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In this video, Matthew demonstrates how to create a photo licensing agreement using legal templates. He suggests accessing the templates via a link provided in the video description. Matthew recommends navigating to the business forms section and utilizing the search function to find the "photo licensing agreement." He guides viewers through selecting their state and identifying the ownership of the photos, using Mr. Ed as a sample client. The agreement process includes naming the photos and selecting the type of license, such as an exclusive license, with an emphasis on the license’s duration, which can be perpetual.