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The provision does not negate the intention per se and would not be a provision that if I were the lender would want to delete. This provision helps protects lenders estate and heirs in the event of lender's death and the agreement is an asset of the estate and the beneficiaries of such can continue to collect from the Borrower. In addition, if a default is by incapacity/incompetent or death of borrower the terms are binding on the beneficiaries of the borrower which means default and takeover by the lender. The provision states the borrower's beneficiaries agree to all the terms of the agreement, including takeover by lender.
One could also request a specific power of attorney be executed from the borrower which permits the lender to takeover the business in the event borrower is declared incompetent.
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