                 IN THE UNITED STATES COURT OF APPEALS

                         FOR THE FIFTH CIRCUIT
                         _____________________

                              No. 01-11040
                         _____________________

PERSONAL SECURITY & SAFETY SYSTEMS INC.; RICHARD R. JAFFE,

                                                 Plaintiffs-Appellees,

                                versus

MOTOROLA INC.,

                                                 Defendant-Appellant.

__________________________________________________________________

          Appeal from the United States District Court
               for the Northern District of Texas

_________________________________________________________________
                           July 1, 2002
Before JOLLY, JONES, and BARKSDALE, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

     Motorola, Inc. appeals the district court’s denial of its

motion to compel arbitration of claims raised by Personal Security

and Safety Systems, Inc. (“PSSI”).        In 2000, PSSI filed suit

against Motorola alleging that Motorola breached a stock purchase

agreement with PSSI and made fraudulent misrepresentations during

the negotiations leading up to the agreement.      Although the stock

purchase agreement did not include an arbitration clause, Motorola

moved to compel arbitration based on a provision in a licensing

agreement that was executed alongside the stock purchase agreement

as part of a broader contractual arrangement.      The district court
initially granted Motorola’s motion, but it later reconsidered its

decision and denied the motion.

     The central issue in this appeal is whether PSSI’s claims

under the stock purchase agreement fall within the scope of the

broad arbitration provision in the licensing agreement.    We hold

that the licensing agreement’s arbitration provision governs claims

arising out of the stock purchase agreement because the agreements

were executed together as part of the same overall transaction and

therefore are properly construed together.   We further hold that a

forum selection clause in the stock purchase agreement does not

operate to preclude arbitration of claims arising out of that

agreement.   Accordingly, we reverse the district court’s denial of

Motorola’s motion to compel arbitration and remand to the district

court for entry of an order staying the litigation and requiring

the parties to submit their dispute to binding arbitration.

                                  I

     The underlying dispute in this case stems from Motorola’s

abortive strategic investment in PSSI.   Before its demise in 1999,

PSSI was a small start-up company engaged in the development and

sale of specialized security systems -- primarily a “Personal 911

System” that allowed individuals to summon help from within a

limited geographic area by means of a wireless communications

device.   Although it had made substantial progress in developing

the technology for the Personal 911 System by 1997, PSSI did not



                                  2
have sufficient capital to complete development of the system or to

install the system at customer sites.     At about the same time,

Motorola was in the process of developing a similar localized

security system for use in the hospitality industry, but its

technology was significantly less developed than PSSI’s technology.

     Seeing an opportunity for collaboration, Motorola initiated

discussions with PSSI in June 1997 concerning a possible investment

in PSSI that would give Motorola access to PSSI’s technology.    On

December 17, 1997, PSSI and Motorola executed three agreements in

connection with this investment:     a Stock Purchase Agreement, a

Product Development and License Agreement, and a Shareholders

Agreement.   Each of these agreements played a particular role in

the overall transaction.

     Under the Stock Purchase Agreement, Motorola agreed to provide

twelve million dollars in financing in return for a convertible

debenture and a nine percent equity stake in PSSI.   The financing

was to come in three parts.   First, Motorola paid PSSI one million

dollars in cash and forgave a one million dollar interim loan that

it had provided to PSSI during the negotiations.   Second, Motorola

loaned PSSI five million dollars to finance the development of the

existing Personal 911 System. Third, Motorola agreed to provide up

to five million dollars to finance the installation of the existing

Personal 911 System at customer sites once PSSI secured purchase

contracts for the system.



                                 3
     Under the Product Development Agreement, the parties agreed to

collaborate on the development of new communications technologies

based on   the   existing   PSSI   system.   The   Product   Development

Agreement also defines in detail the parties’ respective rights to

existing intellectual property and to any new, jointly-developed

intellectual property.      The Shareholders Agreement, which is not

directly at issue in this litigation, defines shareholder rights.

     In May 1999, PSSI completed development of its Personal 911

System, and several customers committed to purchase the system.

Relying on the terms of the Stock Purchase Agreement, PSSI asked

Motorola to provide it with financing to install the system at the

customer sites.    When Motorola refused to disburse the requested

funds, PSSI filed a complaint in federal district court alleging

that (1) Motorola’s refusal to provide financing constituted a

breach of the Stock Purchase Agreement and (2) Motorola made

fraudulent representations during negotiations to induce PSSI to

enter into the agreement.      Invoking the arbitration provision in

the Product Development Agreement, Motorola filed a motion to stay

the proceedings and to compel arbitration.1         The district court

ultimately denied Motorola’s motion, and Motorola now appeals


     1
       In its initial complaint, PSSI also alleged that Motorola
fraudulently inserted a provision into the Product Development
Agreement. After Motorola filed its motion to compel arbitration,
however, PSSI filed an amended complaint that omitted all claims
relating to the Product Development Agreement.     The claims in
PSSI’s amended complaint thus rely exclusively on the Stock
Purchase Agreement, which does not contain an arbitration clause.

                                    4
pursuant to 9 U.S.C. § 16.2         The proceedings in the district court

have been stayed pending the appeal.

                                          II

     The primary issue in this appeal is whether the arbitration

provision in the Product Development Agreement applies to PSSI’s

claims arising under the Stock Purchase Agreement. Motorola argues

that PSSI’s claims fall within the broad scope of the arbitration

provision because the Stock Purchase Agreement and the Product

Development Agreement were executed together as part of the same

transaction      and   therefore    must       be   construed   together.    PSSI

responds that the two agreements are independent, freestanding

contracts. Because PSSI’s claims rely solely on the Stock Purchase

Agreement and because the arbitration provision in the Product

Development Agreement does not expressly apply to claims arising

under    other   agreements,       PSSI    maintains     that   the   arbitration

provision does not reach claims under the Stock Purchase Agreement.

Instead, PSSI argues that the forum selection clause in the Stock

Purchase Agreement controls, and the claims stated in its complaint

must be litigated in a court located in Texas.

     The district court agreed with PSSI and denied Motorola’s

motion to compel arbitration.                 We review de novo the district

court’s denial of a motion to compel arbitration.                See OPE Int’l LP



     2
      The district court initially granted Motorola’s motion, but
later reversed itself upon PSSI’s motion for reconsideration.

                                          5
v. Chet Morrison Contractors, Inc., 258 F.3d 443, 445 (5th Cir.

2001).

                                        A

     We begin our inquiry by outlining the basic principles that

inform federal law in this area.            The Supreme Court has made it

clear that the Federal Arbitration Act, 9 U.S.C. § 3, establishes

a “liberal policy favoring arbitration” and a “strong federal

policy    in   favor   of   enforcing   arbitration   agreements.”   Texaco

Exploration and Prod. Co. v. AmClyde Engineered Prod. Co., Inc.,

243 F.3d 906, 909 (5th Cir. 2001) (citations and internal quotation

marks omitted).        Of course, this general policy is not without

limits.    Because arbitration is necessarily a matter of contract,

courts may require a party to submit a dispute to arbitration only

if the party has expressly agreed to do so.           See AT&T Tech., Inc.

v. Communications Workers of Am., 475 U.S. 643, 648 (1986); see

also Volt Info. Sciences, Inc. v. Bd. of Trustees, 489 U.S. 468,

478 (1989) (“[The FAA] simply requires courts to enforce privately

negotiated     agreements    to   arbitrate,   like   other   contracts,   in

accordance with their terms.”).

     To ascertain whether the parties have agreed to arbitrate a

particular claim, we must determine: “(1) whether there is a valid

agreement to arbitrate between the parties; and (2) whether the

dispute in question falls within the scope of that arbitration

agreement.”     OPE Int’l, 258 F.3d at 445 (citations and internal



                                        6
quotation    marks   omitted).   In       view   of    the   policy   favoring

arbitration, we ordinarily “resolve doubts concerning the scope of

coverage of an arbitration clause in favor of arbitration.”                  Neal

v. Hardee's Food Systems, Inc., 918 F.2d 34, 37 (5th Cir. 1990);

see also Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460

U.S. 1, 24-25 (1983) (same).     As a consequence, a valid agreement

to arbitrate applies “unless it can be said with positive assurance

that    [the]   arbitration   clause        is   not    susceptible     of    an

interpretation which would cover the dispute at issue.”               Neal, 918

F.2d at 37 (internal citations and quotation marks omitted). With

these principles in mind, we now turn to the arbitration provision

in this case.

                                      B

       Motorola and PSSI agree that the Product Development Agreement

contains a valid arbitration provision and that there are no

external constraints that preclude arbitration of PSSI’s claims.

Thus, the central question is whether the arbitration provision

covers the claims -- arising solely out of the Stock Purchase

Agreement -- alleged in PSSI’s amended complaint.             Stated in terms

of the applicable caselaw, the question is whether we can say “with

positive assurance” that the arbitration provision in the Product

Development Agreement is not susceptible of an interpretation that

would cover those claims.




                                      7
     We start, as always, with the language of the arbitration

provision itself.       Paragraph 14.2 of the Product Development

Agreement provides, in relevant part:

           [T]he parties hereby agree to resolve by
           binding arbitration any and all claims,
           demands, actions, disputes, controversies,
           damages,   losses,  liabilities,   judgments,
           payments of interest, penalties, enforcement
           of settlement agreements, deficiencies, any
           and all demands not yet matured into the
           foregoing, and other matters in question
           arising out of or relating to this Agreement
           (all of which are referred to as “Claims”),
           even though some or all of such Claims
           allegedly are extra-contractual in nature and
           even though some or all of such Claims sound
           in contract, tort or otherwise, at law or in
           equity,   in   accordance   with   Commercial
           Arbitration Rules . . . of the American
           Arbitration Association . . . .

     Where, as here, an arbitration provision purports to cover all

disputes “related to” or “connected with” the agreement, we have

held that the provision is “not limited to claims that literally

‘arise under the contract,’ but rather embrace[s] all disputes

between the parties having a significant relationship to the

contract   regardless   of   the   label   attached   to   the   dispute.”

Pennzoil Exploration and Production Co. v. Ramco Energy Ltd., 139

F.3d 1061, 1067 (5th Cir. 1998).        Thus, PSSI must arbitrate its

dispute with Motorola if the allegations of fraud and breach of the

Stock Purchase Agreement have a “significant relationship to” the

subject matter of the transaction.




                                    8
     PSSI argues that the arbitration provision does not apply in

this case because it governs only those claims related to the

Product Development Agreement, while the claims stated in PSSI’s

complaint arise under an entirely separate agreement.                    It is well

established, however, that “[u]nder general principles of contract

law, separate agreements executed contemporaneously by the same

parties,    for   the    same    purposes,     and   as    part     of    the    same

transaction, are to be construed together.”               Neal v. Hardee's Food

Systems, Inc., 918 F.2d 34, 37 (5th Cir. 1990) (citations omitted);

see also Restatement (Second) of Contracts § 202(2) (1979) (same);

Richland Plantation Co. v. Justiss-Mears Oil Co., Inc., 671 F.2d

154, 156 (5th Cir. 1982) (“When several documents represent one

agreement, all must be construed together in an attempt to discern

the intent of the parties, reconciling apparently conflicting

provisions and attempting to give effect to all of them, if

possible.” (citations omitted)).

     In the present case, the Stock Purchase Agreement and the

Product    Development     Agreement       were   both    key     elements      of   a

transaction in which Motorola agreed to provide financing in return

for a stake in PSSI and access to PSSI’s technology.                 Although the

Stock Purchase Agreement and the Product Development Agreement

govern     different    facets    of   the    parties’      relationship,        the

agreements must be construed together because they were executed at




                                       9
the same time as part of the same overall transaction.3                  Indeed,

each agreement expressly anticipates the execution of the other,4

and   the   parties   attached   a   form     of   the   Product     Development

Agreement as an exhibit to the Stock Purchase Agreement.                    As we

observed in Neal, 918 F.2d at 37, “[a]lthough the parties used

multiple agreements to delineate their relationship, each agreement

was dependent upon the entire transaction. . . .               The individual

agreements were integral and interrelated parts of the one deal.”

      PSSI argues that this view runs contrary to the intent of the

parties in this case because the arbitration provision was in an

ancillary agreement and was therefore not intended to govern the

parties’    entire    relationship.5        Even   assuming   that    the   Stock

      3
      Paragraph 1.1 of the Stock Purchase Agreement provides that
“each and every event . . . that is to occur at the Purchase
Closing [including the execution of the Product Development
Agreement] shall be deemed to have occurred contemporaneously.”
      4
      The Stock Purchase Agreement provides that “[i]n connection
with the Purchase and Loan, [Motorola] and [PSSI] desire to enter
into certain other agreements, upon the terms and subject to the
conditions set forth herein.”      The Stock Purchase Agreement
expressly refers to the Product Development Agreement as one of
those agreements.   The Product Development Agreement similarly
provides that “the parties have executed or will execute between
them various agreements in connection with an investment by
Motorola in PSSI (the ‘Related Agreements’).”
      5
      As further evidence that the two agreements were intended to
be construed separately, PSSI notes that each agreement selects a
different governing law. In particular, the Product Development
Agreement provides that Illinois law governs its interpretation
while Texas law governs the interpretation of the Stock Purchase
Agreement. Although this potential conflict in governing law may
have to be resolved during the course of arbitration, such a
conflict is not conclusive evidence of the parties’ intent, and it
does not affect our interpretation of the scope of the arbitration

                                       10
Purchase Agreement is the heart of the transaction at issue here,

however, this fact is not dispositive because the arbitration

provision is contained in an agreement that was essential to the

overall transaction.6

     As we explained earlier, the thrust of the transaction was

relatively straightforward.    In return for providing funds to

complete the development and installation of PSSI’s Personal 911

System, Motorola received a minority stake in PSSI (with an option

to purchase a larger stake) and it received access to PSSI’s

technology to facilitate the joint development of future products.

It seems clear that the Product Development Agreement, which




clause in the Product Development Agreement.
     6
       To support its contention that the Stock Purchase Agreement
and the Product Development Agreement should not be construed
together, PSSI directs our attention to our recent decision in
PaineWebber Inc. v. Chase Manhattan Private Bank (Switzerland), 260
F.3d 453, 464 (5th Cir. 2001).       In PaineWebber, we held that
binding arbitration provisions in a set of Option Agreements did
not apply to disputes arising under a separate Referral Agreement,
which did not contain a binding arbitration provision. See id.
Our holding in PaineWebber is easily distinguished from the present
case.   The agreements in PaineWebber were construed separately
because (1) the securities trades at issue occurred outside the
“strictly limited” effective period of the Option Agreements and
(2) the parties explicitly provided that the trades “would be
executed in accordance with the terms of the Referral Agreement”
and explicitly declined to apply the terms of the Option
Agreements. Id. at 463-64. In this case, by contrast, the Stock
Purchase Agreement and the Product Development Agreement were
executed at the same time as part of the same transaction. In
addition,   the   Product   Development  Agreement   contained   no
restrictions on its scope or duration, and its terms were not made
subject to the terms of the Stock Purchase Agreement. In short,
PaineWebber does not control our decision in the instant case.

                                11
governed access to each party’s intellectual property as well as

the parties’ joint development efforts, was a central part of this

transaction.7     Although the arbitration provision in the Product

Development Agreement is somewhat narrower than the provision at

issue in Neal, we conclude that it is sufficiently broad to cover

all disputes related to the entire transaction.          It is of no moment

that each element of the transaction focuses on a different aspect

of the transaction and could be a valid free-standing contract.

      In sum, we hold that, where the parties include a broad

arbitration provision in an agreement that is “essential” to the

overall transaction, we will presume that they intended the clause

to reach all aspects of the transaction -- including those aspects

governed by other contemporaneously executed agreements that are

part of the same transaction.       Thus, in the absence of a contrary

expression   of    intent   in   the    Stock     Purchase   Agreement,   the

arbitration provision in the Product Development Agreement covers

all   disputes    related   to   the    subject     matter   of   the   entire

transaction between PSSI and Motorola. Because we cannot say “with

positive assurance that [the] arbitration clause is not susceptible

of an interpretation which would cover the dispute at issue,” we

      7
       As PSSI acknowledges, Motorola initiated talks with PSSI
primarily for the purpose of gaining access to PSSI’s advanced
technology. For example, PSSI’s amended complaint alleges that
Motorola “expressed an interest in PSSI and licensing its
technology” because Motorola had determined that “at least two more
years of development work was necessary before the development of
its . . . product progressed to the stage PSSI had already reached
in its development of the Personal 911 System.”

                                       12
find that it applies to PSSI’s claims under the Stock Purchase

Agreement.

                                  C

     PSSI argues that, even assuming the arbitration provision in

the Product Development Agreement can be construed to cover claims

arising out of the Stock Purchase Agreement, the forum selection

clause   in    the   Stock   Purchase   Agreement   forecloses   this

interpretation.      Paragraph 6.7 of the Stock Purchase Agreement

provides:

            Governing Law.     THIS AGREEMENT SHALL BE
            GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
            THE LAWS OF THE STATE OF TEXAS. ANY SUIT OR
            PROCEEDING BROUGHT HEREUNDER SHALL BE SUBJECT
            TO THE EXCLUSIVE JURISDICTION OF THE COURTS
            LOCATED IN TEXAS.

Focusing on the term “exclusive jurisdiction,” PSSI reads this

provision to mean that any dispute arising out of the Stock

Purchase Agreement must be litigated in Texas courts.    PSSI argues

that, because the parties “intended to confer solely upon Texas

courts the power to decide” any dispute brought under the Stock

Purchase Agreement, the parties expressly excluded the use of

arbitration to resolve such a dispute.8

     8
       In PaineWebber, 260 F.3d at 463, we held that an agreement
to submit all disputes “‘to the appropriate arbitrator or court in
the United States’” was not a binding agreement to arbitrate
because the provision plainly permits resolution of disputes either
in court or by arbitration. In so holding, we noted that a binding
agreement to arbitrate “precludes by its very terms any court
resolution.” Id. Read in context, it seems clear to us that this
statement stands for the unremarkable proposition that only one
adjudicatory body can resolve the merits of a dispute.          The

                                  13
     We do not find PSSI’s interpretation of the forum selection

clause persuasive.     Standing alone, one could plausibly read the

forum selection clause to mean that Texas courts have the exclusive

power to resolve all disputes arising under the Stock Purchase

Agreement.     But the forum selection clause does not stand alone.

To the contrary, we must interpret the forum selection clause in

the context of the entire contractual arrangement and we must give

effect to all of the terms of that arrangement.               See Richland

Plantation Co. v. Justiss-Mears Oil Co., Inc., 671 F.2d 154, 156

(5th Cir. 1982) (“When several documents represent one agreement,

all must be construed together in an attempt to discern the intent

of the parties, reconciling apparently conflicting provisions and

attempting to give effect to all of them, if possible.”).             Given

our conclusion that the arbitration provision in the Product

Development Agreement applies to all claims related to the overall

transaction,    we   must   therefore    interpret   the   forum   selection

provision in the Stock Purchase Agreement in a manner that is

consistent with the arbitration provision.

     Reading the two provisions together, it becomes clear that the

forum selection clause does not require the parties to litigate all

claims in Texas courts, nor does it expressly forbid arbitration of

claims arising under the Stock Purchase Agreement.             Instead, we



PaineWebber Court did not suggest that a binding arbitration
provision precludes the litigation in court of disputes concerning
the application and enforcement of that provision.

                                    14
interpret the forum selection clause to mean that the parties must

litigate in Texas courts only those disputes that are not subject

to arbitration -- for example, a suit to challenge the validity or

application of the arbitration clause or an action to enforce an

arbitration award.9      Rather than covering all “disputes” or all

“claims” like the arbitration provision in the Product Development

Agreement,     the   forum    selection    clause    confers    “exclusive

jurisdiction” on Texas courts only with respect to “any suit or

proceeding.”     This limitation suggests that the parties intended

the clause to apply only in the event of a non-arbitrable dispute

that must be litigated in court.10

      Thus, read together with the arbitration provision, the forum

selection clause in the Stock Purchase Agreement does not operate

to   bar   arbitration   of   disputes    where   otherwise    required   by

contract.11    Consequently, we conclude that the claims in PSSI’s

      9
       Indeed, the parties’ dispute concerning the scope of the
arbitration clause in the Product Development Agreement was
litigated in a “court located in Texas,” in accordance with the
forum selection clause.
      10
        This reading comports with the plain meaning of the terms
“suit” and “proceeding.” See Webster’s Third New Int’l Dictionary
2286 (1993) (defining “suit” as “an action or process in a court
for the recovery of a right or claim”); id. at 1807 (defining a
“proceeding” as “the course of procedure in a judicial action or in
a suit in litigation”).
      11
       This interpretation of Paragraph 6.7 of the Stock Purchase
Agreement is also consistent with cases holding that a forum
selection clause cannot nullify an arbitration clause unless the
forum selection clause specifically precludes arbitration. See
Patten Securities Corp., Inc. v. Diamond Greyhound & Genetics,
Inc., 819 F.2d 400, 407 (3d Cir. 1987) (holding that a forum

                                    15
complaint must be arbitrated in accordance with the terms of the

Product Development Agreement.

                                       III

     For the reasons set out above, we REVERSE the judgment of the

district court denying Motorola’s motion to compel arbitration of

PSSI’s   claims   and   REMAND   for    entry   of   an   order   staying   the

litigation and requiring the parties to submit their dispute to

binding arbitration.

                                                     REVERSED and REMANDED.




selection clause under which a party agreed to “submit to the
jurisdiction” of courts located in New Jersey “with respect to
controversies arising under this Agreement” did not preclude
arbitration), abrogated on other grounds by Gulfstream Aerospace
Corp. v. Mayacamas Corp., 485 U.S. 271, 287 (1988); In re Winter
Park Const., Inc., 30 S.W.3d 576, 578 (Tex.App.-Texarkana 2000, no
pet.) (holding that an arbitration clause was not “superceded” by
a forum selection clause providing that “[v]enue for any suit
arising out of any relationship between Seller and Buyer shall be
the appropriate court in Harrison county [sic], Texas”).

                                       16
