAPwD3WiiipGFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMDC/tTXv+hc/8nk/wo/tTXv+hc/8nk/wrcorn9jP/n4//Jf/AJE6PbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SMP+1Ne/wChc/8AJ5P8KP7U17/oXP8AyeT/AArcoo9jP/n4/wDyX/5EPbQ/59r/AMm/+SKmn3F3cQM97ZfY5A2BH5okyMDnI/Hj2q3RRW0U0rN3MJNN3SsFFFFMQUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAUUVztxp1pqPiG/N3a/afJtojGmcHnfwOQOcd6zqzcbcqu3/AF5mtKCnfmdkv+G7o6KiuZ/sXTf+hYuP+/kX/wAcqG90TTRpd9INDktXjtpHSSR1I3BTj7rnn8O1YOvUSvy/i/8A5E3WHpNpcz+5f/JHWUVW04k6ZaEnJMKfyFWa6ou6TOSSs2gooopiCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACsZBnX9VG12zaxfLG21j9/gHIwffI+tbNYyDOv6qNrtm1i+WNtrH7/AORg++R9axrbx9f0ZvR2l6fqhnkf9Q3Wf8AwYf/AG6o7qLZpOpH7JqEP+hy/Nc3XmKfl6Y8xuffH41KlsHkVWsNYQEgFmvzhfc4mJrH1DUGjW+tLWynl8xnslaS/dyzFRkiNs9Mjn9RmuOo4wjeX5f/AGp20lKpJKLv8/8A7Y6rTv8AkF2n/XFP/QRVmoLKN4bC3ikGHSJVYZzggCp69CHwo82esmFFFFUSFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAo60UDrRTASiiikAUUUUAFFFFABRRRQAUUUUAFZlzpMkt+93b389s8iKjhFVgcZx1B9TWnRUzgpqzLhOUHeJlf2Xf/APQcuv8Av1H/APE0aboUGn3U120j3F1KxJlkAyM9cAcCtWioVCF1Lt3bf5lvEVGnG9k+yS/IKKKK1MQooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigArnPF/jfRPBFhHdavO4aUkQwQruklI67RkDjI5JA5HqK6Ovl/9oGd5PiLFGx+WKwjVR6ZZz/WmB6J/wAND+Ff+fDVf+/af/F0f8NDeFf+fDVf+/af/FV4XoWiaX/Zj6x4jkvodOaRYLYWiDfPIfvEMw2gIOSDycgDGSRm+INIGha5dael5BexRN+6uoGykyEZVgenII7nByO1FhH0N/w0N4V/58NV/wC/af8AxVH/AA0N4V/58NV/79p/8VXzNXaeAPhrrHj+7k+ystrp0DBZ72VSVU/3VH8TY5xkAcZIyMlgPZf+GhvCv/Phqv8A37T/AOKo/wCGhvCv/Phqv/ftP/iq5dPgt4O1E/2dpPxAtbjWBnEYeJw5HUBFbcOnPJxXlPiXwrqvhPxBJo2qxLHcLgo4b93KhOA6scfKcHk4xgg4IIosB79/w0N4V/58NV/79p/8VR/w0N4V/wCfDVf+/af/ABVeS+P/AIYy+BdPs7s6ql75xRJV8gxeW7KzADJO7hTnoRlcj5hXAUWA+pNM+Pfg+/v47WZb+yWQ4E88S+Wp/wBoqxI+uMepFeoAhgCCCDyCO9fBdfZvw3mef4b+HnkOW+wxrn2AwP0AoYzqKKKKQBRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABXy38ff+Sk/9uUX82r6kr5b+Pv8AyUn/ALcov5tTQFB7Sy8R6NoMNwviK1+yW8VukFtpImhO+RiZFYOCS5Dn7uSVI5xWf4zeNdC8O2kVtqzRW8Uohv8AUbL7MZ4WKuiJhm3Ku5iDn/lp6Yznaf411vTbIWdvcJ9n8lbco8YbdGHZ9pz2JYg+o46U3W/GeteItLtdP1WdLmO1leSKR4x5i7uSu7rt5+70HHYDDEZWmadc6vqtpptmm+5uplhiUnALMcDPoOa9s+LOtw+BfCWmfDnw/MY/9HD38qHDOpzwfQu25mHpgdDisP8AZ+0NL/xvcazOo+z6TbGTeTwsj5Vc/wDAfMP4CvPvFuvS+J/Fmp61Lu/0udnRW6rGOEX8FCj8KAMmGaS3mjmhkeOWNg6OhwysDkEEdDX0QV8M/HXw5ZWx1CS18W6fZgsXj27mwockdGjLdMHK56c4PzpXpHwLt4ZfinYTS3sNsbeKV0WRgDOxQpsXPU/OT9FNAHGa7da2b19M1u9u55tOke3EU87SCEqdrKuSQBlccegrKru/jFpl9p3xN1aS9t1iW7k+0QFPuyRngN9eDn3B+tcJQAV9k/DH/kmfh/8A681/rXxtX2T8Mf8Akmfh/wD681/rSYHWUUUUhhRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAKOtFA60UwEooopAFFFFABRRRQAUUUUAFFFFABXy38ff+Sk/9uUX82r6kr5b+Pv8AyUn/ALcov5tTQHl1emeAPhxo/j3wpqX2TVpIPFFs5aO1kZfKaPAwSNu7BOQSDwcZHIz5nV7R9Yv9B1W31PTLl7a8t23RyJ29QR3BHBB4IpiPa9H0y8+H3wB8TXOoW32bVNSne18t+G2kiHH4fvWBHUHNeaaP8L/GmvWEV9p2gzSW0y745HkjiDrzgjewyOP5etb3xE+Lkvj7wzp2lvpgs5IZhPcOsm5XcIVG0dQPmY4Oe3JrQ+D/AI+8QN408P8Ah691t/7GXzIlglK4/wBU+xNxG7720AZ9AOwoA890vwjr+ta/NoVhpk0upwb/ADYDhTHsOG3FiAMHjk9SB1Iq2ngDxiNUSxXw3qi3Rb5c27KOD13/AHcZ/izj3r6P8N+Abzwv8TPEXjK+1CyGnXsU5A3FWiDSJJliQAAAhyc15E37QPjOKGS2RtNlIYhbl7Y+YRk4OAwX/wAdoA2/2iJlSLwpp9zcJPqkFtK1y68ZyIxux6Myvj6GvDauarq1/rmpz6jqd1JdXk7bpJZDkn/ADoAOAOBVOgAr7J+GP/JM/D//AF5r/Wvjavsn4Y/8kz8P/wDXmv8AWkwOsooopDCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACvlv4+/8lJ/7cov5tX1JXy38ff+Sk/9uUX82poDy6iiimI7fw94T0PVvAus+ILm/wBQin0jy/PgjhQq/mMVTaxbP1yOPeqU3h7RZo9MhttSurLULu5iie31ODy1SKQfLMHXIKDjOcHngEV0vgTW9H0TwB4hs38VwaZq+q+SbfEFwTAYnJ+ZkjI+YH+Eng/hXKT6/H4k8W2d74smlntgI7e6ntuJHjUbd/PVscnjn0oA3vE3gPRvC19f6ZqOoarb3MNu8tpdzWSi2vGC7gikOSM9M5PJ5AxWe3gu00bwvp+veJdQnthqas1jZWkAklkQD77lmUIvK4+8SGHFdVo/ivRPD/h/WNH1XxJH4o0WW2ZLDTvskweOX+Ft0igRAc/dZsE5HI5yrrX/AA9418GaJput6m+k61o0TW8d1JatLDcQ8bFYpllIAA+6f1OADjdat9FhFnLot7czrNEWmiuYgrwOGI2kjhsgA5Hr26VlVd1K1srSVI7PUVvuPnkjhZEB/wBndhj+IFUqACvsn4Y/8kz8P/8AXmv9a+Nq+yfhj/yTPw//ANea/wBaTA6yiiikMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAK+W/j7/yUn/tyi/m1fUlfLfx9/5KT/25RfzamgPLqKK3n8F+Io9G/tdtKl+w+Qtx5oZT+6bo+0HO33xxTEWdOPg/+xbc6gt7/aXmATBPubN+CRz12Nke8f8AtcX93w8+0TYTVPJSJTFk/M7/ADMwY9h8qoOP+Whb+HBTUfhH460qya8u9AkEKsifup4pWLMwVQFRixJZgOB3rJ1DwT4k0sXBvdKmiFvCJ5fmU4j3bSwweQGIBxnb3xQBqx3HhN9Pjt7xLU3NmFiSaBJlW5xITubodpBJJOGxtAAPSC3HhKKJ5bpo53acyGGLz12xh1ARSR3AkJLEna0eDu3AVbbwF4pvLqW2g0W5eaGNJJV4GwONyBsnhiCMKfm9qrf8InrmzRmNgyjWZ3t7ANIgMsiyCNlIJyuHIHzYoAs+JrTSoLDSptPFoss8W+WO3naQqCiEb8s21txkGOOAMjOa5yu3vPhB470+ES3OgsqFtuRdQtzgnnDnHQ81y2raPqGhag9jqdpJbXKAEo/cHoQRwQfUcUAUa+yfhj/yTPw//wBea/1r42r7J+GP/JM/D/8A15r/AFpMDrKKKKQwooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAr5b+Pv/JSf+3KL+bV9SV8t/H3/kpP/blF/NqaA8ur0yb4i6ZceHf7FNm0IOgR2Avo7WP7SsynJTfnJhbABHXuB1zwOi6Y+ta9p2lJIInvbqO2WRhkKXYLkj2zXWXfwq1/zpxpYi1CKCCOeciRYnh35wrozZVgFJx6EdzimI9I8W+P/A9zq66/Y6npt1cQTK4ht9FlhvZ1MZhYG6YgfKrs4BUfcUds15zpPinRPDXiLQJtKuNXuLC0eT7cbpVHnRyH541h3MoG0c5PzHnjAquvwp8ZSRzyxaWksMGN8sd1EydSpwwbBwQwOOmDms2z8Ea1f3Wo29utkzac4S4Zr6FUU7Xc4YsA2FikJwTgKfSgDV07xXpmpaXJaeKbjVRMdW/tQ3diiM8rFQrqQWXaflG1hnGTxXY6Z4g8FanpXgy51LxRJpd3oOoXN49pJZT3TSB7rzVUygYztUfNz97pxiuIPwv8WJAlxNp8UNu08tu00l1EqRtGXD7juwAPLfk+nuMw678PNf8AD6pcXluqWEt89jDdvIqq7hmUEjOVB2Meew+lAHp/ibxt4DubfVTBqOmSHU/NiaTS/Drw3ah8ndJLJIokGQMjgkkHjFeSeKtZstWm02DTkuBZ6bYpZxyXOBJLhncswBIXlyAuTgAc1r6r8LtesL25itTaXkMTMqyLcxI0m0svCFt2SY5Ao6t5bYHFZuveBdf8N2bXepW9usKyiFjFdxSlWJcYIViRzG45HVSOtAHN19k/DH/kmfh//rzX+tfG1fZPwx/5Jn4f/wCvNf60mB1lFFFIYUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFABRRRQAUUUUAFFFFACjrRQOtFMBKKKKQBRRRQAUUUUAFFFFABRRRQAV8t/H3/kpP8A25RfzavqSvlv4+/8lJ/7cov5tTQHAeHY7yXxNpUenTrb3z3kK28zdI5C42seDwDg9DXpfh/wj4y0HRY73SPEemDSbuRpJEHmSBlVZMOY/L34YRsMKN3TOMceSxSyQTJNDI0cqMGR0OCpHIII6GrUOsanbLAsGpXkQt2Z4Ak7L5TN94rg8E98daYj1i50f4hTXNzcy+JbaEXnziOMStnDRqFSNYyyfvJTGRgcq4bI6rrPwo8U+GLi8S08SWMlldOzzyujLIV+zT73aMK5xsa4QBSSd3T08rl8QarMbc/bZIvs9r9kj8jEWIsklTsxnJZiScliSTkmln8Sa7dTLNca1qM0qyiZXkunZhIBtDAk/ewAM9cCgD0ky+MbrW9fs08YRQQaJfyjzbyM5kbbcyMcJG3GxJyQeOcAdBTtV8FeL77SHl8QeJLZ7WO4u3SJdxZp4xcOG+4BtJjlIJOAGOACSK8q/tG+3Tt9suN07Fpj5rZkJDKS3PJw7jnsx9TVg6/rJQIdXvygZmC/aXwGbO49ep3Nn13H1oA9isfAPjFvFB03U/Glrbm+jaBpbYPK0hb7S5UDYoBDJOSSVwGIBycVh+K/Bnie18O+IL3XfEUNz9jS2umhgjLLM0tzMhBYhSpV2lbGDnd27edR+Idahu47uPWNQS5jACTLcuHXClRg5yMKzD6EjvST+INaurea3uNXv5oZ1RZo5Ll2WQKcqGBOCAeRnoaAM6vsn4Y/8kz8P/8AXmv9a+Nq+yfhj/yTPw//ANea/wBaTA6yiiikMKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAK+W/j8CPiTyOtlFj82r6krzL4q/CtvHTW2o6dcxW+qW8flHzyfLljzkAkZwQS2DjnOD2w0B5z4Ev9A0L4QT6rrMNyPM15rYTWVnbTzEG3Vgp89WXZwx45zj1NWpbjw9L4R0ddTl0pLG3k08eXDLBKJlBTzyqqFmjfBYyBww64OSDWJ/woHxpn/mG/wDgSf8A4mj/AIUF40/6hv8A4En/AOJpiNCfxY3he7+3a7p3hPXVLz29lbWZh3JbsFwwMasgjwMKrjf8zds1g+CLgroN6dFl0e115r+Mu2omEKLPY+4IZv4c/fA+YjHXmr3/AAoLxp/1Df8AwJP/AMTR/wAKC8af9Q3/AMCT/wDE0AalvN4c/sSQXr+H20kO5uFtVjWRrr+0AVMatmUR/Z84xxs3A806fUdHsvHmgPdw+H7i5lS4iuJIfKMEMRlbyHzGQm8RjA3ZIUrkZxjJ/wCFBeNP+ob/AOBJ/wDiaP8AhQXjT/qG/wDgSf8A4mgCr4e1y3h8IaVp2oz6a63+rxQN9ogjYWlrEyO7NjDfMz4O4/dRgOua72S50CTxZLPH/ZCSz2EcTgX9oklvH9pfdLuCNA5EQjO3hggA561xn/CgvGn/AFDf/Ak//E0f8KC8af8AUN/8CT/8TQB5xqYhGq3gt5/PgE7+XNs2eYu44bb2yOcV9f8AwyGPhp4f/wCvNa8T0z9nvxNPexrqN5YWlrn946O0j4/2VwAT9SK+j9OsLfStMtdPtFK29rCsMQJyQqgAZPfgUmBZooopDCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWigdaKYCUUUUgCiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigBR1ooHWimAlFFFIAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAUdaKB1opgJRRRSAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKACiiigAooooAKKKKAFHWiiimB/9k=)

Mitchells & Butlers online

Mitchells & Butlers’ comprehensive

website gives you fast, direct access to

a wide range of Company information.

•  Downloadable Annual Report and Accounts

•  Latest investor news and press releases

•  Brand news and offers

•  Responsibility policies

•  Find a local restaurant or pub

•  Sign up for latest news

To find out more go to:

www.mbplc.com

Design and production: Gather

Printed by: Park Communications Limited

This report is printed on recycled paper using vegetable-based

inks. Pages 1 to 118 are printed on Revive 100 Silk manufactured

from FSC

®

Recycled certified fibre derived from 100% pre and

post-consumer waste. Pages 119 to 192 are printed on Revive

100 Offset manufactured from FSC

®

Recycled 100% post-

consumer waste. All material is manufactured in accordance

with ISO certified standards for environmental, quality and

energy management and is carbon balanced. Both the

manufacturing paper mill and printer are registered to the

Environmental Management System ISO 14001 and are Forest

Stewardship Council

®

(‘FSC’) chain-of-custody certified.

![](data:image/jpeg;base64,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)

Mitchells & Butlers plc

27 Fleet Street

Birmingham B3 1JP

Tel: +44 (0)121 498 4000

Company Number: 4551498