The LICENSE file contains the licenses / user terms & conditions / end user aggrements to show on the package installation wizard. The package center would open up a dialog to show the content of LICENSE file and provide a checkbox for user to agree these terms on the dialog.
How to place LICENSE file
Prepare a file containing your terms & conditions in plain text format then put it to
/ of your package (the directory where the INFO is)
If the LICENSE file is properly put inside spk, the installation wizard would show your license file content like this: