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In this video, Matthew explains how to create a photo licensing agreement using legal templates. He guides viewers to click the link provided in the video description, navigate to the business forms section, and use the search function to find the photo licensing agreement. Matthew demonstrates selecting a state and setting the tax details. He uses a fictional client, Mr. Ed, and outlines inputting information such as the client's name, the photo titles (e.g., wedding and party photos), and the type of license being granted, mentioning options for an exclusive license and its duration (perpetual).