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Layered template are the best! When dragging an item onto the template, it has to be from another active window-so you cannot drag from the project bin (at the bottom) directly onto your page. So make sure the template window and the paper window are side by side and then drag the paper onto the template. Then, in the layers palette, move the paper layer directly OVER the template layer you want it to take the shape of, click Layer/Group With Previous and VOILA it will take the shape of that layer!
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