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In this video tutorial, Matthew explains how to create a licensing agreement using Legal Templates. He provides a link to legaltemplates.net and guides viewers to navigate to the "Business Forms" section to find various forms. He specifically focuses on the "Licensing Agreement" template, selecting Texas as the jurisdiction. Matthew emphasizes identifying the owner of the intellectual property and the licensee, which in this case is "Mr. Add." He instructs viewers to specify the intellectual property involved and choose between an exclusive or non-exclusive license. The video aims to help users understand the process of drafting a licensing agreement effectively.