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In this video tutorial, Matthew explains how to create a licensing agreement using legal templates. He guides viewers to legaltemplates.net, where they can access various business forms. After navigating to the business forms section, he demonstrates searching for a "license agreement" template specific to Texas. Matthew outlines the process of designating the owner of the intellectual property, identifying the licensee (in this case, Mr. Add), and filling in details about the intellectual property involved. He also discusses the type of license to be granted, either exclusive or non-exclusive, and mentions the option to specify the purpose of the license.